EXECUTION COPY
REVOLVING CREDIT AGREEMENT
dated as of April 26, 2002
between
MAPICS, INC.
as Borrower
and
SUNTRUST BANK
as Lender
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS; CONSTRUCTION.....................................
Section 1.1. Definitions...............................................
Section 1.2. Accounting Terms and Determination........................
Section 1.3. Terms Generally...........................................
ARTICLE II. THE REVOLVING COMMITMENT......................................
Section 2.1. Revolving Loans and Revolving Credit Note.................
Section 2.2. Procedure for Revolving Loans.............................
Section 2.3. Interest Elections........................................
Section 2.4. Optional Reduction and Termination of Commitment..........
Section 2.5. Mandatory Termination of Revolving Commitment; Extension
of Commitment Termination Date............................
Section 2.6. Optional Prepayments......................................
Section 2.7. Interest on Loans.........................................
Section 2.8. Fees......................................................
Section 2.9. Computation of Interest and Fees..........................
Section 2.10. Inability to Determine Interest Rates.....................
Section 2.11. Illegality................................................
Section 2.12. Increased Costs...........................................
Section 2.13. Funding Indemnity.........................................
Section 2.14. Payments Generally........................................
Section 2.15. Letters of Credit.........................................
ARTICLE III. CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT...........
Section 3.1. Conditions to Effectiveness...............................
Section 3.2. Each Credit Event.........................................
ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................
Section 4.1. Existence; Power..........................................
Section 4.2. Organizational Power; Authorization.......................
Section 4.3. Governmental Approvals; No Conflicts......................
Section 4.4. Financial Statements; Projections.........................
Section 4.5. Litigation and Environmental Matters......................
Section 4.6. Compliance with Laws and Agreements.......................
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Section 4.7. Investment Company Act, Etc................................
Section 4.8. Taxes......................................................
Section 4.9. Margin Regulations.........................................
Section 4.10. ERISA......................................................
Section 4.11. Ownership of Property......................................
Section 4.12. Absence of Financing Statements, Etc.......................
Section 4.13. Bank Accounts..............................................
Section 4.14. Disclosure.................................................
Section 4.15. Subsidiaries...............................................
ARTICLE V. AFFIRMATIVE COVENANTS..........................................
Section 5.1. Financial Statements and Other Information.................
Section 5.2. Notices of Material Events.................................
Section 5.3. Existence; Conduct of Business.............................
Section 5.4. Compliance with Laws, Etc..................................
Section 5.5. Use of Proceeds............................................
Section 5.6. Payment of Obligations.....................................
Section 5.7. Books and Records..........................................
Section 5.8. Visitation, Inspections, Etc...............................
Section 5.9. Maintenance of Properties, Insurance.......................
Section 5.10. Cash Management............................................
Section 5.11. Further Assurances.........................................
Section 5.12. Additional Subsidiaries....................................
ARTICLE VI. FINANCIAL COVENANTS............................................
Section 6.1. Minimum Quarterly Adjusted EBITDA..........................
Section 6.2. Minimum Net Cash...........................................
Section 6.3. Minimum Operating Cash Flow to Interest Ratio..............
ARTICLE VII. NEGATIVE COVENANTS.............................................
Section 7.1. Indebtedness...............................................
Section 7.2. Negative Pledge............................................
Section 7.3. Fundamental Changes........................................
Section 7.4. Investments, Loans, Etc....................................
Section 7.5. Restricted Payments........................................
Section 7.6. Sales of Assets............................................
Section 7.7. Transactions with Affiliates...............................
Section 7.8. Restrictive Agreements.....................................
Section 7.9. Sales and Leaseback Transactions...........................
Section 7.10. Amendment to Material Documents............................
Section 7.11. Accounting Changes.........................................
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ARTICLE VIII. EVENTS OF DEFAULT............................................
Section 8.1. Events of Default.........................................
ARTICLE IX. MISCELLANEOUS................................................
Section 9.1. Notices...................................................
Section 9.2. Waiver; Amendments........................................
Section 9.3. Expenses; Indemnification.................................
Section 9.4. Successors and Assigns....................................
Section 9.5. Governing Law; Jurisdiction; Consent to Service of
Process...................................................
Section 9.6. Waiver of Jury Trial......................................
Section 9.7. Counterparts; Integration.................................
Section 9.8. Survival..................................................
Section 9.9. Severability..............................................
Section 9.10. Confidentiality...........................................
Schedules
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Schedule 4.5 Litigation and Environmental Matters
Schedule 4.15 Subsidiaries
Schedule 7.1 Outstanding Indebtedness
Schedule 7.2 Outstanding Liens
Exhibits
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Exhibit A - Revolving Credit Note
Exhibit B - Notice of Revolving Borrowing
Exhibit C - Form of Continuation/Conversion
Exhibit D - Form of Officer's Certificate
Exhibit E - Form of Compliance Certificate
Exhibit F - Form of Subsidiary Guarantee Agreement
Exhibit G - Form of Indemnity, Contribution & Subrogation Agreement
Exhibit H - Form of Security Agreement
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REVOLVING CREDIT AGREEMENT
--------------------------
THIS REVOLVING CREDIT AGREEMENT is made and entered into as of April
26, 2002 between MAPICS, INC. and SUNTRUST BANK.
W I T N E S S E T H:
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WHEREAS, the Borrower has requested that the Lender establish a
$10,000,000 revolving credit facility to the Borrower;
WHEREAS, subject to the terms and conditions of this Agreement, the
Lender is willing to establish the requested revolving credit facility to the
Borrower.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Borrower and the Lender agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
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Section 1.1. Definitions. In addition to the other terms defined
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herein, the following terms used herein shall have the meanings herein specified
(to be equally applicable to both the singular and plural forms of the terms
defined):
"Adjusted EBITDA" shall mean with respect to any fiscal period, an
amount equal to the sum of (a) Consolidated Net Income (Loss) of the Borrower
and its Subsidiaries for such fiscal period, plus (b) in each case to the extent
deducted in the calculation of such Consolidated Net Income (Loss) and without
duplication (i) amortization and depreciation for such period, plus (ii) income
tax expense for such period, plus (iii) Consolidated Total Interest Expense paid
or accrued during such period, plus (iv) noncash losses and expenses (or minus
noncash gains) on any Asset Sale outside the ordinary course of business for
such period, plus (v) the noncash effect of accounting changes for such period,
plus (vi) noncash losses and expenses (or minus noncash gains) arising from any
non-cash one time write-up or write-down in the book value of any assets for
such period, but only to the extent such a write-up or write-down in the book
value of such asset would otherwise have been treated as amortization and/or
depreciation of such asset on the profit and loss statement of the Borrower, all
as determined in accordance with GAAP, minus (c) the portion of the costs of
software development required to be capitalized pursuant to FASB statement No.
86 for such period, plus (d) non-recurring, noncash charges and one-time
administrative expenses.
"Adjusted LIBO Rate" shall mean, with respect to each Interest Period
for a Eurodollar Loan, the rate per annum obtained by dividing (i) LIBOR for
such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar
Reserve Percentage.
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"Affiliate" shall mean, as to any Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by, or is under common Control with, such Person.
"Agreement" shall mean this Revolving Credit Agreement, as hereafter
amended, supplemented or otherwise modified.
"Asset Sale" shall mean any one or series of related transactions on
which any Person conveys, sells, transfers or otherwise disposes of, directly or
indirectly, any of its properties, businesses or assets (including the sale or
issuance of capital stock of any Subsidiary other than to the Borrower or any
Subsidiary) whether owned on the Closing Date or thereafter acquired.
"Availability Period" shall mean the period from the Closing Date to
the Commitment Termination Date.
"Base Rate" shall mean the higher of (i) the Prime Rate, as in effect
from time to time, and (ii) the Federal Funds Rate, as in effect from time to
time, plus one-half of one percent (0.50%).
"Base Rate Loan" shall mean a Revolving Loan bearing interest at a
rate based on the Base Rate.
"Borrower" shall mean MAPICS, Inc., a Georgia corporation having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Business Day" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia are authorized or
required by law to close and (ii) if such day relates to a borrowing of, a
payment or prepayment of principal or interest on, a conversion of or into, or
an Interest Period for, a Eurodollar Loan or a notice with respect to any of the
foregoing, any day on which dealings in Dollars are carried on in the London
interbank market.
"Capital Assets" shall mean fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible (such as patents,
copyrights, trademarks, franchises and goodwill but excluding capitalized
software); 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 GAAP.
"Capital Expenditures" shall mean amounts paid or Indebtedness
incurred by the Borrower or any of its Subsidiaries in connection with (a) the
purchase or leases 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 GAAP or (b) the lease of any assets by the Borrower or
any of its Subsidiaries as lessee under any "synthetic" lease referred to in
clause (iii) of the definition of "Off-Balance Sheet Liabilities" to the extent
that such assets would have been Capital Assets had such "synthetic" lease been
treated for accounting purposes as a Capitalized Lease.
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"Capitalized Leases" shall mean 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 GAAP.
"Change in Control" shall mean the occurrence of one or more of the
following events: (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the date hereof) of 35% or more of the
outstanding shares of the voting stock of the Borrower; or (b) the first day on
which a majority of the board of directors of the Borrower are not Continuing
Directors.
"Change in Law" shall mean (i) the adoption of any applicable law,
rule or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by the Lender (or for purposes of Section
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2.12(b), by the Lender's holding company, if applicable) with any request,
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guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" shall mean the date on which the conditions precedent
set forth in Section 3.1 and Section 3.2 have been satisfied or waived in
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accordance with Section 9.2.
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"Collateral" shall mean all of the property, rights and interests of
the Borrower and its Subsidiaries that are or are intended to be subject to the
Liens created pursuant to the Security Agreement.
"Commitment Termination Date" shall mean the earliest of (i) the
Scheduled Termination Date, (ii) the date on which the Revolving Commitment is
terminated pursuant to Section 2.4, and (iii) the date on which all amounts
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outstanding under this Agreement have been declared or have automatically become
due and payable (whether by acceleration or otherwise) in accordance with the
terms hereof.
"Consolidated" or "consolidated" shall mean, with reference to any
term defined herein, that term as applied to the accounts of the Borrower and
its Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Net Income (Loss)" shall mean the consolidated net
income (or loss) of the Borrower and its Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP,
after eliminating therefrom all extraordinary items of income and all
extraordinary noncash items of loss.
"Consolidated Operating Cash Flow" shall mean for any period, an
amount equal to (a) Adjusted EBITDA for such period, less (b) the sum of (i)
cash payments for all income taxes paid
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during such period (net of cash payments received during such period in respect
of income tax refunds), plus (ii) Capital Expenditures made during such period.
"Consolidated Total Assets" shall mean all assets of the Borrower and
its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Interest Expense" shall mean, for any period and
without duplicaton, 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 included in the
definition of "Off-Balance Sheet Liabilities" referred to in clause (k) of the
definition of Indebtedness, and including commitment fees, agency fees, facility
fees, balance deficiency fees and similar fees or expenses in connection with
the borrowing of money.
"Continuing Directors" shall mean the members of the board of
directors of the relevant entity as of Closing Date (together with any new
director whose election by the Borrower's board of directors or whose nomination
for election by the Borrower's shareholders was approved by a vote of at least a
majority of the directors then still in office who either were directors as of
the Closing Date or whose election or nomination for election was previously so
approved).
"Control" shall mean the power, directly or indirectly, to direct or
cause the direction of the management and policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. The terms
"Controlling", "Controlled by", and "under common Control with" have meanings
correlative thereto.
"Default" shall mean any condition or event that, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"Default Interest" shall have the meaning set forth in Section 2.7(b).
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"Dollars" or "$" means the lawful currency of the United States of
America.
"Domestic Subsidiary" shall mean any Subsidiary that is not a Foreign
Subsidiary.
"Environmental Laws" shall mean all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the management, Release or threatened Release of any
Hazardous Material or to health and safety matters.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
investigation and remediation, costs of administrative oversight, fines, natural
resource damages, penalties or indemnities), of the Borrower
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or any Subsidiary directly or indirectly resulting from or based upon (a) any
actual or alleged violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d)
the Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated), which, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for the purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator appointed by the PBGC of any notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Eurodollar Loan" shall mean a Revolving Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
"Eurodollar Reserve Percentage" shall mean the aggregate of the
maximum reserve percentages (including, without limitation, any emergency,
supplemental, special or other marginal reserves) expressed as a decimal
(rounded upwards to the next 1/100th of 1%) in effect on any day to which the
Lender is subject with respect to the Adjusted LIBO Rate pursuant to regulations
issued by the Board of Governors of the Federal Reserve System (or any
Governmental Authority succeeding to any of its principal functions) with
respect to eurocurrency funding (currently referred to as "eurocurrency
liabilities" under Regulation D). Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to the Lender under
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Regulation D. The Eurodollar Reserve Percentage shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"Event of Default" shall have the meaning provided in Article VIII.
