Exhibit 10.17
REVOLVING CREDIT
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AND
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TERM LOAN AGREEMENT
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Dated as of August 4, 1997
among
MAPICS, INC.
BANKBOSTON, N.A.
and the other lending institutions
set forth on Schedule 1 hereto
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and
BANKBOSTON, N.A. as Agent
TABLE OF CONTENTS
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1. DEFINITIONS AND RULES OF INTERPRETATION......................................................... 1
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1.1. Definitions.......................................................................... 1
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1.2. Rules of Interpretation.............................................................. 19
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2. THE REVOLVING CREDIT FACILITY................................................................... 20
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2.1. Commitment to Lend................................................................... 20
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2.2. Commitment Fee....................................................................... 21
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2.3. Reduction of Total Commitment........................................................ 21
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2.4. The Revolving Credit Notes........................................................... 21
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2.5. Interest on Revolving Credit Loans................................................... 22
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2.6. Requests for Revolving Credit Loans.................................................. 22
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2.7. Conversion Options................................................................... 23
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2.7.1. Conversion to Different Type of Revolving Credit Loan..................... 23
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2.7.2. Continuation of Type of Revolving Credit Loan............................. 23
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2.7.3. Eurodollar Rate Loans..................................................... 23
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2.8. Funds for Revolving Credit Loan...................................................... 24
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2.8.1. Funding Procedures........................................................ 24
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2.8.2. Advances by Agent......................................................... 24
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2.9. Change in Borrowing Base............................................................. 25
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3. REPAYMENT OF THE REVOLVING CREDIT LOANS......................................................... 25
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3.1. Maturity............................................................................. 25
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3.2. Mandatory Repayments of Revolving Credit Loans....................................... 25
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3.3. Optional Repayments of Revolving Credit Loans........................................ 25
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4. THE TERM LOAN................................................................................... 26
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4.1. Commitment to Lend................................................................... 26
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4.2. The Term Notes....................................................................... 26
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4.3. Repayments of the Term Loan.......................................................... 26
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4.3.1 Schedule of Installment Payments of Principal of Term Loan.................. 26
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4.3.2 Proceeds.................................................................... 27
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4.4. Optional Prepayment of Term Loan..................................................... 27
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4.5. Interest on Term Loan................................................................ 27
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4.5.1. Interest Rates............................................................ 27
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4.5.2. Notification by Borrower.................................................. 28
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4.5.3. Amounts, etc.............................................................. 28
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5. LETTERS OF CREDIT............................................................................... 28
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5.1. Letter of Credit Commitments......................................................... 28
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5.1.1. Commitment to Issue Letters of Credit..................................... 28
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5.1.2. Letter of Credit Applications............................................. 29
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5.1.3. Terms of Letters of Credit................................................ 29
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5.1.4. Reimbursement Obligations of Banks........................................ 29
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5.1.5. Participations of Banks................................................... 29
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5.2. Reimbursement Obligation of the Borrower............................................. 30
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5.3. Letter of Credit Payments............................................................ 30
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5.4. Obligations Absolute................................................................. 31
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5.5. Reliance by Issuer................................................................... 31
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5.6. Letter of Credit Fee................................................................. 32
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6. CERTAIN GENERAL PROVISIONS...................................................................... 32
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6.1. Drawdown Fee......................................................................... 32
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6.2. [Reserved]........................................................................... 32
6.3. Funds for Payments................................................................... 32
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6.3.1. Payments to Agent......................................................... 32
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6.3.2. No Offset, etc............................................................ 33
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6.4. Computations......................................................................... 33
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6.5. Inability to Determine Eurodollar Rate............................................... 33
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6.6. Illegality........................................................................... 34
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6.7. Additional Costs, etc................................................................ 34
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6.8. Capital Adequacy..................................................................... 35
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6.9. Certificate.......................................................................... 36
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6.10. Indemnity........................................................................... 36
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6.11. Interest After Default.............................................................. 36
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6.11.1. Overdue Amounts.......................................................... 36
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6.11.2. Amounts Not Overdue...................................................... 36
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7. COLLATERAL SECURITY AND GUARANTIES.............................................................. 37
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7.1. Security of Borrower................................................................. 37
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7.2. Guaranties and Security of Domestic Subsidiaries..................................... 37
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8. REPRESENTATIONS AND WARRANTIES.................................................................. 37
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8.1. Corporate Authority.................................................................. 37
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8.1.1. Incorporation; Good Standing.............................................. 37
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8.1.2. Authorization............................................................. 37
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8.1.3. Enforceability............................................................ 38
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8.2. Governmental Approvals............................................................... 38
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8.3. Title to Properties; Leases.......................................................... 38
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8.4. Financial Statements and Projections................................................. 38
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8.4.1. Fiscal Year............................................................... 38
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8.4.2. Financial Statements...................................................... 38
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8.4.3. Projections............................................................... 39
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8.5. No Material Changes, etc............................................................. 39
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8.6. Franchises, Patents, Copyrights, etc................................................. 39
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8.7. Litigation........................................................................... 39
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8.8. No Materially Adverse Contracts, etc................................................. 39
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8.9. Compliance with Other Instruments, Laws, etc......................................... 40
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8.10. Tax Status.......................................................................... 40
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8.11. No Event of Default................................................................. 40
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8.12. Holding Company and Investment Company Acts......................................... 40
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8.13. Absence of Financing Statements, etc................................................ 40
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8.14. Perfection of Security Interest..................................................... 41
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8.15. Certain Transactions................................................................ 41
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8.16. Employee Benefit Plans.............................................................. 41
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8.16.1. In General............................................................... 41
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8.16.2. Terminability of Welfare Plans........................................... 41
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8.16.3. Guaranteed Pension Plans................................................. 41
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8.16.4. Multiemployer Plans...................................................... 42
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8.17. Use of Proceeds..................................................................... 42
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8.17.1. General.................................................................. 42
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8.17.2. Regulations U and X...................................................... 42
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8.17.3. Ineligible Securities.................................................... 42
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8.18. Environmental Compliance............................................................ 43
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8.19. Subsidiaries, etc................................................................... 44
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8.20. Bank Accounts....................................................................... 44
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8.21. Additional Representations.......................................................... 44
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8.22. Disclosure.......................................................................... 45
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9. AFFIRMATIVE COVENANTS OF THE BORROWER........................................................... 45
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9.1. Punctual Payment..................................................................... 45
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9.2. Maintenance of Office................................................................ 45
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9.3. Records and Accounts................................................................. 46
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9.4. Financial Statements, Certificates and Information................................... 46
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9.5. Notices.............................................................................. 47
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9.5.1. Defaults.................................................................. 47
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9.5.2. Environmental Events...................................................... 48
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9.5.3. Notification of Claim against Collateral.................................. 48
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9.5.4. Notice of Litigation and Judgments........................................ 48
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9.6. Corporate Existence; Maintenance of Properties....................................... 48
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9.7. Insurance............................................................................ 49
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9.8. Taxes................................................................................ 49
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9.9. Inspection of Properties and Books, etc.............................................. 49
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9.9.1. General................................................................... 49
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9.9.2. Collateral Reports........................................................ 50
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9.9.3. Environmental Assessments................................................. 50
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9.9.4. Communications with Accountants........................................... 50
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9.10. Compliance with Laws, Contracts, Licenses, and Permits.............................. 51
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9.11. Employee Benefit Plans.............................................................. 51
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9.12. Use of Proceeds..................................................................... 51
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9.13. Bank Accounts....................................................................... 51
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9.14. New Guarantors...................................................................... 51
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9.15. Copyright Registration.............................................................. 52
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9.16. Further Assurances.................................................................. 52
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10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER..................................................... 52
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10.1. Restrictions on Indebtedness........................................................ 52
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10.2. Restrictions on Liens............................................................... 53
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10.3. Restrictions on Investments......................................................... 54
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10.4. Distributions....................................................................... 56
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10.5. Merger, Consolidation and Disposition of Assets..................................... 56
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10.5.1. Mergers and Acquisitions................................................. 56
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10.5.2. Disposition of Assets.................................................... 57
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10.6. Sale and Leaseback.................................................................. 57
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10.7. Compliance with Environmental Laws.................................................. 57
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10.8. Subordinated Debt................................................................... 57
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10.9. Employee Benefit Plans.............................................................. 57
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10.10. Business Activities................................................................ 58
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10.11. Fiscal Year........................................................................ 58
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10.12. Transactions with Affiliates....................................................... 58
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10.13. Upstream Limitations............................................................... 58
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11. FINANCIAL COVENANTS OF THE BORROWER............................................................ 58
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11.1. Leverage Ratio...................................................................... 58
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11.2. Consolidated Operating Cash Flow to Debt Service.................................... 59
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11.3. Profitable Operations............................................................... 59
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11.4. Quick Ratio......................................................................... 59
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12. CLOSING CONDITIONS............................................................................. 59
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12.1. Loan Documents...................................................................... 59
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12.2. Certified Copies of Charter Documents............................................... 59
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12.3. Corporate, Action................................................................... 59
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12.4. Incumbency Certificate.............................................................. 59
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12.5. Validity of Liens................................................................... 60
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12.6. Perfection Certificates and UCC Search Results...................................... 60
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12.7. Certificates of Insurance........................................................... 60
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12.8. Agency Account Agreements........................................................... 60
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12.9. Borrowing Base Report............................................................... 60
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12.10. Accounts Receivable Aging Report................................................... 60
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12.11. Solvency Certificate............................................................... 60
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12.12. Opinion of Counsel................................................................. 61
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12.13. Disbursement Instructions.......................................................... 61
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13. CONDITIONS TO ALL BORROWINGS................................................................... 61
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13.1. Representations True; No Event of Default........................................... 61
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13.2. No Legal Impediment................................................................. 61
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13.3. Governmental Regulation............................................................. 61
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13.4. Proceedings and Documents........................................................... 62
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13.5. Borrowing Base Report............................................................... 62
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13.6. Commercial Finance Exam............................................................. 62
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14. EVENTS OF DEFAULT; ACCELERATION; ETC........................................................... 62
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14.1. Events of Default and Acceleration.................................................. 62
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14.2. Termination of Commitments.......................................................... 65
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14.3. Remedies............................................................................ 66
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14.4. Distribution of Collateral Proceeds................................................. 66
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15. SETOFF......................................................................................... 67
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16. THE AGENT...................................................................................... 68
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16.1. Authorization....................................................................... 68
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16.2. Employees and Agents................................................................ 68
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16.3. No Liability........................................................................ 68
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16.4. No Representations.................................................................. 69
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16.4.1. General.................................................................. 69
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16.4.2. Closing Documentation, etc............................................... 69
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16.5. Payments............................................................................ 70
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16.5.1. Payments to Agent........................................................ 70
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16.5.2. Distribution by Agent.................................................... 70
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16.5.3. Delinquent Banks......................................................... 70
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16.6. Holders of Notes.................................................................... 71
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16.7. Indemnity........................................................................... 71
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16.8. Agent as Bank....................................................................... 71
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16.9. Resignation......................................................................... 71
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16.10. Notification of Defaults and Events of Default..................................... 71
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16.11. Duties in the Case of Enforcement.................................................. 72
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17. EXPENSES AND INDEMNIFICATION................................................................... 72
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17.1. Expenses............................................................................ 72
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17.2. Indemnification..................................................................... 73
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17.3. Survival............................................................................ 73
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18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.................................................. 74
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18.1. Sharing of Information with Section 20 Subsidiary................................... 74
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18.2. Confidentiality..................................................................... 74
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18.3. Prior Notification.................................................................. 74
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18.4. Other............................................................................... 74
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19. SURVIVAL OF COVENANTS, ETC..................................................................... 75
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20. ASSIGNMENT AND PARTICIPATION................................................................... 75
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20.1. Conditions to Assignment by Banks................................................... 75
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20.2. Certain Representations and Warranties; Limitations; Covenants...................... 76
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20.3. Register............................................................................ 77
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20.4. New Notes........................................................................... 77
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20.5. Participations...................................................................... 78
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20.6. Disclosure.......................................................................... 78
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20.7. Assignee or Participant Affiliated with the Borrower................................ 78
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20.8. Miscellaneous Assignment Provisions................................................. 79
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20.9. Assignment by Borrower.............................................................. 79
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21. NOTICES, ETC................................................................................... 79
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22. GOVERNING LAW.................................................................................. 80
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23. HEADINGS....................................................................................... 80
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24. COUNTERPARTS................................................................................... 80
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25. ENTIRE AGREEMENT, ETC.......................................................................... 81
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26. WAIVER OF JURY TRIAL........................................................................... 81
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27. CONSENTS, AMENDMENTS, WAIVERS, ETC............................................................. 81
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28. SEVERABILITY................................................................................... 82
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REVOLVING CREDIT
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AND
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TERM LOAN AGREEMENT
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This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of August 4, 1997,
by and among MAPICS, INC. (the "Borrower"), a Massachusetts corporation having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (formerly known as Marcam Corporation), BANKBOSTON,
N.A. and the other lending institutions listed on Schedule 1 hereto and
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BANKBOSTON, N.A. as agent for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1. Definitions. The following terms shall have the meanings set forth in
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this (S)1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Accounts Receivable. All rights of the Borrower or any of its Subsidiaries
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which are party to a Security Agreement to payment for goods sold, leased,
licensed or otherwise marketed in the ordinary course of business or services
rendered in the ordinary course of business and all sums of money or other
proceeds due thereon pursuant to transactions with account debtors, except for
that portion of the sum of money or other proceeds due thereon that relate to
sales, use or property taxes in conjunction with such transactions, recorded on
books of account in accordance with generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the
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month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to (S)9.4(d).
