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EXHIBIT - 10.5
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CREDIT AGREEMENT
by and between
TRITON SYSTEMS, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
Dated As of September 26, 1996
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TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS AND RULES OF INTERPRETATION............................ 1
1.1 Definitions............................................... 1
1.2 Rules of Interpretation................................... 14
2. THE REVOLVING CREDIT FACILITY...................................... 14
2.1 Commitment to Lend........................................ 14
2.2 Commitment Fee............................................ 16
2.3 Reduction of Commitment................................... 16
2.4 The Revolving Credit Note................................. 16
2.5 Interest on Revolving Credit Loans........................ 17
2.6 Requests for Revolving Credit Loans; Type of Loan......... 17
2.7 One Loan.................................................. 18
2.8 Letter of Credit Arrangements............................. 18
3. REPAYMENT OF THE LOANS............................................. 19
3.1 Maturity.................................................. 19
3.2 Mandatory Repayments of Revolving Credit Loans............ 19
3.3 Optional Repayments of Loans.............................. 19
4. CERTAIN GENERAL PROVISIONS......................................... 20
4.1 Facility Fee.............................................. 20
4.2 Funds for Payments........................................ 20
4.3 Computations.............................................. 20
4.4 Additional Costs, Etc..................................... 21
4.5 Capital Adequacy.......................................... 22
4.6 Certificate............................................... 22
4.7 Interest on Overdue Amounts............................... 22
4.8 Inability to Determine LIBOR.............................. 22
4.9 Illegality................................................ 23
4.10 Indemnity................................................. 23
5. COLLATERAL SECURITY................................................ 24
6. REPRESENTATIONS AND WARRANTIES..................................... 24
6.1 Corporate Authority; Etc.................................. 24
6.2 Governmental Approvals.................................... 25
6.3 Title to Properties; Leases............................... 25
6.4 Financial Statements...................................... 25
6.5 No Material Changes, Etc.................................. 26
6.6 Intellectual Property Rights.............................. 26
6.7 Litigation................................................ 26
6.8 No Materially Adverse Contracts, Etc...................... 27
6.9 Compliance With Other Instruments, Laws, Etc.............. 27
6.10 Tax Status................................................ 27
6.11 No Event of Default....................................... 27
6.12 Holding Company and Investment Company Acts............... 27
6.13 Absence of UCC Financing Statements, Etc.................. 27
6.14 Setoff, Etc............................................... 28
6.15 Certain Transactions...................................... 28
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6.16 Employee Benefit Plans; Multiemployer Plans;
Guaranteed Pension Plans.................................. 28
6.17 Regulations U and X....................................... 28
6.18 Environmental Compliance.................................. 28
6.19 Subsidiaries.............................................. 30
6.20 Loan Documents............................................ 30
6.21 Acquisition Agreement..................................... 30
6.22 Real Property; Leases..................................... 30
6.23 Chief Place of Business; Locations of Property............ 31
6.24 Authorized and Outstanding Stock.......................... 31
7. AFFIRMATIVE COVENANTS OF THE BORROWER.............................. 31
7.1 Punctual Payment.......................................... 32
7.2 Maintenance of Office; Business Name...................... 32
7.3 Records and Accounts...................................... 32
7.4 Financial Statements, Certificates and
Information............................................... 32
7.5 Notices................................................... 34
7.6 Existence; Maintenance of Properties...................... 35
7.7 Insurance................................................. 35
7.8 Taxes..................................................... 36
7.9 Inspection of Properties and Books........................ 36
7.10 Compliance with Laws, Contracts, Licenses, and
Permits................................................... 37
7.11 Use of Proceeds........................................... 37
7.12 Further Assurances........................................ 37
7.13 Maintenance of Liens of Security Documents................ 37
7.14 Equipment Not to Become Fixtures.......................... 38
7.15 Verification of Accounts.................................. 38
7.16 Key Man Life Insurance.................................... 38