"Existing Credit Facility" shall mean the Revolving Credit and Term
Loan Agreement, dated as of January 12, 2000 among the Borrower, Fleet National
Bank (f/k/a BankBoston, N.A.) and the other lending institutions party thereto
and Fleet National Bank (f/k/a BankBoston, N.A.), as agent, as amended and in
effect from time to time.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100/th/ of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
member banks of the Federal Reserve System arranged by Federal funds brokers, as
published by the Federal Reserve Bank of New York on the next succeeding
Business Day or if such rate is not so published for any Business Day, the
Federal Funds Rate for such day shall be the average rounded upwards, if
necessary, to the next 1/100/th/ of 1% of the quotations for such day on such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by the Lender.
"Financing Statements" shall mean UCC-1 financing statements naming
the Lender as the "secured party": (a) to be filed in the office of the Clerk of
the Superior Court of any county of the State of Georgia naming the Borrower as
the "debtor", (b) to be filed in the office of the Clerk of the Superior Court
of any county of the State of Georgia naming MAPICS U, Inc. as the "debtor", (c)
to be filed in the office of the Secretary of State of the State of Delaware
naming Thru-Put Corporation as the "debtor", (d) to be filed in the office of
the Secretary of State of the State of California naming Minx Software,
Incorporated as the "debtor", and (e) to be filed in the office of the Secretary
of State of the State of Massachusetts naming Pivotpoint, Inc. as the "debtor".
"Foreign Subsidiary" shall mean 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 a
jurisdiction other than the United States of America or a state or other
subdivision of the United States of America.
"GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of Section
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1.2.
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"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner,
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whether directly or indirectly and including any obligation, direct or indirect,
of the guarantor (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued in support of such Indebtedness or obligation; provided, that the term
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"Guarantee" shall not include endorsements for collection or deposits in the
ordinary course of business. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which Guarantee is made or, if not so stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" shall mean, collectively, MAPICS U, Inc., a Georgia
corporation, Pivotpoint, Inc., a Massachusetts corporation, Minx Software,
Incorporated, a California corporation, and Thru-Put Corporation, a Delaware
corporation, and all other direct or indirect Domestic Subsidiaries (excluding
Non-Material Subsidiaries) of the Borrower now or at any time hereafter in
existence.
"Guaranty" shall mean that certain Subsidiary Guarantee Agreement
dated as of April 26, 2002 substantially in form of Exhibit F attached hereto,
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as amended, supplemented or otherwise modified.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values.
"Indebtedness" of any Person shall mean, without duplication (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business), (d) all obligations of such Person under any conditional sale or
other title retention agreement(s) relating to property acquired by such Person,
(e) all obligations of such Person under any Capitalized Lease, (f) all
obligations, contingent or otherwise, of such Person in respect of letters of
credit, bankers' acceptances or similar extensions of credit, (g) all Guarantees
of such Person of
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the type of Indebtedness described in clauses (a) through (f) and (j) hereof,
(h) all Indebtedness of a third party secured by any Lien on property owned by
such Person, whether or not such Indebtedness has been assumed by such Person,
(i) all obligations of such Person to purchase, redeem, retire or otherwise
acquire for cash any common stock of such Person, excluding, in the case of the
Borrower and any of its Subsidiaries, all such obligations due after the
Scheduled Termination Date, and (j) Off-Balance Sheet Liabilities. The
Indebtedness of any Person shall include the Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor. The Indebtedness of a Person shall not include
such Person's obligations in respect of deferred compensation arrangements with
officers and other employees of such Person.
"Indemnity and Contribution Agreement" shall mean the Indemnity,
Subrogation and Contribution Agreement dated as of April 26, 2002, substantially
in the form of Exhibit G attached hereto, among the Borrower, the Guarantors and
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the Lender, as hereafter amended, supplemented or otherwise modified.
"Interest Period" shall mean, with respect to any Eurodollar Loan, a
period of one, two or three months, as the Borrower may request; provided, that:
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(i) the initial Interest Period for any Eurodollar Loan shall
commence on the date of such Eurodollar Loan (including the date of any
conversion from a Base Rate Loan) and each Interest Period occurring
thereafter in respect of such Eurodollar Loan shall commence on the day on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise end on a day other than
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless such Business Day falls in another calendar
month, in which case such Interest Period would end on the next preceding
Business Day;
(iii) any Interest Period which begins on the last Business Day of a
calendar month or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period shall end on
the last Business Day of such calendar month; and
(iv) no Interest Period may extend beyond the Commitment Termination
Date.
"Investment" has the meaning given that term in Section 7.4.
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"LC Commitment" shall mean that portion of the Revolving Commitment
that may be used by the Borrower for the issuance of Letters of Credit in an
aggregate face amount not to exceed $3,000,000.
"LC Disbursement" shall mean a payment made by the Lender pursuant to
a Letter of Credit.
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"LC DOCUMENTS" shall mean the Letters of Credit and all applications,
agreements and instruments relating to the Letters of Credit.
"LC EXPOSURE" shall mean, at any time, the sum of (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Borrower at such time.
"LETTER OF CREDIT" shall mean any letter of credit issued pursuant to
Section 2.15 by the Lender for the account of the Borrower pursuant to the LC
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Commitment.
"LENDER" shall mean SunTrust Bank, a Georgia banking corporation, and
its successors and assigns.
"LIBOR" shall mean, for any applicable Interest Period with respect to
any Eurodollar Loan, the rate per annum quoted at or about 11:00 a.m. (London,
England time) two Business Days prior to the first day of the Interest Period on
that page of the Reuters, Telerate or Bloombergs reporting service (as then
being used by the Lender to obtain such interest rate quotes) that displays
British Banker's Association Interest Settlement Rates for deposits in Dollars
for a period equal to such Interest Period or if such page or such service shall
cease to be available, such other page or service (as the case may be) for the
purpose of displaying British Banker's Association Interest Settlement Rates as
reasonably determined by the Lender upon advising the Borrower as to the use of
any such other service; provided, that if the Lender determines that the
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relevant foregoing sources are unavailable for the relevant Interest Period,
LIBOR shall mean the rate of interest determined by the Lender to be the average
(rounded upward, if necessary, to the nearest 1/100th of 1%) of the rates per
annum at which deposits in the applicable currency are offered to the Lender two
(2) Business Days preceding the first day of such Interest Period by leading
banks in the London interbank market as of 10:00 a. m. for delivery on the first
day of such Interest Period, for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Loan of the Lender.
"LIEN" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other arrangement having the practical effect of the
foregoing or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease having
the same economic effect as any of the foregoing).
"LOAN DOCUMENTS" shall mean, collectively, this Agreement, the
Revolving Credit Note, the Security Agreement, the Guaranty, the Indemnity and
Contribution Agreement, the Financing Statements, the LC Documents and any and
all other instruments, agreements, documents and writings executed in connection
with any of the foregoing.
"LOAN PARTIES" shall mean the Borrower and the Guarantors.
-12-
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences whether or not related, a
material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, liabilities or prospects of
the Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Loan
Parties to perform any of their respective material obligations under the Loan
Documents, (iii) the rights and remedies of the Lender under any of the Loan
Documents or (iv) the legality, validity or enforceability of any of the Loan
Documents.
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"NET CASH" shall mean, as of any given date, (a) Total Cash and
Marketable Securities of the Borrower and its Subsidiaries outstanding on such
date, less (b) Total Funded Indebtedness of the Borrower and its Subsidiaries
outstanding on such date.
"NON-MATERIAL SUBSIDIARY" shall mean at any time any direct or
indirect Subsidiary of the Borrower (other than a Guarantor) having a net worth
of less than $500,000.
"NOTICE OF CONVERSION/CONTINUATION" shall mean the notice given by the
Borrower to the Lender in respect of the conversion or continuation of an
outstanding Loan as provided in Section 2.3(b) hereof.
----------- -
"NOTICE OF REVOLVING BORROWING" shall have the meaning as set forth in
Section 2.2.
-----------
"OBLIGATIONS" shall mean all amounts owing by the Borrower to the
Lender pursuant to or in connection with this Agreement or any other Loan
Document, including without limitation, all principal, interest (including any
interest accruing after the filing of any petition in bankruptcy or the
commencement of any insolvency, reorganization or like proceeding relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), all reimbursement obligations under Letters of
Credit, fees, expenses, indemnification and reimbursement payments, costs and
expenses (including all fees and expenses of counsel to the Lender incurred
pursuant to this Agreement or any other Loan Document), whether direct or
indirect, absolute or contingent, liquidated or unliquidated, now existing or
hereafter arising hereunder or thereunder, together with all renewals,
extensions, modifications or refinancings thereof.
"OFF-BALANCE SHEET LIABILITIES" of any Person shall mean (i) any
repurchase obligation or liability of such Person with respect to accounts or
notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions which do not create a liability on the
balance sheet of such Person, (iii) any liability of such Person under any so-
called "synthetic" lease transaction or (iv) any obligation arising with respect
to any other transaction which is the functional equivalent of or takes the
place of borrowing but which does not constitute a liability on the balance
sheet of such Person.
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"PARTICIPANT" shall have the meaning set forth in Section 9.4(c).
----------- -
"PAYMENT OFFICE" shall mean the office of the Lender located at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as to
which the Lender shall have given written notice to the Borrower.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, and any successor entity performing similar functions.
"PERMITTED ENCUMBRANCES" shall mean:
(i) Liens imposed by law for taxes not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law created
in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(iii) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(iv) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(v) judgment and attachment liens not giving rise to an Event of
Default or Liens created by or existing from any litigation or legal
proceeding that are currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained in accordance with GAAP; and
(vi) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or materially
interfere with the ordinary conduct of business of the Borrower and its
Subsidiaries taken as a whole;
provided, that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.
"PERMITTED INVESTMENTS" shall mean:
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(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States (or
by any agency thereof to the extent such obligations are backed by the full
faith and credit of the United States), in each case maturing within one
year from the date of acquisition thereof;
(ii) commercial paper issued by a corporation organized under the
laws of any state of the United States or the District of Columbia having
the highest rating, at the time of acquisition thereof, of at least two of
Standard and Poor's Rating Group ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's") or Fitch Investors Service, Inc. ("Fitch");
(iii) demand deposits, certificates of deposit, bankers' acceptances
and time deposits of United States banks or banks organized under the laws
of any country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any
such country, 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, having in each case total capital and surplus in
excess of $1,000,000,000;
(iv) corporate notes and corporate bonds, taxable and/or tax-exempt
municipal notes/bonds and taxable and/or tax-exempt municipal auction rate
securities with reset mechanisms, each maturing within one year of the date
of acquisition thereof and having the highest rating, at the time of
acquisition thereof, of at least two of S & P, Moody's or Fitch;
(v) Investments in money- market mutual funds consisting entirely
of (i) United States treasury or agency funds, (ii) money-market funds
which are open-end investment companies registered under the Investment
Company Act of 1940, as amended, and (iii) other money-market mutual funds
acceptable to the Lender; and
(vi) any security, instrument or other type of investment made by or
through Trusco Capital Management, Inc. or any other money manager, on
behalf of the Borrower.
"PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE" shall mean the per annum rate which the Lender publicly
announces from time to time to be its prime lending rate, as in effect from time
to time. The Lender's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate charged to customers. The Lender
may make commercial loans or other loans at rates of interest at, above or
-15-
below the Lender's prime lending rate. Each change in the Lender's prime lending
rate shall be effective from and including the date such change is publicly
announced as being effective.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to time, and
any successor regulations.
"RELATED PARTIES" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"RELEASE" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into the environment (including ambient air, surface water,
groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
"RESPONSIBLE OFFICER" shall mean any of the president, the chief
executive officer, the chief operating officer, the chief financial officer, the
treasurer or a vice president of the Borrower or such other representative of
the Borrower as may be designated in writing by any one of the foregoing with
the consent of the Lender; and, with respect to the financial covenants only,
the chief financial officer or the treasurer of the Borrower, or if neither of
such officers is available, the chief executive officer of the Borrower.
"REVOLVING COMMITMENT" shall mean the obligation of the Lender to make
Revolving Loans to the Borrower in an aggregate principal amount not exceeding
$10,000,000.
"REVOLVING CREDIT NOTE" shall mean a promissory note of the Borrower
payable to the order of the Lender in the principal amount of the Revolving
Commitment, in substantially the form of Exhibit A attached hereto.
---------
"REVOLVING LOAN" shall mean a loan made by the Lender to the Borrower
under its Revolving Commitment, which may either be a Base Rate Loan or a
Eurodollar Loan.
"SCHEDULED TERMINATION DATE" shall mean April 24, 2003 or such later
date to which the Scheduled Termination Date has been extended pursuant to
Section 2.5(b).
----------- -
"SECURITY AGREEMENT" shall mean that certain Security Agreement,
substantially in the form of Exhibit H attached hereto, made by the Borrower and
---------
each Guarantor in favor of the Lender, as amended, supplemented or otherwise
modified.
"SUBSIDIARY" shall mean, with respect to any Person (the "PARENT"),
any corporation, partnership, joint venture, limited liability company,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, partnership, joint venture, limited liability
company, association or other entity of which securities or other ownership
interests representing more than 50% of the equity or more than
-16-
50% of the ordinary voting power, or in the case of a partnership, more than 50%
of the general partnership interests are, as of such date, owned, controlled or
held by the parent or one or more subsidiaries of the parent. Unless otherwise
indicated, all references to "Subsidiary" hereunder shall mean a Subsidiary of
the Borrower.