Affiliate. Any Person that would be considered to be an affiliate of the
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Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agency Account Agreement. See (S)9.14.1.
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Agent's Head Office. The Agent's head office located at 100 Federal
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▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
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Agent's Special Counsel. ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ LLP or such other counsel
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as may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
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through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio, as determined for the
fiscal period of the Borrower and its Subsidiaries ending immediately prior to
the applicable Rate Adjustment Period.
Eurodollar Rate Letter of Credit
Base Rate Loans loans Fee
Tier Leverage Ratio (basis points) basic points (basis points)
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1 Less than 2.00:1.00 0 125 125
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2 Less than 2.50:1.00 but 150 150
greater than or equal to
2.00:1.00 0
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3 Greater than or equal to 200 200
2.50:1.00 50
Notwithstanding the foregoing, (a) Loans outstanding and Letter of Credit
Fees payable during the period commencing on the Closing Date through the date
immediately preceding the first Adjustment Date to occur after the fiscal
quarter ending September 30, 1997, the Applicable Margin shall be a Tier 2, and
(b) if the Borrower fails to deliver any Compliance Certificate pursuant to
(S)9.4(d) hereof then, for the period commencing on the next Adjustment Date to
occur subsequent to such failure through the date immediately following the date
on which such Compliance Certificate is delivered, the Applicable Margin shall
be the highest Applicable Margin set forth above.
Asset Sale. Any one or series of related transactions on which any Person
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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.
Assignment and Acceptance. See (S)20.1.
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Balance Sheet Date. March 31, 1997.
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Banks. BKB and the other lending institutions listed on Schedule 1 hereto
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and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to (S)20.
Base Rate. The higher of (i) the annual rate of interest announced from
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time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the
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purposes of this definition, "Federal Funds Effective Rate" shall mean for any
day, the rate per annum equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans and all or any portion of the Term
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Loan bearing interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A. a national banking association, in its individual
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capacity.
BKB Concentration Account. See (S)9.14.1.
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Borrower. As defined in the preamble hereto.
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Borrowing Base. At the relevant time of reference thereto, an amount
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determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to (S)9.4(h), as adjusted pursuant
to the provisions below, which is equal to eighty percent (80%) of Eligible
Accounts Receivable for which invoices have been issued and are payable.
The Agent may, in accordance with its standard commercial practices, from time
to time, upon five (5) days' prior notice to the Borrower, reduce the lending
formula with respect to Eligible Accounts Receivable to the extent that the
Agent determines that: (i) the dilution with respect of the Accounts Receivable
for any period has increased in any material respect or may be reasonably
anticipated to increase in any material respect above historical levels, or (ii)
the general creditworthiness of account debtors or other obligors of the
Borrower has declined in any material respect. In determining whether to reduce
the lending formula, the Agent may consider events, conditions, contingencies or
risks which are also considered in determining Eligible Accounts Receivable.
Borrowing Base Report. A Borrowing Base Report signed by the chief
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financial officer of the Borrower and in substantially the form of Exhibit A
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hereto.
Business Day. Any day on which banking institutions in Boston,
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Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
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include any item
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customarily charged directly to expense or depreciated over a useful life of
twelve (12) months or less in accordance with generally accepted accounting
principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the
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Borrower or any of its Subsidiaries in connection with (i) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (ii) the lease of
any assets by the Borrower or any of its Subsidiaries as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been Capital Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which the Borrower or any of its
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Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See (S)8.18(a).
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Closing Date. The first date on which the conditions set forth in (S)12
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have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
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Collateral. All of the property, rights and interests of the Borrower and
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its Subsidiaries that are or are intended to be subject to the security
interests created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
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hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth
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on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
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all of the Banks.
Compliance Certificate. A certificate delivered pursuant to (S)9.4(d).
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Consolidated or consolidated. With reference to any term defined herein,
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shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles; provided, however, that such terms shall mean and refer to the
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accounts of MAPICS, Inc., combined in accordance with generally accepted
accounting
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principles on a basis consistent with the audited financial statements of
MAPICS, Inc. contained in the Borrower's Registration Statement on Form S-3 (No.
333-26203) for all periods that include periods prior to July 30, 1997, unless
and until the audited financial statements of the Borrower and its Subsidiaries
are subsequently presented as consolidated in accordance with generally accepted
accounting principles.
Consolidated Financial Obligations. With respect to any fiscal quarter, an
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amount equal to the sum of all payments on Indebtedness that become due and
payable or that are to become due and payable during the such fiscal quarter
pursuant to any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party relating to the borrowing of money or the obtaining of
credit or in respect of any Capitalized Lease, or of any synthetic lease
referred to in clause (vi) of the definition of the term "Indebtedness."
(collectively, "Borrowed Money Indebtedness"). For purposes of this definition,
any obligations in respect of Borrowed Money Indebtedness which are on a demand
basis shall be deemed to be due and payable during any fiscal quarter during
which such obligations are outstanding. In addition, for the avoidance of
doubt, Consolidated Financial Obligations do not include (a) trade accounts
payable or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith; and (b) voluntary
repayments of any amounts outstanding under the Credit Agreement.
Consolidated Current Liabilities. All liabilities and other Indebtedness
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of the Borrower and its Subsidiaries, excluding deferred revenue, on a
consolidated basis maturing on demand or within one (1) year from the date as of
which Consolidated Current Liabilities are to be determined, and such other
liabilities as may properly be classified as current liabilities in accordance
with generally accepted accounting principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
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deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
Consolidated Net Worth. The excess of (a) all assets of a Person and its
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Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles over (b) all liabilities of such Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, and all Indebtedness of such Person and its
Subsidiaries, whether or not so classified, less, to the extent otherwise
includable in the computations of Consolidated Net Worth, any subscriptions
receivable.
Consolidated Operating Cash Flow. For any period, an amount equal to (i)
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EBITDA for such period, less (ii) the sum of (A) cash payments for all taxes
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paid during such period, plus (B) Capital Expenditures made during such period
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to the
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extent permitted by (S)11.6, plus (C) the portion of the costs of software
development required to be capitalized pursuant to FASB Statement No. 86.
Consolidated Quick Assets. All cash and Accounts Receivable of the
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Borrower and its Subsidiaries on a consolidated basis that, in accordance with
generally accepted accounting principles, are properly classified as current
assets, provided that accounts receivable shall be included only if good and
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collectible as determined by the Borrower in accordance with established
practice consistently applied; and such accounts receivable shall be taken at
their face value less reserves determined to be sufficient in accordance with
generally accepted accounting principles.
Consolidated Tangible Net Worth. Consolidated Net Worth of the Borrower
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and its Subsidiaries, and less the sum of:
(a) the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as good will, the
purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, brand names, copyrights,
patents and licenses, and rights with respect to the foregoing, provided,
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however, for purposes of this Credit Agreement, any deffered tax assets of
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the Borrower or any Subsidiaries shall not be considered intangible assets;
plus
----
(b) all amounts representing any write-up in the book value of any
assets of the Borrower or its Subsidiaries resulting from a revaluation
thereof subsequent to the Balance Sheet Date, excluding adjustments to
translate foreign assets and liabilities for changes in foreign exchange
rates made in accordance with Financial Accounting Standards Board
Statement No. 52; plus
----
(c) all amounts representing the book value of computer software
development costs and the book value of other computer software costs of
the Borrower and its Subsidiaries; plus
----
(d) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any stock subscription receivables;
provided, however, to the extent the Borrower's Consolidated Tangible Net Worth
-------- -------
is reduced as a result of the Borrower making any permitted repurchases of its
capital stock, the amount of such reduction, up to an aggregate amount not to
exceed $20,000,000, shall be added back to Consolidated Tangible Net Worth for
purposes of this Credit Agreement.
Consolidated Total Interest Expense. For any period, the aggregate amount
-----------------------------------
of interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
-7-
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 referred to in clause (vi) of the definition of the term
"Indebtedness," and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Consolidated Total Liabilities. All liabilities of the Borrower and its
------------------------------
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and classified as such on the consolidated
balance sheet of the Borrower and its Subsidiaries, and all other Indebtedness
of the Borrower and its Subsidiaries, whether or not so classified, provided,
---------
however, for purposes of this Credit Agreement, Consolidated Total Liabilities
-------
shall not include any amounts relating to deferred revenues of the Borrower or
any Subsidiary.
Conversion Request. A notice given by the Borrower to the Agent of the
------------------
Borrower's election to convert or continue a Loan in accordance with (S)2.7.
Copyright Mortgages. The several Copyright Mortgage and Security
-------------------
Agreements, dated or to be dated on or prior to the Closing Date, made by the
Borrower and its domestic Subsidiaries, if any, in favor of the Agent and in
form and substance satisfactory to the Banks and the Agent.
Credit Agreement. This Revolving Credit and Term Loan Agreement, including
----------------
the Schedules and Exhibits hereto.
Default. See (S)14.1.
-------
Delinquent Bank. See (S)16.5.3.
---------------
DeMinimis Subsidiary. See (S)14.1 hereof.
--------------------
Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Distribution Agreement. The Distribution Agreement dated as of July 17,
----------------------
1997 between the Borrower and Marcam Solutions, Inc.
Dollars or $. Dollars in lawful currency of the United States of America.
------- -
-8-
Domestic Lending Office. Initially, the office of each Bank designated as
-----------------------
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
-------- -
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan or the Term
-------------
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with (S)2.7 or all or any portion of the
Term Loan is converted or continued in accordance with (S)4.5(b).
Earnings Before Interest and Taxes. The consolidated earnings (or loss)
----------------------------------
from the operations of the Borrower and its Subsidiaries for any period, after
all expenses and other proper charges but before payment or provision for any
income taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles.
EBITDA. With respect to any fiscal period, an amount equal to the sum of
-------
(a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal
period, plus (b) in each case to the extent deducted in the calculation of such
----
Person's Consolidated Net Income and without duplication (i) amortization and
depreciation for such period, plus (ii) tax expense for such period, plus (iii)
---- ----
Consolidated Total Interest Expense paid or accrued during such period, all as
determined in accordance with generally accepted accounting principles.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
----------------------------
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that the Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors or other
obligors that (A) are not Affiliates of the Borrower, (B) purchased or licensed
the goods or services giving rise to the relevant Account Receivable in an arm's
length transaction, (C) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Agent's reasonable judgment in
accordance with standard commercial practices, creditworthy; (iii) that are in
payment of obligations that have been fully performed, do not consist of
progress ▇▇▇▇▇▇▇▇ or ▇▇▇▇ and hold invoices and are not subject to dispute or
any other similar claims that would reduce the cash amount payable therefor;
(iv) that are not subject to any pledge, restriction, security interest or other
lien or encumbrance other than those created by the Loan Documents; (v) in which
the Agent has a valid and perfected first priority security interest; (vi) that
are not outstanding for more than ninety (90) days past the earlier to occur of
(A) the date of the respective invoices therefor and (B) the date of shipment
thereof in the case of goods or the end of the calendar month following the
provision thereof in the case of services; (vii) that are not due from an
account debtor or other obligor located in Minnesota or New Jersey unless the
Borrower (A) has received a certificate of authority to do business and is in
good standing in such state or (B) has filed a notice of business activities
report with the appropriate office or agency
-9-
of such state for the current year; (viii) that are not due from any single
account debtor or other obligor if more than fifteen percent (15%) of the
aggregate amount of all Accounts Receivable owing from such account debtor or
other obligor would otherwise not be Eligible Accounts Receivable; (ix) that are
payable in Dollars; (x) that are not payable from an office outside of the
United States unless the Agent in its discretion approves the inclusion of such
foreign receivables; and (xi) that are not secured by a letter of credit unless
the Agent has a prior, perfected security interest in such letter of credit.
General criteria for Eligible Accounts Receivable may be established and revised
from time to time by the Agent.
Eligible Assignee. Any of (i) a commercial bank or finance company
-----------------
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
--------
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
---------------------
(S)3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See (S)8.18(a).
------------------
EPA. See (S)8.18(b).
---
ERISA. The Employee Retirement Income Security Act of 1974.
-----
ERISA Affiliate. Any Person which is treated as a single employer with the
---------------
Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----------------------
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
-------------------------
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of
-10-
Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
-----------------------
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated
-------------------------
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
-------- -
any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
---------------
Loan, the rate of interest equal to (i) the arithmetic average of the rates per
annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, 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 Rate Loan of such Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of
---------------------
the Term Loan bearing interest calculated by reference to the Eurodollar Rate.
Event of Default. See (S)14.1.
