1
Exhibit 10.16
REVOLVING CREDIT AGREEMENT
Dated as of March 29, 2000
among
CABOT MICROELECTRONICS CORPORATION
FLEET NATIONAL BANK
and the other lending institutions which may become a party thereto
and
FLEET NATIONAL BANK, as Agent
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION......................................................... 1
1.1. Definitions.......................................................................... 1
1.2. Rules of Interpretation.............................................................. 13
2. THE REVOLVING CREDIT FACILITY................................................................... 15
2.1. Commitment to Lend................................................................... 15
2.2. Commitment Fee....................................................................... 15
2.3. Reduction of Total Commitment........................................................ 15
2.4. The Notes............................................................................ 15
2.5. Interest on Loans.................................................................... 16
2.6. Requests for Loans................................................................... 16
2.6.1. General................................................................... 16
2.6.2. Swing Line................................................................ 16
2.7. Conversion Options................................................................... 18
2.7.1. Conversion to Different Type of Loan...................................... 18
2.7.2. Continuation of Type of Loan.............................................. 18
2.7.3. LIBOR Rate Loans.......................................................... 18
2.8. Funds for Loan....................................................................... 18
2.8.1. Funding Procedures........................................................ 18
2.8.2. Advances by Agent......................................................... 19
2.9. Settlements.......................................................................... 19
2.9.1. General................................................................... 19
2.9.2. Failure to Make Funds Available........................................... 20
2.9.3. No Effect on Other Banks.................................................. 20
3. REPAYMENT OF THE LOANS.......................................................................... 20
3.1. Maturity............................................................................. 20
3.2. Mandatory Repayments of Loans........................................................ 20
3.3. Optional Repayments of Loans......................................................... 21
4. LETTERS OF CREDIT............................................................................... 21
4.1. Letter of Credit Commitments......................................................... 21
4.1.1. Commitment to Issue Letters of Credit..................................... 21
4.1.2. Letter of Credit Applications............................................. 22
4.1.3. Terms of Letters of Credit................................................ 22
4.1.4. Reimbursement Obligations of Banks........................................ 22
4.1.5. Participations of Banks................................................... 22
4.2. Reimbursement Obligation of the Borrower............................................. 22
4.3. Letter of Credit Payments............................................................ 23
4.4. Obligations Absolute................................................................. 23
4.5. Reliance by Issuer................................................................... 23
4.6. Letter of Credit Fee................................................................. 24
5. CERTAIN GENERAL PROVISIONS...................................................................... 24
5.1. Closing Fees......................................................................... 24
5.2. Funds for Payments................................................................... 24
5.2.1. Payments to Agent......................................................... 24
5.2.2. No Offset, etc............................................................ 24
5.3. Computations......................................................................... 25
5.4. Inability to Determine LIBOR Rate.................................................... 25
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5.5. Illegality........................................................................... 25
5.6. Additional Costs, etc................................................................ 26
5.7. Capital Adequacy..................................................................... 26
5.8. Certificate.......................................................................... 26
5.9. Indemnity............................................................................ 26
5.10. Interest After Default.............................................................. 26
6. GUARANTIES...................................................................................... 28
6.1. Guaranties of Subsidiaries........................................................... 28
7. REPRESENTATIONS AND WARRANTIES.................................................................. 28
7.1. Corporate Authority.................................................................. 28
7.1.1. Incorporation; Good Standing.............................................. 28
7.1.2. Authorization............................................................. 28
7.1.3. Enforceability............................................................ 28
7.2. Governmental Approvals............................................................... 28
7.3. Title to Properties; Leases.......................................................... 28
7.4. Financial Statements and Projections................................................. 29
7.4.1. Fiscal Year............................................................... 29
7.4.2. Financial Statements...................................................... 29
7.4.3. Projections............................................................... 29
7.4.4. Solvency.................................................................. 29
7.5. No Material Changes, etc............................................................. 29
7.6. Franchises, Patents, Copyrights, etc................................................. 29
7.7. Litigation........................................................................... 30
7.8. No Materially Adverse Contracts, etc................................................. 30
7.9. Compliance with Other Instruments, Laws, etc......................................... 30
7.10. Tax Status.......................................................................... 30
7.11. No Event of Default................................................................. 30
7.12. Holding Company and Investment Company Acts......................................... 30
7.13. Absence of Financing Statements, etc................................................ 31
7.14. Certain Transactions................................................................ 31
7.15. Employee Benefit Plans.............................................................. 31
7.15.1. In General............................................................... 31
7.15.2. Terminability of Welfare Plans........................................... 31
7.15.3. Guaranteed Pension Plans................................................. 31
7.15.4. Multiemployer Plans...................................................... 32
7.16. Use of Proceeds..................................................................... 32
7.16.1. General.................................................................. 32
7.16.2. Regulations U and X...................................................... 32
7.16.3. Ineligible Securities.................................................... 32
7.17. Environmental Compliance............................................................ 32
7.18. Subsidiaries, etc................................................................... 34
7.19. Disclosure.......................................................................... 34
8. AFFIRMATIVE COVENANTS OF THE BORROWER........................................................... 34
8.1. Punctual Payment..................................................................... 34
8.2. Maintenance of Office................................................................ 34
8.3. Records and Accounts................................................................. 34
8.4. Financial Statements, Certificates and Information................................... 34
8.5. Notices.............................................................................. 35
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8.5.1. Defaults.................................................................. 35
8.5.2. Environmental Events...................................................... 36
8.5.3. Notification of Claim against Assets...................................... 36
8.5.4. Notice of Litigation and Judgments........................................ 36
8.6. Corporate Existence; Maintenance of Properties....................................... 36
8.7. Insurance............................................................................ 37
8.8. Taxes................................................................................ 37
8.9. Inspection of Properties and Books, etc.............................................. 37
8.9.1. General................................................................... 37
8.9.2. Communications with Accountants........................................... 37
8.10. Compliance with Laws, Contracts, Licenses, and Permits.............................. 37
8.11. Employee Benefit Plans.............................................................. 37
8.12. Use of Proceeds..................................................................... 38
8.13. Replacement Instruments............................................................. 38
8.14. New Guarantors...................................................................... 38
8.15. Additional Subsidiaries............................................................. 38
8.16. Further Assurances.................................................................. 38
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...................................................... 38
9.1. Restrictions on Indebtedness......................................................... 38
9.2. Restrictions on Liens................................................................ 39
9.3. Restrictions on Investments.......................................................... 40
9.4. Restricted Payments.................................................................. 41
9.5. Merger, Consolidation and Disposition of Assets...................................... 41
9.5.1. Mergers and Acquisitions.................................................. 41
9.5.2. Disposition of Assets..................................................... 42
9.6. Sale and Leaseback................................................................... 42
9.7. Compliance with Environmental Laws................................................... 42
9.8. Employee Benefit Plans............................................................... 43
9.9. Business Activities.................................................................. 43
9.10. Fiscal Year......................................................................... 43
9.11. Transactions with Affiliates........................................................ 43
9.12. Upstream Limitations................................................................ 43
9.13. Inconsistent Agreements............................................................. 44
9.14. Modification of Documents........................................................... 44
10. FINANCIAL COVENANTS OF THE BORROWER............................................................ 44
10.1. Leverage Ratio...................................................................... 44
10.2. Quarterly Net Income................................................................ 44
10.3. Debt Service Coverage Ratio......................................................... 44
10.4. Quick Ratio......................................................................... 44
11. CLOSING CONDITIONS............................................................................. 44
11.1. Loan Documents...................................................................... 44
11.2. Certified Copies of Charter Documents............................................... 44
11.3. Corporate Action.................................................................... 45
11.4. Incumbency Certificate.............................................................. 45
11.5. UCC Search Results.................................................................. 45
11.6. Certificates of Insurance........................................................... 45
11.7. Solvency Certificate................................................................ 45
11.8. Audited Financials.................................................................. 45
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11.9. Completion of IPO................................................................... 45
11.10. Pro Forma Balance Sheet............................................................ 45
11.11. Opinion of Counsel................................................................. 45
11.12. Payment of Fees.................................................................... 45
12. CONDITIONS TO ALL BORROWINGS................................................................... 46
12.1. Representations True; No Event of Default........................................... 46
12.2. No Legal Impediment................................................................. 46
12.3. Governmental Regulation............................................................. 46
12.4. Proceedings and Documents........................................................... 46
13. EVENTS OF DEFAULT; ACCELERATION; ETC........................................................... 46
13.1. Events of Default and Acceleration.................................................. 46
13.2. Termination of Commitments.......................................................... 49
13.3. Remedies............................................................................ 49
13.4. Distribution of Proceeds............................................................ 50
14. SETOFF......................................................................................... 50
15. THE AGENT...................................................................................... 51
15.1. Authorization....................................................................... 51
15.2. Employees and Agents................................................................ 51
15.3. No Liability........................................................................ 51
15.4. No Representations.................................................................. 51
15.4.1. General.................................................................. 52
15.4.2. Closing Documentation, etc............................................... 52
15.5. Payments............................................................................ 52
15.5.1. Payments to Agent........................................................ 52
15.5.2. Distribution by Agent.................................................... 52
15.5.3. Delinquent Banks......................................................... 53
15.6. Holders of Notes.................................................................... 53
15.7. Indemnity........................................................................... 53
15.8. Agent as Bank....................................................................... 53
15.9. Resignation......................................................................... 53
15.10. Notification of Defaults and Events of Default..................................... 54
15.11. Duties in the Case of Enforcement.................................................. 54
16. EXPENSES AND INDEMNIFICATION................................................................... 54
16.1. Expenses............................................................................ 54
16.2. Indemnification..................................................................... 55
16.3. Survival............................................................................ 55
17. USURY.......................................................................................... 55
18. SURVIVAL OF COVENANTS, ETC..................................................................... 56
19. ASSIGNMENT AND PARTICIPATION................................................................... 56
19.1. Conditions to Assignment by Banks................................................... 56
19.2. Certain Representations and Warranties; Limitations; Covenants...................... 56
19.3. Register............................................................................ 57
19.4. New Notes........................................................................... 58
19.5. Participations...................................................................... 58
19.6. Disclosure.......................................................................... 58
19.7. Assignee or Participant Affiliated with the Borrower................................ 58
19.8. Miscellaneous Assignment Provisions................................................. 59
19.9. Assignment by Borrower.............................................................. 59
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20. NOTICES, ETC................................................................................... 59
21. GOVERNING LAW.................................................................................. 60
22. HEADINGS....................................................................................... 60
23. COUNTERPARTS................................................................................... 60
24. ENTIRE AGREEMENT, ETC.......................................................................... 60
25. WAIVER OF JURY TRIAL........................................................................... 61
26. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................. 61
27. SEVERABILITY................................................................................... 61
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of March 29, 2000, by and
among CABOT MICROELECTRONICS CORPORATION (the "Borrower"), a Delaware
corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and FLEET NATIONAL BANK, a national banking association, and the
other lending institutions listed on Schedule 1 and FLEET NATIONAL BANK, as
agent for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere iN the provisions of this Credit Agreement
referred to below:
Accounts Receivable. All rights of the Borrower or any of the
Guarantors to payment for goods sold, leased, licensed or otherwise marketed in
the ordinary course of business or services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors, net of any credits, rebates, offsets,
holdbacks or other adjustments or commissions payable to third parties that are
adjustments to such accounts receivable, and except for that portion of the sum
of money or other proceeds due thereon that relate to sales, use or property
taxes in conjunction with such transactions, recorded on books of account in
accordance with generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to Section 8.4(c).