"TOTAL ASSETS" shall mean, as at any date of determination, an amount
equal to the Consolidated Total Assets of the Borrower and its Subsidiaries on
such date, minus the outstanding amount of the Revolving Loans on such date.
"TOTAL CASH AND MARKETABLE SECURITIES" shall mean all cash, cash
equivalents and marketable securities of the Borrower and its Subsidiaries as
determined in accordance with GAAP.
"TOTAL FUNDED INDEBTEDNESS" shall mean all Indebtedness in categories
(a), (b), (c), (e) and (f) of the definition of Indebtedness.
"TYPE", when used in reference to a Loan, refers to whether the rate
of interest on such Loan is determined by reference to the Adjusted LIBO Rate or
the Base Rate.
"VOTING STOCK" shall mean any capital stock or other equity interest
of the Borrower of any class having, by the terms thereof, voting power to elect
directors of the Borrower in the absence of a default or failure to pay
dividends with respect to any class or classes of capital stock. Any percentage
of Voting Stock held by any person shall be determined by dividing the total
number of votes that such person may cast based on the Voting Stock held by such
person by the total number of votes that may be cast based upon the total issued
and outstanding Voting Stock.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA
SECTION 1.2. ACCOUNTING TERMS AND DETERMINATION. Unless otherwise
----------------------------------
defined or specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP as in effect from time to time, applied on a basis
consistent (except for such changes as may be required by GAAP and allowed by
the Borrower's independent public accountants) with the most recent audited
consolidated financial statement of the Borrower delivered pursuant to Section
-------
5.1(a); provided, that if the Borrower notifies the Lender that the Borrower
--- - --------
wishes to amend any covenant in Article VI to eliminate the effect of any change
in GAAP on the operation of such covenant (or if the Lender notifies the
Borrower that it wishes to amend Article VI for such purpose), then the
Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Lender.
SECTION 1.3. TERMS GENERALLY. The definitions of terms herein shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun
-17-
shall include the corresponding masculine, feminine and neuter forms. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the word "to" means "to but
excluding". Unless the context requires otherwise (i) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as it was
originally executed or as it may from time to time be amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (ii) any reference herein to any Person
shall be construed to include such Person's successors and permitted assigns,
(iii) the words "hereof", "herein" and "hereunder" and words of similar import
shall be construed to refer to this Agreement as a whole and not to any
particular provision hereof, (iv) all references to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles, Sections, Exhibits and
Schedules to this Agreement and (v) all references to a specific time shall be
construed to refer to the time in the city and state of the Lender's principal
office, unless otherwise indicated.
ARTICLE II
THE REVOLVING COMMITMENT
------------------------
Section 2.1. Revolving Loans and Revolving Credit Note.
-----------------------------------------
(a) Subject to the terms and conditions set forth herein, the Lender
agrees to make Revolving Loans to the Borrower from time to time during the
Availability Period, in an aggregate principal amount outstanding at any time
that will not result in the sum of the principal amount of Revolving Loans then
outstanding plus the outstanding LC Exposure to exceed the Revolving Commitment.
During the Availability Period, the Borrower shall be entitled to borrow, prepay
and reborrow Revolving Loans in accordance with the terms and conditions of this
Agreement; provided, that the Borrower may not borrow or reborrow should there
--------
exist a Default or Event of Default.
(b) The Borrower's obligation to pay the principal of, and interest
on, the Revolving Loans shall be evidenced by the records of the Bank and by the
Revolving Credit Note. The entries made in such records and/or on the schedule
annexed to the Revolving Credit Note shall be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, that the failure or delay of the Lender in maintaining or making
--------
entries into any such record or on such schedule or any error therein shall not
in any manner affect the obligation of the Borrower to repay the Revolving Loans
(both principal and unpaid accrued interest) in accordance with the terms of
this Agreement.
Section 2.2. Procedure for Revolving Loans. The Borrower shall give
-----------------------------
the Lender written notice (or telephonic notice promptly confirmed in writing)
of each Revolving Loan substantially in the form of Exhibit B (a "Notice of
---------
Revolving Borrowing") (x) prior to 10:00 a.m. on the same Business Day of the
making of each Base Rate Loan requested and (y) prior to 11:00 a.m. two (2)
Business Days prior to the requested date of each Eurodollar Loan. Each Notice
of Revolving Borrowing shall be irrevocable and shall specify: (i) the principal
amount of the Revolving Loan, (ii) the proposed date of such Revolving Loan
(which shall be a Business Day), (iii)
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the Type of such Revolving Loan and (iv) in the case of a Eurodollar Loan, the
duration of the initial Interest Period applicable thereto (subject to the
provisions of the definition of Interest Period). The aggregate principal amount
of each Eurodollar Loan shall be not less than $1,000,000 or a larger multiple
of $100,000 and the principal amount of each Base Rate Loan shall not be less
than $100,000 or a larger multiple of $50,000, or in such lesser amounts equal
to the amount of the unused Revolving Commitment; provided, however, the
-------- -------
preceding amount limitations shall not apply to the initial Revolving Loan
proceeds of which are to be used to repay obligations owing under the Existing
Credit Facility. At no time shall the total number of Eurodollar Loans
outstanding at any time exceed five. Upon the satisfaction of the applicable
conditions set forth in Article III hereof, the Lender will make the proceeds of
each Revolving Loan available to the Borrower at the Payment Office on the date
specified in the applicable Notice of Revolving Borrowing by crediting an
account maintained by the Borrower with the Lender or at the Borrower's option,
by effecting a wire transfer of such amount to an account designated by the
Borrower to the Lender.
Section 2.3. Interest Elections.
------------------
(a) Each Revolving Loan initially shall be of the Type specified in
the applicable Notice of Revolving Borrowing, and in the case of a Eurodollar
Loan, shall have an initial Interest Period as specified in such Notice of
Revolving Borrowing. The Borrower may elect to convert any Revolving Loan into a
different Type or to continue any Revolving Loan as the same Type, and in the
case of a Eurodollar Loan, may elect Interest Periods therefor, all as provided
in this Section.
(b) To make an election pursuant to this Section, the Borrower shall
give the Lender prior written notice substantially in the form of Exhibit C (or
---------
telephonic notice promptly confirmed in writing) of each Revolving Loan (a
"Notice of Conversion/Continuation") that is to be converted or continued, as
the case may be, (x) prior to 10:00 a.m. on the same Business Day as the date
of a conversion into a Base Rate Loan and (y) prior to 11:00 a.m. two (2)
Business Days prior to a continuation of or conversion into a Eurodollar Loan.
Each such Notice of Conversion/Continuation shall be irrevocable and shall
specify (i) the Revolving Loan to which such Notice of Continuation/Conversion
applies; (ii) the effective date of the election made pursuant to such Notice of
Continuation/Conversion, which shall be a Business Day, (iii) whether the
resulting Revolving Loan is to be a Base Rate Loan or a Eurodollar Loan; and
(iv) if the resulting Revolving Loan is to be a Eurodollar Loan, the Interest
Period applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of "Interest Period". If any such Notice
of Continuation/Conversion requests a Eurodollar Loan but does not specify an
Interest Period, the Borrower shall be deemed to have selected an Interest
Period of one month. The principal amount of any resulting Loan shall satisfy
the minimum borrowing amount for Eurodollar Loans and Base Rate Loans set forth
in Section 2.2.
-----------
(c) If, on the expiration of any Interest Period in respect of any
Eurodollar Loan, the Borrower shall have failed to deliver a Notice of
Conversion/Continuation, then, unless such Eurodollar Loan is repaid as provided
herein, the Borrower shall be deemed to have elected to convert such Eurodollar
Loan to a Base Rate Loan. No Revolving Loan may be converted into, or continued
as, a Eurodollar Loan if an Event of Default exists, unless the Lender shall
have otherwise
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consented in writing. If a Eurodollar Loan is converted on a date other than the
last day of an Interest Period applicable thereto, the Borrower shall also pay
all amounts required pursuant to Section 2.13.
-------------
Section 2.4. Optional Reduction and Termination of Revolving
-----------------------------------------------
Commitment. Upon at least two (2) Business Days' prior written notice (or
----------
telephonic notice promptly confirmed in writing) to the Lender (which notice
shall be irrevocable), the Borrower may reduce the Revolving Commitment in part
or terminate the Revolving Commitment in whole; provided, that (i) any partial
--------
reduction pursuant to this Section 2.4 shall be in an amount of at least
-----------
$1,000,000 and any larger multiple of $100,000, and (ii) no such reduction shall
be permitted which would reduce the Revolving Commitment (after giving effect
thereto and any concurrent prepayments made under Section 2.6) to an amount less
-----------
than the outstanding Revolving Loans plus the outstanding LC Exposure.
----
Section 2.5. Mandatory Termination of Revolving Commitment; Extension
--------------------------------------------------------
of Scheduled Termination Date.
-----------------------------
(a) The Revolving Commitment shall terminate on the Commitment
Termination Date, and all Revolving Loans then outstanding (together with
accrued and unpaid interest thereon) shall be due and payable on such date.
(b) At least 30 days, but not more than 45 days, prior to any
anniversary of the Scheduled Termination Date, the Borrower may request that the
Lender extend the Scheduled Termination Date for a successive 364-day period.
The Lender, in its sole discretion, may agree to extend or decline to extend the
Scheduled Termination Date; provided, that if the Lender has not responded to
--------
such request in writing 20 days prior to the existing Scheduled Termination
Date, then the Borrower's request for an extension shall be deemed to have been
denied. In the event that the Lender shall agree to such request, the Borrower
and the Lender shall execute a written amendment and extension agreement in form
reasonably acceptable to the Lender evidencing such extension and the agreed
upon terms and conditions of such extension, together with such other documents
as the Lender shall reasonably request; provided, that the Lender agrees not to
--------
charge a fee in connection with such extension in excess of 0.50% of the
Revolving Commitment.
Section 2.6. Optional Prepayments. The Borrower shall have the right
--------------------
at any time and from time to time to prepay any Revolving Loan, in whole or in
part, without premium or penalty, by giving irrevocable written notice (or
telephonic notice promptly confirmed in writing) to the Lender no later than (i)
in the case of prepayment of any Eurodollar Loan, 11:00 a.m. not less than two
(2) Business Days prior to any such prepayment and (ii) in the case of any
prepayment of any Base Rate Loan, not less than one (1) Business Day prior to
the date of such prepayment. Each such notice shall be irrevocable and shall
specify the proposed date of such prepayment and the principal amount of each
Revolving Loan or portion thereof to be prepaid. Such amount shall be due and
payable on the date designated in such notice, together with accrued interest to
such date on the amount so prepaid in accordance with Section 2.7(a); provided,
----------- - --------
that if a Eurodollar Loan is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.13. Each partial prepayment of any Revolving Loan
------------
shall
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be in an amount that would be permitted in the case of an advance of a Revolving
Loan of the same Type pursuant to Section 2.2.
------------
Section 2.7. Interest on Loans.
-----------------
(a) The Borrower shall pay interest on each Base Rate Loan at the
Base Rate in effect from time to time plus 1.00% per annum, and on each
Eurodollar Loan at the Adjusted LIBO Rate for the applicable Interest Period in
effect for such Loan, plus 2.50% per annum.
(b) While an Event of Default exists or after acceleration, at the
option of the Lender, the Borrower shall pay interest ("Default Interest") with
respect to all Eurodollar Loans at the rate otherwise applicable for the then-
current Interest Period plus an additional 2% per annum until the last day of
such Interest Period, and thereafter, and with respect to all Base Rate Loans
and all other Obligations hereunder (other than Loans), at an all-in rate in
effect for Base Rate Loans, plus an additional 2% per annum.
(c) Interest on the principal amount of all Revolving Loans shall
accrue from and including the date such Loans are made to but excluding the date
of any repayment thereof. Interest on all outstanding Base Rate Loans shall be
payable quarterly in arrears on the last day of each March, June, September and
December and on the Commitment Termination Date. Interest on all outstanding
Eurodollar Loans shall be payable on the last day of each Interest Period
applicable thereto, and on the Commitment Termination Date. Interest on any
Revolving Loan which is converted into a Revolving Loan of another Type or which
is repaid or prepaid shall be payable on the date of such conversion or on the
date of any such repayment or prepayment (on the amount repaid or prepaid)
thereof. All Default Interest shall be payable on demand.
(d) The Lender shall determine each interest rate applicable to the
Revolving Loans hereunder and shall promptly notify the Borrower of such rate in
writing (or by telephone, promptly confirmed in writing). Any such
determination shall be conclusive and binding for all purposes, absent manifest
error.
Section 2.8. Fees.
----
(a) Closing Fee. The Borrower agrees to pay to the Lender a closing
fee as provided in the letter agreement dated March 28, 2002 (the "Fee Letter")
between the Borrower and the Bank.
(b) Commitment Fee. The Borrower agrees to pay to the Lender a
commitment fee as provided in the Fee Letter.
(c) Letter of Credit Fees. The Borrower agrees to pay to the Lender
in respect of each Letter of Credit a letter of credit fee which shall accrue at
2.50% per annum on the average daily amount of the Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
attributable to such Letter of Credit during the period from and including the
date of issuance of such Letter of Credit to but excluding the date on which
such Letter
-21-
of Credit expires or is drawn in full (including without limitation any LC
Exposure that remains outstanding after the Commitment Termination Date), as
well as the Lender's standard fees with respect to issuance, amendment, renewal
or extension of any Letter of Credit or processing of drawings thereunder.