----------------
Fee Letter. The fee letter agreement between the Borrower and the Agent
----------
dated on or prior to the Closing Date.
generally accepted accounting principles. (i) When used in (S)11, whether
----------------------------------------
directly or indirectly through reference to a capitalized term used therein,
means (A) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal periods ended on the Balance Sheet Date, and (B) to the
extent consistent with such principles, the accounting practice of the Borrower
reflected in its financial statements for the fiscal period ended on the Balance
Sheet Date, and (ii) when used in general, other than as provided above, means
principles that are (A) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (B) consistently applied with past financial statements of the
Borrower adopting the same
-11-
principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied, provided, however, that all
references to accounting practices of the Borrower or financial statements of
the Borrower that include periods prior to July 30, 1997 shall refer only to
those, and be consistent with those, as set forth in the audited financial
statements of MAPICS, Inc. contained in the Borrower's Registration Statement on
Form S-3 (No. 333-26203).
Guaranteed Pension Plan. Any employee pension benefit plan within the
-----------------------
meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See (S)8.18(b).
--------------------
Indebtedness. As to any Person and whether recourse is secured by or is
------------
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(v) every obligation of such Person under any Capitalized Lease,
(vi) every obligation of such Person under any lease (a "synthetic
lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general intangibles
for money due or to become due, (B) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (C) other
-12-
receivables (collectively "receivables"), whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement,
and together with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or other amounts
in connection therewith,
(viii) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights,
(ix) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices,
(x) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(i) through (x) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (A) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of such primary
obligation, or (C) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (x) any sale of
-13-
receivables shall be the amount of unrecovered capital or principal investment
of the purchaser (other than the Borrower or any of its wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, (y) any synthetic lease shall be the stipulated loss
value, termination value or other equivalent amount and (z) any equity related
purchase obligation shall be the maximum fixed redemption or purchase price
thereof inclusive of any accrued and unpaid dividends to be comprised in such
redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt
---------------------
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. (S)24, Seventh), as amended.
Interest Payment Date. (i) As to any Base Rate Loan, the last day of the
---------------------
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter which includes the Drawdown
Date of such Base Rate Loan; and (ii) as to any Eurodollar Rate Loan in respect
of which the Interest Period is (A) 3 months or less, the last day of such
Interest Period and (B) more than 3 months, the date that is 3 months from the
first day of such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Revolving Credit Loan or all or any
---------------
relevant portion of the Term Loan, (i) initially, the period commencing on the
Drawdown Date of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrower in a Loan Request or as otherwise
required by the terms of this Credit Agreement (A) for any Base Rate Loan, the
last day of the calendar quarter; and (B) for any Eurodollar Rate Loan, 1, 2, 3,
or 6 months; and (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Revolving Credit Loan or all
or such portion of the Term Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods are
--------
subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in (S)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base
-14-
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar 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 Eurodollar
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date (if comprising a Revolving Credit Loan)
or the Term Loan Maturity Date (if comprising the Term Loan or a portion
thereof) shall end on the Revolving Credit Loan Maturity Date or (as the
case may be) the Term Loan Maturity Date.
Interim Concentration Account. See (S)9.14.1.
-----------------------------
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof. Notwithstanding
anything to the contrary contained in this definition, for purposes of this
Credit Agreement, Investments shall exclude any prepaid royalties or advanced
commissions paid by the Borrower to any Person.
Letter of Credit. See (S)5.1.1.
----------------
Letter of Credit Application. See (S)5.6.
----------------------------
Letter of Credit Fee. See (S)5.1.1.
--------------------
Letter of Credit Participation. See (S)5.1.4.
------------------------------
-15-
Leverage Ratio. For any fiscal quarter, the ratio of (a) Consolidated
--------------
Total Liabilities for such fiscal quarter to (b) Consolidated Tangible Net Worth
for such fiscal quarter.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
--------------
Applications, the Letters of Credit and the Security Documents.
Loan Request. See (S)2.6.
------------
Loans. The Revolving Credit Loans and the Term Loan.
-----
Local Account. See (S)9.14.1.
-------------
Majority Banks. As of any date, the Banks holding at least sixty-six and
--------------
two-thirds percent (66 2/3%) of the outstanding principal amount of the Notes on
such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least sixty-six and two-thirds percent (66 2/3%) of
the Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the
----------------------
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------------
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale of stock, partnership
-----------------
interests or other equity issuances, the excess of the gross cash proceeds
received by such Person for such issuance after deduction of all reasonable and
customary transaction expenses (including without limitation, underwriting
discounts and commissions) actually incurred in connection with such a sale or
other issuance.
Net Cash Sale Proceeds. The net cash proceeds received by a Person in
----------------------
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other reasonably and customary expenses actually incurred
in connection with such Asset Sale, including the amount of income, franchise,
sales and other applicable taxes required to be paid by such Person in
connection with such Asset Sale, and (b) the aggregate amount of cash so
received by such Person which is required to be used to retire (in whole or in
part) any Indebtedness (other than under the Loan Documents) of such Person
permitted by this Credit Agreement that was secured by a lien or security
interest permitted by this Credit Agreement having priority over the liens and
security interests (if any) of the Agent (for the benefit of the Agent and the
Banks) with respect to such assets transferred and which is required to be
repaid in whole or in part (which repayment, in the case of any other revolving
credit arrangement or multiple advance arrangement, reduces the commitment
thereunder) in connection with such Asset Sale.
-16-
Non-Material Subsidiary. At the relevant time of determination, any
-----------------------
Subsidiary with a Consolidated Net Worth of less than $500,000
Notes. The Term Notes and the Revolving Credit Notes.
-----
Obligations. All indebtedness, obligations and liabilities of any of the
-----------
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof or under any interest rate swap, cap or other hedging agreements
between the Borrower and any of the Banks.
Operating Account. See (S)2.6.2.
-----------------
outstanding. With respect to the Loans, the aggregate unpaid principal
-----------
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
-----------------------
Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances
---------------
permitted by (S)10.2.
Person. Any individual, corporation, partnership, trust, unincorporated
------
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Adjustment Period. See the definition of Applicable Margin.
----------------------
RCRA. See (S)8.18(a).
----
Real Estate. All real property at any time owned or leased (as lessee or
-----------
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid, or
------
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Bank. BKB
--------------
-17-
Register. See (S)20.3.
--------
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
------------------------
and the Banks on account of any drawing under any Letter of Credit as provided
in (S)5.2.
Rental Obligations. All present or future obligations of the Borrower or
------------------
any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (i) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due as of the date on which such notice is given and
under which no penalty or premium is paid as a result of any such termination,
and (ii) obligations in respect of any Capitalized Leases or any synthetic
leases referred to in clause (vi) of the definition of the term "Indebtedness".
Reserves. As determined by the Agent, such amounts as the Agent may from
--------
time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do or may (i) adversely affect either (A) any
Collateral, the rights of the Agent or any of the Banks in any Collateral or its
value or (B) the security interest and other rights of the Agent or any of the
Banks in the Collateral (including the enforceability, perfection and priority
thereof) or (ii) adversely affect in any material respect the assets (other than
any Collateral) or business or financial condition of the Borrower or any of its
Subsidiaries or (b) to reflect the belief of the Agent that any Borrowing Base
Report or other collateral report or financial information furnished by or on
behalf of the Borrower to the Agent or any of the Banks is or may have been
incomplete, inaccurate or misleading in any material respect.
Revolving Credit Loan Maturity Date. June 30, 2001.
-----------------------------------
Revolving Credit Loans. Revolving credit loans made or to be made by the
----------------------
Banks to the Borrower pursuant to (S)2.
Revolving Credit Note Record. A Record with respect to a Revolving Credit
----------------------------
Note.
Revolving Credit Notes. See (S)2.4.
----------------------
▇▇▇▇. See (S)8.18(a).
----
Section 20 Subsidiary. A Subsidiary of the bank holding company
---------------------
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements, dated or to be dated
-------------------
on or prior to the Closing Date, between the Borrower and its domestic
Subsidiaries and the Agent and in form and substance satisfactory to the Banks
and the Agent.
-18-
Security Documents. The Security Agreements, the Trademark Assignments,
------------------
the Copyright Mortgages and all other instruments and documents, including
without limitation Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document.
Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
-----------------
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by a written
instrument containing subordination provisions in form and substance approved by
the Agent and the Majority Banks in writing.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Term Loan. The term loan made or to be made by the Banks to the Borrower
---------
on the Closing Date in the aggregate principal amount of $15,000,000 pursuant to
(S)4.1.
Term Loan Maturity Date. September 30, 2000.
-----------------------
Term Notes. See (S)4.2.
----------
Term Note Record. A Record with respect to a Term Note.
----------------
Total Commitment. The sum of the Commitments of the Banks, as in effect
----------------
from time to time.
Total Funded Indebtedness. All Indebtedness of the Borrower and its
-------------------------
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases, determined on a consolidated basis in accordance with
generally accepted accounting principles.
Trademark Assignments. The several Trademark Assignments, dated or to be
---------------------
dated on or prior to the Closing Date, made by the Borrower and its domestic
Subsidiaries, if any, in favor of the Agent and in form and substance
satisfactory to the Banks and the Agent.
Type. As to any Revolving Credit Loan or all or any portion of the Term
----
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
-19-
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
-------------------------------
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, (S)5.2.
Voting Stock. Stock or similar interests, of any class or classes (however
------------
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. Rules of Interpretation.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer; provided,
however, that, in the case of the Borrower and its Subsidiaries, applied on
a basis consistent with that set forth in the audited financial statements
of MAPICS, Inc. contained in the Borrower's Registration Statement on Form
S-3 (No. 333-26203). Accounting terms referring to the Borrower and its
Subsidiaries (i) shall give retroactive effect to the transactions
contemplated by the Distribution Agreement for all fiscal periods, and (ii)
shall not include any payments with respect to or Indebtedness under the
Promissory Note dated as of July 25, 1997 made by the Borrower to
BankBoston, N.A.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
-20-
(h) Reference to a particular "(S)" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including," the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same
or similar matters. All such limitations, tests and measurements are,
however, cumulative and are to be performed in accordance with the terms
thereof.
(l) This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others,
the Agent and the Borrower and are the product of discussions and
negotiations among all parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Agent or
any of the Banks merely on account of the Agent's or any Bank's involvement
in the preparation of such documents.
(m) Notwithstanding any other provision of this Credit Agreement, the
other Loan Documents and the Security Documents, the Borrower shall not be
prohibited from completing the transactions contemplated by the
Distribution Agreement.
2. THE REVOLVING CREDIT FACILITY.
-----------------------------
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with (S)2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment minus such Bank's Commitment Percentage of the sum of
-----
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided
--------
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) plus the Maximum Drawing Amount and all
----
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (i)
the Total Commitment and (ii) the Borrowing Base. The Revolving Credit Loans
shall be made pro rata in accordance with each Bank's Commitment Percentage.
--- ----
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and
-21-
warranty by the Borrower that the conditions set forth in (S)12 and (S)13, in
the case of the initial Revolving Credit Loans to be made on the Closing Date,
and (S)13, in the case of all other Revolving Credit Loans, have been satisfied
on the date of such request.
2.2. Commitment Fee. The Borrower agrees to pay to the Agent for the
--------------
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee (a) from the Closing Date through June 30, 1999 calculated at
the rate of 37.5 basis points (.375%) per annum on the average daily amount
during each calendar quarter or portion thereof from the Closing Date through
June 30, 1999 by which the Total Commitment minus the sum of the Maximum Drawing
-----
Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount
of Revolving Credit Loans during such calendar quarter; (b) from June 30, 1999
through the date on which the Borrower makes its initial request for a Revolving
Credit Loan to be made hereunder or requests the Agent to issue any Letter of
Credit (such date being hereinafter referred to as the "Initial Borrowing
Date"), calculated at the rate of 31.25 basis points (.3125%) per annum on the
Total Commitment for such period; and (c) at any time after the Initial
Borrowing Date, calculated at a rate of 37.5 basis points (.375%) per annum on
the average daily amount during each calendar quarter or portion thereof from
the Initial Borrowing Date to the Revolving Credit Loan Maturity Date by which
the Total Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
-----
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the right at
-----------------------------
any time and from time to time upon five (5) Business Days prior written notice
to the Agent to reduce by $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
--- ----
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this (S)2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
--------------------------
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the Closing
------- -
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable
-22-
to the order of each Bank in a principal amount equal to such Bank's Commitment
or, if less, the outstanding amount of all Revolving Credit Loans made by such
Bank, plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt
of any payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall be prima facie evidence of the principal
----- -----
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Revolving Credit Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note to make payments of principal of or
interest on any Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided in
----------------------------------
(S)6.11,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate per annum equal to the Base Rate
plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable
Margin.
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans. The Borrower shall give to the
-----------------------------------
Agent written notice in the form of Exhibit C hereto (or telephonic notice
------- -
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
------- -
Loan requested hereunder (a "Loan Request") no less than (i) one (1) Business
Day prior to the proposed Drawdown Date of any Base Rate Loan and (ii) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (A) the principal amount of the
Revolving Credit Loan requested, (B) the proposed Drawdown Date of such
Revolving Credit Loan, (C) the Interest Period for such Revolving Credit Loan
and (D) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan
-23-
Request shall be in a minimum aggregate amount of $1,000,000 or an integral
multiple thereof.