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Agent. Fleet National Bank acting as agent for the Banks.
Agent's Special Counsel. ▇▇▇▇▇▇▇ ▇▇▇▇ LLP or such other counsel as may
be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio, as determined for the
fiscal period of the Borrower and its Subsidiary ending on the fiscal quarter
ended immediately prior to the applicable Rate Adjustment Period.
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BASE RATE LIBOR RATE
TIER LEVERAGE RATIO LOANS LOANS COMMITMENT FEE
---------- ------------------------------------ -------------- ------------- -------------------
1 Greater than or equal to 2.00:1.00 0.50% 2.00% 0.50%
2 Greater than or equal to 1.25:1.00 0.25% 1.75% 0.40%
but less than 2.00:1.00
3 Less than 1.25:1.00 0.0% 1.50% 0.30%
Notwithstanding the foregoing, (a) for Loans outstanding and the
Commitment Fee payable during the period commencing on the Closing Date through
the date immediately preceding the first Adjustment Date to occur after June 30,
2000, the Applicable Margin shall be the Applicable Margin set forth in Tier 3
above, and (b) if the Borrower fails to deliver any Compliance Certificate
pursuant to Section 8.4(c) hereof then, for the period commencing on the
Adjustment Date to occur subsequent to such failure through the date immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Margin shall be the highest Applicable Margin set forth above.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. September 30, 1999.
Banks. Fleet and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by Fleet at its head office in Boston, Massachusetts, as its "base
rate" or "prime rate" and (b) one-half of one percent (1/2%) above the Federal
Funds Effective Rate. For the purposes of this definition, "Federal Funds
Effective Rate" shall mean for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three funds brokers of
recognized standing selected by the Agent. The Base Rate is a reference rate and
does not necessarily represent the lowest or best rate being charged to any
customer. Changes in the rate of interest resulting from changes in the Base
Rate shall take place immediately without notice or demand of any kind.
Base Rate Loans. Loans bearing interest calculated by reference to the
Base Rate.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
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Cabot Dividend. The Distributions made by the Borrower to Cabot
Corporation in an aggregate amount not to exceed the sum of (a) the aggregate
amount of all advances made to the Borrower by LaSalle Bank National Association
under the LaSalle Loan Agreement plus (b) the lesser of (i) the net proceeds
received by the Borrower from the consummation of its IPO and (ii) the aggregate
amount of Cabot Corporation's estimated tax basis in the Borrower's capital
stock as of the date of the consummation of the IPO.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic
Lease to the extent that such assets would have been Capital Assets had the
synthetic lease been treated for accounting purposes as a Capitalized Lease.
Capitalization Documents. Collectively, the formation documents
(including without limitation any certificate of incorporation and by-laws) of
the Borrower and its Subsidiaries.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
Cash Equivalents. As to the Borrower and its Subsidiaries, (a)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than six (6) months from the date of acquisition; (b) certificates of
deposit and eurodollar time deposits with maturities of six (6) months or less
from the date of acquisition, bankers' acceptances with maturities not exceeding
six (6) months and overnight bank deposits, in each case (i) with any Bank, or
(ii) with any domestic commercial bank having capital and surplus in excess of
$300,000,000 or any commercial bank organized under the laws of any OECD country
and having total assets in excess of $1,000,000,000; (c) repurchase obligations
with a term of not more than seven (7) days for underlying securities of the
types described in clauses (a) and (b) entered into with any financial
institution meeting the qualifications specified in clause (b) above, (d) any
commercial paper issued by any Bank, the parent corporation of any Bank or any
Subsidiary of such Bank's parent corporation and which matures within six (6)
months after the date of acquisition thereof, and (e) any commercial paper or
other security which constitutes an Investment permitted under Section 10.3(c)
and whicH matures within six (6) months after the date of acquisition thereof.
CERCLA. See Section 7.17(a).
Closing Date. The first date on which the conditions set forth in
Section 11 have been satisfied and any Loans are to be made or any Letter of
Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
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Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Fee. See Section 2.2.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See Section 8.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Current Liabilities. All liabilities and other
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis
maturing on demand or within one (1) year from the date as of which Consolidated
Current Liabilities are to be determined, (including, without limitation, the
outstanding amount of all Loans as of the date of determination) and such other
liabilities as may properly be classified as current liabilities in accordance
with generally accepted accounting principles.
Consolidated EBIT. With respect to any fiscal period, an amount equal
to the sum of (a) Consolidated Net Income (or Deficit) of the Borrower and its
Subsidiaries for such fiscal period, plus (b) in each case to the extent
deducted in the calculation of such Person's Consolidated Net Income (or
Deficit) and without duplication (i) tax expense for such period, plus (ii)
Consolidated Total Interest Expense paid or accrued during such period, plus
(iii) other noncash charges for such period, and minus (c) to the extent added
in computing Consolidated Net Income, and without duplication, all noncash gains
(including income tax benefits) for such period, all as determined in accordance
with generally accepted accounting principles.
Consolidated EBITDA. With respect to any fiscal period, an amount equal
to the sum of (a) Consolidated EBIT of the Borrower and its Subsidiaries for
such fiscal period, plus (b) to the extent deducted in the calculation of such
Person's Consolidated Net Income (or Deficit) and without duplication,
depreciation and amortization for such period, all as determined in accordance
with generally accepted accounting principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
Consolidated Quick Assets. All cash, Cash Equivalents and Accounts
Receivable of the Borrower and its Subsidiaries on a consolidated basis that, in
accordance with generally accepted accounting principles, are properly
classified as current assets, provided that accounts receivable shall be
included only if good and collectible as determined by the Borrower in
accordance with established practice consistently applied, and only if payable
and outstanding (a) not more than one hundred eighty (180) days after the date
of the shipment of goods or other transactions out of which any such account
receivable arose and (b) are not outstanding for more than sixty (60) days past
due; and such accounts
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receivable shall be taken at their face value less reserves determined to be
sufficient in accordance with generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease, or any Synthetic Lease and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with Section
2.7.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
Debt Service Coverage Ratio. As at any date of determination, the ratio
of (a) Consolidated EBIT of the Borrower and its Subsidiaries for the Reference
Period most recently ended, to (b) Consolidated Total Interest Expense of the
Borrower and its Subsidiaries for such Reference Period.
Default. See Section 13.1.
Delinquent Bank. See Section 15.5.3.
Derivative Contract. Every obligation of any Person under any forward
contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Domestic Subsidiary. Any Subsidiary (direct or indirect, existing on
the date hereof or acquired or formed hereafter in accordance with the
provisions hereof) of the Borrower which is organized under the laws of the
United States of America or a state or other subdivision of the United States of
America.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with
Section 2.7.
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Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; (e) any investment company,
investment fund or other institutional lender (other than a commercial bank,
finance company, or savings and loan association or savings bank) approved by
the Agent which is an "accredited investor" (as defined in Regulation D of the
federal Securities and Exchange Commission) engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of business; and
(f) if, but only if, any Event of Default has occurred and is continuing, any
other bank, insurance company, commercial finance company or other financial
institution or other Person approved by the Agent, such approval not to be
unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained oR contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See Section 7.17(a).
EPA. See Section 7.17(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of The Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See Section 13.1.
Fee Letter. The fee letter agreement between the Borrower and the Agent
dated on or prior to the Closing Date.
Fleet. Fleet National Bank, a national banking association in its
individual capacity.
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generally accepted accounting principles. (a) When used in Section 10,
whether directly or indirectly thrOugh reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantor. Each Domestic Subsidiary of the Borrower existing on the
Closing Date (if any) and each other Domestic Subsidiary of the Borrower which
is required to be or become a Guarantor from time to time pursuant to
Section 8.13 hereof. Each such Person shall be a party to a Guaranty.
Guaranty. Collectively, each Guaranty dated on or after the Closing
Date which is required to be delivered by Section 8.13, made by each Guarantor
in favor of the Banks and the Agent pursuant to which each GuaranTor guaranties
to the Banks and the Agent the payment and performance of the Obligations and in
form and substance satisfactory to the Banks and the Agent.
Hazardous Substances. See Section 8.18(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person,
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized
Lease,
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(f) every obligation of such Person under any lease (a
"Synthetic Lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than (x) in
connection with the disposition of the business operations of such
Person relating thereto, (y) the disposition of any receivables where
there is no recourse to the Person consummating such disposition or (z)
a disposition of defaulted receivables for collection and not as a
financing arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value (i) any shares of capital stock of any class issued by such
Person, (ii) any warrants, options or other rights to acquire any such
shares, or (iii) any rights measured by the value of such shares,
warrants, options or other rights, other than any equity related
purchase obligation which is satisfied solely by the issuance of the
capital stock of such Person and not cash,
(i) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness
provide that such Person is not liable therefor and such terms are
enforceable under applicable law,
(j) every obligation, contingent or otherwise, of such Person
guaranteeing, or otherwise acting as surety for, any obligation of a
type described in any of clauses (a) through (i) (the "primary
obligation") of another Person (the "primary obligor"), in any manner,
whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply
funds for the purchase of) any security for the payment of such primary
obligation, (ii) to purchase property, securities or services for the
purpose of assuring the payment of such primary obligation, or (iii) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (x) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (y) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount, and (z) any
equity related purchase obligation shall be the maximum fixed redemption or
purchase price
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thereof inclusive of any accrued and unpaid dividends to be comprised in such
redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan and; (b) as to any LIBOR Rate Loan in
respect of which the Interest Period is (i) three (3) months or less, the last
day of such Interest Period and (ii) more than three (3) months, the date that
is three (3) months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request or
as otherwise required by the terms of this Credit Agreement (i) for any Base
Rate Loan, the last day of the calendar quarter; (ii) for any Money Market Rate
Loan, 1, 2, 3, 4, 5, 6 or 7 days; and (iii) for any LIBOR Rate Loan, 1, 2, 3, or
6 months; and (b) thereafter, each period commencing on the day immediately
following the end of the next preceding Interest Period applicable to such Loan
and ending on the last day of one of the periods set forth above, as selected by
the Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that
Interest Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan or
a Money Market Rate Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected LIBOR Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last LIBOR 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 LIBOR
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor
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code of standby letter of credit practices among banks adopted by the Agent in
the ordinary course of its business as a standby letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
IPO. The initial public offering of the common stock of the Borrower.
LaSalle Loan Agreement. The Credit Agreement, dated as of March 31,
2000, between the Borrower and LaSalle Bank National Association, pursuant to
which LaSalle Bank National Association has agreed to lend to the Borrower
$17,000,000.
LaSalle Loan Documents. The LaSalle Loan Agreement and all agreements
and documents required to be entered into or delivered in connection therewith,
each in the form delivered to the Agent prior to the Closing Date.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.1.1.
Letter of Credit Fee. See Section 4.6.
Letter of Credit Participation. See Section 4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date, to (b) Consolidated EBITDA of the Borrower and its Subsidiaries for the
Reference Period ending on such date.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (a) the rate determined by the Agent at which
Dollar deposits for such Interest Period are offered
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based on information presented on Telerate Page 3750 as of 11:00 a.m. London
time on the second LIBOR Business Day prior to the first day of such Interest
Period, divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
LIBOR Rate Loans. Loans bearing interest calculated by reference to the
LIBOR Rate.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Guaranty.
Loan Request. See Section 2.6.
Loans. Revolving credit loans made or to be made by the Banks to the
Borrower pursuant to Section 2.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date; and
if no such principal is outstanding, the Banks whose aggregate Commitments
constitutes at least fifty-one percent (51%) of the Total Commitment.