(d) Payments. Accrued fees (other than the closing fee referenced in
paragraph (a)) shall be payable quarterly in arrears on the last day of each
March, June, September and December, commencing on the first such date following
the Closing Date, and on the Commitment Termination Date (and if later, the date
the Loans and LC Exposure shall be repaid in their entirety).
Section 2.9. Computation of Interest and Fees. All computations of
--------------------------------
interest and fees hereunder shall be made on the basis of a year of 360 days for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable (to the
extent computed on the basis of days elapsed). Each determination by the Lender
of an interest amount or fee hereunder shall be made in good faith and, except
for manifest error, shall be final, conclusive and binding for all purposes.
Section 2.10. Inability to Determine Interest Rates. If prior to the
-------------------------------------
commencement of any Interest Period for any Eurodollar Loan, the Lender shall
have reasonably determined (which determination shall be conclusive and binding
upon the Borrower) that (i) by reason of circumstances affecting the relevant
interbank market, adequate means do not exist for ascertaining LIBOR for such
Interest Period, or (ii) the Adjusted LIBO Rate does not adequately and fairly
reflect the cost to the Lender of making, funding or maintaining such
Eurodollar Loan for such Interest Period, the Lender shall give written notice
(or telephonic notice, promptly confirmed in writing) to the Borrower as soon as
practicable thereafter. Until the Lender notifies the Borrower that the
circumstances giving rise to such notice no longer exist (which the Lender
agrees to do promptly upon such circumstances ceasing to exist), (i) the
obligation of the Lender to make Eurodollar Loans or to continue or convert
outstanding Revolving Loans as or into Eurodollar Loans shall be suspended and
(ii) all such affected Revolving Loans shall be converted into Base Rate Loans
on the last day of the then current Interest Period applicable thereto unless
the Borrower prepays such Revolving Loans in accordance with this Agreement.
Section 2.11. Illegality. If any Change in Law shall make it
----------
unlawful or impossible for the Lender to make, maintain or fund any Eurodollar
Loan, the Lender shall promptly give notice thereof to the Borrower, whereupon
until the Lender notifies the Borrower that the circumstances giving rise to
such suspension no longer exist (which the Lender agrees to do promptly upon
such circumstances ceasing to exist), the obligation of the Lender to make
Eurodollar Loans, or to continue or convert outstanding Revolving Loans into
Eurodollar Loans, shall be suspended. If the affected Eurodollar Loan is then
outstanding, such Loan shall be converted to a Base Rate Loan either (i) on the
last day of the then current Interest Period applicable to such Eurodollar Loan
if the Lender may lawfully continue to maintain such Loan to such date or (ii)
immediately if the Lender shall determine that it may not lawfully continue to
maintain such Eurodollar Loan to such date. If the Borrower elects not to
convert such Eurodollar Loan into a Base Rate Loan, then the Borrower shall
prepay such Eurodollar Loan.
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Section 2.12. Increased Costs.
---------------
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement that is not otherwise included in the determination
of the Adjusted LIBO Rate hereunder against assets of, deposits with or for
the account of, or credit extended by, the Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on the Lender or the Eurodollar interbank market any other
condition affecting this Agreement or any Eurodollar Loans made by the
Lender;
and the result of the foregoing is to increase the cost to the Lender of making,
converting into, continuing or maintaining a Eurodollar Loan or to increase the
cost to the Lender of issuing any Letter of Credit or to reduce the amount
received or receivable by the Lender hereunder (whether of principal, interest
or any other amount), then the Borrower shall promptly pay, upon written notice
from and demand by the Lender, within five (5) Business Days after the date of
such notice and demand, additional amount or amounts sufficient to compensate
the Lender for such additional costs incurred or reduction suffered.
(b) If the Lender shall have reasonably determined that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on the Lender's capital (or on the capital of the Lender's parent
corporation) as a consequence of its obligations in respect of Eurodollar Loans
hereunder to a level below that which the Lender or the Lender's parent
corporation could have achieved but for such Change in Law (taking into
consideration the Lender's policies or the policies of the Lender's parent
corporation with respect to capital adequacy) then, from time to time, within
five (5) Business Days after receipt by the Borrower of written demand by the
Lender, the Borrower shall either pay to the Lender such additional amounts as
will compensate the Lender or the Lender's parent corporation for any such
reduction suffered.
(c) A certificate of the Lender setting forth the amount or amounts
necessary to compensate the Lender or its parent corporation, as the case may
be, specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive, absent manifest error. The Borrower shall pay
the Lender such amount or amounts within 10 days after receipt thereof. The
Lender shall only be entitled to compensation under this Section for events
occurring during the 180-day period ending on the date the Borrower receives the
certificate described in this paragraph.
Section 2.13. Funding Indemnity. In the event of (a) the payment of
-----------------
any principal of a Eurodollar Loan other than on the last day of the Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion or continuation of a Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, or (c) the failure by the Borrower to
borrow, prepay, convert or continue any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate the Lender,
within five (5) Business Days after written demand from the Lender,
-23-
for any loss, cost or expense attributable to such event. Such loss, cost or
expense shall be deemed to include an amount determined by the Lender to be the
excess, if any, of (A) the amount of interest that would have accrued on the
principal amount of such Eurodollar Loan if such event had not occurred at the
Adjusted LIBO Rate applicable to such Eurodollar Loan for the period from the
date of such event to the last day of the then current Interest Period therefor
(or in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Eurodollar Loan) over (B) the
amount of interest that would accrue on the principal amount of such Eurodollar
Loan for the same period if the Adjusted LIBO Rate were set on the date such
Eurodollar Loan was prepaid or converted or the date on which the Borrower
failed to borrow, convert or continue such Eurodollar Loan. A certificate as to
any additional amount payable under this Section 2.13 submitted to the Borrower
------------
by the Lender shall be conclusive, absent manifest error.
Section 2.14. Payments Generally.
------------------
The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees, or LC Disbursements or of
amounts payable under Section 2.12 or 2.13 or otherwise) prior to 12:00 noon on
------------ ----
the date when due without set-off or counterclaim, either by payment of
immediately available funds or by authorizing the Lender to debit any account
maintained with the Lender by an amount equal to such payment. Solely for
purposes of calculating interest thereon, any amounts received after such time
on any date may, in the discretion of the Lender, be deemed to have been
received on the next succeeding Business Day. All such payments shall be made
to the Lender at its Payment Office. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such extension. All
payments hereunder shall be made in Dollars.
Section 2.15. Letters of Credit.
-----------------
(a) During the Availability Period, the Lender agrees to issue, at
the request of the Borrower, Letters of Credit for the account of the Borrower
on the terms and conditions hereinafter set forth; provided, that (i) each
--------
Letter of Credit shall expire on the date that is five (5) Business Days prior
to the Commitment Termination Date; (ii) each Letter of Credit shall be in a
stated amount of at least $100,000; and (iii) the Borrower may not request any
Letter of Credit, if, after giving effect to such issuance (A) the LC Exposure
would exceed the LC Commitment or (B) the LC Exposure, plus the outstanding
----
Revolving Loans, would exceed the Revolving Commitment.
(b) To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
give the Lender irrevocable written notice at least three (3) Business Days
prior to the requested date of such issuance specifying the date (which shall be
a Business Day) such Letter of Credit is to be issued (or amended, extended or
renewed, as the case may be), the expiration date of such Letter of Credit, the
amount of such Letter of Credit, the name and address of the beneficiary
thereof and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. In addition to the satisfaction of the
conditions in Article III, the issuance of such Letter of Credit (or any
amendment which increases the amount of such Letter of Credit) will be subject
to the further conditions that such Letter of
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Credit shall be in such form and contain such terms as the Lender shall approve
and that the Borrower shall have executed and delivered any additional
applications, agreements and instruments relating to such Letter of Credit as
the Lender shall reasonably require; provided, that in the event of any conflict
--------
between such applications, agreements or instruments and this Agreement, the
terms of this Agreement shall control.
(c) The Lender shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Lender shall notify the Borrower of such demand for payment and
whether the Lender has made or will make a LC Disbursement thereunder; provided,
--------
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Lender with respect to such LC
Disbursement. The Borrower shall promptly reimburse the Lender for any LC
Disbursements paid by the Lender in respect of such drawing, without
presentment, demand or other formalities of any kind.
(d) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding the
deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Lender, in the name of the Lender and for the
benefit of the Lender, an amount in cash equal to the LC Exposure as of such
date plus any accrued and unpaid interest thereon; provided, that the obligation
--------
to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, with demand or notice of any
kind, upon the occurrence of any Event of Default with respect to the Borrower
described in clause (g) or (h) of Section 8.1. Such deposit shall be held by
-----------
the Lender as collateral for the payment and performance of the Obligations.
The Lender shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Lender and at the Borrower's risk and expense, such
deposits shall not bear interest. Interest and profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall
applied by the Lender to reimburse itself for LC Disbursements for which it had
not been reimbursed and to the extent so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Revolving Loans has been
accelerated, be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not so applied as aforesaid) shall be returned to the Borrower with
three (3) Business Days after all Events of Default have been cured or waived.
(e) The Borrower's obligation to reimburse LC Disbursements hereunder
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement under all circumstances
whatsoever and irrespective of any of the following circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit or any other Loan Document;
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(ii) The existence of any claim, set-off, defense or other right
which the Borrower or any Subsidiary or Affiliate of the Borrower may have
at any time against a beneficiary or any transferee of any Letter of Credit
(or any Persons or entities for whom any such beneficiary or transferee may
be acting), the Lender or any other Person, whether in connection with this
Agreement or the Letter of Credit or any document related hereto or thereto
or any unrelated transaction;
(iii) Any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) Payment by the Lender under a Letter of Credit against
presentation of a draft or other document to the Lender that does not
comply with the terms of such Letter of Credit;
(v) Any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section, constitute a legal or equitable discharge of, or provide a right
of setoff against, the Borrower's obligations hereunder; or
(vi) The existence of a Default or an Event of Default.
Neither the Lender nor any Related Party of the Lender shall have any liability
or responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to above), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Lender; provided, that nothing in this Section 2.15(e) shall
-------- -------
be construed to excuse the Lender from liability to the Borrower to the extent
of any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Lender's failure to
exercise care when determining whether drafts or other documents presented under
a Letter of Credit comply with the terms thereof. The parties hereto expressly
agree, that in the absence of gross negligence or willful misconduct on the part
of the Lender (as finally determined by a court of competent jurisdiction), the
Lender shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Lender may, with the consent of the Borrower, accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or, without notice to or the consent of
the Borrower, refuse to accept and make payment upon such documents if such
documents are not in strict compliance with the terms of such Letter of Credit.
-26-
(f) Each Letter of Credit shall be subject to the Uniform Customs and
Practices for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No.500, as the same may be amended from time to time, and,
to the extent not inconsistent therewith, the governing law of this Agreement
set forth in Section 10.5.
------------
ARTICLE III
CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT
---------------------------------------------------
Section 3.1. Conditions To Effectiveness. The obligations of the
---------------------------
Lender to make the initial Revolving Loan or to issue the initial Letter of
Credit hereunder, whichever shall occur first, is subject to the receipt by the
Lender of the following documents in form and substance reasonably satisfactory
to the Lender:
(a) each of the Loan Documents duly executed and delivered by the
respective parties thereto;
(b) a certificate of the Secretary or Assistant Secretary of each of
the Loan Parties, attaching and certifying copies of its bylaws and of the
resolutions of its boards of directors, authorizing the execution, delivery and
performance of the Loan Documents to which it is a party and certifying the
name, title and true signature of each officer of such Loan Party executing the
Loan Documents to which it is a party;
(c) certified copies of the articles of incorporation or other
charter documents of each of the Loan Parties, and certificates of good standing
or existence dated within two (2) weeks of the Closing Date from the Secretary
of State of each of the jurisdiction of incorporation of each Loan Party and
each foreign jurisdiction in which each such Loan Party is required to be
qualified, excluding any such foreign jurisdiction where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect;
(d) a certificate substantially in the form of Exhibit D, dated the
---------
Closing Date and signed by a Responsible Officer, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 3.2;
-----------
(e) a duly executed Notice of Revolving Borrowing, if applicable;
(f) a duly executed funds disbursement agreement;
(g) a completed and duly executed Perfection Certificate of each Loan
Party and the results of UCC lien searches with respect to the Collateral,
indicating no liens other than Permitted Encumbrances and the liens in favor of
Fleet National Bank, as agent under the Existing Credit Facility ("Fleet");
-27-
(h) A payoff letter from Fleet addressed to the Lender confirming,
among other things, the amount necessary to repay in full all amounts
outstanding under the Existing Credit Facility and that upon payment of such
amounts all liens securing the Existing Credit Facility shall be released;
(i) a favorable legal opinion of ▇▇▇▇▇▇ & Bird LLP, counsel to the
Loan Parties;
(j) the payment of the closing fee required pursuant to Section
-------
2.8(a) and the fees and expenses of the Lender's counsel (not to exceed
------
$10,000); and
(k) the Lender shall have received such other documents,
certificates, information or legal opinions as it may reasonably request, all in
form and substance reasonably satisfactory to the Lender.