2.7. Conversion Options.
------------------
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
-----------------------------------------------------
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (i)
--------
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business Day
prior written notice of such election; (ii) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower
shall give the Agent at least three (3) Eurodollar Business Days prior
written notice of such election; (iii) with respect to any such conversion
of a Eurodollar Rate Loan into a Revolving Credit Loan of another Type,
such conversion shall only be made on the last day of the Interest Period
with respect thereto and (iv) no Loan may be converted into a Eurodollar
Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office or
its Eurodollar Lending Office, as the case may be. All or any part of
outstanding Revolving Credit Loans of any Type may be converted into a
Revolving Credit Loan of another Type as provided herein, provided that any
--------
partial conversion shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof. Each Conversion Request relating to the
conversion of a Revolving Credit Loan to a Eurodollar Rate Loan shall be
irrevocable by the Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
---------------------------------------------
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
(S)2.7.1; provided that no Eurodollar Rate Loan may be continued as such
--------
when any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the Borrower
fails to provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks promptly
when any such automatic conversion contemplated by this (S)2.7 is scheduled
to occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from Eurodollar
---------------------
Rate Loans shall be in such amounts and be made pursuant to such elections
-24-
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $5,000,000 or a whole multiple of $1,000,000 in excess thereof. In
addition, there shall not be more than ten (10) Eurodollar Rate Loans
outstanding at any one time.
2.8. Funds for Revolving Credit Loan.
-------------------------------
2.8.1. Funding Procedures. Not later than 11:00 a.m. (Boston time) on
------------------
the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by (S)(S)12 and 13 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. Advances by Agent. The Agent may, unless notified to the
-----------------
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (ii) the amount of such Bank's
-----
Commitment Percentage of such Revolving Credit Loans, times (iii) a
-----
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
----- -----
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made
-25-
available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the rate per
annum applicable to the Revolving Credit Loans made on such Drawdown Date.
2.9. Change in Borrowing Base. The Borrowing Base shall be determined
------------------------
monthly (or at such other interval as may be specified pursuant to (S)9.4(f)) by
the Agent by reference to the Borrowing Base Report delivered to the Banks and
the Agent pursuant to (S)9.4(f). The Agent shall give to the Borrower written
notice of any change in the Borrowing Base determined by the Agent. In the case
of a reduction in the lending formula with respect to Eligible Accounts
Receivable, such notice shall be effective 5 Business Days after its receipt by
the Borrower, and in the case of any change in the general criteria for Eligible
Accounts Receivable, such notice shall be effective upon its receipt by the
Borrower. Prior to the time that such notice becomes effective the Borrowing
Base shall be computed as it would have been computed in the absence of such
notice.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
---------------------------------------
3.1. Maturity. The Borrower promises to pay on the Revolving Credit Loan
--------
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
----------------------------------------------
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (i) the
Total Commitment and (ii) the Borrowing Base, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to provide to the
Agent cash collateral for Reimbursement Obligations as contemplated by (S)5.2(b)
and (c). Each payment of any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the Banks, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall
---------------------------------------------
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
--------
of any Eurodollar Rate Loans pursuant to this (S)3.3 may be made only on the
last day of the Interest Period relating thereto. The Borrower shall give the
Agent, no later than 10:00 a.m., Boston time, at least one (1) Business Day
prior written notice of any proposed prepayment pursuant to this (S)3.3 of Base
Rate Loans, and three (3)
-26-
Eurodollar Business Days notice of any proposed prepayment pursuant to this
(S)3.3 of Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid.
Each such partial prepayment of the Revolving Credit Loans shall be in an
integral multiple of $1,000,000, shall be accompanied by the payment of accrued
interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrower, first to the principal
of Base Rate Loans and then to the principal of Eurodollar Rate Loans, at the
Agent's option. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Bank's Revolving Credit Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.
4. THE TERM LOAN.
-------------
4.1. Commitment to Lend. Subject to the terms and conditions set forth in
------------------
this Credit Agreement, each Bank agrees to lend to the Borrower on the Closing
Date the amount of its Commitment Percentage of the principal amount of
$15,000,000.
4.2. The Term Notes. The Term Loan shall be evidenced by separate
--------------
promissory notes of the Borrower in substantially the form of Exhibit D hereto
------- -
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Commitment Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made a notation
on such Bank's Term Note Record reflecting the original principal amount of such
Bank's Commitment Percentage of the Term Loan and, at or about the time of such
Bank's receipt of any principal payment on such Bank's Term Note, an appropriate
notation on such Bank's Term Note Record reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall be prima facie
----- -----
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Term Note Record shall not affect the obligations of the Borrower hereunder or
under any Term Note to make payments of principal of and interest on any Term
Note when due.
4.3. Repayments of the Term Loan.
---------------------------
4.3.1 Schedule of Installment Payments of Principal of Term Loan. The
----------------------------------------------------------
Borrower promises to pay to the Agent for the account of the Banks the
principal amount of the Term Loan in eight (8) consecutive quarterly
payments of $1,250,000, such installments to be due and payable on the last
day of each calendar quarter of each calendar year, commencing on
-27-
September 30, 1998, with a final payment on the Term Loan Maturity Date in
an amount equal to the unpaid balance of the Term Loan.
4.3.2 Proceeds. Concurrently with the receipt by the Borrower or any
--------
of its Subsidiaries of (a) Net Cash Sale Proceeds from Assets Sales or
other dispositions of assets (other than the sale or disposition of assets
in the ordinary course of business consistent with past practices), (b) Net
Cash Proceeds from the sale of stock, partnership interests or other equity
issuances of the Borrower or any of its Subsidiaries or (c) cash proceeds
received from insurance claims received by the Borrower or any of its
Subsidiaries which have not been applied by the Borrower or such Subsidiary
within 180 days of receipt by such Person of such proceeds (provided,
--------
however, if a Default or Event of Default has occurred and is continuing,
-------
such proceeds shall be immediately paid to the Agent), the Borrower shall
pay to the Agent for the respective accounts of the Banks an amount equal
to 100% of such proceeds, to be applied against the scheduled installments
of principal on the Term Loan in the inverse order of maturity.
4.4. Optional Prepayment of Term Loan. The Borrower shall have the right
--------------------------------
at any time to prepay the Term Notes on or before the Term Loan Maturity Date,
as a whole, or in part, upon not less than five (5) Business Days prior written
notice to the Agent, without premium or penalty, provided that (i) each partial
--------
prepayment shall be in the principal amount of $1,000,000.00 or an integral
multiple thereof, (ii) any portion of the Term Loan bearing interest at the
Eurodollar Rate prepaid pursuant to this (S)4.4 except on the last day of the
Interest Period relating thereto shall be subject to the indemnity requirement
in (S)6.10, and (iii) each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective outstanding
amount of each Bank's Term Note, with adjustments to the extent practicable to
equalize any prior prepayments not exactly in proportion. Any prepayment of
principal of the Term Loan shall include all interest accrued to the date of
prepayment and shall be applied against the scheduled installments of principal
due on the Term Loan in the inverse order of maturity. No amount repaid with
respect to the Term Loan may be reborrowed as a Term Loan.
4.5. Interest on Term Loan.
---------------------
4.5.1. Interest Rates. Except as otherwise provided in (S)6.11, the
--------------
Term Loan shall bear interest during each Interest Period relating to all
or any portion of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Base Rate, the Term
Loan or such portion shall bear interest during such Interest Period
at the rate of per annum equal to the Base Rate plus the Applicable
Margin.
-28-
(b) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Eurodollar Rate, the
Term Loan or such portion shall bear interest during such Interest
Period at the rate of per annum equal to the Eurodollar Rate plus the
Applicable Margin.
The Borrower promises to pay interest on the Term Loan or any portion
thereof outstanding during each Interest Period in arrears on each Interest
Payment Date applicable to such Interest Period.
4.5.2. Notification by Borrower. The Borrower shall notify the Agent,
------------------------
such notice to be irrevocable, at least three (3) Eurodollar Business Days
prior to the Drawdown Date of the Term Loan if all or any portion of the
Term Loan is to bear interest at the Eurodollar Rate. After the Term Loan
has been made, the provisions of (S)2.7 shall apply mutatis mutandis with
------- --------
respect to all or any portion of the Term Loan so that the Borrower may
have the same interest rate options with respect to all or any portion of
the Term Loan as it would be entitled to with respect to the Revolving
Credit Loans.
4.5.3. Amounts, etc. Any portion of the Term Loan bearing interest at
-------------
the Eurodollar Rate relating to any Interest Period shall be in the amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. No
Interest Period relating to the Term Loan or any portion thereof bearing
interest at the Eurodollar Rate shall extend beyond the date on which a
regularly scheduled installment payment of the principal of the Term Loan
is to be made unless a portion of the Term Loan at least equal to such
installment payment has an Interest Period ending on such date or is then
bearing interest at the Base Rate.
5. LETTERS OF CREDIT.
-----------------
5.1. Letter of Credit Commitments.
----------------------------
5.1.1. Commitment to Issue Letters of Credit. Subject to the terms
-------------------------------------
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon
the agreement of the Banks set forth in (S)5.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in
its individual capacity, to issue, extend and renew for the account of the
Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested from
time to time by the Borrower and agreed to by the Agent; provided, however,
-------- -------
that, after giving effect to such request, (a) the sum of the aggregate
Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations,
-29-
and (iii) the amount of all Revolving Credit Loans outstanding shall not
exceed the lesser of (A) the Total Commitment and (B) the Borrowing Base.
Notwithstanding the foregoing, the Agent shall have no obligation to issue
any Letter of Credit to support or secure any Indebtedness of the Borrower
or any of its Subsidiaries to the extent that such Indebtedness was
incurred prior to the proposed issuance date of such Letter of Credit,
unless in any such case the Borrower demonstrates to the satisfaction of
the Agent that (x) such prior incurred Indebtedness were then fully secured
by a prior perfected and unavoidable security interest in collateral
provided by the Borrower or such Subsidiary to the proposed beneficiary of
such Letter of Credit or (y) such prior incurred Indebtedness were then
secured or supported by a letter of credit issued for the account of the
Borrower or such Subsidiary and the reimbursement obligation with respect
to such letter of credit was fully secured by a prior perfected and
unavoidable security interest in collateral provided to the issuer of such
letter of credit by the Borrower or such Subsidiary.
5.1.2. Letter of Credit Applications. Each Letter of Credit
-----------------------------
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
5.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
--------------------------
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (ii) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons, forty-
five (45) days) prior to the Revolving Credit Loan Maturity Date. Each
Letter of Credit so issued, extended or renewed shall be subject to the
Uniform Customs.
5.1.4. Reimbursement Obligations of Banks. Each Bank severally agrees
----------------------------------
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to (S)5.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
5.1.5. Participations of Banks. Each such payment made by a Bank
-----------------------
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under (S)5.2 in an amount equal
to such payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to (S)5.2.
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5.2. Reimbursement Obligation of the Borrower. In order to induce the
----------------------------------------
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in (S)5.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to such Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with
any payment made by the Agent or any Bank under, or with respect to, such
Letter of Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with (S)14, an amount equal to the then Maximum Drawing Amount
on all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this (S)5.2 at any time from the date such amounts become due
and payable (whether as stated in this (S)5.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in (S)6.11 for overdue principal on the
Revolving Credit Loans.
5.3. Letter of Credit Payments. If any draft shall be presented or other
-------------------------
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
(S)5.2 on or before the date that such draft is paid or other payment is made by
the Agent, the Agent may at any time thereafter notify the Banks of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation,
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together with an amount equal to the product of (i) the average, computed for
the period referred to in clause (iii) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each day
included in such period, times (ii) the amount equal to such Bank's Commitment
-----
Percentage of such Unpaid Reimbursement Obligation, times (iii) a fraction, the
-----
numerator of which is the number of days that elapse from and including the date
the Agent paid the draft presented for honor or otherwise made payment to the
date on which such Bank's Commitment Percentage of such Unpaid Reimbursement
obligation shall become immediately available to the Agent, and the denominator
of which is 360. The responsibility of the Agent to the Borrower and the Banks
shall be only to determine that the documents (including each draft) delivered
under each Letter of Credit in connection with such presentment shall be in
conformity in all material respects with such Letter of Credit.
5.4. Obligations Absolute. The Borrower's obligations under this (S)5
--------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under (S)5.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except if such error was the direct result of the Agent or
any Bank's gross negligence or willful misconduct. The Borrower agrees that any
action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and absent the Agent's or such Bank's gross negligence and willful
misconduct, shall be binding upon the Borrower and shall not result in any
liability on the part of the Agent or any Bank to the Borrower.
5.5. Reliance by Issuer. To the extent not inconsistent with (S)5.4, the
------------------
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed in good faith by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel, independent accountants
and other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action
-32-
under this Credit Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Revolving Credit Notes or of a Letter of Credit
Participation.
5.6. Letter of Credit Fee. The Borrower shall, on the date of issuance or
--------------------
any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (i) in respect of each standby Letter of
Credit calculated at the Applicable Margin per annum of the face amount of such
standby Letter of Credit, plus a fee equal to one-quarter of one percent (1/4%)
----
per annum of the face amount of such standby Letter of Credit for the account of
the Agent, as a fronting fee, and the balance of which Letter of Credit Fee
shall be for the accounts of the Banks in accordance with their respective
Commitment Percentages and (ii) in respect of each documentary Letter of Credit
calculated at the rate of the Applicable Margin per annum on the face amount of
such documentary Letter of Credit, plus a fee equal to one-quarter of one
----
percent (1/4%) per annum of the face amount of such documentary Letter of Credit
for the account of the Agent, as a fronting fee, and the balance of which Letter
of Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages. In respect of each Letter of Credit, the
Borrower shall also pay to the Agent for the Agent's own account, at such other
time or times as such charges are customarily made by the Agent, the Agent's
customary issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time.