Maturity Date. March 29, 2003.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Money Market Rate. The fixed rate of interest quoted by the Agent on
the first day of any Interest Period which is the rate the Agent is willing to
charge with respect to a Money Market Rate Loan to be made by the Agent during
such period.
Money Market Rate Loan. Loans being interest calculated by reference to
the Money Market Rate.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Note Record. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by any
Bank with respect to any Loan referred to in such Note.
Notes. See Section 2.4.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made or Reimbursement Obligations incurred or any of
the Notes, Letter of Credit Application, Letter of Credit or other instruments
at any time evidencing any thereof.
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outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity Or entities having similar responsibilities.
Permitted Acquisition. See Section 9.5.1.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Purchase Price. See Section 9.5.1.
Quick Ratio. As at any date of determination, the ratio of (a)
Consolidated Quick Assets of the Borrower and its Subsidiaries on such date, to
(b) Consolidated Current Liabilities of the Borrower and its Subsidiaries on
such date.
Rate Adjustment Period. As defined in the definition of "Applicable
Margin."
RCRA. See Section 7.17(a).
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Reference Period. As of any date of determination, the period of four
(4) consecutive fiscal quarters of the Borrower and its Subsidiaries ending on
such date, or if such date is not a fiscal quarter end date, the period of four
(4) consecutive fiscal quarters most recently ended.
Register. See Section 19.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 4.2.
Restricted Payment. In relation to the Borrower and its Subsidiaries,
any (a) Distribution or (b) payment or prepayment by the Borrower or its
Subsidiaries to the Borrower's shareholders or to any Affiliate of the Borrower
or the Borrower's shareholders.
▇▇▇▇. See Section 7.17(a).
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Settlement. The making or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Loans (after giving effect to any Loan
Request) to be equal to such Bank's Commitment Percentage of the
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outstanding amount of such Loans (after giving effect to any Loan Request), in
any case where, prior to such event or action, the actual share is not so equal.
Settlement Amount. See Section 2.9.1.
Settlement Date. (a) The date which is seven (7) days from the Drawdown
Date of any Money Market Rate Loan made pursuant to Section 2.6.2 hereof, or if
such day is not a Business Day, the Business Day immediately follOwing such
Business Day, (b) at the option of the Agent, on any Business Day following a
day on which the account officers of the Agent active upon the Borrower's
account become aware of the existence of an Event of Default, (c) any Business
Day on which the amount of Loans outstanding from Fleet plus Fleet's Commitment
Percentage of the sum of the Maximum Drawing Amount and any Unpaid Reimbursement
Obligations is equal to or greater than Fleet's Commitment Percentage of the
Total Commitment, or (d) any day on which any conversion of a Money Market Rate
Loan to a Base Rate Loan or a Eurodollar Rate Loan occurs.
Settling Bank. See Section 2.9.1.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Synthetic Lease. As defined in paragraph (f) of the definition of
"Indebtedness."
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Total Funded Indebtedness. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases and Synthetic Leases, determined on a consolidated basis in
accordance with generally accepted accounting principles.
Type. As to any Loan, its nature as a Base Rate Loan, a Money Market
Rate Loan or a LIBOR Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
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(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that section
of this Credit Agreement unlEss otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
(m) All pro forma computations required to be made hereunder
giving effect to any acquisition, investment, sale, disposition, merger
or similar event shall reflect on a pro forma basis such event and, to
the extent applicable, the historical earnings and cash flows
associated with the assets acquired or disposed of and any related
incurrence or reduction of Indebtedness,
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but shall not take into account any projected synergies or similar benefits
expected to be realized as a result of such event.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Maturity Date upon notice by the
Borrower to the Agent given in accordance with Section 2.6, such sums as are
requested by the Borrower up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment minus such Bank's Commitment Percentage of the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations, provided that the sum
of the outstanding amount of the Loans (after giving effect to all amounts
requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Total Commitment. The Loans shall
be made pro rata in accordance with each Bank's Commitment Percentage. Each
request for a Loan hereunder shall constitute a representation and warranty by
the Borrower that the conditions set forth in Section 11 and Section 12, in the
case of the initial Loans to be made on the Closing Date, And Section 12, in the
case of all other Loans, have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee (the "Commitment Fee") calculated in accordance with the
pricing grid contained in the definition of "Applicable Margin" for the
Commitment Fee on a per annum basis on the average daily amount during each
calendar quarter or portion thereof from the date hereof to the Maturity Date by
which the Total Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Loans during
such calendar quarter. The commitment fee shall be payable quarterly in arrears
on the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on the Maturity Date or any earlier date on which the Commitments
shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the Total Commitment, whereupon the Commitments of the Banks
shall be reduced pro rata in accordance with their respective Commitment
Percentages of the amount specified in such notice or, as the case may be,
terminated. Promptly after receiving any notice of the Borrower delivered
pursuant to this Section 2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any Commitment Fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. THE NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit A hereto (each a
"Note"), dated as of the Closing Date and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Loans made
by such Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Loan or at the time of receipt of any payment
of principal on such Bank's Note, an appropriate notation on such Bank's Note
22
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Record reflecting the making of such Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Loans set forth on such Bank's Note
Record shall be prima facie evidence of the principal amount thereof owing and
unpaid to such Bank, but the failure to record, or any error in so recording,
any such amount on such Bank's Note Record shall not limit or otherwise affect
the obligations of the Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due.
2.5. INTEREST ON LOANS. Except as otherwise provided in Section 5.10,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate plus the Applicable Margin for Base Rate Loans.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate of per annum equal
to the LIBOR Rate determined for such Interest Period, plus the
Applicable Margin for LIBOR Rate Loans.
(c) Each Money Market Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum
equal to the Money Market Rate.
(d) The Borrower promises to pay interest on each Loan in
arrears on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR LOANS.
2.6.1. GENERAL. The Borrower shall give to the Agent written
notice in the form of Exhibit B hereto (or telephonic notice confirmed
in a writing in the form of Exhibit B hereto) of each Loan requested
hereunder (a "Loan Request") no less than (a) one (1) Business Day
prior to the proposed Drawdown Date of any Base Rate Loan and (b) three
(3) LIBOR Business Days prior to the proposed Drawdown Date of any
LIBOR Rate Loan. Each such notice shall specify (i) the principal
amount of the Loan requested, (ii) the proposed Drawdown Date of such
Loan, (iii) the Interest Period for such Loan and (iv) the Type of such
Loan. Promptly upon receipt of any such notice, the Agent shall notify
each of the Banks thereof. Each Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the
Loan requested from the Banks on the proposed Drawdown Date. Each Loan
Request shall be in a minimum aggregate amount of $1,000,000 or an
integral multiple thereof.
2.6.2. SWING LINE. Notwithstanding the notice and minimum
amount requirements set forth in Section 2.6.1 but otherwise in
accordance with the terms and conditions of this Credit Agreement, the
Agent may, in its sole discretion and without conferring with the
Banks, make Money Market Rate Loans to the Borrower in an amount
requested by the Borrower, but in no event shall the aggregate amount
of all Money Market Rate Loans outstanding at any one time exceed
$5,000,000. The Borrower hereby requests and authorizes the Agent to
make from time to time such Money Market Rate Loan so requested. The
Borrower acknowledges and agrees that the making of such Money Market
Rate Loans shall, in each case, be subject in all respects to the
provisions of this Credit Agreement as if they were Loans covered by a
Loan Request including, without limitation, the limitations set forth
in Section 2.1 and the requirements that the
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applicable provisions of Section 11 (in the case of Loans made on the Closing
Date) and Section 12 be satisfied. All actions taken by the Agent pursuant to
the provisions of this Section 2.6.2 shall be conclusive and binding on the
Borrower and the Banks absent the Agent's gross negligence or willful
misconduct. Loans made pursuant to this Section 2.6.2 shall be Money Market
Rate Loans until converted in accordance with the provisions of the Credit
Agreement and, prior to a Settlement, such interest shall be for the account
of the Agent.
2.6.2.1. PROCEDURAL REQUIREMENT. Money Market Rate
Loans shall be requested and funded in accordance with the
procedures set forth below. Each request for a Money Market
Rate Loan shall be referred to as an "Advance Request".
2.6.2.2. ADVANCE REQUESTS. In the event the Borrower
desires to borrow any Money Market Rate Loan, the Borrower may
request by telephone (a "Rate Request") that the Agent on any
Business Day give the Borrower a firm quotation of the Money
Market Rate Loan which would be applicable to a Money Market
Rate Loan to be made on such day for an Interest Period
commencing on the date of such Rate Request. Each Rate Request
shall (a) specify the aggregate principal amount of the Money
Market Rate Loan to which such rate quotation would apply
(which shall be in integral multiples of $100,000), (b) the
Interest Period being requested for such Money Market Rate
Loan and (c) be received by the Agent not later than 11:00
a.m., Boston time, on such day. At or before 12:00 noon,
Boston time, the Agent shall notify the Borrower by telephone,
telex or telecopier of the Money Market Rate which would apply
to such Money Market Rate Loan; provided, however, that the
Agent may, in its sole and absolute discretion, decline to
give any such quotation. Such rate quotation shall remain in
effect for one hour on such day. If the Borrower wishes to
accept the rate quotation from the Agent, and thereby request
such Money Market Rate Loan, the Borrower shall give the Agent
written notice of acceptance (a "M/M Rate Acceptance"), no
later than the expiration of such one hour period. Each M/M
Rate Acceptance may be given by telex or telecopier (confirmed
by letter), and shall confirm the Borrower's acceptance of
such rate quotation and the aggregate principal amount of the
Money Market Rate Loan requested. Each Advance Request made by
the Borrower shall
(a) obligate the Borrower to borrow the
principal amount of the Money Market Rate Loan requested
thereby; and
(b) constitute a representation and warranty
by the Borrower to the Agent that all of the conditions set
forth in Section 11 and Section 12 hereof have been satisfied.
An Advance Request made by the Borrower shall be
valid if given by an officer or other agent of the Borrower
identified as being an officer or agent authorized by the
Borrower to give such notices in a certificate executed by the
Secretary of the Borrower and delivered to the Agent. The
Agent is authorized to accept any telephonic Advance Requests
or Rate Requests if, in good faith, it believes them to have
been given by such an authorized person, and the Borrower
shall be obligated to borrow the amount of the Money Market
Rate Loan requested thereby and repay all such Money Market
Rate Loans made by the Agent. Any Advance Request or Rate
Request made by an officer or other agent of the Borrower
identified as being an officer or agent authorized by the
Borrower shall be binding upon the Borrower until such time as
the Agent has received
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written notification from the Borrower in the form of a
certificate executed by the Secretary of the Borrower and
delivered to the Agent that such officer or agent, as the case
may be, is no longer authorized by the Borrower to give such
notice.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. The Borrower may
elect from time to time to convert any outstanding Loan to a Loan of
another Type, provided that (a) with respect to any such conversion of
a Loan to a Base Rate Loan, the Borrower shall give the Agent at least
one (1) Business Day prior written notice of such election; (b) with
respect to any such conversion of a Money Market Rate Loan or a Base
Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Agent at
least three (3) LIBOR Business Days prior written notice of such
election; (c) with respect to any such conversion of a LIBOR Rate Loan
into a Base Rate Loan, such conversion shall only be made on the last
day of the Interest Period with respect thereto and (d) no Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default
has occurred and is continuing. On the date on which such conversion is
being made each Bank shall take such action as is necessary to transfer
its Commitment Percentage of such Loans to its Domestic Lending Office
or its LIBOR Lending Office, as the case may be. All or any part of
outstanding Loans of any Type may be converted into a Loan of another
Type as provided herein, provided that any partial conversion shall be
in an aggregate principal amount of $1,000,000 or an integral multiple
thereof plus an integral multiple of $100,000 in excess thereof. Each
Conversion Request relating to the conversion of a Loan to a LIBOR Rate
Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF LOAN. Any Loan of any Type may
be continued as a Loan of the same Type upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in Section 2.7.1; provided that no
Money Market Rate Loan or LIBOR Rate Loan may be continued as such when
any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Agent active upon the Borrower's account have actual knowledge. In the
event that the Borrower fails to provide any such notice with respect
to the continuation of any Money Market Rate Loan or LIBOR Rate Loan as
such, then such Money Market Rate Loan or LIBOR Rate Loan, as the case
may be, shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The Agent shall
notify the Banks promptly when any such automatic conversion
contemplated by this Section 2.7 is scheduled to occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all LIBOR Rate Loans having the same Interest Period shall not be less
than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof. In addition, there shall be more than five (5) LIBOR Rate
Loans outstanding at any one time.