Section 3.2. Each Credit Event. The obligation of the Lender to make
-----------------
any Revolving Loan or to issue any Letter of Credit is subject to the
satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to such
Revolving Loan or to the issuance of such Letter of Credit, no Default or Event
of Default shall exist; and
(b) all representations and warranties of each Loan Party in each of
the Loan Documents to which it is a party shall be true and correct in all
material respects on and as of the date of such Revolving Loan or the date of
issuance of such Letter of Credit, both before the making of such Revolving Loan
or the issuance of such Letter of Credit and after giving effect thereto, except
to the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall have
been true and accurate on and as of such earlier date).
The making of each Revolving Loan and the issuance of each Letter of Credit
shall be deemed to constitute a representation and warranty by the Borrower on
the date thereof as to the matters specified in paragraphs (a) and (b) of this
Section 3.2.
-----------
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Lender as follows:
Section 4.1. Existence; Power. Each of the Borrower and its
----------------
Subsidiaries (i) is a corporation, partnership or other legal entity, duly
organized or formed, validly existing and in good standing under the
jurisdiction of its incorporation or formation, (ii) has all requisite power and
authority to carry on its business as now conducted, and (iii) is duly qualified
to do business, and is
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in good standing, in each jurisdiction where such qualification is required,
except where the failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect.
Section 4.2. Organizational Power; Authorization. The execution,
-----------------------------------
delivery and performance by each Loan Party of the Loan Documents to which it is
a party are within its organizational powers and have been duly authorized by
all necessary organizational action. Each of the Loan Documents to which a Loan
Party is a party has been duly executed and delivered by such Loan Party, and
constitutes a valid and binding obligation of such Loan Party, enforceable
against it in accordance with its respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
Section 4.3. Governmental Approvals; No Conflicts. The execution,
------------------------------------
delivery and performance by each Loan Party of each of the Loan Documents to
which it is a party (a) do not require any consent or approval of, registration
or filing with, or any action by, any Governmental Authority, except those as
have been obtained or made and are in full force and effect, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of such Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
material agreement or other material instrument binding on the Borrower or any
of its Subsidiaries or any of its assets or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries (except the Liens granted to the Lender
pursuant to the Loan Documents).
Section 4.4. Financial Statements; Projections. (a) The Borrower has
---------------------------------
furnished to the Lender (i) the audited consolidated balance sheet of the
Borrower and its Subsidiaries as of September 30, 2001 and the related
consolidated statements of operations, shareholders' equity and cash flows for
the fiscal year then ended audited by PricewaterhouseCoopers LLP and (ii) the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of December 31, 2001, and the related unaudited consolidated statements
of operations and cash flows for the fiscal quarter and year-to-date period then
ending, certified by a Responsible Officer. Such financial statements fairly
present, in all material respects, the consolidated financial condition of the
Borrower and its Subsidiaries as of such dates and the consolidated results of
operations for such periods in conformity with GAAP consistently applied,
subject to year end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii). Since September 30, 2001, except
for matters that have been disclosed to the Lender, there have been no changes
with respect to the Borrower and its Subsidiaries which have had or could
reasonably be expected to have, singly or in the aggregate, a Material Adverse
Effect.
(b) The projections of the Borrower and its Subsidiaries on a consolidated
basis, balance sheets and cash flow statements for the Borrower's fiscal year
ending September 2003, copies of which have been delivered to the Lender, are
based on reasonable estimates and assumptions, have been prepared on the basis
of assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries (as of the date thereof) of the results of
operations and other information projected therein.
-19-
Section 4.5. Litigation and Environmental Matters. (a) Except as
------------------------------------
disclosed in Schedule 4.5 attached hereto, no litigation, investigation or
proceeding of or before any arbitrators or Governmental Authorities is pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination that could reasonably be expected to
have, either individually or in the aggregate, a Material Adverse Effect or (ii)
which in any manner draws into question the validity or enforceability of this
Agreement or any other Loan Document.
(b) Except for matters that could not reasonably be expected to have a
Material Adverse Effect and the matters set forth on Schedule 4.5, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
Section 4.6. Compliance with Laws and Agreements. The Borrower and
-----------------------------------
each Subsidiary are in compliance with (a) all applicable laws, rules,
regulations and orders of any Governmental Authority, and (b) all indentures,
agreements or other instruments binding upon it or its properties, except, in
each case, where non-compliance, either singly or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
Section 4.7. Investment Company Act, Etc. Neither the Borrower nor
---------------------------
any of its Subsidiaries is (a) an "investment company", as defined in, or
subject to regulation under, the Investment Company Act of 1940, as amended, (b)
a "holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended or (c) otherwise subject to any
other regulatory scheme limiting its ability to incur debt.
Section 4.8. Taxes. The Borrower and its Subsidiaries and each other
-----
Person for whose taxes the Borrower or any Subsidiary could become liable have
timely filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except (i) to the
extent the failure to do so would not have a Material Adverse Effect or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as the case may be,
has set aside on its books adequate reserves in accordance with GAAP. The
charges, accruals and reserves on the books of the Borrower and its Subsidiaries
in respect of such taxes are adequate, and no tax liabilities that could be
materially in excess of the amount so provided are anticipated.
Section 4.9. Margin Regulations. Neither the Borrower nor any of
------------------
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying "margin stock" within the meaning
of Regulation U of the Board of Governors of the Federal Reserve System.
-20-
Section 4.10. ERISA. No ERISA Event has occurred or is reasonably
-----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected
to have a Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts exceed by more than
$1,000,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Standards No. 87)
did not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $2,000,000 the fair market value of the assets of
all such underfunded Plans.
Section 4.11. Ownership of Property.
---------------------
(a) Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all of its real and personal property material to
the operation of its business.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed,
or otherwise has the right, to use, all patents, trademarks, service marks,
trade names, copyrights and other intellectual property material to its
business, and the use thereof by the Borrower and its Subsidiaries does not, to
the best of the Borrower's knowledge, infringe on the rights of any other
Person.
Section 4.12. Absence of Financing Statements, etc. Except with
------------------------------------
respect to Permitted Encumbrances, there is no financing statement, security
agreement, chattel mortgage, deed to secure debt or other type of 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 any assets or property of any Loan Party or
any rights relating thereto.
Section 4.13. Bank Accounts. As of the Closing Date, the Perfection
-------------
Certificate of each Loan Party delivered pursuant to Section 3.1(g) sets forth
the account numbers and financial institutions where all domestic demand deposit
accounts and all investment or brokerage accounts of each such Loan Party are
maintained.
Section 4.14. Disclosure. The Borrower has disclosed to the Lender all
----------
agreements, instruments, and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. None of the reports (including
without limitation all reports that the Borrower is required to file with the
Securities and Exchange Commission), financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Lender in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading;
provided, that with respect to projected financial information,
--------
-21-
the Borrower represents only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
Section 4.15. Subsidiaries. Schedule 4.15 sets forth, as of the
------------
Closing Date, the name of, the ownership interest of the Borrower in, the
jurisdiction of incorporation of, and the type of, each Subsidiary and
identifies each Domestic Subsidiary that is a Guarantor.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
The Borrower covenants and agrees that so long as the Revolving
Commitment is outstanding hereunder or the principal of and interest on any
Revolving Loan, any LC Disbursement or any other amount under any Loan Document
remains unpaid or any Letter of Credit remains outstanding:
Section 5.1. Financial Statements and Other Information. The Borrower
------------------------------------------
will deliver to the Lender:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the annual audited report for
such fiscal year for the Borrower, containing a consolidated balance sheet of
the Borrower and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, stockholders' equity and cash
flows (together with all footnotes thereto) of the Borrower and its Subsidiaries
for such fiscal year, setting forth in each case in comparative form the figures
for the previous fiscal year, all in reasonable detail and reported on by
independent public accountants of nationally recognized standing (without a
"going concern" or like qualification, exception or explanation and without any
qualification or exception as to scope of such audit) to the effect that such
financial statements present fairly in all material respects the financial
condition and the results of operations of the Borrower and its Subsidiaries for
such fiscal year on a consolidated basis in accordance with GAAP and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards, together with a written statement from such accountants to the effect
that they have read a copy of this 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 Lender for failure to obtain knowledge of
any Default or Event of Default; and, provided further that the consolidated
----------------
information required by this paragraph may be satisfied by delivery by the
Borrower within such 90-day period of the Borrower's Form 10-K for such fiscal
year;
(b) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of the Borrower's fiscal year, an
unaudited consolidated balance sheet of the Borrower as of the end of such
fiscal quarter and the related unaudited consolidated statements of
-22-
operations and cash flows of the Borrower and its Subsidiaries for such fiscal
quarter and the then elapsed portion of such fiscal year, setting forth in each
case in comparative form the figures for the corresponding fiscal quarter and
the corresponding portion of the Borrower's previous fiscal year, all certified
by the chief financial officer or treasurer of the Borrower as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP as at such date and for such periods, subject to normal year-end audit
adjustments and the absence of footnotes; provided that the consolidated
--------
information required by this paragraph may be satisfied by delivery by the
Borrower within such 45-day period of the Borrower's Form 10-Q for such fiscal
quarter;
(c) concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer or treasurer substantially in the form of Exhibit E, (i) certifying as
---------
to whether there exists a Default or Event of Default on the date of such
certificate, and if a Default or an Event of Default then exists, specifying the
details thereof and the action which the Borrower has taken or proposes to take
with respect thereto, (ii) setting forth in reasonable detail calculations
demonstrating compliance with the financial covenants contained in Article VI
and (iii) stating whether any change in GAAP or the application thereof has
occurred since the date of the Borrower's audited financial statements referred
to in Section 4.4 and, if any change has occurred, specifying the effect of
-----------
such change on the financial statements accompanying such certificate;
(d) promptly after the same become publicly available, copies of all
registration statements (excluding the exhibits thereto and any registration
statements on Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) and all other periodic reports (including proxy
statements) which the Borrower or any Subsidiary shall file with the Securities
and Exchange Commission, or any Governmental Authority succeeding to any or all
functions of said Commission, or with any national securities exchange,
(e) promptly after the same become publicly available, copies of all
reports and other materials distributed by the Borrower to its shareholders
generally; and
(f) promptly following any request therefor, such other information
regarding the results of operations, business affairs and financial condition
of the Borrower or any Subsidiary as the Lender may reasonably request.
Section 5.2. Notices of Material Events. The Borrower will furnish to
--------------------------
the Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default; and
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or, to the knowledge
of the Borrower, affecting the Borrower or any Subsidiary which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect;
-23-
(c) the occurrence of any event or any other development by which the
Borrower or any of its Subsidiaries (i) fails to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) becomes subject to any Environmental
Liability, (iii) receives notice of any claim with respect to any Environmental
Liability, or (iv) becomes aware of any basis for any Environmental Liability,
and in the case of each of the preceding clauses, which individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;
(d) the occurrence of any ERISA Event that alone, or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate amount
exceeding $1,000,000; and
(e) any other development that has, or could reasonably be expected
to have, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
written statement of a Responsible Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
Section 5.3. Existence; Conduct of Business. The Borrower will, and
------------------------------
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and maintain in full force and effect its legal
existence and its respective rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names material to the conduct of its
business and will continue to engage in the same business as presently conducted
or such other businesses that are reasonably related thereto; provided, that
nothing in this Section shall prohibit any merger, consolidation, liquidation or
dissolution permitted by Section 7.3.
-----------
Section 5.4. Compliance with Laws, Etc. The Borrower will, and will
--------------------------
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its properties, except
where the failure to do so, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
Section 5.5. Use of Proceeds. The Borrower will use the proceeds of
----------------
the initial Revolving Loan to payoff all obligations under the Existing Credit
Facility and all other Revolving Loans to finance working capital needs and for
other general corporate purposes of the Borrower and its Subsidiaries. No part
of the proceeds of any Revolving Loan will be used, whether directly or
indirectly, for any purpose that would violate any rule or regulation of the
Board of Governors of the Federal Reserve System, including Regulations T, U or
X.
Section 5.6. Payment of Obligations. The Borrower will, and will
-----------------------
cause each of its Subsidiaries to, pay and discharge at or before maturity, all
of its obligations and liabilities (including without limitation all tax
liabilities and claims that could result in a statutory Lien) before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside
-24-
on its books adequate reserves with respect thereto in accordance with GAAP and
(c) the failure to make payment could not reasonably be expected to result in a
Material Adverse Effect.
Section 5.7. Books and Records. The Borrower will maintain, and will
-----------------
cause each of its Subsidiaries to maintain, books and records pertaining to its
business operations in such detail, form and scope as is consistent with good
business practice in accordance with GAAP.
Section 5.8. Visitation, Inspection, Etc. The Borrower will, and
----------------------------
will cause each of its Domestic Subsidiaries to, permit any representative of
the Lender to visit and inspect its properties, to examine its books and records
and to make copies and take extracts therefrom, and to discuss its affairs,
finances and accounts with any of its officers and with its independent
certified public accountants, all at such reasonable times and as often as the
Lender may reasonably request after reasonable prior notice to the Borrower. The
Borrower shall be obligated to reimburse the Lender for its costs and expenses
incurred in connection with the exercise of the Lender's rights under this
Section only if such exercise occurs while an Event of Default exists.