6. CERTAIN GENERAL PROVISIONS.
--------------------------
6.1. Drawdown Fee. The Borrower shall pay to the Agent for the respective
------------
accounts of the Banks a drawdown fee of $10,000 on the Initial Borrowing Date.
6.2. [Reserved]
6.3. Funds for Payments.
------------------
6.3.1. Payments to Agent. All payments of principal, interest,
-----------------
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in each
case in immediately available funds.
-33-
6.3.2. No Offset, etc. All payments by the Borrower hereunder and
---------------
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.
6.4. Computations. All computations of interest on the Loans and of
------------
commitment fees, Letter of Credit Fees or other fees shall, be based on a 360-
day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records and the Term Note Records from
time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Borrower of
such outstanding amount, the Borrower shall notify the Agent or any Bank to the
contrary.
6.5. Inability to Determine Eurodollar Rate. In the event, prior to the
--------------------------------------
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine in accordance with its standard commercial practice that
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period, the Agent shall forthwith give
notice of such determination (which shall be conclusive and binding on the
Borrower and the Banks) to the Borrower and the Banks. In such event (i) any
Loan Request or Conversion Request with respect to Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Base Rate Loans,
(ii) each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (iii) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent
-34-
determines in accordance with its standard commercial practice that the
circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.
6.6. Illegality. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this (S)6.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
6.7. Additional Costs, etc. If any present or future applicable law, which
---------------------
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Loans (other than taxes based upon or measured by
the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Bank, or
-35-
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or any
class of loans, letters of credit or commitments of which any of the Loans
or such Bank's Commitment forms a part, and the result of any of the
foregoing is
(i) to materially increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of the Loans
or such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent hereunder
on account of such Bank's Commitment, any Letter of Credit or any of
the Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time within one hundred eighty (180) days
of the event giving rise thereto and from time to time and as often as the
occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
6.8. Capital Adequacy. If after the date hereof any Bank or the Agent
----------------
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount reasonably deemed by such Bank or (as the case may be) the Agent in
accordance with its standard commercial practices to be material, then such Bank
or the Agent may notify the Borrower of such fact within one hundred eighty
(180) days of the event giving rise thereto. To the extent that
-36-
the amount of such reduction in the return on capital is not reflected in the
Base Rate, the Borrower agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital as and when such
reduction is determined upon presentation by such Bank or (as the case may be)
the Agent of a certificate in accordance with (S)6.9 hereof. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
6.9. Certificate. A certificate setting forth any additional amounts
-----------
payable pursuant to (S)(S)6.7 or 6.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.10. Indemnity. The Borrower agrees to indemnify each Bank and to hold
---------
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request, notice (in the case of
all or any portion of the Term Loans pursuant to (S)4.5.2) or a Conversion
Request relating thereto in accordance with (S)2.6 or (S)2.7 or (S)4.5 or (iii)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.
6.11. Interest After Default.
----------------------
6.11.1. Overdue Amounts. Overdue principal and (to the extent
---------------
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall
bear interest compounded monthly and payable on demand at a rate per annum
equal to three percent (3%) above the Base Rate until such amount shall be
paid in full (after as well as before judgment).
6.11.2. Amounts Not Overdue. During the continuance of a Default or
-------------------
an Event of Default the principal of the Revolving Credit Loans and the
Term Loan not overdue shall, until such Default or Event of Default has
been cured or remedied or such Default or Event of Default has been waived
by the Majority Banks pursuant to (S)27, bear interest at a rate per annum
equal to the greater of (i) three percent (3%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to (S)2.5 and
the Term Loan pursuant to (S)4.5 and (ii) the rate of interest applicable
to overdue principal pursuant to (S)6.11.1.
-37-
7. COLLATERAL SECURITY AND GUARANTIES.
----------------------------------
7.1. Security of Borrower. The Obligations shall be secured by a perfected
--------------------
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
7.2. Guaranties and Security of Domestic Subsidiaries. If the Borrower
------------------------------------------------
shall have in the future any Subsidiaries which operate in the United States,
the Obligations shall also be guaranteed by such domestic Subsidiary pursuant to
the terms of a guaranty in a form satisfactory to the Agent. The obligations of
the Borrower's domestic Subsidiaries under the Guaranty shall be in turn secured
by a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each such
Subsidiary, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which such Subsidiary is a party.
8. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks and the Agent as follows:
8.1. Corporate Authority.
-------------------
8.1.1. Incorporation; Good Standing. Except as set forth on Schedule
--------
8.1.1 hereto, each of the Borrower and its Subsidiaries (i) ia a
-----
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so
qualified would not have a materially adverse effect on the business,
assets or financial condition of the Borrower or such Subsidiary.
8.1.2. Authorization. The execution, delivery and performance of this
-------------
Credit Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (i) are within the corporate authority of
such Person, (ii) have been duly authorized by all necessary corporate
proceedings, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
the Borrower or any of its Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrower or any of
its Subsidiaries and (iv) do not conflict with any provision of the
corporate
-38-
charter or bylaws of, or any agreement or other instrument binding upon,
the Borrower or any of its Subsidiaries.
8.1.3. Enforceability. The execution and delivery of this Credit
--------------
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement
of creditors' rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
8.2. Governmental Approvals. The execution, delivery and performance by
----------------------
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
8.3. Title to Properties; Leases. The Borrower and its Subsidiaries own
---------------------------
all of the assets reflected in the combined balance sheet of the Borrower and
its Subsidiaries as at the Balance Sheet Date or acquired since that date
(except property and assets sold or otherwise disposed of in the ordinary course
of business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
8.4. Financial Statements and Projections.
------------------------------------
8.4.1. Fiscal Year. The Borrower and each of its Subsidiaries
-----------
has a fiscal year which is the twelve months ending on September 30 of each
calendar year.
8.4.2. Financial Statements. There has been furnished to each of
--------------------
the Banks a combined balance sheet of the Borrower and its Subsidiaries as
at the Balance Sheet Date, and a combined statement of income of the
Borrower and its Subsidiaries for the fiscal period then ended, certified
by Coopers & ▇▇▇▇▇▇▇ LLP. Such balance sheet and statement of income have
been prepared in accordance with generally accepted accounting principles
and fairly present the financial condition of the Borrower as at the close
of business on the date thereof and the results of operations for the
fiscal period then ended. There are no contingent liabilities of the
Borrower or any of its Subsidiaries as of such date involving material
amounts, known to the officers of the Borrower, which were not disclosed in
such balance sheet and the notes related thereto.
-39-
8.4.3. Projections. The projections of the annual operating
-----------
budgets of the Borrower and its Subsidiaries on a combined basis, balance
sheets and cash flow statements for the 1997 to 2000 fiscal years, copies
of which have been delivered to each Bank, disclose all assumptions made
with respect to general economic, financial and market conditions used in
formulating such projections. To the knowledge of the Borrower or any of
its Subsidiaries, no facts exist that (individually or in the aggregate)
would result in any material change in any of such projections. The
projections are based upon reasonable estimates and assumptions, have been
prepared on the basis of the assumptions stated therein and reflect the
reasonable estimates of the Borrower and its Subsidiaries (as of the date
thereof) of the results of operations and other information projected
therein.
8.5. No Material Changes, etc. Since the Balance Sheet Date there has
------------------------
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the combined statement of income for the fiscal period then ended, other than
changes contemplated by the Distribution Agreement or in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of the Borrower or any
of its Subsidiaries. Since the Balance Sheet Date, the Borrower has not made any
Distributions, except as contemplated by the Distribution Agreement or except as
expressly permitted by the terms of this Credit Agreement.
8.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and its
------------------------------------
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
8.7. Litigation. Except as set forth in Schedule 8.7 hereto, there are no
---------- -------- ---
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrower and its Subsidiaries,
considered as a whole, or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower and its Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
8.8. No Materially Adverse Contracts, etc. Neither the Borrower nor any of
------------------------------------
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any
-40-
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of the Borrower or any of its Subsidiaries. Except as previously
disclosed to the Agent in writing, neither the Borrower nor any of its
Subsidiaries is a party to any contract or agreement that has or is expected, in
the judgment of the Borrower's officers, to have any materially adverse effect
on the business of the Borrower or any of its Subsidiaries.
8.9. Compliance with Other Instruments, Laws, etc. Except as previously
--------------------------------------------
disclosed to the Agent in writing, neither the Borrower nor any of its
Subsidiaries is in violation of any provision of its charter documents, bylaws,
or any agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Borrower or any of its
Subsidiaries.
8.10. Tax Status. The Borrower and its Subsidiaries (i) have made or filed
----------
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (ii) have paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (iii) have set aside on their
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.
8.11. No Event of Default. No Event of Default has occurred and is
-------------------
continuing.
8.12. Holding Company and Investment Company Acts. Neither the Borrower
-------------------------------------------
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.13. Absence of Financing Statements, etc. Except with respect to
------------------------------------
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
-41-
8.14. Perfection of Security Interest. All filings, assignments, pledges
-------------------------------
and deposits of documents or instruments have been made and all other actions
have been taken, or arrangements satisfactory to the Agent have been made for
taking, that are necessary or advisable, under applicable law, to establish and
perfect the Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower or a Subsidiary of the
Borrower party to one of the Security Agreements is the owner of the Collateral
free from any lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
8.15. Certain Transactions. None of the officers, directors, or employees
--------------------
of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
8.16. Employee Benefit Plans.
----------------------
8.16.1. In General. Each Employee Benefit Plan and each
----------
Guaranteed Pension Plan has been maintained and operated in compliance in
all material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by (S)412 of
ERISA. The Borrower has heretofore delivered to the Agent the most recently
completed annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under (S)103(d) of ERISA, with
respect to each Guaranteed Pension Plan.
8.16.2. Terminability of Welfare Plans. No Employee Benefit Plan,
------------------------------
which is an employee welfare benefit plan within the meaning of (S)3(1) or
(S)3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment, except as required by Title I, Part 6 of ERISA or the
applicable state insurance laws. The Borrower may terminate each such Plan
at any time (or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of the Borrower without liability
to any Person other than for claims arising prior to termination.
8.16.3. Guaranteed Pension Plans. Each contribution required to
------------------------
be made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of (S)302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
-42-
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to (S)307 of ERISA or (S)401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event (other than an ERISA Reportable Event as to which the requirement of
30 days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of (S)4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
8.16.4. Multiemployer Plans. Neither the Borrower nor any ERISA
-------------------
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under (S)4201 of ERISA or as a
result of a sale of assets described in (S)4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
(S)4241 or (S)4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under (S)4041A of ERISA.
8.17. Use of Proceeds.
---------------
8.17.1. General. The proceeds of the Loans, together with the
-------
proceeds of the Borrower's public offering shall be used on the Closing
Date to pay in full any Indebtedness which remains outstanding under a
$64,000,000 note payable to BankBoston, N.A. and thereafter for working
capital and general corporate purposes. The Borrower will obtain Letters of
Credit solely for general corporate purposes.
8.17.2. Regulations U and X. No portion of any Loan is to be
-------------------
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin stock"
as such terms are used in Regulations U and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
8.17.3. Ineligible Securities. No portion of the proceeds of any
---------------------
Loans is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of (a) knowingly purchasing, or providing credit
support for
-43-
the purchase of, Ineligible Securities from a Section 20 Subsidiary during
any period in which such Section 20 Subsidiary makes a market in such
Ineligible Securities, (b) knowingly purchasing, or providing credit
support for the purchase of, during the underwriting or placement period,
any Ineligible Securities being underwritten or privately placed by a
Section 20 Subsidiary, or (c) making, or providing credit support for the
making of, payments of principal or interest on Ineligible Securities
underwritten or privately placed by a Section 20 Subsidiary and issued by
or for the benefit of the Borrower or any Subsidiary or other Affiliate of
the Borrower.
8.18. Environmental Compliance. To the Borrower's knowledge, and except as
------------------------
set forth on Schedule 8.18 attached hereto:
-------------
(a) none of the Borrower, its Subsidiaries or any of their
operations at the Real Estate is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a material
adverse effect on the environment or the business, assets or financial
condition of the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that
any hazardous waste, as defined by 42 U.S.C. (S)6903(5), any hazardous
substances as defined by 42 U.S.C. (S)9601(14), any pollutant or
contaminant as defined by 42 U.S.C. (S)9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that any Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;
-44-
(c) (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrower or its Subsidiaries, no Hazardous Substances have
been generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws; (iii) there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping)
or threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would have a
material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would
have a material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrower's knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby or to the
effectiveness of any other transactions contemplated hereby.
8.19. Subsidiaries, etc. The only Subsidiaries of the Borrower are listed
-----------------
on Schedule 8.19. Neither the Borrower nor any Subsidiary of the Borrower is
-------------
engaged in any joint venture or partnership with any other Person.
8.20. Bank Accounts. Schedule 8.20 sets forth the account numbers and
------------- -------- ----
location of all Local Accounts, Interim Concentration Accounts and other bank
accounts of the Borrower or any of its Subsidiaries.