2.8. FUNDS FOR LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Loans, each of the Banks
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
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Percentage of the amount of the requested Loans. Upon receipt from each
Bank of such amount, and upon receipt of the documents required by
Sections 11 and 12 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Loans made
available to the Agent by the Banks. The failure or refusal of any Bank
to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other
Bank's Commitment Percentage of any requested Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to the product of (a) the average
computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(b) the amount of such Bank's Commitment Percentage of such Loans,
times (c) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown Date to the date on which the
amount of such Bank's Commitment Percentage of such Loans shall become
immediately available to the Agent, and the denominator of which is
365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be prima facie evidence of
the amount due and owing to the Agent by such Bank. If the amount of
such Bank's Commitment Percentage of such Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from
the Borrower on demand, with interest thereon at the rate per annum
applicable to the Loans made on such Drawdown Date.
2.9. SETTLEMENTS.
2.9.1. GENERAL. On each Settlement Date, the Agent shall, not
later than 11:00 a.m. (Boston time), give telephonic or facsimile
notice (a) to the Banks and the Borrower of the respective outstanding
amount of Money Market Rate Loans made by the Agent on behalf of the
Banks from the immediately preceding Settlement Date through the close
of business on the prior day and the amount of any Base Rate Loan or
LIBOR Rate Loans to be made (following the giving of notice pursuant to
Section 2.6.1(b)) on such date pursuant to a Loan Request and (b) to
the Banks of the amount (a "Settlement Amount") that each Bank (a
"Settling Bank") shall pay to effect a Settlement of any Money Market
Rate Loan. A statement of the Agent submitted to the Banks and the
Borrower or to the Banks with respect to any amounts owing under this
Section 2.9 shall be prima facie evidence of the amount due and owing.
Each Settling Bank shall, not later than 3:00 p.m. (Boston time) on
such Settlement Date, effect a wire transfer of immediately available
funds to the Agent in the amount of the Settlement Amount for such
Settling Bank. On the Settlement Date, all outstanding Money Market
Rate Loans shall automatically be converted into Base Rate Loans. All
funds advanced by any Bank as a Settling Bank pursuant to this Section
2.9 shall for all purposes be treated as a Base Rate Loan made by such
Settling Bank to the Borrower and all funds received by any Bank
pursuant to this Section 2.9 shall for all purposes be treated as
repayment of amounts owed with respect to Loans made by such Bank. In
the event that any
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bankruptcy, reorganization, liquidation, receivership or similar cases
or proceedings in which the Borrower is a debtor prevent a Settling
Bank from making any Loan to effect a Settlement as contemplated
hereby, such Settling Bank will make such dispositions and arrangements
with the other Banks with respect to such Money Market Rate Loans,
either by way of purchase of participations, distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each
Bank's share of the outstanding Loans being equal, as nearly as may be,
to such Bank's Commitment Percentage of the outstanding amount of the
Loans.
2.9.2. FAILURE TO MAKE FUNDS AVAILABLE. The Agent may, unless
notified to the contrary by any Settling Bank prior to a Settlement
Date, assume that such Settling Bank has made or will make available to
the Agent on such Settlement Date the amount of such Settling Bank's
Settlement Amount, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Settling Bank makes available to the Agent
such amount on a date after such Settlement Date, such Settling Bank
shall pay to the Agent on demand an amount equal to the product of (a)
the average computed for the period referred to in clause (c) below, of
the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(b) the amount of such Settlement Amount, times (c) a fraction, the
numerator of which is the number of days that elapse from and including
such Settlement Date to the date on which the amount of such Settlement
Amount shall become immediately available to the Agent, and the
denominator of which is 360. A statement of the Agent submitted to such
Settling Bank with respect to any amounts owing under this Section
2.10.2 shall be prima facie evidence of the amount due and owing to the
Agent by such Settling Bank. If such Settling Bank's Settlement Amount
is not made available to the Agent by such Settling Bank within three
(3) Business Days following such Settlement Date, the Agent shall be
entitled to recover such amount from the Borrower on demand, with
interest thereon at the rate per annum applicable to the Loans as of
such Settlement Date.
2.9.3. NO EFFECT ON OTHER BANKS. The failure or refusal of any
Settling Bank to make available to the Agent at the aforesaid time and
place on any Settlement Date the amount of such Settling Bank's
Settlement Amount shall not (a) relieve any other Settling Bank from
its several obligations hereunder to make available to the Agent the
amount of such other Settling Bank's Settlement Amount or (b) impose
upon any Bank, other than the Settling Bank so failing or refusing, any
liability with respect to such failure or refusal or otherwise increase
the Commitment of such other Bank.
3. REPAYMENT OF THE LOANS.
3.1. MATURITY. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. MANDATORY REPAYMENTS OF LOANS. If at any time the sum of the
outstanding amount of the Loans, the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the Total Commitment, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Loans; and third, to provide to the Agent cash
collateral for Reimbursement Obligations as contemplated by Section 4.2(b) and
(c). Each payment of any Unpaid Reimbursement Obligations or
27
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prepayment of Loans shall be allocated among the Banks, in proportion, as nearly
as practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Note, with adjustments to the
extent practicable to equalize any prior payments or repayments not exactly in
proportion.
3.3. OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the right,
at its election, to repay the outstanding amount of the Loans, as a whole or in
part, at any time without penalty or premium, provided that any full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this
Section 3.3 may be made only on the last day of the Interest Period relating
thereto. The Borrower shall give the Agent, no later than 10:00 a.m., Boston
time, at least one (1) Business Day prior written notice of any proposed
prepayment pursuant to this Section 3.3 of Base Rate Loans, and three (3) LIBOR
Business Days notice of any proposed prepayment pursuant to this Section 3.3 of
LIBOR Rate Loans, in each case specifying the proposed date of prepayment of
Loans and the principal amount to be prepaid. Each such partial prepayment of
the Loans shall be in an integral multiple of $1,000,000, shall be accompanied
by the payment of accrued interest on the principal prepaid to the date of
prepayment and shall be applied, in the absence of instruction by the Borrower,
first to the principal of Base Rate Loans and then to the principal of LIBOR
Rate Loans, at the Agent's option. Each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Bank's Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
Section 4.1.4 and upon the representations and warranties of the
Borrower contained herein, agrees, in its individual capacity, to
issue, extend and renew for the account of the Borrower one or more
standby or documentary letters of credit (individually, a "Letter of
Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after
giving effect to such request, (a) the sum of the aggregate Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Loans outstanding shall not
exceed the Total Commitment. Notwithstanding the foregoing, the Agent
shall have no obligation to issue any Letter of Credit to support or
secure any Indebtedness of the Borrower or any of its Subsidiaries to
the extent that such Indebtedness was incurred prior to the proposed
issuance date of such Letter of Credit, unless in any such case the
Borrower demonstrates to the satisfaction of the Agent that (x) such
prior incurred Indebtedness was then fully secured by a prior perfected
and unavoidable security interest in collateral provided by the
Borrower or such Subsidiary to the proposed beneficiary of such Letter
of Credit or (y) such prior incurred Indebtedness was then secured or
supported by a letter of credit issued for the account of the Borrower
or such Subsidiary and the reimbursement obligation with respect to
such letter of credit was fully secured by a prior perfected and
unavoidable security interest in collateral provided to the issuer of
such letter of credit by the Borrower or such Subsidiary.
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4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject
to the Uniform Customs or, in the case of a standby Letter of Credit,
either the Uniform Customs or the International Standby Practices.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to Section 4.2
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under Section 4.2
in an amount equal to such payment. Each Bank shall share in accordance
with its participating interest in any interest which accrues pursuant
to Section 4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b)
and (c), on each date that any draft presented under such Letter of
Credit is honored by the Agent, or the Agent otherwise makes a payment
with respect thereto, (i) the amount paid by the Agent under or with
respect to such Letter of Credit, and (ii) the amount of any taxes,
fees, charges or other costs and expenses whatsoever incurred by the
Agent or any Bank in connection with any payment made by the Agent or
any Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 13, an amount equal to the
then Maximum Drawing Amount on all Letters of Credit, which amount
shall be held by the Agent for the benefit of the Banks and the Agent
as cash collateral for all Reimbursement Obligations.
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Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.10 for overdue
principal on the Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in Section 4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (b) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times
(c) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 4.2 shall not be affected by,
among other things, the validity 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, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with Section
4.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made
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by the proper Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this Credit
Agreement unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable 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 Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of issuance
or any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (a) in respect of each standby Letter of
Credit, calculated at the Applicable Margin per annum for LIBOR Rate Loans on
the face amount of such standby Letter of Credit, plus, to the extent there is
more than one Bank party to the Credit Agreement, a fee equal to one-eighth of
one percent (1/8%) per annum of the face amount of such standby Letter of Credit
(the "Standby Fronting Fee"), which Standby Fronting Fee shall be for the
account of the Agent, as a fronting fee, and the balance of which Letter of
Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages and (b) in respect of each documentary Letter
of Credit calculated at the Applicable Margin per annum for LIBOR Rate Loans on
the face amount of such documentary Letter of Credit, plus to the extent there
is more than one Bank party to the Credit Agreement, a fee equal to one-eighth
of one percent (1/8%) per annum on the face amount of such documentary Letter of
Credit (the "Documentary Fronting Fee"), which Documentary Fronting Fee shall be
for the account of the Agent, as a fronting fee, and the balance of which Letter
of Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages. The Letter of Credit Fee, the Standby
Fronting Fee and the Documentary Fronting Fee shall be payable quarterly in
arrears on the last Business Day of each calendar quarter for the calendar
quarter then ending. In respect of each Letter of Credit, the Borrower shall
also pay to the Agent for the Agent's own account, at such other time or times
as such charges are customarily made by the Agent, the Agent's customary
issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEES. The Borrower agrees to pay to the Agent for the pro
rata accounts of the Banks on the Closing Date a closing fee in the amount of
and at the times set forth in the Fee Letter.
5.2. FUNDS FOR PAYMENTS.
5.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, Commitment Fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made on the due date thereof to the Agent in
Dollars, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other place that the Agent may from time
to time designate, in each case at or about 11:00 a.m. (Boston,
Massachusetts, time or other local time at the place of payment) and in
immediately available funds.
5.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions,
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withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document,
such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation
been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.
5.3. COMPUTATIONS. All computations of interest on Base Rate Loans
shall be based on a 365-day year and paid for the actual number of days elapsed.