Section 5.9. Maintenance of Properties; Insurance. The Borrower will,
------------------------------------
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, except where the failure to do so, either
individually or it the aggregate, could not reasonably be expected to have a
Material Adverse Effect and (b) maintain with financially sound and reputable
insurance companies, insurance with respect to its properties and business, and
the properties and business of its Subsidiaries, against loss or damage of the
kinds customarily insured against by companies in the same or similar businesses
operating in the same or similar locations.
Section 5.10. Cash Management.
---------------
(a) The Borrower will maintain substantially all of its domestic demand
deposit accounts with the Lender.
(b) At any time after the occurrence of an Event of Default, at the
request of the Lender, the Borrower will, and will cause each other Loan Party
to, cause all payments constituting proceeds of accounts receivable or other
Collateral to be paid, in the form received with any appropriate endorsements,
into an account with the Lender, which shall be subject to a lockbox or similar
agreement in form and substance satisfactory to the Lender.
Section 5.11. Further Assurances. The Borrower will, and will cause
------------------
each of its Subsidiaries to, make, execute, endorse, acknowledge and deliver any
amendments, modifications or supplements hereto and restatements hereof and any
other agreements, instruments or documents, and take any and all such actions,
as may from time to time be reasonably requested by the Lender to perfect and
maintain the validity and priority of the Liens granted pursuant to the Security
Documents and to effect, confirm or further assure or protect and preserve the
interests, rights and remedies of the Lender under this Agreement and the other
Loan Documents (including, without limitation, any and all instruments necessary
or appropriate to effect the guarantee of the Obligations by all Guarantors
created or acquired after the date hereof).
-25-
SECTION 5.12 ADDITIONAL SUBSIDIARIES. If any additional Subsidiary
-----------------------
is acquired or formed after the Closing Date, the Borrower, within ten (10)
Business Days after such Subsidiary is acquired or formed, (a) will notify the
Lender thereof and (b) if such Subsidiary is a Domestic Subsidiary and not a
Non-Material Subsidiary, (i) will cause such Subsidiary to become a Guarantor by
executing agreements substantially in the forms of Annex I to each of Exhibits
--------
F, G and H, and (ii) will deliver, or will cause such Subsidiary to deliver,
----------
simultaneously therewith similar documents applicable to such Subsidiary
required under clauses (b), (c), (g), (i) and (k) of Section 3.1 as reasonably
-----------
requested by the Lender.
ARTICLE VI
FINANCIAL COVENANTS
-------------------
The Borrower covenants and agrees that so long as the Lender has its
Revolving Commitment hereunder or the principal of or interest on or any
Revolving Loan remains unpaid or other amount under any Loan Document remains
unpaid or any Letter of Credit remains outstanding:
SECTION 6.1. MINIMUM QUARTERLY ADJUSTED EBITDA. The Borrower will
---------------------------------
have, as of the end of each fiscal quarter of the Borrower, Adjusted EBITDA of
not less than (a) $1,500,000 for the fiscal quarter ending June 30, 2002 and (b)
$2,000,000 for each fiscal quarter thereafter.
SECTION 6.2. MINIMUM NET CASH. The Borrower will maintain, at all
----------------
times, Net Cash equal to not less than $5,000,000.
SECTION 6.3. MINIMUM OPERATING CASH FLOW TO INTEREST RATIO. The
---------------------------------------------
Borrower will maintain as of the end of each fiscal quarter of the Borrower,
commencing with the fiscal quarter ending June 30, 2002, a ratio of Consolidated
Operating Cash Flow to Consolidated Total Interest Expense of not less than 3.00
to 1.00.
ARTICLE VII
NEGATIVE COVENANTS
------------------
The Borrower covenants and agrees that so long as the Lender has its
Revolving Commitment hereunder or the principal of or interest on any Revolving
Loan remains unpaid or any other amount under any Loan Document remains unpaid
or any Letter of Credit remains outstanding:
SECTION 7.1. INDEBTEDNESS. The Borrower will not, and will not permit
------------
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness to the Lender under the Loan Documents;
-26-
(b) Indebtedness existing on the date hereof and set forth on
Schedule 7.1 and extensions, renewals and replacements of any such Indebtedness
------------
that do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(c) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including obligations under Capitalized Leases, and any Indebtedness
assumed in connection with the acquisition of any such assets secured by a Lien
on any such assets prior to the acquisition thereof; provided, that such
--------
Indebtedness is incurred prior to, concurrently with, or within 90 days after,
such acquisition or the completion of such construction or improvements, and
extensions, renewals, and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (immediately prior to giving
effect to such extension, renewal or replacement) or shorten the maturity or the
weighted average life thereof; provided further, that the aggregate principal
----------------
amount of Indebtedness permitted under this clause (c) does not exceed
$5,000,000 at any time outstanding;
(d) Indebtedness of any Loan Party owing to any other Loan Party;
(e) In addition to Indebtedness permitted under Section 7.1(b),
Indebtedness of Foreign Subsidiaries owed to any Loan Party not to exceed
$5,000,000 at any time outstanding;
(f) Indebtedness of the Borrower consisting of a Guarantee by the
Borrower of loans to employees of the Borrower; provided, that the aggregate
--------
principal amount of such Indebtedness shall not exceed $1,000,000 at any time
outstanding;
(g) Indebtedness of the Borrower or any Subsidiary in respect of
performance bonds and completion guaranties provided by the Borrower or any
Subsidiary in the ordinary course of business not to exceed $5,000,000 in the
aggregate at any time outstanding;
(h) Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities and
not for speculative purposes;
(i) unsecured Indebtedness of the Borrower or any Subsidiary
consisting of a Guaranty by the Borrower or such Subsidiary of Indebtedness
otherwise permitted to be incurred under this Section 7.1;
(j) Indebtedness of the Borrower in respect of equity related
purchase obligations arising under its stock option plan or executive
compensation plans;
(k) Indebtedness (i) owing by any Person at the time such Person
becomes a Subsidiary of the Borrower, (ii) owing by any Person at the time such
Person is merged with or into the Borrower or any Subsidiary or (iii) secured by
any asset prior to the acquisition thereof by the Borrower or any Subsidiary;
provided, that such Indebtedness (x) was not created or incurred in the
--------
contemplation of any of the foregoing and (y) if such Indebtedness is secured by
a Lien, such Lien is
-27-
permitted under Section 7.2; and
(l) other unsecured Indebtedness of the Borrower or any Subsidiary in
an aggregate principal amount not to exceed $2,000,000 at any time outstanding,
provided that the terms and conditions of such Indebtedness (including the
default provisions) are not more onerous than the terms of this Agreement.
SECTION 7.2. NEGATIVE PLEDGE. The Borrower will not, and will not
---------------
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien on any of its assets or property now owned or hereafter acquired or,
except:
(a) Liens created in favor of the Lender pursuant to the Loan
Documents;
(b) Permitted Encumbrances;
(c) any Liens on any property or asset of the Borrower or any
Subsidiary existing on the Closing Date set forth on Schedule 7.2; provided,
------------ --------
that such Lien shall not apply to any other property or asset of the Borrower or
any Subsidiary;
(d) Liens upon or in any fixed or capital assets to secure the
purchase price or the cost of construction or improvement of such fixed or
capital assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition, construction or improvement of such fixed or capital
assets (including Liens securing any Capital Lease Obligations); provided, that
--------
(i) such Lien secures Indebtedness permitted by Section 7.1(c), (ii) such Lien
----------- -
attaches to such asset concurrently or within 90 days after the acquisition,
improvement or completion of the construction thereof; (iii) such Lien does not
extend to any other asset; and (iv) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets;
(e) any Lien (i) existing on any asset of any Person at the time such
Person becomes a Subsidiary of the Borrower, (ii) existing on any asset of any
Person at the time such Person is merged with or into the Borrower or any
Subsidiary of the Borrower or (iii) existing on any asset prior to the
acquisition thereof by the Borrower or any Subsidiary of the Borrower; provided,
--------
that any such Lien was not created in the contemplation of any of the foregoing
and any such Lien secures only those obligations which it secures on the date
that such Person becomes a Subsidiary or the date of such merger or the date of
such acquisition;
(f) Liens securing Indebtedness permitted under Section 7.1(f); and
--------------
(g) extensions, renewals, or replacements of any Lien referred to in
paragraphs (b) through (f) of this Section; provided, that the principal amount
--------
of the Indebtedness secured thereby is not increased and that any such
extension, renewal or replacement is limited to the assets originally encumbered
thereby.
SECTION 7.3. FUNDAMENTAL CHANGES.
-------------------
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(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate into any other Person, or permit any other Person to
merge into or consolidate with it, or liquidate or dissolve; provided, that if
--------
at the time thereof and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing (i) the Borrower or any
Subsidiary may merge with a Person if the Borrower (or such Subsidiary if the
Borrower is not a party to such merger) is the surviving Person, (ii) any
Subsidiary may merge into another Subsidiary or the Borrower; provided, that if
--------
any party to such merger is a Guarantor, the surviving Person must be, or become
concurrently with such merger, a Guarantor, and (iii) any Subsidiary (other than
a Guarantor) may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lender; provided, that any such
--------
merger involving a Person that is not a wholly-owned Subsidiary immediately
prior to such merger shall not be permitted unless an Investment made as a
result of such merger is permitted by Section 7.4. Nothing in this Section 7.3
-----------
shall be deemed to prohibit the disposition of the Minxware product line
permitted under Section 7.6(c).
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date hereof and businesses reasonably related thereto.
SECTION 7.4. INVESTMENTS, LOANS, ETC. The Borrower will not, and will
------------------------
not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly-owned Subsidiary
prior to such merger), any common stock, evidence of indebtedness or other
securities (including any option, warrant, or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person (all of the foregoing being collectively called
"Investments"), or purchase or otherwise acquire (in one transaction or a series
of transactions) any assets of any other Person that constitute a business unit,
except:
(a) Investments (including Investments in Subsidiaries but excluding
Permitted Investments) existing on the date hereof and set forth on Schedule
--------
7.4;
---
(b) Permitted Investments;
(c) Investments constituting Indebtedness permitted by Section 7.1(d)
and other Investments in a Guarantor;
(d) Investments in Foreign Subsidiaries resulting from the transfer
by the Borrower to such Foreign Subsidiaries of existing software license
arrangements with customer operations currently located in the territory served
by such Foreign Subsidiary;
(e) In addition to Investments permitted under either of the
immediately preceding clauses (a) and (d), other Investments by the Borrower in
a Foreign Subsidiary of the Borrower not to exceed $5,000,000 in the aggregate,
including without limitation Investments constituting Indebtedness permitted by
Section 7.1(e);
-29-
(f) Investments consisting of loans or advances to employees, officers
or directors of the Borrower or any Subsidiary in the ordinary course of
business for travel, relocation and related expenses;
(g) Investments consisting of promissory notes received as proceeds of
asset dispositions permitted by Section 7.6;
-----------
(h) Investments represented by accounts receivable created, acquired
or made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;
(i) Investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(j) any prepaid royalties or advanced commissions paid by the Borrower
or any Subsidiary to any Person; and
(k) Investments of a nature not contemplated in the foregoing
subsections in an amount not to exceed $2,000,000 in the aggregate at any time
outstanding.
Section 7.5. Restricted Payments. The Borrower will not, and will not
-------------------
permit its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any dividend on any class of its stock, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for, the
purchase, redemption, retirement, defeasance or other acquisition of, any shares
of common stock or Indebtedness subordinated to the Obligations of the Borrower
or any options, warrants, or other rights to purchase such common stock or such
Indebtedness, whether now or hereafter outstanding (each, a "Restricted
Payment"), except for (i) Restricted Payments made by any Subsidiary to the
Borrower or to a Guarantor, (ii) cash dividends paid on, and cash redemptions or
repurchases of, the common stock of the Borrower in an aggregate amount not to
exceed $2,000,000 during any fiscal year of the Borrower (excluding any
repurchase made from employees of the Borrower related to the Borrower's stock
option plan or executive compensation plan), so long as no Default or Event of
Default has occurred and is continuing. Nothing in this Section 7.5, nor
anything else contained in this Agreement or any other Loan Document, shall
prohibit payment of amounts (whether in cash, stock or other property) required
to be paid by the Borrower under Section 2.9 of the Agreement and Plan of Merger
dated March 1, 2000, by and among the Borrower, Athens Merger Corp., ▇▇▇▇
Associates, Inc., RM Systems, Inc., ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇; provided, however, the amount of cash payments paid
by the Borrower after the date hereof shall not exceed $700,000 in the
aggregate.