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER......................... 38
8.1 Restrictions on Indebtedness.............................. 38
8.2 Restrictions on Liens, Etc................................ 39
8.3 Restrictions on Investments............................... 41
8.4 Merger, Consolidation..................................... 42
8.5 Sale and Leaseback........................................ 42
8.6 Compliance with Environmental Laws........................ 42
8.7 Distributions............................................. 42
8.8 Change to Fiscal Year..................................... 43
9. FINANCIAL COVENANTS OF THE BORROWER................................ 43
9.1 Minimum Net Income........................................ 43
9.2 Total Debt Service Coverage............................... 43
9.3 Leverage Ratio............................................ 43
9.4 Capital Expenditures...................................... 43
10. CLOSING CONDITIONS................................................. 44
10.1 Loan Documents............................................ 44
10.2 Certified Copies of Organization Documents................ 44
10.3 By-laws; Resolutions...................................... 44
10.4 Incumbency Certificate; Authorized Signers................ 44
10.5 Validity of Liens......................................... 44
10.6 UCC Searches.............................................. 44
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10.7 Leases.................................................... 44
10.8 Lease Collateral Agreements............................... 45
10.9 Certificates of Insurance................................. 45
10.10 Opinion of Counsel Concerning Organization and
Loan Documents............................................ 45
10.11 Payment of Fees........................................... 45
10.12 Permit Assurances......................................... 45
10.13 Other Documents........................................... 45
11. CONDITIONS TO ALL BORROWINGS....................................... 45
11.1 Representations True; No Event of Default................. 45
11.2 No Legal Impediment....................................... 46
11.3 Governmental Regulation................................... 46
11.4 Proceedings and Documents................................. 46
12. EVENTS OF DEFAULT; ACCELERATION; ETC............................... 46
12.1 Events of Default and Acceleration........................ 46
12.2 Termination of Commitment................................. 48
12.3 Remedies.................................................. 49
12.4 Distribution of Collateral Proceeds....................... 49
12.5 Event of Default Waiver................................... 50
13. SETOFF............................................................. 50
14. [Intentionally blank.]............................................. 50
15. EXPENSES........................................................... 50
16. INDEMNIFICATION.................................................... 51
17. SURVIVAL OF COVENANTS, ETC......................................... 52
18. SUCCESSORS......................................................... 52
19. NOTICES, ETC....................................................... 52
20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE................. 53
21. HEADINGS........................................................... 53
22. COUNTERPARTS....................................................... 53
23. ENTIRE AGREEMENT, ETC.............................................. 54
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS..................... 54
25. CONSENTS, AMENDMENTS, WAIVERS, ETC................................. 54
26. SEVERABILITY....................................................... 54
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EXHIBITS AND SCHEDULES:
Exhibit A - Revolving Credit Note
Exhibit B - Officer's Certificate
Exhibit C - NOTICE OF BORROWING
Exhibit D
Schedule 1 - Statement of Cash Flows
Schedule 6.2 - Government Approvals
Schedule 6.3 - Title to Properties; Leases
Schedule 6.6 - Intellectual Property
Schedule 6.7 - Litigation
Schedule 6.10 - Tax Status
Schedule 6.15 - Certain Transactions
Schedule 6.16 - Employee Benefit Plans
Schedule 6.18 - Environmental Compliance
Schedule 6.22 - Real Property; Leases
Schedule 6.24 - Stock Ownership
Schedule 8.1 - Restrictions on Indebtedness
Schedule 8.2 - Restrictions on Liens, Etc.
Schedule 8.3 - Restrictions on Investments
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CREDIT AGREEMENT
This CREDIT AGREEMENT is made as of the 26th day of September, 1996, by
and between TRITON SYSTEMS, INC., a Mississippi corporation (the "Borrower"),
having its principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, and THE FIRST NATIONAL BANK OF BOSTON, a national banking
association (the "Bank"), having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 Definitions. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Agreement referred to
below:
Accounts and Accounts Receivable. See Security Agreement.
Account Debtor. A Person who is an obligor to Borrower under any
Account.