All computations of interest on LIBOR Rate Loans and of Commitment Fees, Letter
of Credit Fees or other fees shall, unless otherwise expressly provided herein,
be based on a 360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term "Interest Period"
with respect to LIBOR Rate Loans, whenever a payment hereunder or under any of
the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension. The outstanding amount of the
Loans as reflected on the Note Records from time to time shall be considered
correct and binding on the Borrower unless within five (5) Business Days after
receipt of any notice by the Agent or any of the Banks of such outstanding
amount, the Agent or such Bank shall notify the Borrower to the contrary.
5.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan, and (c) the obligations of the Banks
to make LIBOR Rate Loans shall be suspended until the Agent or the Majority
Banks determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrower and the other Banks and thereupon (a) the commitment of such Bank
to make LIBOR Rate Loans or convert Loans of another Type to LIBOR Rate Loans
shall forthwith be suspended and (b) such Bank's Loans then outstanding as LIBOR
Rate Loans, if any, shall be converted automatically to Base Rate Loans on the
last day of each Interest Period applicable to such LIBOR Rate Loans or within
such earlier period as may be required by law. The Borrower hereby agrees
promptly to pay the Agent for the account of such Bank, upon demand by such
Bank, any additional amounts
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necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this Section 5.5, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder.
5.6. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent),
or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts payable
to any Bank or the Agent under this Credit Agreement or any of the
other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of
the Loans or such Bank's Commitment forms a part, and the result of any
of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or such Bank's Commitment or any Letter of Credit,
or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent
33
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for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum. Each Bank shall allocate such cost
increases among its customers in good faith and on an equitable basis.
5.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrower of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrower and such Bank shall thereafter attempt to negotiate
in good faith, within thirty (30) days of the day on which the Borrower receives
such notice, an adjustment payable hereunder that will adequately compensate
such Bank in light of these circumstances. If the Borrower and such Bank are
unable to agree to such adjustment within thirty (30) days of the date on which
the Borrower receives such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in such Bank's reasonable determination, provide adequate compensation. Each
Bank shall allocate such cost increases among its customers in good faith and on
an equitable basis.
5.8. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.6 or 5.7 and a brief explanation of such
amounts which are due, submitted by any Bank or the Agent to the Borrower, shall
be conclusive, absent manifest error, that such amounts are due and owing.
5.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request or a Conversion Request relating thereto in
accordance with Section 2.6 or Section 2.7 or (c) the making of any payment of a
LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain any such Loans.
5.10. INTEREST AFTER DEFAULT. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to two
percent (2.0%) above the rate of interest otherwise applicable to such Loans
pursuant to Section 2.5 until such amount shall be paid in full (after as well
as before judgment)
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6. GUARANTIES.
6.1. GUARANTIES OF SUBSIDIARIES. The Obligations shall be guaranteed
pursuant to the terms of the Guaranty.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, (b)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (c) is in
good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where such qualification is necessary
except where a failure to be so qualified would not have a materially
adverse effect on the business, assets or financial condition of the
Borrower or such Subsidiary.
7.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute, rule
or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries and (d) do not
conflict with any provision of the corporate charter or bylaws of, or
any agreement or other instrument binding upon, the Borrower or any of
its Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others,
35
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including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
7.4. FINANCIAL STATEMENTS AND PROJECTIONS.
7.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries
has a fiscal year which is the twelve months ending on September 30 of
each calendar year.
7.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement
of income of the Borrower and its Subsidiaries for the fiscal year then
ended, certified by PricewaterhouseCoopers LLP. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
7.4.3. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 2000 to 2002 fiscal
years, copies of which have been delivered to each Bank, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change
in any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
7.4.4. SOLVENCY. The Borrower and its Subsidiaries, on a
consolidated and consolidating basis, both before and after giving
effect to the transactions contemplated by this Credit Agreement and
the other Loan Documents (a) are solvent; (b) have assets having a fair
value in excess of their liabilities; (c) have assets having a fair
value in excess of the amount required to pay their liabilities on
existing debts as such debts become due and payable, and (d) have, and
expect to continue to have, access to adequate capital for the conduct
of their business and the ability to pay their debts from time to time
incurred in connection with the operation of their business as such
debts mature.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of the Borrower or any of its Subsidiaries. Since the
Balance Sheet Date, the Borrower has not made any Distributions.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Except as set forth in
Schedule 7.7, neither the Borrower nor any Subsidiary has received written
notice from any Person alleging or claiming that the Borrower or any Subsidiary
is infringing any patent, trademark, copyright or any other intellectual
36
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property rights of such Person, and, in addition, neither the Borrower nor any
Subsidiary has any actual knowledge of any claim by any Person that would
preclude the Borrower or such Subsidiary from possessing and otherwise using all
franchises, patents (if any), copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, which are adequate for the
conduct of its business substantially as now conducted.
7.7. LITIGATION. Except as set forth in Schedule 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or, to the
best of the Borrower's knowledge, threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or administrative agency or board that,
if adversely determined, might, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of the Borrower and its Subsidiaries or materially impair the right of
the Borrower and its Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or, to the best of the
Borrower's knowledge, other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected in the future to have a materially
adverse effect on the business, assets or financial condition of the Borrower or
any of its Subsidiaries. Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower's officers, to have any materially adverse effect on the business
of the Borrower or any of its Subsidiaries.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or, to the best of the
Borrower's knowledge, any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of the Borrower or any of its
Subsidiaries.
7.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
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7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Borrower or any of its Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than the Borrower or
such Subsidiary could obtain from third parties, none of the officers,
directors, or employees of the Borrower or any of its Subsidiaries is presently
a party to any transaction with the Borrower or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
7.15. EMPLOYEE BENEFIT PLANS.
7.15.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan of the Borrower and its Subsidiaries has been
maintained and operated and is being maintained and operated in
compliance in all material respects with the provisions of ERISA and,
to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by Section 412 of ERISA. The Borrower has heretofore delivered
to the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
7.15.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan of the Borrower or any Subsidiary, which is an employee welfare
benefit plan within the meaning of Section 3(1) or Section 3(2)(B) of
ERISA, provides benefit coverage subsequent to termination of
employment, except as required by Title I, Part 6 of ERISA or the
applicable state insurance laws and certain retiree medical and life
insurance benefits. The Borrower may terminate each such Plan at any
time (or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of the Borrower without
liability to any Person other than for claims arising prior to
termination.
7.15.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan by the Borrower or any
Subsidiary, whether required to be made to avoid the incurrence of an
accumulated funding deficiency, the notice or lien provisions of
Section 302(f) of ERISA, or otherwise, has been timely made. No waiver
of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan,
and neither the Borrower nor any ERISA Affiliate is obligated to or has
posted security in connection with an amendment to a Guaranteed Pension
Plan pursuant to Section 307 of ERISA or Section 401(a)(29) of the
Code. No liability to the PBGC (other than required insurance premiums,
all of which have been paid) has been incurred by the Borrower or any
ERISA Affiliate with respect to any Guaranteed Pension Plan and there
has not been any ERISA Reportable Event (other than an ERISA Reportable
Event as to which the requirement of 30 days
38
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notice has been waived), or any other event or condition which presents
a material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA
did not exceed the aggregate value of the assets of all such Guaranteed
Pension Plans.
7.15.4. MULTIEMPLOYER PLANS. Neither the 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 the 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 is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
7.16. USE OF PROCEEDS.
7.16.1. GENERAL. The proceeds of the Loans shall be used for
working capital, general corporate purposes (including, without
limitation, financing all or any portion of any Permitted Acquisition)
and capital expenditures. The Borrower will obtain Letters of Credit
solely for working capital and general corporate purposes.
7.16.2. REGULATIONS U AND X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
7.16.3. INELIGIBLE SECURITIES. No portion of the proceeds of
any Loans is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of knowingly purchasing, or providing
credit support for the purchase of, during the underwriting or
placement period or within thirty (30) days thereafter, any Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary.
7.17. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) none of the Borrower, its Subsidiaries or any operator of
the Real Estate or any operations thereon is in violation, or, to the
best of the Borrower's knowledge, alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"),
which violation would have a material adverse effect on the environment
or the business, assets or financial condition of the Borrower or any
of its Subsidiaries;
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(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42
U.S.C. Section 9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at
which a federal, state or local agency or other third party has
conducted or has ordered that any Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 7.17 attached hereto: (i)
no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is
located on any portion of the Real Estate; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries or operators of
its properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would
have a material adverse effect on the value of any of the Real Estate
or adjacent properties or the environment; (iv) to the best of the
Borrower's knowledge, there have been no releases on, upon, from or
into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located
on, and which would have a material adverse effect on the value of, the
Real Estate; and (v) in addition, any Hazardous Substances that have
been generated on any of the Real Estate have been transported offsite
only by carriers having an identification number issued by the EPA,
treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the best
of the Borrower's knowledge, operating in compliance with such permits
and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the
Real Estate is subject to any applicable environmental law requiring
the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice
to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or to the
effectiveness of any other transactions contemplated hereby.
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7.18. SUBSIDIARIES, ETC. Except as set forth on Schedule 7.18(a)
hereto, the Borrower has no Subsidiaries. Except as set forth on Schedule
7.18(b) hereto, neither the Borrower nor any Subsidiary of the Borrower is
engaged in any joint venture or partnership with any other Person.
7.19. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to the Borrower or any of its Subsidiaries in the
case of any document or information not furnished by it or any of its
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. There is no fact known to the Borrower or any of its Subsidiaries
which materially adversely affects, or which is reasonably likely in the future
to materially adversely affect, the business, assets, financial condition or
prospects of the Borrower or any of its Subsidiaries, exclusive of effects
resulting from changes in general economic conditions, legal standards or
regulatory conditions.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the Commitment Fees and all other
amounts provided for in this Credit Agreement and the other Loan Documents to
which the Borrower or any of its Subsidiaries is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Aurora, Illinois, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (c) at all times engage
PricewaterhouseCoopers LLP or other independent certified public accountants
satisfactory to the Agent as the independent certified public accountants of the
Borrower and its Subsidiaries and will not permit more than thirty (30) days to
elapse between the cessation of such firm's (or any successor firm's) engagement
as the independent certified public accountants of the Borrower and its
Subsidiaries and the appointment in such capacity of a successor firm as shall
be satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of
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cash flow and consolidating statement of income and consolidating
statement of cash flow for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such consolidated
and consolidating statements to be in reasonable detail, prepared in
accordance with generally accepted accounting principles, and certified
without qualification by PricewaterhouseCoopers LLP or by other
independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to the effect
that they have read a copy of this Credit Agreement, and that, in
making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default
or Event of Default they shall disclose in such statement any such
Default or Event of Default; provided that such accountants shall not
be liable to the Banks for failure to obtain knowledge of any Default
or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries and the unaudited consolidating balance
sheet of the Borrower and its Subsidiaries, each as at the end of such
quarter, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such
financial statements fairly presents the financial position of the
Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower (the "Compliance Certificate") in substantially the form of
Exhibit C hereto and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in Section 11 and
(if applicable) reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Borrower;
(e) from time to time upon request of the Agent, projections
of the Borrower and its Subsidiaries updating those projections
delivered to the Banks and referred to in Section 7.4.2 or, if
applicable, updating any later such projections delivered in response
to a request pursuant to this Section 8.4(e); and
(f) from time to time such other financial data and
information (including accountants, management letters) as the Agent or
any Bank may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or
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other obligation to which or with respect to which the Borrower or any
of its Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to materially affect the assets,
liabilities, financial conditions or operations of the Borrower or any
of its Subsidiaries.