Section 7.6. Sale of Assets. The Borrower will not, and will not
---------------
permit any of its Subsidiaries to, convey, sell, lease, assign, transfer or
otherwise dispose of, any of its assets, business or property, whether now owned
or hereafter acquired (including, without limitation, any shares or other
ownership interests in any direct or indirect Subsidiary of the Borrower)
except:
-30-
(a) the sale or other disposition for fair market value of obsolete or
worn out property or other property not necessary for operations disposed of in
the ordinary course of business;
(b) the sale of inventory, and the licensing of software and other
products, in the ordinary course of business; and
(c) the sale (whether a sale of assets, capital stock, or both) of the
Minxware product line;
(d) transfers of assets constituting Investments between and among the
Borrower and its Subsidiaries to the extent not prohibited by Section 7.4; and
-----------
(e) so long as no Default or Event of Default exists or would result
therefrom and so long as the Borrower or a Subsidiary receives fair and
reasonable consideration in cash for any such sale or other disposition, the
sale or other disposition of other assets in an aggregate amount not to exceed
10% of the value of Total Assets of the Borrower and its Subsidiaries in any
twelve (12) consecutive month period ending on the date of determination
thereof.
In connection with any asset disposition permitted under this Section 7.6, the
-----------
Lender agrees to execute, upon the Borrower's request and at the Borrower's sole
cost and expense, such documents and instruments of release as the Borrower may
reasonably request to evidence the release and termination of (a) any security
interest or other lien of the Lender created pursuant to any of the Loan
Documents in the assets that are the subject of such disposition and (b) the
Guaranty with respect to any Guarantor, the capital stock of which is the
subject of such disposition.
Section 7.7. Transactions with Affiliates. The Borrower will not,
----------------------------
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
Affiliate (other than for services as employees, officers and directors), except
(a) in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and its wholly-owned Subsidiaries not involving any other
Affiliates and (c) any Restricted Payment permitted by Section 7.5.
-----------
Section 7.8. Restrictive Agreements. The Borrower will not, and will
----------------------
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement that prohibits, restricts or imposes any condition
upon (a) the ability of the Borrower or any Subsidiary to create, incur or
permit any Lien upon any of its assets or properties, whether now owned or
hereafter acquired, or (b) the ability of any Subsidiary to pay dividends or
other distributions with respect to its common stock, to make or repay loans or
advances to the Borrower or any other Subsidiary, to Guarantee Indebtedness of
the Borrower or any other Subsidiary or to transfer any of its property or
assets to the Borrower or any Subsidiary of the Borrower; provided, that (i) the
--------
foregoing shall not apply to restrictions or conditions imposed by law or by
this Agreement or any other Loan Document, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in
-31-
agreements relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is sold and such
sale is permitted hereunder, (iii) clause (a) shall not apply to restrictions or
conditions imposed by any agreement relating to secured Indebtedness permitted
by this Agreement if such restrictions and conditions apply only to the property
or assets securing such Indebtedness and (iv) clause (a) shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.
Section 7.9. Sale and Leaseback Transactions. The Borrower will not,
-------------------------------
and will not permit any of the Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby it shall sell or transfer any property, real or
personal, used or useful in its business, whether now owned or hereinafter
acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property
sold or transferred.
Section 7.10. Amendment to Material Documents. The Borrower will not,
-------------------------------
and will not permit any Subsidiary to, amend, modify or waive any of its rights
in a manner materially adverse to the Lender under its certificate or articles
of incorporation, bylaws or other organizational documents.
Section 7.11. Accounting Changes. The Borrower will not, and will not
------------------
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Borrower or of any Subsidiary, except to change the fiscal year of a
Subsidiary to conform its fiscal year to that of the Borrower.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
Section 8.1. Events of Default. If any of the following events (each
-----------------
an "Event of Default") shall occur:
----------------
(a) the Borrower shall fail to pay any principal of any Revolving
Loan or any reimbursement obligation with respect to a LC Disbursement when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment or otherwise; or
(b) the Borrower shall fail to pay any interest on any Revolving Loan
or any fee or any other amount (other than an amount payable under clause (a) of
this Section) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of three (3) Business Days following receipt by the
Borrower of notice of such failure from the Lender; or
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any other Loan Party in this Agreement or any other
Loan Document (including the Schedules attached thereto) and any amendments or
modifications hereof or waivers hereunder, or in any certificate, report,
financial statement or other document submitted to the Lender by any Loan
-32-
Party or any representative of any Loan Party pursuant to or in connection with
this Agreement or any other Loan Document shall prove to be incorrect in any
material respect when made or deemed made or submitted; or
(d) the Borrower shall fail to observe or perform any covenant or
agreement contained in Section 5.2(a) or 5.3 (with respect to the existence of
------- --- - ---
the Borrower or any Guarantor) or Articles VI or VII; or
(e) the Borrower shall fail to observe or perform any covenant or
agreement contained in this Agreement (other than those referred to in clauses
(a), (b) and (d) above), and such failure shall remain unremedied for 15 days
after written notice thereof shall have been given to the Borrower by the
Lender; or
(f) the Borrower or any Subsidiary (whether as primary obligor or as
guarantor or other surety) shall fail to pay any principal of or premium or
interest on any Indebtedness constituting borrowed money or obligations under
Capitalized Leases or net amounts due under Hedging Agreements in an aggregate
in excess of $1,000,000, when and as the same shall become due and payable
(whether at scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument evidencing such Indebtedness;
or any other event shall occur or condition shall exist under any agreement or
instrument relating to such Indebtedness and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate, or permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid or redeemed (other than by a
regularly scheduled required prepayment or redemption), purchased or defeased,
or any offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
(g) the Borrower or any Subsidiary (other than a Non-Material
Subsidiary) shall (i) commence a voluntary case or other proceeding or file any
petition seeking liquidation, reorganization or other relief under any federal,
state or foreign bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a custodian, trustee, receiver, liquidator
or other similar official of it or any substantial part of its property, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or petition described in clause (i) of this Section,
(iii) apply for or consent to the appointment of a custodian, trustee, receiver,
liquidator or other similar official for the Borrower or any such Subsidiary
(other than a Non-Material Subsidiary) or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, or (vi) take any action for the purpose of effecting any of the
foregoing; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary (other than a Non- Material
Subsidiary) or its debts, or any substantial part of its assets, under any
federal, state or foreign bankruptcy, insolvency or other similar law now or
hereafter in
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effect or (ii) the appointment of a custodian, trustee, receiver, liquidator or
other similar official for the Borrower or any Subsidiary (other than a Non-
Material Subsidiary) or for a substantial part of its assets, and in any such
case, such proceeding or petition shall remain undismissed for a period of 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
(i) the Borrower or any Subsidiary (other than a Non-Material
Subsidiary) shall become unable to pay, shall admit in writing its inability to
pay, or shall fail to pay, its debts as they become due; or
(j) an ERISA Event shall have occurred that when taken together with
other ERISA Events that have occurred, could reasonably be expected to result in
liability to the Borrower and the Subsidiaries in an aggregate amount exceeding
$1,000,000; or
(k) any judgment or order for the payment of money in excess of
$1,000,000 in the aggregate shall be rendered against the Borrower or any
Subsidiary (other than a Non-Material Subsidiary), and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(l) any non-monetary judgment or order shall be rendered against the
Borrower or any Subsidiary (other than a Non-Material Subsidiary) that could
reasonably be expected to have a Material Adverse Effect, and there shall be a
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(m) a Change in Control shall occur or exist; or
(n) except as a result of any asset disposition or other transaction
expressly permitted by this Agreement, the Borrower shall cease to own 100% of
the capital stock of any Guarantor that is a direct Subsidiary of the Borrower,
or any Guarantor shall cease to own 100% of the capital stock of any other
Guarantor that is its direct Subsidiary; or
(o) any material provision of any Loan Document shall for any reason
cease to be valid and binding on, or enforceable against, the Borrower or any
other Loan Party, or any Loan Party shall so state in writing, or any Loan Party
shall seek to terminate any Loan Document to which it is a party; or
(p) the Lender shall cease for any reason (other than failure to take
action required on its part) to have a perfected, first priority Lien in and on
any Collateral; or
(q) the occurrence of an event of default under any other Loan
Document;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Section) and at any time thereafter
during the continuance of such event, the Lender
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may, by notice to the Borrower, take any or all of the following actions, at the
same or different times: (i) terminate its Revolving Commitment; (ii) declare
the principal of and any accrued interest on any outstanding Revolving Loans,
and all other Obligations owing hereunder, to be, whereupon the same shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower, (iii)
enforce any or all of the Liens created pursuant to the Security Agreement in
accordance with such Security Agreements and (iv) exercise all remedies
contained in any Loan Document; and that, if an Event of Default specified in
either clause (g) or (h) shall occur, the Revolving Commitment shall
automatically terminate and the principal of all outstanding Revolving Loans
then outstanding, together with accrued interest thereon, and all fees, and all
other Obligations shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1. Notices.
-------
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
To the Borrower: MAPICS, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: MAPICS, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Managing Director
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
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Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the mails or if
delivered, upon delivery; provided, that notices delivered to the Lender shall
--------
not be effective until actually received by the Lender at its address specified
in this Section 9.1.
-----------
(b) Any agreement of the Lender herein to receive certain notices by
telephone or facsimile is solely for the convenience and at the request of the
Borrower. The Lender shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice and the
Lender shall not have any liability to the Borrower or other Person on account
of any action taken or not taken by the Lender in reliance upon such telephonic
or facsimile notice. The obligation of the Borrower to repay the Revolving
Loans and all other obligations hereunder shall not be affected in any way or to
any extent by any failure of the Lender to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Lender of a confirmation
which is at variance with the terms understood by the Lender to be contained in
any such telephonic or facsimile notice.
Section 9.2. Waiver; Amendments.
------------------
(a) No failure or delay by the Lender in exercising any right or
power hereunder or any other Loan Document, and no course of dealing between the
Borrower and the Lender, shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power or any abandonment or
discontinuance of steps to enforce such right or power, preclude any other or
further exercise thereof or the exercise of any other right or power hereunder
or thereunder. The rights and remedies of the Lender hereunder and under the
other Loan Documents are cumulative and are not exclusive of any rights or
remedies provided by law. No waiver of any provision of this Agreement or any
other Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Revolving Loan or the issuance of a
Letter of Credit shall not be construed as a waiver of any Default or Event of
Default, regardless of whether the Lender may have had notice or knowledge of
such Default or Event of Default at the time.
(b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Borrower and the Lender and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 9.3. Expenses; Indemnification.
-------------------------
-36-
(a) The Borrower shall pay (i) all reasonable, out-of-pocket costs
and expenses of the Lender (including, without limitation, the reasonable fees,
charges and disbursements of outside counsel and the allocated cost of inside
counsel) actually incurred in connection with the preparation and administration
of any of the Loan Documents and any amendments, modifications or waivers
thereof (whether or not the transactions contemplated by this Agreement or any
other Loan Document shall be consummated) and (ii) all out-of-pocket costs and
expenses (including, without limitation, the reasonable fees, charges and
disbursements of outside counsel and the allocated cost of inside counsel)
actually incurred by the Lender in connection with the enforcement or protection
of its rights in connection with this Agreement (including its rights under this
Section), or in connection with the Revolving Loans made, or any Letters of
Credit issued, hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Revolving
Loans or Letters of Credit, or in connection with any other Loan Document.
(b) The Borrower shall indemnify the Lender and each Related Party of
the Lender (each, an "Indemnitee") against, and hold each of them harmless from,
any and all costs, losses, liabilities, claims, damages and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
which may be actually incurred by or asserted against any Indemnitee arising out
of, in connection with or as a result of (i) the execution or delivery of any
this Agreement or any other Loan Document, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
any of the transactions contemplated hereby or thereby, (ii) any Revolving Loan
or any Letter of Credit or any actual or proposed use of the proceeds therefrom
(including any refusal by the Lender to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit, (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned
by the Borrower or any Subsidiary or any Environmental Liability related in
any way to the Borrower or any Subsidiary or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort, or any other theory and regardless of whether
any Indemnitee is a party thereto; provided, that the Borrower shall not be
--------
obligated to indemnify any Indemnitee for any of the foregoing arising out of
such Indemnitee's gross negligence or willful misconduct as determined by a
court of competent jurisdiction in a final and nonappealable judgment.
(c) The Borrower shall pay, and hold the Lender harmless from and
against, any and all present and future stamp, documentary, and other similar
taxes with respect to this Agreement and any other Loan Documents, any
collateral described therein, or any payments due thereunder, and save the
Lender harmless from and against any and all liabilities with respect to or
resulting from any delay or omission to pay such taxes.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to actual or direct damages) arising out of, in connection with or as a result
of, this Agreement or any other Loan Document, the transactions contemplated
herein or therein, any Revolving Loan or the use of proceeds thereof.
Section 9.4. Successors and Assigns.
----------------------
-37-
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
hereunder without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void).
(r) The Lender may at any time assign to one or more assignees all or
any portion of its rights and obligations under this Agreement and the other
Loan Documents (including all or a portion of its Revolving Commitment and the
Revolving Loans and LC Exposure at the time owing to it); provided, that the
--------
Borrower must give its prior written consent (which consent shall not be
unreasonably withheld or delayed) to any assignment, except during the
occurrence and continuation of an Event of Default. Upon the execution and
delivery of an assignment agreement by the Lender and such assignee and payment
by such assignee of an amount equal to the purchase price agreed between the
Lender and such assignee, such assignee shall become a party to this Agreement
and the other Loan Documents and shall have the rights and obligations of a
Lender under this Agreement, and the Lender shall be released from its
obligations hereunder to a corresponding extent. Upon the consummation of any
such assignment hereunder, the Lender, the assignee and the Borrower shall make
appropriate arrangements to have a new Revolving Credit Note issued to reflect
such assignment.