Acquisition Agreement. Stock Purchase and Redemption Agreement by and
among the Borrower, Summit Ventures IV, L.P., Summit Investors III, L.P., Summit
Subordinated Debt Fund, L.P. and the Borrower Key Officers dated as of July 25,
1996.
Affiliate means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with such Person, and shall include (i) any officer or director or
general partner of such Person and (ii) any Person of which such Person or any
Affiliate (as defined in clause (i) above) of such Person shall, directly or
indirectly, beneficially own either at least 10% of the outstanding equity
securities having the general power to vote or at least 10% of all equity
interests.
Agreement. This Credit Agreement, including the Schedules and Exhibits
hereto.
Balance Sheet Date. The balance sheet of the borrower dated as of
August 31, 1996.
Bank. The First National Bank of Boston, its successors and assigns,
and any other Person who becomes an assignee of any rights thereof.
Bank's Head Office. The Bank's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Bank may
designate in writing from time to time.
Bank's Special Counsel. ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP.
Base Maximum Amount. Section 2.1(b).
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Base Rate. The higher of (a) the annual rate of interest announced from
time to time by Bank at its head office in Boston, Massachusetts as its "base
rate" and (b) one half of one percent (1/2%) above the overnight Federal Funds
Effective Rate as published by the Board of Governors of the Federal Reserve
System, as in effect from time to time (rounded upwards, if necessary, to the
next one-eighth of one percent).
Base Rate Applicable Margin. The percentage determined as set forth
below, at any time during the period the Leverage Ratio is at the level set
forth below:
Leverage Ratio Base Rate Applicable Margin
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greater than or equal to 2.50:1.0 0.25%
less than 2.50:1.0 0.0
Base Rate Loan. Any Revolving Credit Loans bearing interest determined
with reference to the Base Rate.
Book Value. As defined by generally accepted accounting principles.
Borrower. As defined in the preamble hereto.
Borrower's Key Officers: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, and
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Business Day. Any day (other than a Saturday or Sunday) on which
banking institutions in Boston, Massachusetts, are open for the transaction of a
substantial part of their commercial banking business and with respect to all
notices and determinations in connection with and payments of principal and
interest on LIBOR Rate Loans, any day that is a London Banking Day.
Calculation Date. April 1 of each calendar year.
Capital Expenditures. For any period, amounts added or required to be
added to the fixed assets account on the consolidated balance sheet of the
Borrower, prepared in accordance with generally accepted accounting principles,
in respect of (i) the acquisition, construction, improvement or replacement of
land, buildings, machinery, equipment, leaseholds and any other real or personal
property, and (ii) to the extent not included in clause (i) above, expenditures
on account of materials, contract labor and direct labor relating thereto
(excluding expenditures properly expensed as repairs and maintenance in
accordance with generally accepted accounting principles).
Capitalized Lease Obligations. The amount of the liability reflecting
the aggregate discounted amount of future payments under all Capitalized Leases
calculated in accordance with generally accepted accounting principles.
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Capitalized Leases. Any lease that is capitalized on the balance sheet
of the lessee in accordance with generally accepted accounting principles.
Cash Flow Commitment Reduction. An amount equal to the greater of:
(a) the difference between (i) seventy-five percent (75%) of Net Cash
Provided by Operating Activities for the applicable Fiscal Year and
(ii) the sum of;
(x) $1,000,000.00;
(y) any other scheduled payments of principal on
the Senior Debt and any Subordinated Debt and
any voluntary principal payments to
irrevocably reduce the Commitment under
Section 2.3;
(z) up to $700,000 in Capital Expenditures
actually made with respect to each Fiscal Year;
and
(b) $0.00.
CERCLA. See Section 6.18.
Closing Date. The first date on which the conditions set forth in
Sections 10 and 11 have been satisfied and any Revolving Credit Loan is made.
Code. The Federal Internal Revenue Code of 1986 and the rules and
regulations thereunder, collectively, as the same may from time to time be
supplemented or amended and remains in effect.