8.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Borrower's or any Subsidiary assets
are subject.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
materially adverse effect on the Borrower or any of its Subsidiaries
and stating the nature and status of such litigation or proceedings.
The Borrower will, and will cause each of its Subsidiaries to, give
notice to the Agent and each of the Banks, in writing, in form and
detail satisfactory to the Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against the Borrower or
any of its Subsidiaries in an amount in excess of $5,000,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
Section 8.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the aggregate materially adversely
affect the business of the Borrower and its Subsidiaries on a consolidated
basis.
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8.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request.
8.9.2. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower
authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants with respect to the business, financial condition and other
affairs of the Borrower or any of its Subsidiaries. At the request of
the Agent, the Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this
Section 8.9.2.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (b) the provisions of its charter documents and by-laws,
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service upon
request of the Agent, furnish to the Agent a copy
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of the most recent actuarial statement required to be submitted under
Section 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (b) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under Sections 302, 4041,
4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer
Plan, under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
solely for the purposes specified in Section 7.16.1. The Borrower will obtain
Letters of Credit solely for general corporate purposes.
8.13. REPLACEMENT INSTRUMENTS. Upon receipt of an affidavit of an
officer of the Agent or any Bank as to the loss, theft, destruction or
mutilation of any Note, and, in the case of any such loss, theft, destruction or
mutilation, upon cancellation of such Note, the Borrower shall issue, in lieu
thereof, a replacement Note in the same principal amount thereof and otherwise
of like tenor.
8.14. NEW GUARANTORS. The Borrower will cause each Domestic Subsidiary
created, acquired or otherwise existing, on or after the Closing Date to
immediately become a Guarantor on the Closing Date or on the date of its
acquisition or formation, as the case may be, and shall cause such Domestic
Subsidiary to execute and deliver to the Agent, for the benefit of the Agent and
the Banks, a Guaranty, together with legal opinions in form and substance
satisfactory to the Agent to be delivered to the Agent and the Banks opining as
to authorization validity and enforceability of such Guaranty and as to the due
incorporation, and legal existence of such Domestic Subsidiary.
8.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent of such creation or
acquisition, as the case may be, and provide the Agent with an updated Schedule
7.18(a) hereof and take all other actions required by Section 8.14 and
Section 9.5.1 hereof.
8.16. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
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(c) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary or under any Capitalized Lease or Synthetic Lease,
provided that the aggregate principal amount of such Indebtedness of
the Borrower and its Subsidiaries shall not exceed the aggregate amount
of $5,000,000 at any one time;
(d) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 hereto;
(e) Indebtedness of a Subsidiary of the Borrower to the
Borrower or a Guarantor so long as such Subsidiary is a Guarantor
hereunder and remains a Subsidiary;
(f) unsecured Indebtedness of the Borrower evidenced by the
LaSalle Loan Documents in an aggregate principal amount not to exceed
$17,000,000 outstanding at any time;
(g) unsecured Indebtedness of the Borrower or any Subsidiary
not otherwise permitted by this Section 9.1, provided that the
aggregate amount of such Indebtedness permitted by this Section 9.1(g)
does not exceed $5,000,000 outstanding at any time; and
(g) unsecured Indebtedness in respect of any Derivative
Contracts, provided that such Derivative Contracts are entered into in
the ordinary course of business and not for speculative purposes.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (g) of the definition of the
term "Indebtedness," with or without recourse; provided that the Borrower or any
of its Subsidiaries may create or incur or suffer to be created or incurred or
to exist:
(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
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(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties in existence less than
120 days from the date of creation thereof in respect of obligations
not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a materially
adverse effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule
9.2 hereto; and
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by Section 9.1(c), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America or any OECD country that mature within one (1) year
from the date of purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks or any other
commercial banks organized under the laws of any other country which is
a member of the OECD having total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof or any OECD country that at the
time of purchase have been rated and the ratings for which are not less
than "P 1" if rated by ▇▇▇▇▇'▇ Investors Service, Inc., and not less
than "A 1" if rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 9.3 hereto;
(e) Investments with respect to Indebtedness permitted by
Section 9.1(e) so long as such entities remain Subsidiaries of the
Borrower and remain Guarantors;
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(f) Investments consisting of the Guaranty or Investments by
the Borrower or any Guarantor in Subsidiaries of the Borrower which are
also Guarantors; and
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Section 9.5.2.
9.4. RESTRICTED PAYMENTS. Neither the Borrower nor any Subsidiary will
make any Restricted Payment, provided, however, notwithstanding anything to the
contrary contained in this Credit Agreement, so long as no Default or Event of
Default has occurred and is continuing or would exist as a result thereof, (a)
any Subsidiary of the Borrower shall be permitted to make a Restricted Payment
to the Borrower or a Guarantor, (b) the Borrower shall be permitted to make the
Cabot Dividend, (c) the Borrower shall be permitted Restricted Payments to Cabot
Corporation pursuant to the terms of the various agreements between the Borrower
and Cabot Corporation, as described in the preliminary prospectus relating to
the IPO dated March 15, 2000 (under the section entitled "Relationship between
our Company and Cabot Corporation"), which agreements are in place on or before
the date of the completion of the IPO; and (d) the Borrower shall be permitted
to make Distributions (including, without limitation, any repurchase by the
Borrower of any of its capital stock so long as such purchase price is not
greater than the fair market value of such capital stock), provided, that the
aggregate amount of such Distributions made over the life of this Credit
Agreement does not exceed the amount equal to the lesser of (i) fifty percent
(50%) of the Consolidated Net Income of the Borrower and its Subsidiaries
(calculated on a cumulative basis from the Closing Date through and including
the date of any such Distribution) and (ii) $25,000,000.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except (a) the
merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower, (b) the merger or consolidation of
two or more Subsidiaries of the Borrower provided, however, to the
extent any Subsidiary is a Guarantor, the survivor of such merger or
consolidation shall be a Guarantor; and (c) any merger or asset or
stock acquisition by the Borrower or any of its Subsidiaries of Persons
in the same or similar line of business as the Borrower, or such
Person's line of business is incidental to the Borrower's existing line
of business (a "Permitted Acquisition") where (i) the Borrower has
provided the Agent with written notice of such Permitted Acquisition,
which notice shall include a reasonably detailed description of such
Permitted Acquisition; (ii) the business to be acquired would not
subject the Agent or the Banks to any additional regulatory or third
party approvals in connection with the exercise of its rights and
remedies under this Credit Agreement or any other Loan Document; (iii)
any Indebtedness incurred or assumed in connection with such Permitted
Acquisition shall have been permitted to be incurred or assumed
pursuant to Section 9.1 hereof; (iv) the Borrower has provided the
Agent with such other information as was reasonably requested by the
Agent; (v) after the consummation of the Permitted Acquisition, to the
extent such acquisition was a stock acquisition, either (A) the Person
so acquired is merged with and into the Borrower or its Subsidiary,
with the Borrower or such Subsidiary, as the case may be, being the
survivor of such merger or (B) to the extent such Person is not merged
with and into the Borrower or a Subsidiary, such Person shall become a
Guarantor hereunder to the extent such Person is a Domestic Subsidiary;
(vi) the aggregate amount of the Purchase Price for all Permitted
Acquisitions (or series of related acquisitions) shall not exceed
$60,000,000 during the life of the Credit Agreement and, in addition
the aggregate amount of the Purchase Price for all Permitted
Acquisitions (or series of related acquisitions) which are payable in
anything other than the capital stock of the Borrower shall not exceed
$30,000,000 in the aggregate; (vii) no more than $15,000,000 in the
aggregate of the Purchase Price for all Permitted Acquisitions (or
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series of related acquisitions) may be funded with borrowings
hereunder; (viii) the board of directors and the shareholders (if
required by applicable law), or the equivalent, of each of the Borrower
and the Person to be acquired has approved such merger, consolidation
or acquisition and such Permitted Acquisition is otherwise considered
"friendly"; (ix) no Default or Event of Default has occurred and is
continuing hereunder or will occur as a result of the Permitted
Acquisition; (x) the Borrower has demonstrated to the satisfaction of
the Agent that the Borrower is in compliance, on a pro forma basis,
with the financial covenants contained in Section 10 hereof both before
and after giving effect to such Permitted Acquisition; and (xi) the
Borrower has delivered to the Agent a certificate of the chief
financial officer of the Borrower to the effect that (A) the Borrower
and its Subsidiaries, on a consolidated and consolidating basis, will
be solvent upon the consummation of the Permitted Acquisition; (B) the
pro forma Compliance Certificate fairly presents the financial
condition of the Borrower and its Subsidiaries as of the date thereof
and after giving effect to such Permitted Acquisition; and (C) no
Default or Event of Default then exists or would result after giving
effect to the Permitted Acquisition. For purposes of this Section
9.5.1, the Purchase Price shall be defined as the aggregate amount of
consideration paid by the Borrower to the seller on the closing date of
any Permitted Acquisition (including, without limitation, the aggregate
amount of all potential earn-out payments and the aggregate amount of
Indebtedness incurred or assumed in connection therewith regardless of
the maturity date thereof). In addition, when valuing the capital stock
component of the Purchase Price, the value of the Borrower's capital
stock shall be valued in the manner consistent with the purchase
agreement pertaining to the Permitted Acquisition, and, to the extent
no such purchase agreement exists, or a valuation method is not
detailed therein, then the value shall equal the average of the fair
market value of the Borrower's capital stock for the ten (10) Business
Days immediately preceding the date on which such Permitted Acquisition
is consummated.
In the event any new Domestic Subsidiary is formed or acquired as a
result of or in connection with any acquisition, the Loan Documents shall be
amended and/or supplemented as necessary to make the terms and conditions of the
Loan Documents applicable to such Domestic Subsidiary. Such Domestic Subsidiary
shall, immediately upon its formation, creation or acquisition, become a
Guarantor hereunder and shall execute and deliver to the Agent a Guaranty.
9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the sale of inventory,
the licensing of intellectual property and the disposition of obsolete
assets, in each case in the ordinary course of business consistent with
past practices and (b) the disposition or other transfer of assets from
the Borrower to any wholly-owned Domestic Subsidiary (which such
Domestic Subsidiary complying with the conditions set forth in
Section 8.14 hereof).
9.6. SALE AND LEASEBACK. Except as permitted by Section 9.5.1, the
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby the Borrower or any Subsidiary
of the Borrower shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that the Borrower or
any Subsidiary of the Borrower intends to use for substantially the same purpose
as the property being sold or transferred.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (b) cause or permit to be located on any of the Real
Estate
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any underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real Estate in any manner so
as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into the Real
Estate or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate in any manner that would violate any Environmental Law or bring such Real
Estate in violation of any Environmental Law.
9.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could result
in a material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to
Section 302(f) or Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to Section 307 of ERISA or
Section 401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess
of benefit liabilities.
9.9. BUSINESS ACTIVITIES. The Borrower will not, and will not permit
any of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
9.10. FISCAL YEAR. The Borrower will not, and will not permit any of it
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in Section 7.4.1.
9.11. TRANSACTIONS WITH AFFILIATES. Except in respect of the agreements
between the Borrower and Cabot Corporation described in section 9.4(c) hereof,
the Borrower will not, and will not permit any of its Subsidiaries to, engage in
any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm's-length basis in the
ordinary course of business.
9.12. UPSTREAM LIMITATIONS. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement, contract or arrangement
(other than the Credit Agreement and the other
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Loan Documents) restricting the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind to the Borrower, to make loans,
advances or other payments of whatsoever nature to the Borrower, or to make
transfer or distributions of all or any part of its assets to the Borrower.