(c) The Lender may at any time, without the consent of the Borrower,
sell participations to one or more banks or other entities (a "Participant") in
-----------
all or a portion of the Lender's rights and obligations under this Agreement;
provided, that (i) the Lender's obligations under this Agreement shall remain
--------
unchanged, (ii) the Lender shall remain solely responsible to the other parties
hereto for the performance of its obligations hereunder, and (iii) the Borrower
shall continue to deal solely and directly with the Lender in connection with
the Lender's rights and obligations under this Agreement and the other Loan
Documents. Any agreement between the Lender and the Participant with respect to
such participation shall provide that the Lender shall retain the sole right and
responsibility to enforce this Agreement and the other Loan Documents and the
right to approve any amendment, modification or waiver of this Agreement and the
other Loan Documents.
(d) The Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and the Revolving
Credit Note to secure its obligations to a Federal Reserve Bank without
complying with this Section; provided, that no such pledge or assignment shall
--------
release the Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.
Section 9.5. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process.
-------
(a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of Georgia.
-38-
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of the United States
District Court of the Northern District of Georgia, and of any state court of
the State of Georgia located in ▇▇▇▇▇▇ County and any appellate court from any
thereof, in any action or proceeding between the parties hereto arising out of
or relating to this Agreement or any other Loan Document or the transactions
contemplated hereby or thereby, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such Georgia state court or, to the extent permitted by
applicable law, such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Lender may otherwise have to bring any action or
relating to this Agreement or any other Loan Document against the Borrower or
its properties in the courts of any jurisdiction.
(c) The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in paragraph (b) of this Section and brought in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 9.1. Nothing in this
-----------
Agreement or in any other Loan Document will affect the right of any party
hereto to serve process in any other manner permitted by law.
Section 9.6. WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY
--------------------
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING BETWEEN THE PARTIES HERETO DIRECTLY
OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.7. Counterparts; Integration. This Agreement may be
-------------------------
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement and the other Loan Documents constitute the entire agreement among the
parties hereto and thereto regarding the subject matters hereof and thereof and
supersede all prior agreements and understandings, oral or written, regarding
such subject matters.
-39-
Section 9.8. Survival. All covenants, agreements, representations
--------
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Revolving Loans, regardless of any investigation made by any such other party or
on its behalf and notwithstanding that the Lender may have had notice or
knowledge of any Default or Event of Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Revolving Commitment has not expired or
terminated. The provisions of Section 9.3 shall survive and remain in full
-----------
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Revolving Loans, the expiration or termination of
the Revolving Commitment or the termination of this Agreement or any provision
hereof. All representations and warranties made herein, in the certificates,
reports, notices, and other documents delivered pursuant to this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents, and the making of the Revolving Loans.
Section 9.9. Severability. Any provision of this Agreement or any
------------
other Loan Document held to be illegal, invalid or unenforceable in any
jurisdiction, shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity or unenforceability without affecting the legality,
validity or enforceability of the remaining provisions hereof or thereof; and
the illegality, invalidity or unenforceability of a particular provision in a
particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 9.10. Confidentiality. Except as otherwise provided by
---------------
applicable law, the Lender shall utilize all non-public information regarding
the Borrower and its Subsidiaries and Affiliates obtained pursuant to the
requirements of this Agreement and the other Loan Document in accordance with
its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices but in any event may make
disclosure: (a) to any of the Lender's Affiliates (provided any such Affiliate
shall agree in writing to keep such information confidential in accordance with
the terms of this Section); (b) as reasonably requested by any bona fide
assignee, participant or other transferee in connection with the contemplated
assignment by the Lender of its rights hereunder or participations therein as
permitted hereunder (provided they shall agree in writing to keep such
information confidential in accordance with the terms of this Section); (c) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process or in connection with any legal proceedings; (d) to
the Lender's independent auditors and other professional advisors (provided they
shall be notified of the confidential nature of the information); (e) if an
Event of Default exists, to any other Person, in connection with the exercise by
the Lender of rights hereunder or under any of the other Loan Documents; and (f)
to the extent such information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Lender on a
nonconfidential basis from a source other than the Borrower, a Subsidiary or any
Affiliate of the Borrower.
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[Remainder of page intentionally left blank]
-41-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
MAPICS, INC.
By________________________________________
Name:
Title:
SUNTRUST BANK
By________________________________________
Name:
Title:
[SIGNATURE PAGE TO
REVOLVING CREDIT AGREEMENT]
EXHIBIT A
REVOLVING CREDIT NOTE
---------------------
$10,000,000.00 Atlanta, Georgia
April __, 2002
FOR VALUE RECEIVED, the undersigned, MAPICS, INC., a Georgia corporation
(the "Borrower"), hereby promises to pay to SunTrust Bank (the "Lender") or its
registered assigns at its principal office or any other office or bank account
that the Lender designates, on the Commitment Termination Date (as defined in
the Revolving Credit Agreement dated as of April __, 2002 between the Borrower
and the Lender (as the same may be amended, supplemented or otherwise modified
from time to time, the "Credit Agreement")), the lesser of the principal sum of
$10,000,000 and the aggregate unpaid principal amount of all Revolving Loans
made by the Lender to the Borrower pursuant to the Credit Agreement, in
immediately available funds, and to pay interest from the date hereof on the
principal amount thereof from time to time outstanding, in like funds and in
like currency, at said office, at the rate or rates per annum and payable on
such dates as provided in the Credit Agreement. In addition, should legal
action or an attorney-at-law be utilized to collect any amount due hereunder,
the Borrower further promises to pay all costs of collection, including the
reasonable attorneys' fees of the Lender actually incurred.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at a
rate or rates provided in the Credit Agreement.
All borrowings evidenced by this Revolving Credit Note and all payments and
prepayments of the principal hereof and the date thereof shall be endorsed by
the holder hereof on the schedule attached hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; provided, that the
--------
failure of the holder hereof to make such a notation or any error in such
notation shall not affect the obligations of the Borrower to make the payments
of principal and interest in accordance with the terms of this Revolving Credit
Note and the Credit Agreement.
This Revolving Credit Note is issued in connection with, and is entitled to
the benefits of, the Credit Agreement which, among other things, contains
provisions for the acceleration of the maturity hereof upon the happening of
certain events, for prepayment of the principal hereof prior to the maturity
hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified. This Revolving
Credit Note is secured by the Collateral described in the Security Agreements
and is unconditionally guaranteed by the Guarantors pursuant to the Guaranty.
A-1
THIS REVOLVING CREDIT NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF GEORGIA AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA.
MAPICS, INC.
By:__________________________
Name:
Title:
A-2
LOANS AND PAYMENTS
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Unpaid Principal Name of Person
Amount and Payments of Balance of Making
Date Type of Loan Principal Note Notation
---- ------------ --------- ---- --------
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A-3
NOTICE OF REVOLVING BORROWING
April 26, 2002
SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Dear Sirs:
Reference is made to the Revolving Credit Agreement dated as of April 26,
2002 (as amended and in effect on the date hereof, the "Credit Agreement"),
between the undersigned, as Borrower, and SunTrust Bank, as Lender. Terms
defined in the Credit Agreement are used herein with the same meanings. This
notice constitutes a Notice of Revolving Borrowing, and the Borrower hereby
requests a Revolving Loan under the Credit Agreement, and in that connection the
Borrower specifies the following information with respect to the Revolving
Borrowing requested hereby:
(A) Principal amount of Revolving Loan: $8,427,649.49
(B) Date of Revolving Loan (which is a Business Day): April 26, 2002
(C) Interest Rate basis: Base Rate
(D) Interest Period: N/A
(E) Location and number of Borrower's account to which proceeds of
Revolving Loan are to be disbursed: N/A
The Borrower hereby represents and warrants that the conditions specified
in paragraphs (a) and (b) of Section 3.2 of the Credit Agreement are satisfied.
Very truly yours,
MAPICS, INC.
By:__________________________
Name:
Title:
Exhibit B
EXHIBIT C
FORM OF CONTINUATION/CONVERSION
[Date]
SunTrust Bank
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Attention:
Dear Sirs:
Reference is made to the Revolving Credit Agreement dated as of April __,
2002 (as amended and in effect on the date hereof, the "Credit Agreement"),
among the undersigned, as Borrower, and SunTrust Bank, as Lender. Terms defined
in the Credit Agreement are used herein with the same meanings. This notice
constitutes a Notice of Continuation/Conversion and the Borrower hereby requests
the conversion or continuation of a Revolving Loan under the Credit Agreement,
and in that connection the Borrower specifies the following information with
respect to the Revolving Loan to be converted or continued as requested hereby:
(A) Revolving Loan to which this request applies: ________________________
(B) Principal amount of Revolving Loan to be converted/continued:
___________________________
(C) Effective date of election (which is a Business Day):_________________
(D) Interest rate basis of resulting Loan:_______________________
(E) Interest Period of resulting Loan:____________________________
Very truly yours,
MAPICS, INC.
By:___________________
Name:
Title:
Exhibit C
EXHIBIT D
FORM OF OFFICER'S CERTIFICATE
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Reference is made to the Revolving Credit Agreement dated as of April __,
2002 (the "Credit Agreement"), between MAPICS, INC. (the "Borrower"), and
SUNTRUST BANK (the "Lender"). Terms defined in the Credit Agreement are used
herein with the same meanings. This certificate is being delivered pursuant to
Section 3.1(d) of the Credit Agreement.
I, [ ], [ ] of
the Borrower, DO HEREBY CERTIFY to the Lender, in such capacity and not in my
individual capacity, that to the best of my knowledge and belief:
(a) the representations and warranties of the Borrower set forth in the
Credit Agreement are true and correct on and as of the date hereof; and
(b) no Default or Event of Default has occurred and is continuing at the
date hereof; and
(c) since [the date], which is the date of the most recent financial
statements described in Section 5.1(a) of the Credit Agreement, there has been
no change which has had or could reasonably be expected to have a Material
Adverse Effect.
IN WITNESS WHEREOF, I have hereunto signed my name this ___ day of April,
2002.
__________________________
Name:
Title:
EXHIBIT D
EXHIBIT E
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FORM OF COMPLIANCE CERTIFICATE
Date: _____________, _____
To: SunTrust Bank
Ladies and Gentlemen:
Reference is made to the Revolving Credit Agreement dated as of April 26,
2002 (the "Credit Agreement"), between MAPICS, Inc. (the "Borrower") and
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SunTrust Bank (the "Lender"). Terms defined in the Credit Agreement are used
herein with the same meanings. This certificate is being delivered pursuant to
Section 5.1(c) of the Credit Agreement.
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The undersigned hereby certifies as of the date hereof that he/she is the
[chief financial officer][treasurer] of the Borrower, and that, as such, he/she
is authorized to execute and deliver this certificate to the Lender, and that:
[Use following for fiscal year-end financial statements]
1. Attached hereto is the [annual audited financial statement][Borrower's
10-K] for the fiscal year ending [date] required to be delivered pursuant to
Section 5.1(a) of the Credit Agreement, together with the written statement of
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[name independent certified public accountants] required by such section.
[Use following for fiscal quarter-end financial statements]
1. Attached hereto is the [unaudited financial statement (including the
unaudited consolidated balance sheet, and the related unaudited consolidated
statements of operations and cash flows)][the Borrower's Form 10-Q] for the
fiscal quarter ending [date] required to be delivered pursuant to Section 5.1(b)
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of the Credit Agreement. I hereby certify that such financial statement fairly
presents in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP as at such date and for such periods, subject only to
normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Credit Agreement and the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statement.
3. A review of the activities of the Borrower during such fiscal period
has been
made at the direction of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed each covenant and
condition of the Loan Documents applicable to it, and
[select one:]
(a) [To the best knowledge of the undersigned during such fiscal period,
the Borrower (and, to the extent applicable, each Subsidiary) performed and
observed each covenant and condition of the Loan Documents applicable to it and
no Default or Event of Default exists as of the date of this certificate.]
[or]
[The following covenants or conditions have not been performed or
observed by the Borrower under the Loan Documents and the following is a list of
each such Default or Event of Default and its nature and status:]
[select one:]
(b) [no change in GAAP or the application thereof has occurred since the
date of the Borrower's audited financial statement last delivered to the Lender
pursuant to Section 5.1(a) of the Credit Agreement.]
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[or]
[a change in GAAP or the application thereof has occurred since the
date of the Borrower's audited financial statement last delivered to the Lender
and the effect of such change on such financial statement attached hereto is as
follows:]
4. The financial covenant calculations set forth on Schedule I attached
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hereto are true and accurate on and as of the date of this certificate [and
demonstrate compliance with Article VI of the Credit Agreement on and as of the
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date hereof.]
IN WITNESS WHEREOF, the undersigned has executed this certificate as of
____________ ___, 200__.
MAPICS, INC.
By: ________________________
Name: ______________________
Title: _____________________
Schedule I
FINANCIAL COVENANT CALULATIONS
FOR THE FISICAL PERIOD ENDING [Date]
[To be attached.]