Collateral. All of the property, rights and interests of the Borrower
that are or are intended to be subject to the security interests and liens and
mortgages created by the Security Documents, as more particularly defined in the
Security Agreement.
Commitment. $15,000,000.00 as such amount shall be reduced in
accordance with Section 2.1 and as such amount may be irrevocably reduced by the
Borrower pursuant to Section 2.3.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of any Person, after deduction of all expenses, taxes, and other proper
charges, determined in accordance with generally accepted accounting principles,
after eliminating therefrom all extraordinary items of income which include,
without limitation, (i) any net gain or net loss resulting from the
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sale was in the ordinary course of business), (ii) any gain arising from any
write-up of assets, (iii) any gain arising from the acquisition of any
securities of Borrower, and (iv) any extraordinary and nonrecurring gains.
Contract Assignment. That certain collateral assignment and security
agreement dated September 26, 1996 by and between the Borrower and the Lender in
respect of the Acquisition Agreement.
Creditor(s). Holder(s) of any Subordinated Debt.
Cumulative Cash Flow Commitment Reduction. An amount equal to the sum
of each annual Cash Flow Commitment Reduction which shall be recalculated as of
each Calculation Date and the Stated Maximum shall be reduced accordingly.
Default. See Section 12.1., provided that the application of the
Default Rate shall not be construed as a waiver of or limitation of the Bank's
rights under this Agreement, the Security Documents or any of the other Loan
Documents.
Default Rate. See Section 4.7.
Distribution means, with respect to any Person:
(i) the declaration or payment of any dividend, including
dividends payable in shares of capital stock of such Person, on or in
respect of any shares of any class of capital stock of such Person;
(ii) the purchase or redemption of any shares of any class of
capital stock of such Person (or of options, warrants or other rights
for the purchase of such shares), directly, indirectly through a
Subsidiary of such Person or otherwise;
(iii) any other distribution on or in respect of any shares of
any class of equity of or beneficial interest in such Person;
(iv) any payment of principal or interest with respect to, or
any purchase or redemption of, any Indebtedness of such Person which by
its terms is subordinated to the payment of the Senior Debt; and
(v) any payment, loan or advance (including any salary,
management fee or other fee, benefit, bonus or any other compensation
in respect of services provided to such Person) by the Borrower to, or
any other Investment by the Borrower in, the holder of any shares of
any class of the capital stock of or equity interest in the Borrower
but excluding (a) payments made to employees in the ordinary course of
business for salaries and benefits and (b) bonuses to employees other
than Borrower's Key Officers, in the ordinary course of business and
(c) payments to the shareholders of Borrower
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under Section 2.2(d) of the Acquisition Agreement to enable such
shareholders to pay their income taxes resulting from the inclusion of
the Borrower's net income in the shareholders' personal income tax
returns by virtue of the Borrower's status as a Subchapter S
corporation under the Internal Revenue Code of 1986, as amended.
Dollars or $. Dollars in lawful currency of the United States of
America.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made.
EBITDA. For any period, the sum of (x) the Consolidated Net Income (or
deficit) of the Borrower and its Subsidiaries for such period plus (y) all
amounts deducted in computing such Consolidated Net Income in respect of (i)
taxes based upon or measured by income, (ii) Total Interest Expense, (iii)
depreciation and amortization, and (iv) other non-cash charges reducing
Consolidated Net Income.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 6.18(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. See Section 12.1.
Excess Cash Flow Commitment Reduction. See Section 2.1(c)
Federal Funds Effective Rate means, for any day, (i) the fluctuating
rate equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve Bank arranged by federal funds
brokers, as such weighted average is published for such day (or, if such day is
not a Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York or (ii) if such rate is not so published for such
Business Day, the average of the quotations for such day on such transactions
received by the Bank from three federal funds brokers of recognized standing
selected by the Bank.
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Fiscal Year. The Borrower's fiscal year ending on December 31.