8.21. Additional Representations. (a) The Borrower has in all material
--------------------------
respects transferred the business, assets and liabilities relating to its PRISM,
Protean and Avantis product lines to Marcam Solutions, Inc. and has contributed
-45-
$39,000,000 in cash to Marcam Solutions, Inc. pursuant to the Distribution
Agreement.
(b) The shares of Marcam Solutions, Inc. have been distributed to
stockholders of the Borrower in a tax-free distribution under Section 355 of the
Code.
(c) The Borrower and Marcam Solutions, Inc. are party to a Distribution
Agreement, a General Services Agreement, an International Facilities Sharing
Agreement, and a Tax Sharing Agreement, copies of which have been delivered to
the Agent on or prior to the Closing Date.
(d) The Borrower's Earnings Before Interest and Taxes for the four fiscal
quarters ended prior to the Closing Date exceeded $19,000,000.
(e) The Borrower has completed a public offering and received Net Cash
Proceeds therefrom in excess of $34,000,000.
8.22. Disclosure. None of this Credit Agreement or any of the other Loan
----------
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower or any of its Subsidiaries in the case of
any document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made not misleading. Except as otherwise
disclosed to the Agent on or prior to the Closing Date, there is no fact known
to the Borrower or any of its Subsidiaries which materially adversely affects,
or which is reasonably likely in the future to materially adversely affect, the
business, assets, financial condition or prospects of the Borrower or any of its
Subsidiaries, exclusive of effects resulting from changes in general economic
conditions, legal standards or regulatory conditions.
9. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
9.1. Punctual Payment. The Borrower will duly and punctually pay or cause
----------------
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
9.2. Maintenance of Office. The Borrower will maintain its chief executive
---------------------
office in Alpharetta, Georgia, or at such other place in the United States of
America
-46-
as the Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
9.3. Records and Accounts. The Borrower will (i) keep, and cause each of
--------------------
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (ii) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (iii) at all times engage Coopers &
▇▇▇▇▇▇▇ LLP or other independent certified public accountants satisfactory to
the Agent as the independent certified public accountants of the Borrower and
its Subsidiaries and will not permit more than thirty (30) days to elapse
between the cessation of such firm's (or any successor firm's) engagement as the
independent certified public accountants of the Borrower and its Subsidiaries
and the appointment in such capacity of a successor firm as shall be
satisfactory to the Agent.
9.4. Financial Statements, Certificates and Information. The Borrower will
--------------------------------------------------
deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries, each as at
the end of such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated and consolidating statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
certified without qualification by Coopers & ▇▇▇▇▇▇▇ LLP or by other
independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to the effect that
they have read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such accountants shall
have obtained knowledge of any then existing Default or Event of Default
they shall disclose in such statement any such Default or Event of Default;
provided that such accountants shall not be liable to the Banks for failure
--------
to obtain knowledge of any Default or Event of Default; and, provided
--------
further that the information required by this paragraph may be satisfied by
-------
delivery by the Borrower within such ninety (90) day period of the
Borrower's Form 10-K for such fiscal year;
(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower,
copies of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow
for the portion
-47-
of the Borrower's fiscal year then elapsed, all in reasonable detail and
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such financial
statements fairly presents the financial position of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments);
provided that the information required by this paragraph may be satisfied
--------
by the Borrower within such forty-five (45) day period of the Borrower's
Form 10-Q for such fiscal quarter;
(c) [Reserved]
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of Exhibit E hereto and setting forth in reasonable detail
------- -
computations evidencing compliance with the covenants contained in (S)11
and (if applicable) reconciliations to reflect changes in generally
accepted accounting principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all publicly available material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Borrower;
(f) if any Revolving Credit Loans are outstanding or requested,
within twenty (20) days after the end of each calendar month or at such
earlier time as the Agent may reasonably request, a Borrowing Base Report
setting forth the Borrowing Base as at the end of such calendar month or
other date so requested by the Agent;
(g) if any Revolving Credit Loans are outstanding or requested,
within twenty (20) days after the end of each calendar month, an Accounts
Receivable aging report; and
(h) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
9.5. Notices.
-------
9.5.1. Defaults. The Borrower will promptly notify the Agent and
--------
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or obligor,
whether as principal,
-48-
guarantor, surety or otherwise, the Borrower shall forthwith give written
notice thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
9.5.2. Environmental Events. The Borrower will promptly give
--------------------
notice to the Agent and each of the Banks (i) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (ii) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any
federal, state or local environmental agency or board, that has the
potential to materially adversely affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Subsidiaries.
9.5.3. Notification of Claim against Collateral. The Borrower
----------------------------------------
will, immediately upon becoming aware thereof, notify the Agent and each of
the Banks in writing of any setoff, claims (including, with respect to the
Real Estate, environmental claims), withholdings or other defenses to which
any of the Collateral, or the Agent's rights with respect to the
Collateral, are subject.
9.5.4. Notice of Litigation and Judgments. The Borrower will, and
----------------------------------
will cause each of its Subsidiaries to, give notice to the Agent and each
of the Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a materially adverse
effect on the Borrower or any of its Subsidiaries and stating the nature
and status of such litigation or proceedings. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks, in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess of
$1,000,000.
9.6. Corporate Existence; Maintenance of Properties. The Borrower will do
----------------------------------------------
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence (provided, simultaneously with the execution and
delivery by the Borrower to the Agent of an assumption agreement in
substantially the form of Exhibit G hereto, the Borrower shall be permitted to
merge with and into MAPICS, Inc., a Georgia corporation ("Mapics-Georgia"), with
the survivor of such merger being Mapics-Georgia, for the purpose of changing
the Borrower's state of incorporation from Massachusetts to Georgia), rights and
franchises and those of its Subsidiaries and will not, and will not cause or
permit any of its Subsidiaries to,
-49-
convert to a limited liability company. It (i) will cause all of its properties
and those of its Subsidiaries used or useful in the conduct of its business or
the business of its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (ii) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (iii) will, and will cause each of
its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
--------
(S)9.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the aggregate materially adversely
affect the business of the Borrower and its Subsidiaries on a consolidated
basis.
9.7. Insurance. The Borrower will, and will cause each of its Subsidiaries
---------
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent and
in accordance with the terms of the Security Agreements.
9.8. Taxes. The Borrower will, and will cause each of its Subsidiaries to,
-----
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
--------
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
------- --------
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
9.9. Inspection of Properties and Books, etc.
---------------------------------------
9.9.1. General. The Borrower shall permit the Banks, through the
-------
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries,
to examine the books of account of the Borrower and its Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with, and to be
advised as to the same by, its and their officers, all at such reasonable
times during regular business hours and intervals as the Agent or any Bank
may
-50-
reasonably request and, so long as no Event of Default has occurred and
is continuing, upon reasonable prior notice.
9.9.2. Collateral Reports. No more frequently than once during
------------------
each calendar year, or more frequently as determined by the Agent if an
Event of Default shall have occurred and be continuing, upon the request of
the Agent, the Borrower will obtain and deliver to the Agent, or, if the
Agent so elects, will cooperate with the Agent in the Agent's obtaining, a
report of an independent collateral auditor satisfactory to the Agent
(which may be affiliated with one of the Banks) with respect to the
Accounts Receivable and inventory components included in the Borrowing
Base, which report shall indicate whether or not the information set forth
in the Borrowing Base Report most recently delivered is accurate and
complete in all material respects based upon a review by such auditors of
the Accounts Receivable (including verification with respect to the amount,
aging, identity and credit of the respective account debtors and the
billing practices of the Borrower or its applicable Subsidiary). All such
collateral value reports shall be conducted and made at the expense of the
Borrower.
9.9.3. Environmental Assessments. Whether or not an Event of Default
-------------------------
shall have occurred, the Agent may, from time to time, obtain one or more
environmental assessments or audits of the Real Estate prepared by a
hydrogeologist, an independent engineer or other qualified consultant or
expert approved by the Agent to evaluate or confirm (i) whether any
Hazardous Materials are present in the soil or water at such property and
(ii) whether the use and operation of such property complies with all
Environmental Laws; provided, however, notwithstanding anything to the
-------- -------
contrary contained in this (S)9.9.3, the Agent shall not obtain any
assessment or audit on any leased Real Estate if the Lease pertaining to
such Real Estate prohibits the Borrower from permitting the Agent to obtain
such assessments or audits. Environmental assessments may include without
limitation detailed visual inspections of such property including any and
all storage areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas, and
the taking of soil samples, surface water samples and ground water samples,
as well as such other investigations or analyses as the Agent deems
appropriate. All such environmental assessments shall be conducted and made
at the expense of the Borrower.
9.9.4. Communications with Accountants. The Borrower authorizes the
-------------------------------
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrower's independent certified public accountants and authorizes
such accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries. At the request of the Agent, the Borrower shall deliver a
letter
-51-
addressed to such accountants instructing them to comply with the
provisions of this (S)9.9.4.
9.10. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
------------------------------------------------------
will, and will cause each of its Subsidiaries to, comply with (i) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its charter documents and by-laws,
(iii) all agreements and instruments by which it or any of its properties may be
bound and (iv) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
9.11. Employee Benefit Plans. The Borrower will (i) promptly upon filing
----------------------
the same with the Department of Labor or Internal Revenue Service upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under (S)103(d) of ERISA and Annual Report, Form 5500,
with all required attachments, in respect of each Guaranteed Pension Plan and
(ii) promptly upon receipt or dispatch, furnish to the Agent any notice, report
or demand sent or received in respect of a Guaranteed Pension Plan under
(S)(S)302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under (S)(S)4041A, 4202, 4219, 4242, or 4245 of ERISA.
9.12. Use of Proceeds. The Borrower will use the proceeds of the Loans
---------------
solely for the purposes specified in (S)8.17.1. The Borrower will obtain Letters
of Credit solely for general corporate purposes.
9.13. Bank Accounts. The Borrower will, and will cause each of its
-------------
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form received,
with any appropriate endorsements, in one of the accounts designated as a
central depositary account on Schedule 8.20.
-------- ----
9.14. New Guarantors. In the event any Subsidiary organized under the laws
--------------
of the United States of America or any State thereof is formed or acquired after
the date hereof, such Subsidiary shall, on the date of its formation or
acquisition, guarantee the Obligations and shall execute and deliver to the
Agent a joinder to the Guaranty in form and substance satisfactory to the Agent.
-52-
9.15. Copyright Registration. The Borrower hereby agrees to, and to cause
----------------------
each of its Subsidiaries to, register copyrights for all software products with
the United States Copyright Office not later than sixty (60) days after the
Closing Date with respect to products existing on the date hereof and within
sixty (60) days of marketing any new product and the Borrower shall, and shall
cause each of its Subsidiaries to, simultaneously with such registration,
execute and deliver to the Bank for recordation with the United States Copyright
Office an amendment to the Copyright Memorandum covering such registered
copyrights in form and substance satisfactory to the Agent.
9.16. Further Assurances. The Borrower will, and will cause each of its
------------------
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
------------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
10.1. Restrictions on Indebtedness. The Borrower will not, and will not
----------------------------
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) Subordinated Debt in an amount and on terms and conditions
approved by the Majority Banks in writing;
(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower or
such Subsidiary or under any Capitalized Lease, provided that the aggregate
--------
principal amount of such Indebtedness of the Borrower and its Subsidiaries
shall not exceed the aggregate amount of $1,000,000 at any one time;
(e) Indebtedness existing on the date hereof and listed and
described on Schedule 10.1 hereto;
-------- ----
-53-
(f) Indebtedness of a Subsidiary of the Borrower existing on the
date hereof to the Borrower; and
(g) Indebtedness of the Borrower consisting of a guaranty by the
Borrower of loans to employees of the Borrower, provided that the aggregate
principal amount of such Indebtedness of the Borrower shall not exceed the
aggregate amount of $500,000 at any one time
10.2. Restrictions on Liens. The Borrower will not, and will not permit
---------------------
any of its Subsidiaries to, (i) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (vii) of the definition of the
term "Indebtedness," with or without recourse; or (vi) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits the Borrower or any of its Subsidiaries from
creating or incurring any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest other than in favor of the Agent for the
benefit of the Banks and the Agent under the Loan Documents and other than
customary anti-assignment provisions in leases and licensing agreements entered
into by the Borrower or such Subsidiary in the ordinary course of its business,
provided that the Borrower or any of its Subsidiaries may create or incur or
--------
suffer to be created or incurred or to exist:
(a) liens in favor of the Borrower on all or part of the assets
of Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries
of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations not
overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations or deposits made in
connection with performance bonds obtained in the ordinary course of
business;
-54-
(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an appeal
so long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens, in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
(f) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower is
a party, and other minor liens or encumbrances none of which in the opinion
of the Borrower interferes materially with the use of the property affected
in the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower individually or
of the Borrower and its Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule 10.2
-------- ----
hereto;
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness of the type and amount permitted by
(S)10.1(d), incurred in connection with the acquisition of such property,
which security interests or mortgages cover only the real or personal
property so acquired and liens in favor of lessors under Capitalized Leases
on assets subject to Capitalized Leases permitted by (S)10.1(d) hereof;
(i) liens in favor of the Agent for the benefit of the Banks and
the Agent under the Loan Documents; and
(j) liens to secure Indebtedness of the type and amount permitted
by (S)10.1(g).