9.13. INCONSISTENT AGREEMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement containing any
provision which would be violated or breached by the performance by the Borrower
or any of its Subsidiaries of their respective obligations hereunder or under
any of the Loan Documents.
9.14. MODIFICATION OF DOCUMENTS. The Borrower will not, nor will it
permit any of its Subsidiaries to, consent to or agree to any amendment,
supplement or other modification to the Capitalization Documents or the LaSalle
Loan Documents without the prior written consent of the Agent unless such
amendment, supplement or modification would not have any material adverse effect
on the Agent's or the Bank's rights under the Loan Documents or the Borrower's
or any of its Subsidiaries' obligations under the Loan Documents.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
10.1. LEVERAGE RATIO. The Borrower will not at any time permit the
Leverage Ratio to exceed 2.25:1.00.
10.2. QUARTERLY NET INCOME. The Borrower will not permit Consolidated
Net Income (or Deficit) (a) for any single fiscal quarter to be greater than
($7,500,000) and (b) for any two (2) consecutive fiscal quarters to be greater
than ($10,000,000).
10.3. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit the
Debt Service Coverage Ratio as at the end of any fiscal quarter for the
Reference Period ending on such date to be less than 3.00:1.00.
10.4. QUICK RATIO. The Borrower will not permit the Quick Ratio to be
less than 1.25:1.00 at any time.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Loans and of the Agent
to issue any initial Letters of Credit shall be subject to the satisfaction of
the following conditions precedent on or prior to the Closing Date:
11.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower and each Guarantor a copy, certified by a duly
authorized officer of such Person to be true and
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complete on the Closing Date, of each of (a) its charter or other incorporation
documents as in effect on such date of certification, and (b) its by-laws as in
effect on such date.
11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of the Guarantors
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from the Borrower and each Guarantor an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of the Borrower or such
Guarantor, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrower of such Guarantor, each of the Loan Documents to which the
Borrower or such Guarantor is or is to become a party; (b) in the case of the
Borrower, to make Loan Requests and Conversion Requests and to apply for Letters
of Credit; and (c) to give notices and to take other action on its behalf under
the Loan Documents.
11.5. UCC SEARCH RESULTS. The Agent shall have received from each of
the Borrower and its Subsidiaries the results of UCC searches, indicating no
liens other than Permitted Liens and otherwise in form and substance
satisfactory to the Agent.
11.6. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms.
11.7. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Banks.
11.8. AUDITED FINANCIALS. The Agent shall have received from the
Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries
for the fiscal year ended September 30, 1999, and the related consolidated
statement of income and statement of cash flow for such year, such financials to
be in reasonable detail, prepared in accordance with generally accepted
accounting principles and certified without qualification by
PricewaterhouseCoopers LLP.
11.9. COMPLETION OF IPO. The IPO shall have been completed on terms and
conditions satisfactory to the Agent.
11.10. PRO FORMA BALANCE SHEET. The Agent shall have received from the
Borrower, a pro forma balance sheet demonstrating that on the Closing Date, on a
pro forma basis after giving effect to the IPO, and after giving effect to the
borrowings hereunder, Indebtedness of the Borrower is less than $22,000,000.
11.11. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from counsel to the Borrower and its Subsidiaries.
11.12. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the closing fees pursuant to Section 5.1
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12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, including the initial
Loan, and of the Agent to issue, extend or renew any Letter of Credit, in each
case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Loans,
the Commitment Fee, any Letter of Credit Fee, the Agent's fee, or other
sums due hereunder or under any of the other Loan Documents, within
three (3) days of when the same shall become due and payable, whether
at the stated date of maturity or any accelerated date of maturity or
at any other date fixed for payment;
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(c) the Borrower shall fail to comply with any of its
covenants contained in Section 8.1, 8.3, 8.4, 8.5.1, 8.6, 8.9, 8.12,
8.13, 8.14, 8.15, 9 and 10;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
Section 13.1) for fifteen (15) days after written notice of such
failure has been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases in an amount in excess of $5,000,000, or fail to observe or
perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money
or credit received or in respect of any Capitalized Leases in an amount
in excess of $5,000,000, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof, or any such holder or holders shall rescind or
shall have a right to rescind the purchase of any such obligations;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary of the Borrower in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against the Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$5,000,000;
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(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of its
Subsidiaries party thereto or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency
of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $5,000,000, or the Borrower or any
ERISA Affiliate is assessed withdrawal liability pursuant to Title IV
of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $5,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
Section 302(f)(1) of ERISA), provided that the Agent determines in its
reasonable discretion that such event (A) could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding
$5,000,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan or for the imposition of a lien in favor
of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (iii) the institution by the PBGC of proceedings to
terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(m) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of the
Borrower or any of its Subsidiaries if such event or circumstance is
not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of the
Borrower or such Subsidiary;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower
or such Subsidiary;
(o) the Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought or threatened against the Borrower or any
of its Subsidiaries, a punishment for which in any such case could
include the
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forfeiture of any assets of the Borrower or such Subsidiary having a
fair market value in excess of $5,000,000; or
(p) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
other than Cabot Corporation shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 20% or more of the outstanding
shares of common stock of the Borrower; or, during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in Section 13.1(g) or 13.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Loans to the Borrower and
the Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. If any other Event of Default shall have occurred and be
continuing, or if on any Drawdown Date or other date for issuing, extending or
renewing any Letter of Credit the conditions precedent to the making of the
Loans to be made on such Drawdown Date or (as the case may be) to issuing,
extending or renewing such Letter of Credit on such other date are not
satisfied, the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 13.1, each Bank, if
owed any amount with respect to the Loans or the Reimbursement Obligations, may,
with the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
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13.4. DISTRIBUTION OF PROCEEDS. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of its rights hereunder or under any of the other Loan
Documents, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in support of any provision of adequate indemnity to the Agent against
any taxes or liens which by law shall have, or may have, priority over
the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
(i) distributions shall be made with respect to each type of Obligation
owing to the Banks, such as interest, principal, fees and expenses,
among the Banks pro rata, and (ii) the Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to Section 9-504(1)(c) of the Uniform Commercial
Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
14. SETOFF.
During the continuance of any Event of Default, any deposits or other
sums credited by or due from any of the Banks to the Borrower and any securities
or other property of the Borrower in the possession of such Bank may be applied
to or set off by such Bank against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of the Borrower to such Bank. Each of
the Banks agrees with each other Bank that (a) if an amount to be set off is to
be applied to Indebtedness of the Borrower to such Bank, other than Indebtedness
evidenced by the Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank or constituting Reimbursement Obligations owed to such Bank, and (b)
if such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Notes held by, or constituting Reimbursement Obligations
owed to, such Bank by proceedings against the Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by, or Reimbursement Obligations owed to, such Bank any
amount in excess of its ratable portion of the payments received by all of the
Banks with respect to the Notes held by, and Reimbursement Obligations owed to,
all of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the
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Notes held by it or Reimbursement obligations owed it, its proportionate payment
as contemplated by this Credit Agreement; provided that if all or any part of
such excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
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15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or
for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower or
any of its Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect
any of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or
any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in Section 11,
each Bank that has executed this Credit Agreement shall be deemed to
have consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent to
such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Bank, unless an officer of the Agent active
upon the Borrower's account shall have received notice from such Bank
prior to the Closing Date specifying such Bank's objection thereto and
such objection shall not have been withdrawn by notice to the Agent to
such effect on or prior to the Closing Date.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a
court of competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is
to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.
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15.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of Section 14 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of,
their respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.
15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by Section 16), and liabilities of
every nature and character arising out of or related to this Credit Agreement,
the Notes, or any of the other Loan Documents or the transactions contemplated
or evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, Fleet shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any
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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, the provisions of this Credit Agreement and the other Loan
Documents 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.
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
15.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
16. EXPENSES AND INDEMNIFICATION.
16.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all title insurance premiums
and surveyor, engineering and appraisal charges, (e) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank or the Agent in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the
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Agent's relationship with the Borrower or any of its Subsidiaries and (f) all
reasonable fees, expenses and disbursements of any Bank or the Agent incurred in
connection with UCC searches.
16.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Loans or Letters of Credit, (b) the Borrower or any of
its Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (c) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding, except to the extent that any of
the foregoing are directly caused by the gross negligence or willful misconduct
of the otherwise indemnified party. In litigation, or the preparation therefor,
in the event in the opinion of counsel to the Banks and the Agent the interests
of the Borrower, on the one hand and the interests of the Banks and the Agent,
on the other hand are not sufficiently the same or a conflict exists or could
arise as a result of the Borrower, the Agent and the Banks using one counsel,
the Banks and the Agent and its affiliates shall be entitled to select their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel, provided, the
Borrower shall only be required to pay the reasonable fees and expenses of one
such counsel so selected by the Agent, unless the Agent or any Bank reasonably
believes a conflict exists or could arise as a result of the Agent and/or the
Banks using one counsel, in which case each of the Banks making such a
determination and the Agent shall be entitled to select their own counsel, and
in addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 16.2 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law.
16.3. SURVIVAL. The covenants contained in this Section 16 shall
survive payment or satisfaction in full of all other Obligations.
17. USURY.
All agreements between the Borrower and the Agent and the Banks are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of the maturity of the Notes or otherwise, shall the
amount paid or agreed to be paid to the Agent or any Bank for the use or the
forbearance of the Indebtedness represented by any Note exceed the maximum
permissible under applicable law. In this regard, it is expressly agreed that it
is the intent of the Borrower, the Agent and the Banks, in the execution,
delivery and acceptance of the Notes, to contract in strict compliance with the
laws of the Commonwealth of Massachusetts. If, under any circumstances
whatsoever, performance or fulfillment of any provision of any of the Notes or
any of the other Loan Documents at the time such provision is to be performed or
fulfilled shall involve exceeding the limit of validity prescribed by applicable
law, then the obligation so to be performed or fulfilled shall be reduced
automatically to the
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limits of such validity, and if under any circumstances whatsoever the Agent or
any Banks should ever receive as interest an amount which would exceed the
highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced by the Notes and not
to the payment of interest. The provisions of this Section 27 shall control
every other provision of this Credit Agreement and each of the Notes.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (a) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (c) each assignment shall be in an amount that is a whole multiple of
$5,000,000 and (d) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of Exhibit D hereto (an "Assignment
and Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in Section 19.3,
be released from its obligations under this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning
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Bank makes no representation or warranty, express or implied, and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Section 7.4 and Section 8.4 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on 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 this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to and Letter of Credit
Participations purchased by, the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit
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Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.
19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this Section 19.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation. For purposes of this Section 19.6
an assignee or participant or potential assignee or participant may include a
counterparty with whom such Bank has entered into or potentially might enter
into a derivative contract referenced to credit or other risks or events arising
under this Credit Agreement or any other Loan Document.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making
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requests to the Agent pursuant to Section 13.1 or Section 13.2, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans or Reimbursement Obligations. If any Bank
sells a participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to Section 13.1 or Section 13.2 to the extent that such participation
is beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrower and with
the consent of the Borrower and the Majority Banks, appoint another Bank to act
as a Reference Bank hereunder. Anything contained in this Section 19 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341, provided that any
foreclosure or similar action by such trustee or other representative shall be
subject to the other provisions of this Section 19. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Financial Officer, or at such
other address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Director or
such other address for notice as the Agent shall last have furnished in
writing to the Person giving the notice; and
66
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(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 26.
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25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of such rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or any
of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Notes (other than interest accruing
pursuant to Section 5.10 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto) or the
amount of the Commitment Fee or Letter of Credit Fees may not be decreased
without the written consent of each Bank affected thereby; the amount of the
Commitments may not be increased without the written consent of the Borrower and
of each Bank affected thereby; the Maturity Date may not be postponed without
the written consent of each Bank affected thereby; this Section 26 and the
definition of Majority Banks may not be amended, without the written consent of
all of the Banks; and the amount of the Letter of Credit Fees payable for the
Agent's account and Section 15 may not be amended without the written consent of
the Agent. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrower shall entitle the Borrower to other or further notice
or demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
68
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
CABOT MICROELECTRONICS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CFO, Treasurer and Secretary
FLEET NATIONAL BANK, individually and as
Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Director
69
SCHEDULE 1
Banks and Commitments
--------------------------------------------------------------------------------
COMMITMENT
BANK COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FLEET NATIONAL BANK $25,000,000 100%
Domestic and Eurodollar Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
TOTAL: $25,000,000 100%
--------------------------------------------------------------------------------
70
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Schedule 7.3
UCC SEARCH SUMMARY
FLEET NATIONAL BANK/CABOT MICROELECTRONICS
1000/104351
DEBTOR: CABOT CORPORATION
Secured Party Jurisdiction File Number Date Filed Collateral Comments
------------- ------------ ----------- ---------- ---------- --------
----------------------------------------------------------------------------------------------------------------------------------
GTE Leasing Corporation SOS, IL 3057196 12/1/92 Equipment Lease UCCs searched through 2/29/00
3764377 11/18/97 Continue
United Financial of Illinois, Inc.; 3209576 1/11/94 Equipment Lease
assigned to Drexel National Bank
3969673 1/8/99 Continue
Citicorp Leasing, Inc. 3464437 10/31/95 Equipment Lease
Citicorp Leasing, Inc. 3473996 11/29/93 Equipment Lease
▇▇▇▇▇▇▇ Telecom Funding Corporation 3499392 1/30/96 Equipment Lease
Vanguard Financial Service Corp. 3590566 9/23/96 Equipment Lease
IBM Credit Corporation (Lessor) 3674604 4/8/97 Equipment Lease
Vanguard Financial Service Corp. 3697633 6/4/97 Equipment Lease
Vanguard Financial Service Corp. 3731102 8/22/97 Equipment Lease
----------------------------------------------------------------------------------------------------------------------------------
71
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----------------------------------------------------------------------------------------------------------------------------------
IBM Credit Corporation (Lessor) 3794513 1/29/98 Equipment Lease
NTFC Capital Corporation 4050736 6/14/99 Equipment Lease
Fleet Leasing Corporation 4072755 7/30/99 Equipment Lease
Illinois Material Handling; assigned 4113081 10/25/99 Equipment Lease
to Illinois Material Handling
Lessor, Caterpillar Financial ▇▇▇, ▇▇ ▇▇▇▇▇▇ 5/13/97 Equipment Lease UCCs searched through 3/13/00
Services Corporation
500029 9/29/97 Amend collateral description
StorageTek Distributed Systems 306156 4/18/95 Equipment Lease
Division, Inc.
345995 10/23/95 Amend collateral description
General Electric Capital Corp. 689158 1/18/00 Equipment Lease
▇▇▇▇▇▇▇▇ Machinery Company; assigned 284450 1/5/95 Equipment Lease
to Toyota Motor Credit Corporation
Citicorp Leasing, Inc. 292417 2/13/95 Equipment Lease
Citicorp Leasing, Inc. 347929 10/30/95 Equipment Lease
Citicorp Leasing, Inc. 352632 11/21/95 Equipment Lease
Caterpillar Financial Services 435930 12/16/96 Equipment Lease
Corporation
El Camino Resources, Ltd. 438549 12/26/96 Equipment Lease
----------------------------------------------------------------------------------------------------------------------------------
72
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----------------------------------------------------------------------------------------------------------------------------------
Lessor: NTEC Capital Corporation 441356 1/9/97 Equipment Lease
Sanwa Leasing Corporation 466157 5/5/97 Equipment Lease
Citicorp Leasing Inc. 478777 6/25/97 Equipment Lease
Citicorp Del Lease, Inc. 575444 9/3/98 Equipment Lease
Saleco Credit Co., Inc. 633844 5/24/99 Equipment Lease
Newcourt Financial USA, Inc. 636776 6/4/99 Equipment Lease
Lessor: General Electric Capital 652360 8/9/99 Equipment Lease
Corp.
General Electric Capital Corp. 680122 12/9/99 Equipment Lease
Citicorp Del Lease, Inc. 684850 12/29/99 Equipment Lease
Lessor: NTFC Capital Corporation 052265 10/10/91 Equipment Lease
415639 9/10/96 Amend collateral
▇▇▇▇▇▇▇▇ Machinery Company; assigned ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ 1/5/95 Equipment Lease UCCs searched through 3/10/00
to Toyota Motor Credit Corporation (EXPIRED)
Citicorp Leasing, Inc. 380565 2/21/95 Equipment Lease
(EXPIRED)
Citicorp Leasing, Inc. 386095 10/30/95 Equipment Lease
Citicorp Leasing, Inc. 3866629 11/22/95 Equipment Lease
El Camino Resources, Ltd. 395799 12/26/96 Equipment Lease
----------------------------------------------------------------------------------------------------------------------------------
73
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----------------------------------------------------------------------------------------------------------------------------------
Lessor: NTFC Capital Corporation 396136 1/9/97 Equipment Lease
Citicorp Del Lease, Inc. 410714 9/9/98 Equipment Lease
Safeco Credit Co. Inc. 416994 5/24/99 Equipment Lease
Newcourt Financial USA Inc. 417301 6/7/99 Equipment Lease
General Electric Capital Corporation 421825 12/9/99 Equipment Lease
Citicorp Del Lease, Inc. 422354 12/29/99 Equipment Lease
General Electric Capital Corp. 422770 1/18/00 Equipment Lease
----------------------------------------------------------------------------------------------------------------------------------
DEBTOR: CABOT MICROELECTRONICS
Secured Party Jurisdiction File Number Date Filed Collateral Comments
------------- ------------ ----------- ---------- ---------- --------
----------------------------------------------------------------------------------------------------------------------------------
SOS, IL UCCs clear through 2/21/00
SOS, MA UCCs clear through 3/13/00
Boston, MA UCCs clear through 3/10/00
----------------------------------------------------------------------------------------------------------------------------------
74
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Schedule 7.7
LEGAL PROCEEDINGS
In June 1998, one of our major competitors, Rodel Inc., filed a lawsuit
against Cabot in the United States District Court for the District of Delaware
entitled Rodel, Inc. ▇. ▇▇▇▇▇ Corporation (Civil Action No. 98-352). In this
lawsuit, Rodel has requested a jury trial and is seeking a permanent injunction
and an award of compensatory, punitive, and other damages relating to
allegations that Cabot is infringing United States Patent No. 4,959,113
(entitled "Method and Composition for Polishing Metal Surfaces"), which is owned
by an affiliate of Rodel. We refer to this patent as the ▇▇▇▇▇▇▇ patent and this
lawsuit as the ▇▇▇▇▇▇▇ lawsuit. Cabot filed an answer and counterclaim seeking
dismissal of the ▇▇▇▇▇▇▇ lawsuit with prejudice, a judgment that Cabot is not
infringing the ▇▇▇▇▇▇▇ patent and/or that the ▇▇▇▇▇▇▇ patent is invalid, and
other relief. Cabot subsequently filed a motion for a summary judgment that the
Rodel patent is invalid because all of the claims contained in the patent were
not sufficiently different under applicable patent law from subject matter
contained in previously granted patents, specifically United States Patents Nos.
4,705,566, 4,956,015 and 4,929,257, each of which is owned by a third party not
affiliated with Rodel or us. This motion was denied on September 30, 1999 based
on the court's finding that there were genuine issues of material fact to be
determined at trial. Although the ▇▇▇▇▇▇▇ lawsuit is presently in the discovery
stage and trial is scheduled to begin in November 2000, the trial date has not
yet been scheduled. After the ruling on the summary judgment motion, Rodel filed
a request for reexamination of the ▇▇▇▇▇▇▇ patent with the United States Patent
and Trademark Office, which was granted on November 12, 1999.
In April 1999, Rodel commenced a second lawsuit against Cabot in the United
States District Court for the District of Delaware entitled Rodel, Inc. ▇. ▇▇▇▇▇
Corporation (Civil Action No. 99-256). In this lawsuit, Rodel has requested a
jury trial and is seeking a permanent injunction and an award of compensatory,
punitive, and other damages relating to allegations that Cabot is infringing two
other patents owned by an affiliate of Rodel. These two patents are United
States Patent No. 5,391,258 (entitled "Compositions and Methods for Polishing")
and United States Patent No. 5,476,606 (entitled "Compositions and Methods for
Polishing"). We refer to these patents as the Brancaleoni patents and this
lawsuit as the Brancaleoni lawsuit. Cabot has filed an answer and counterclaim
to the complaint seeking dismissal of the complaint with prejudice, a judgment
that Cabot is not infringing the Brancaleoni patents and/or that the Brancaleoni
patents are invalid, and other relief. The Brancaleoni lawsuit is presently in
the discovery stage which is currently to be completed by February 25, 2000.
Trial is presently currently scheduled to commence on December 4, 2000.
The parties have jointly requested that the court extend these dates.
In the ▇▇▇▇▇▇▇ lawsuit, the only product that Rodel to date has alleged
infringes the ▇▇▇▇▇▇▇ patent is our W2000 slurry, which is used to polish
tungsten and which currently accounts for a significant portion of our total
revenue. In the Brancaleoni lawsuit, Rodel has not alleged that any specific
product infringes the Brancaleoni patents; instead, Rodel alleges that our
United States Patent No. 5,858,813 (entitled "Chemical Mechanical Polishing
Slurry for Metal Layers and Films" and which relates to a CMP polishing slurry
for metal surfaces including, among other things, aluminum and copper) is
evidence that Cabot is infringing the Brancaleoni patents through the
manufacture and sales of unspecified products. At this stage, we cannot predict
whether or to what extent Rodel will make specific infringement claims with
respect to any of our products other than W2000 in these or any future
proceedings. It is possible that Rodel will claim that many of our products
infringe its patents.
Although Cabot is the only named defendant in these lawsuits, we will agree
to indemnify Cabot for any and all losses and expenses arising out of this
litigation as well as any other litigation arising out of our business. While we
believe there are meritorious defenses to the pending actions and intend to
defend them vigorously, these defenses may not be successful. If Rodel wins
either of these cases, we may have to pay damages and, in the future, may be
prohibited from producing any products found to infringe or required to pay
Rodel royalty and licensing fees with respect to sales of those products. In
addition, we may be subject to future infringement claims by Rodel or others
with respect to our products and processes. Such claims, even if they are
without merit, could be expensive and time consuming to defend and if we were to
lose any future infringement claims we could be subject to injunctions, damages
and/or royalty or licensing agreements. Royalty or licensing agreements, if
required as a result of any pending or future claims, may not be available to
use on acceptable terms or at all. Successful claims or infringements against us
could adversely affect our business, financial condition and results of
operations.
75
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Schedule 7.17
None
76
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Schedule 7.18
None
77
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Schedule 9.1
None
78
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Schedule 9.2
Same as Schedule 7.3
79
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Schedule 9.3
None