10.3. Restrictions on Investments. The Borrower will not, and will not
---------------------------
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase
by the Borrower;
-55-
(b) 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;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by ▇▇▇▇▇'▇
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 10.3 hereto;
-------- ----
(e) Investments with respect to Indebtedness permitted by
(S)10.1(f) so long as such entities remain Subsidiaries of the Borrower;
(f) Investments consisting of the Guaranty or Investments by the
Borrower in Subsidiaries of the Borrower existing on the Closing Date or
Investments by the Borrower in domestic Subsidiaries of the Borrower
existing after the Closing Date, so long as the Borrower and such
Subsidiary shall have complied with the provisions of (S)7.2 hereof;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by (S)10.5.2;
(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $1,000,000 in the aggregate at any time
outstanding;
(i) Investments consisting of Investments in money-market mutual
funds consisting entirely of (i) United States treasury or agency funds;
(ii) Boston 1784 funds; (iii) Fidelity Investment money-market funds which
are open-end investment companies registered under the Investment Company
Act of 1940, as amended; and (iv) other money market mutual funds
acceptable to the Agent; and
(j) Investments existing on the date hereof and listed on
Schedule 10.3(j) hereto and other similar Investments in Persons which are
-------- -------
or which are intended to be sales affiliates of the Borrower (including,
without limitation, joint venture entities), provided, the principal amount
--------
of all such
-56-
Investments made pursuant to this (S)10.3(j) (including, without
limitation, those Investments on Schedule 10.3(j)) shall not exceed
----------------
$40,000,000 in the aggregate at any time outstanding and, provided, further
-----------------
that the principal amount of all such Investments made pursuant to this
(S)10.3(j) (including, without limitation, those Investments on Schedule
--------
10.3(j)) which are made with any consideration other than the capital stock
-------
of the Borrower shall not exceed $20,000,000 in the aggregate at any time
outstanding;
provided, however, that, with the exception of demand deposits referred to in
-------- -------
(S)10.3(b) and loans and advances referred to in (S)10.3(h), such Investments
will be considered Investments permitted by this (S)10.3 only if all actions
have been taken to the satisfaction of the Agent to provide to the Agent, for
the benefit of the Banks and the Agent, a first priority perfected security
interest in all of such Investments free of all encumbrances other than
Permitted Liens.
10.4. Distributions. The Borrower will not make any Distributions except
-------------
as provided in the Distribution Agreement; provided, however, notwithstanding
anything to the contrary contained in this Credit Agreement, so long as no
Default or Event of Default has occurred and is continuing or would exist as a
result thereof, the Borrower shall be permitted to repurchase shares of its
capital stock provided that the aggregate amount of all such Distributions made
--------
in connection with all such repurchases permitted by this (S)10.4 does not
exceed, in the aggregate, (a) $25,546,930 from the Closing Date through and
including June 30, 1999; (b) $8,000,000 for the period of July 1, 1999 through
September 30, 1999; and (c) $2,000,000 for each fiscal quarter ending
thereafter, but in no event shall there be more than $16,000,000 in
Distributions made from July 1, 1999 through the end of this facility, provided,
--------
however, that, if during any fiscal quarter the amount of Distributions
-------
permitted for that fiscal quarter to repurchase capital stock is not so
utilized, such unutilized amount may be utilized in the next succeeding fiscal
quarters.
10.5. Merger, Consolidation and Disposition of Assets.
-----------------------------------------------
10.5.1. Mergers and Acquisitions. The Borrower will not, and
------------------------
will not permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices) except the merger or consolidation
of one or more of the Subsidiaries of the Borrower with and into the
Borrower, or the merger or consolidation of two or more Subsidiaries of the
Borrower or, so long as the Borrower has duly executed and delivered to the
Agent an assumption agreement in substantially the form of Exhibit G
hereto, the Borrower shall be permitted to merge with and into MAPICS,
Inc., a Georgia corporation, ("Mapics-Georgia"), with the survivor of such
merger being Mapics-Georgia, for the purpose of changing the Borrower's
state of incorporation from Massachusetts to Georgia.
-57-
10.5.2. Disposition of Assets. The Borrower will not, and will not
---------------------
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than the sale of inventory, the licensing
of intellectual property and the disposition of obsolete assets, in each
case in the ordinary course of business consistent with past practices,
except as contemplated by the Distribution Agreement.
10.6. Sale and Leaseback. The Borrower will not, and will not permit any
------------------
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred.
10.7. Compliance with Environmental Laws. The Borrower will not, and will
----------------------------------
not permit any of its Subsidiaries to, (i) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (ii) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (iii) generate any Hazardous Substances on any of the Real Estate,
(iv) conduct any activity at any Real Estate or use any Real Estate in any
manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
10.8. Subordinated Debt. The Borrower will not, and will not permit any of
-----------------
its Subsidiaries to, amend, supplement or otherwise modify the terms of any of
the Subordinated Debt or prepay, redeem or repurchase any of the Subordinated
Debt.
10.9. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
----------------------
will
(a) engage in any "prohibited transaction" within the meaning of
(S)406 of ERISA or (S)4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in (S)302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner which,
could result in the imposition of a lien or encumbrance on the assets of
the Borrower or any of its Subsidiaries pursuant to (S)302(f) or (S)4068 of
ERISA; or
-58-
(d) amend any Guaranteed Pension Plan in circumstances requiring
the posting of security pursuant to (S)307 of ERISA or (S)401(a)(29) of the
Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of (S)4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
10.10. Business Activities. The Borrower will not, and will not permit any
-------------------
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
10.11. Fiscal Year. The Borrower will not, and will not permit any of it
-----------
Subsidiaries to, without the written consent of the Agent, change the date of
the end of its fiscal year from that set forth in (S)8.4.1.
10.12. Transactions with Affiliates. The Borrower will not, and will not
----------------------------
permit any of its Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any such Affiliate has a substantial interest or is an officer,
director, trustee or partner, on terms more favorable to such Person than would
have been obtainable on an arm's-length basis in the ordinary course of
business.
10.13. Upstream Limitations. Neither the Borrower nor any of its
--------------------
Subsidiaries will enter into any agreement, contract or arrangement (other than
the Credit Agreement and the other Loan Documents) restricting the ability of
any Subsidiary to pay or make dividends or distributions in cash or kind to the
Borrower, to make loans, advances or other payments of whatsoever nature to the
Borrower, or to make transfer or distributions of all or any part of its assets
to the Borrower.
11. FINANCIAL COVENANTS OF THE BORROWER.
-----------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
11.1. Leverage Ratio. The Borrower will not permit the Leverage Ratio to
--------------
exceed 2.50:1.00 at the end of any fiscal quarter.
-59-
11.2. Consolidated Operating Cash Flow to Debt Service. The Borrower will
------------------------------------------------
not permit the ratio of Consolidated Operating Cash Flow to the sum of
Consolidated Financial Obligations plus Consolidated Total Interest Expense for
----
any fiscal quarter ending on or prior to December 31, 1997 to exceed 2:1 and for
any fiscal quarter ending thereafter to be less than 2.50:1.
11.3. Profitable Operations. The Borrower will not permit Consolidated Net
---------------------
Income at the end of each fiscal quarter for such quarter and the immediately
preceding three fiscal quarters to be less than $4,000,000.
11.4. Quick Ratio. The Borrower will not permit the ratio of Consolidated
-----------
Quick Assets to Consolidated Current Liabilities to be less than 1.25 to 1 at
any time.
12. CLOSING CONDITIONS.
------------------
The obligations of the Banks to make the initial Revolving Credit Loans and
the Term Loan and of the Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent on or prior to
August 4, 1997:
12.1. Loan Documents. Each of the Loan Documents shall have been duly
--------------
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
12.2. Certified Copies of Charter Documents. Each of the Banks shall have
-------------------------------------
received from the Borrower and each of its Subsidiaries party to and Loan
Document, unless otherwise agreed by the Agent, a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (i) its charter or other incorporation documents as in effect on such
date of certification, and (ii) its by-laws as in effect on such date.
12.3. Corporate, Action. All corporate action necessary for the valid
-----------------
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
12.4. Incumbency Certificate. Each of the Banks shall have received from
----------------------
the Borrower and each of its Subsidiaries party to any Loan Document an
incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower or such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of the Borrower of such Subsidiary, each
of the Loan Documents to which the Borrower or such Subsidiary is or is to
become a party; (ii) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to
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apply for Letters of Credit; and (iii) to give notices and to take other action
on its behalf under the Loan Documents.
12.5. Validity of Liens. The Security Documents shall be effective to
-----------------
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
12.6. Perfection Certificates and UCC Search Results. The Agent shall have
----------------------------------------------
received from each of the Borrower and its Subsidiaries a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agent.
12.7. Certificates of Insurance. The Agent shall have received (i) a
-------------------------
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained and naming the
Agent as loss payee and additional insured in accordance with the provisions of
the Security Agreements and (ii) certified copies of all policies evidencing
such insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).
12.8. Agency Account Agreements. The Borrower shall have established the
-------------------------
BKB Concentration Account, and the Agent shall have received an Agency Account
Agreement executed by each depository institution with a Local Account or an
Interim Concentration Account.
12.9. Borrowing Base Report. The Agent shall have received from the
---------------------
Borrower the initial Borrowing Base Report dated as of the Closing Date.
12.10. Accounts Receivable Aging Report. The Agent shall have received
--------------------------------
from the Borrower the most recent Accounts Receivable aging report of the
Borrower and its Subsidiaries dated as of a date which shall be no more than
fifteen (15) days prior to the Closing Date and the Borrower shall have notified
the Agent in writing on the Closing Date of any material deviation from the
Accounts Receivable values reflected in such Accounts Receivable aging report
and shall have provided the Agent with such supplementary documentation as the
Agent may reasonably request.
12.11. Solvency Certificate. Each of the Banks shall have received a
--------------------
certificate of an officer of the Borrower dated not less than one (1) day prior
to the Closing Date, describing in detail the solvency of the Borrower and its
Subsidiaries
-61-
12.12. Opinion of Counsel. Each of the Banks and the Agent shall have
------------------
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, counsel to the Borrower and its
Subsidiaries.
12.13. Disbursement Instructions. The Agent shall have received
-------------------------
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Loans are paid to satisfy the obligations described in
(S)8.17.1.
13. CONDITIONS TO ALL BORROWINGS.
----------------------------
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
13.1. Representations True; No Event of Default. Each of the
-----------------------------------------
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
13.2. No Legal Impediment. No change shall have occurred in any law or
-------------------
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
13.3. Governmental Regulation. Each Bank shall have received such
-----------------------
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
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13.4. Proceedings and Documents. All proceedings in connection with the
-------------------------
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
13.5. Borrowing Base Report. Prior to the making of any Revolving Credit
---------------------
Loan, Agent shall have received the most recent Borrowing Base Report required
to be delivered to the Agent in accordance with (S)9.4(f) and, if requested by
the Agent, a Borrowing Base Report dated within three (3) days of the Drawdown
Date of such Loan or of the date of issuance, extension or renewal of such
Letter of Credit.
13.6. Commercial Finance Exam. The Agent shall have completed a commercial
-----------------------
finance exam of the Borrower and the results thereof shall be satisfactory to
the Agent.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
14.1. Events of Default and Acceleration. If any of the following events
----------------------------------
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans or any
Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment;
(b) the Borrower or any of its Subsidiaries shall fail to pay any
interest on the Loans, the commitment fee, any Letter of Credit Fee, the
Agent's fee, or other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in (S)9, 10 or 11;
(d) the Borrower or any of its Subsidiaries shall fail to perform
any term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this (S)14.1) for
fifteen (15) days after written notice of such failure has been given to
the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or
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in any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases,
or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
borrowed money or credit received or in respect of any Capitalized Leases
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries (other than a Non-
Material Subsidiary unless the Borrower or any other Subsidiary has been
adversely effected by the occurrence of such event (a "Deminimis
Subsidiary")) shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the appointment
of a trustee or other custodian, liquidator or receiver of the Borrower or
any of its Subsidiaries (other than a Deminimis Subsidiary) or of any
substantial part of the assets of the Borrower or any of its Subsidiaries
(other than a Deminimis Subsidiary) or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries (other than
a Deminimis Subsidiary) under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, or shall take any action
to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries (other
than a Deminimis Subsidiary) and the Borrower or any of its Subsidiaries
(other than a Deminimis Subsidiary) shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within forty-five (45) days following the
filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries (other than a Deminimis Subsidiary) bankrupt or insolvent,
or approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of the Borrower or any Subsidiary
(other than a Deminimis Subsidiary) of the Borrower in an involuntary case
under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries (other than a
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Deminimis Subsidiary) that, with other outstanding final judgments,
undischarged, against the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) exceeds in the aggregate $1,000,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in
part;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or any of its Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA, or the
Borrower or any ERISA Affiliate is assessed withdrawal liability pursuant
to Title IV of ERISA by a Multiemployer Plan, or any of the following
occurs with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable
Event, or a failure to make a required installment or other payment (within
the meaning of (S)302(f)(1) of ERISA), provided that the Agent determines
--------
in its reasonable discretion that such event (A) could be expected to
result in liability of the Borrower or any of its Subsidiaries to the PBGC
or such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000
and (B) could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension
Plan; or (ii) the appointment by a United States District Court of a
trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan;
(m) the Borrower or any of its Subsidiaries (other than a Deminimis
Subsidiary) shall be enjoined, restrained or in any way prevented by the
order of any court or any administrative or regulatory agency from
conducting any material part of its business and such order shall continue
in effect for more than thirty (30) days;
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(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a material adverse effect on the
business or financial condition of the Borrower and its Subsidiaries, taken
as a whole;
(p) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise
have been brought or threatened against the Borrower or any of its
Subsidiaries, a punishment for which in any such case could include the
forfeiture of any assets of the Borrower or such Subsidiary included in the
Borrowing Base or any assets of the Borrower or such Subsidiary not
included in the Borrowing Base but having a fair market value in excess of
$1,000,000; or
(q) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding shares of common stock of the Borrower; or, during any
period of twelve consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
--------
of Default specified in (S)(S)14.1(g), 14.1(h) or 14.1(j), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
14.2. Termination of Commitments. If any one or more of the Events of
--------------------------
Default specified in (S)14.1(g), (S)14.1(h) or (S)14.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be
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relieved of all further obligations to issue, extend or renew Letters of Credit.
If any other Event of Default shall have occurred and be continuing, the Agent
may and, upon the request of the Majority Banks, shall, by notice to the
Borrower, terminate the unused portion of the credit hereunder, and upon such
notice being given such unused portion of the credit hereunder shall terminate
immediately and each of the Banks shall be relieved of all further obligations
to make Loans and the Agent shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. No termination of the credit hereunder
shall relieve the Borrower or any of its Subsidiaries of any of the Obligations.
14.3. Remedies. In case any one or more of the Events of Default shall
--------
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to (S)14.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
-- -----
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
14.4. Distribution of Collateral Proceeds. In the event that, following
-----------------------------------
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
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(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that (i) distributions
-------- -------
shall be made (A) pari passu among Obligations with respect to the Agent's
---- -----
fee payable pursuant to (S)6.2 and all other Obligations and (B) with
respect to each type of Obligation owing to the Banks, such as interest,
principal, fees and expenses, among the Banks pro rata, and (ii) the Agent
--- ----
may in its discretion make proper allowance to take into account any
Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent of
all of the Obligations, to the payment of any obligations required to be
paid pursuant to (S)9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
15. SETOFF.
------
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities then due, direct,
or indirect, absolute or contingent, now existing or hereafter arising, of the
Borrower to such Bank. Each of the Banks agrees with each other Bank that (i)
if an amount to be set off is to be applied to Indebtedness of the Borrower to
such Bank, other than Indebtedness evidenced by the Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness evidenced by
all such Notes held by such Bank or constituting Reimbursement Obligations owed
to such Bank, and (ii) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
--- -----
otherwise as shall result in each Bank receiving in respect of the Notes held by
it or Reimbursement obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
--------
excess payment is thereafter recovered from such Bank,
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such disposition and arrangements shall be rescinded and the amount restored to
the extent of such recovery, but without interest.
16. THE AGENT.
---------
16.1. Authorization.
-------------
(a) The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
--------
therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of
the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
16.2. Employees and Agents. The Agent may exercise its powers and execute
--------------------
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
16.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given
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or any action taken, or omitted to be taken, in good faith by it or them
hereunder or under any of the other Loan Documents, or in connection herewith or
therewith, or be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person, as the case may
be, may be liable for losses due to its willful misconduct or gross negligence.
16.4. No Representations.
------------------
16.4.1. General. The Agent shall not be responsible for the execution
-------
or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any
time constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants
or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect any
of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of
any of the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any representations
or warranties, express or implied, nor does it assume any liability to the
Banks, with respect to the credit worthiness or financial conditions of the
Borrower or any of its Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
16.4.2. Closing Documentation, etc. For purposes of determining
--------------------------
compliance with the conditions set forth in (S)12, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or BancBoston Securities,
Inc., as arranger to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be to be consent to or approved by
or acceptable or satisfactory to such Bank, unless an officer of the Agent
or BancBoston Securities, Inc. active upon the Borrower's account shall
have received notice from such Bank not less than two days prior to the
Closing Date specifying such Bank's objection thereto and such objection
shall not have been withdrawn by notice to the Agent or BancBoston
Securities, Inc. to such effect on or prior to the Closing Date.
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16.5. Payments.
--------
16.5.1. Payments to Agent. A payment by the Borrower to the Agent
-----------------
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
--- ----
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
16.5.2. Distribution by Agent. If in the opinion of the Agent the
---------------------
distribution of any amount received by it in such capacity hereunder, under
the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.
16.5.3. Delinquent Banks. Notwithstanding anything to the contrary
----------------
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (i) to make available to the Agent its pro rata share of
--- ----
any Loan or to purchase any Letter of Credit Participation or (ii) to
comply with the provisions of (S)15 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata
--- ----
share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any and all payments due
to it from the Borrower, whether on account of outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
--- ----
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
--- ----
Obligations. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and Unpaid Reimbursement Obligations of
the nondelinquent Banks, the Banks' respective pro rata shares of all
--- ----
outstanding Loans and Unpaid Reimbursement Obligations have returned to
those in
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effect immediately prior to such delinquency and without giving effect to
the nonpayment causing such delinquency.
16.6. Holders of Notes. The Agent may deem and treat the payee of any Note
----------------
or the purchaser of any Letter of Credit Participation as the absolute owner or
purchaser thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder, assignee
or transferee.
16.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
---------
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by (S)17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
16.8. Agent as Bank. In its individual capacity, BKB shall have the same
-------------
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
16.9. Resignation. The Agent may resign at any time by giving sixty (60)
-----------
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
16.10. Notification of Defaults and Events of Default. Each Bank hereby
----------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt
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of any notice under this (S)16.10 it shall promptly notify the other Banks of
the existence of such Default or Event of Default.
16.11. Duties in the Case of Enforcement. In case one of more Events of
---------------------------------
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (i) so requested by
the Majority Banks and (ii) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
--------
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
17. EXPENSES AND INDEMNIFICATION.
----------------------------
17.1. Expenses. The Borrower agrees to pay (i) the reasonable costs of
--------
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (ii) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (iii) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent reasonably incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon payment in full in
cash of all of the Obligations or pursuant to any terms of such Loan Document
for providing for such cancellation, (iv) the fees, expenses and disbursements
of the Agent or any of its affiliates reasonably incurred by the Agent or such
affiliate in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (v) any fees, costs, expenses and bank charges, including bank charges
for returned checks reasonably incurred by the Agent in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any of the Collateral; (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Bank or the Agent, and reasonable
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consulting, accounting, appraisal, investment banking and similar professional
fees and charges) reasonably incurred by any Bank or the Agent in connection
with (A) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries and (vii) all reasonable fees, expenses and disbursements of
any Bank or the Agent reasonably incurred in connection with UCC searches, UCC
filings or mortgage recordings.
17.2. Indemnification. The Borrower agrees to indemnify and hold harmless
---------------
the Agent, its affiliates and the Banks from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (i) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Loans or Letters of Credit, (ii) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from lock
box, bank agency or concentration accounts or in connection with the provisional
honoring of checks or other items, (iii) any actual or alleged infringement of
any patent, copyright, trademark, service ▇▇▇▇ or similar right of the Borrower
or any of its Subsidiaries comprised in the Collateral, (iv) the Borrower or any
of its Subsidiaries entering into or performing this Credit Agreement or any of
the other Loan Documents or (v) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrower
agrees to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrower under this (S)17.2 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
17.3. Survival. The covenants contained in this (S)17 shall survive
--------
payment or satisfaction in full of all other Obligations.
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18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
---------------------------------------------
18.1. Sharing of Information with Section 20 Subsidiary. The Borrower
-------------------------------------------------
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
18.2. Confidentiality. Each of the Banks and the Agent agrees, on behalf
---------------
of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
--------
(a) after such information shall have become public other than through a
violation of this (S)18, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants, (e) to the Agent, any Bank or
any Section 20 Subsidiary, (f) in connection with any litigation to which any
one or more of the Banks, the Agent or any Section 20 Subsidiary is a party, or
in connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Bank as provided
in (S)18.1 or (h) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant agrees to be bound by the
provisions of (S)20.6.
18.3. Prior Notification. Unless specifically prohibited by applicable law
------------------
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such non-
public information by any governmental agency or representative thereof (other
than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
18.4. Other. In no event shall any Bank or the Agent be obligated or
-----
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
(S)18
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shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.
19. SURVIVAL OF COVENANTS, ETC.
--------------------------
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
----------------------------
20.1. Conditions to Assignment by Banks. Except as provided herein, each
---------------------------------
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i) each
--------
of the Agent and, unless a Default or Event of Default shall have
occurred and be continuing, the Borrower shall have given its prior written
consent to such assignment, which consent, in the case of the Borrower, will not
be unreasonably withheld, (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement, (iii) each assignment shall be either such Bank's
entire interest or be in an amount that is $5,000,000 or a multiple of
$1,000,000 in excess thereof, and (iv) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the form of Exhibit F
------- -
hereto (an "Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i)
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the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder, and (ii) the assigning Bank shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to in
(S)20.3, be released from its obligations under this Credit Agreement.
20.2. Certain Representations and Warranties; Limitations; Covenants. By
--------------------------------------------------------------
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or
observance by the Borrower and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations of any
of their obligations under this Credit Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in (S)8.4 and (S)9.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Bank, the Agent or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
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Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro
---
rata share of Letter of Credit Fees in respect of outstanding Letters of
----
Credit.
20.3. Register. The Agent shall maintain a copy of each Assignment and
--------
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.
20.4. New Notes. Upon its receipt of an Assignment and Acceptance executed
---------
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this (S)20.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the
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legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Notes shall be cancelled and returned
to the Borrower.
20.5. Participations. Each Bank may sell participations to one or more
--------------
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
--------
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
20.6. Disclosure. The Borrower agrees that in addition to disclosures made
----------
in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
--------
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
20.7. Assignee or Participant Affiliated with the Borrower. If any
----------------------------------------------------
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to (S)14.1 or (S)14.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans or Reimbursement Obligations. If any Bank
sells a participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to (S)14.1 or (S)14.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
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Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.
20.8. Miscellaneous Assignment Provisions. Any assigning Bank shall retain
-----------------------------------
its rights to be indemnified pursuant to (S)17 with respect to any claims or
actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this (S)20 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under (S)4 of
the Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.
20.9. Assignment by Borrower. The Borrower shall not assign or transfer
----------------------
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
21. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief
Financial Officer and Vice President of Finance, or at such other address
for notice as the Borrower shall last have furnished in writing to the
Person giving the notice;
(b) if to the Agent, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇. Massimo, Vice President, or such other
address for notice as the Agent shall last have furnished in writing to the
Person giving the notice; and
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(c) if to any Bank, at such Bank's address set forth on Schedule 1
-------- -
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
22. GOVERNING LAW.
-------------
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN (S)21. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
23. HEADINGS.
--------
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
------------
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
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25. ENTIRE AGREEMENT, ETC.
---------------------
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
(S)27.
26. WAIVER OF JURY TRIAL.
--------------------
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (i)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
----------------------------------
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to
(S)6.11.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default relating thereto), the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank affected thereby; the Revolving Credit Loan
Maturity Date and the Term Loan Maturity Date may not be postponed without the
written consent of each Bank affected thereby; this (S)27 and the definition of
Majority Banks may not be amended, without the written consent of all of the
Banks; all or substantially all of the Collateral may not be released without
the written consent of all of the Banks; and the amount of the Agent's Fee or
any Letter of Credit Fees payable for the Agent's account and (S)16 may not be
amended without the written consent of the Agent. No waiver shall
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extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of the
Agent or any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other
circumstances.
28. SEVERABILITY.
------------
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
MAPICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
BANKBOSTON, N.A., individually and
as Agent
By: /s/ ▇▇▇ ▇. Massimo
-----------------------------------
Name: ▇▇▇ ▇. Massimo
Director
SCHEDULE 1
----------
Banks/Commitments
-----------------
Commitment
Revolving Percentage of Revolving Credit
Credit Loan Loans, Term Loan and Letters
Banks Commitment of Credit
===========================================================================================
BankBoston, N.A. $15,000,000 100%
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Massimo, Vice
President,
Eurodollar Lending Office:
Same as above
===========================================================================================
Totals: $15,000,000 100%
SCHEDULE 10.3(j)
SALES AFFILIATES INVESTMENTS
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Investment Type Investment To: Date: Amount:
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Loan Trimin Systems 09/09/99 $ 350,000
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Loan to joint venture entity Mapics China 07/01/99 $2,500,000
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Equity Investment by Mapics Hong Kong in JV Mapics China 09/99 HKD50,000
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Loan to assist in purchase of computer equipment Trimin Systems 04/05/99 $ 42,750
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Loan to assist in purchase of computer equipment Trimin Systems 12/98 $ 29,025
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Loan Ekip Mapics Turkey 2/1/99-7/31/99 $ 200,000
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Equity Investment Mapics Espana 3/99 EUR22,800
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