Generally accepted accounting principles. (a) When used herein, whether
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect as of June 30, 1996, and (ii) to the extent consistent with such
principles, the accounting practices of the Borrower reflected in its financial
statements as of June 30, 1996 and (b) when used in general, other than as
provided above, means principles that are (i) consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time and (ii) consistently applied with
past financial statements of the Borrower adopting the same principles; provided
that in each case referred to in this definition of "generally accepted
accounting principles" a certified public accountant would, insofar as the use
of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See Section 6.18(b).
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, including in any event and
whether or not so classified: (i) liabilities secured by any Lien existing on
property owned or acquired by the Borrower, whether or not the liability secured
thereby shall have been assumed; (ii) Capitalized Lease Obligations; (iii)
liabilities in respect of mandatory redemption, repurchase or dividend
obligations with respect to capital stock (or other evidence of beneficial
interest); (iv) obligations under the Series A Preferred Stock and the Series B
Preferred Stock; and (v) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including, without limitation, any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit.
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Intellectual Property. All of the following: domestic and foreign
letters patent and patent applications; inventions, discoveries, and
improvements, whether or not patentable; trade names, trademarks, trademark
applications and registrations, service marks, and service ▇▇▇▇ applications and
regulations; copyrights and copyright applications and registrations; and trade
secrets and other proprietary information, including without limitation, the
patents and patent applications listed on Schedule 6.6.
Interest Payment Date. October 1, 1996 and the first day of each
succeeding calendar month.
Interest Period with respect to each LIBOR Rate Loan, a period of one,
two and three or six consecutive months (commencing on the date of such
borrowing and ending on the numerically corresponding day, or if there is no
numerically corresponding day, on the last day) as selected or deemed selected
by the Borrower at least three (3) Business Days prior to a Drawdown Date for a
Revolving Credit Loan; or if a Revolving Credit Loan is already outstanding, at
least three (3) Business Days prior to the end of the then current Interest
Period. However, no Interest Period may be selected which would end beyond the
Maturity Date of the Note. If the last day of an Interest Period would otherwise
occur on a day which is not a Business Day, such last day shall be extended to
the next succeeding Business Day, except, if such Interest Period is for a LIBOR
Rate Loan and such extension would cause such last day to occur in a new
calendar month, then such last day shall occur on the next preceding Business
Day. The term Interest Period with respect to each Base Rate Loan shall mean
consecutive period of one (1) day each.
Inventory. See Security Agreement.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time:
(a) the amount of any Investment represented by a guaranty shall be
taken at not less than the principal amount of the obligations guaranteed and
still outstanding;
(b) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid;
(c) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
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(d) there shall not be deducted in respect of any Investment any
amounts received as earnings on such Investment, whether as dividends, interest
or otherwise, except that accrued interest included as provided in the foregoing
clause (b) may be deducted when paid; and
(e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Key Man Life Insurance Policies. See Section 7.16.
Lease Collateral Agreements. With respect to each Lease, (i) an
estoppel certificate executed by the Borrower and each lessor; (ii) a Landlord's
Waiver and Agreement from each lessor, pursuant to which such lessor agrees to
subordinate its rights under the Lease and any lessor's or landlord's lien with
respect to property of the Borrower to the lien of the Security Documents and
agrees not to terminate the Lease for Borrower's default without notice and an
opportunity to cure given to the Bank and to recognize the Bank or its successor
in interest as tenant under the Lease in the event of a sale or transfer of
Borrower's interest under the Lease; and (iii) a Mortgagee's Waiver and
Agreement from each holder of a mortgage or deed of trust encumbering the
premises subject to a Lease, pursuant to which such mortgagee agrees to
subordinate its rights under its mortgage, and if it succeeds to the landlord's
interest under the Lease, any lessors's or landlord's lien with respect to
property of the Borrower to the lien of the Security Documents and agrees if it
becomes landlord, not to terminate the Lease for Borrower's default without
notice and an opportunity to cure given to the Bank and to recognize the Bank or
its successor in interest as tenant under the Lease in the event of a sale or
transfer of Borrower's interest under the Lease, such certificates and
agreements to be in form and substance satisfactory to the Bank.
Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space by the Borrower, including but not
limited to the leases listed on Schedule 6.22.
Leverage Ratio. Defined in Section 9.3 hereof.
LIBO Rate or LIBOR. The term "LIBO Rate" or "LIBOR" shall mean: with
respect to each Interest Period, the per annum rate of interest determined on
the basis of the offered rates for deposits in Dollars for a period equal to
such Interest Period as quoted by the principal London office of Bank as of
11:00 a.m. (London time) on the day that is two London Banking Days prior to the
first day of such Interest Period; provided, however, that if such office is not
offering such deposits at such time, "LIBOR", with respect to such Interest
Period, shall mean the rate of interest (expressed as an annual rate) equal to
the simple average (rounded up to the nearest 1/16 of 1%) of the rates shown on
the display referred to as the "LIBO page" (or any display substituted therefor)
of the Reuters U.S. Domestic Money Service transmitted through the Reuters
monitor system as being the respective rates at which deposits in
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Dollars would be offered by the principal London offices of each of the banks
named thereon to major banks in the London interbank market at approximately
11:00 a.m. (London time) on the second London Banking Day before the first day
of such Interest Period for a period substantially coextensive with such
Interest Period; provided further, however, that if Bank is unable after
reasonable efforts to ascertain such rate, "LIBOR", with respect to such
Interest Period, shall mean the lowest lending rate (expressed as an annual
rate) that the Bank's Head Office of Bank in Boston is quoting at approximately
11:00 a.m. (Boston time) on the first day of such Interest Period to leading
European banks for loans in Dollars for such period and in such amount.
LIBOR Rate Applicable Margin. The percentage determined as set forth
below, at any time during the period the Leverage Ratio is at the level set
forth below:
=============================================
Leverage Ratio LIBOR Rate
Applicable
Margin
---------------------------------------------
greater than or equal to 2.5:1.0 2.25%
---------------------------------------------
greater than or equal to 1.50:1.0 2.00%
but less than 2.50:1.0
---------------------------------------------
greater than or equal to 0.50:1.0 1.75%
but less than 1.50:1.0
---------------------------------------------
less than 0.50:1.0 1.50%
=============================================
LIBOR Rate Loan. Any Revolving Credit Loans bearing interest determined
with reference to LIBOR.
Lien. With respect to any Person, (i) any encumbrance, mortgage,
pledge, lien, charge or security interest of any kind upon any property or
assets of such Person, whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) any arrangement or agreement that prohibits
such Person from creating encumbrances, mortgages, pledges, liens, charges or
security interests; (iii) the acquisition of, or the agreement or option to
acquire, any property or assets upon conditional sale or subject to any other
title retention agreement, device or arrangement (including a Capitalized
Lease); and (iv) the sale, assignment, pledge or transfer for security of any
accounts, general intangibles or chattel paper of such Person, with or without
recourse.
Loan Documents. This Agreement, the Note, the Security Agreement, the
Contract Assignment and any other Security Documents, and each of the other
documents, agreements and certificates executed by Borrower or any Subsidiary or
Affiliate, thereof and delivered to Bank in connection with or with regard to
the Revolving Credit Loans.
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Loan Request. See Section 2.6.
Loan(s). The Revolving Credit Loans to be made by the Bank hereunder.
London Banking Day means any day on which dealings in deposits in
Dollars are transacted in the London interbank market.
Maturity Date. September 26, 2001, or such earlier date on which the
Loans shall become due and payable pursuant to the terms hereof, including,
without limitation, after acceleration.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Cash Provided by Operating Activities. The net cash provided by
operating activities of the Borrower and its subsidiaries on a consolidated
basis determined based on Financial Statements prepared in accordance with
generally accepted accounting principles and in any case consistent with the
computation, presentation and treatment in that certain audit of the Borrower
prepared by Deloitte & Touche, LLP for the six months ending June 30, 1996 and
shown as "net cash provided by operating activities" on the statement of cash
flows all as set forth in Schedule 1 annexed.
Note. See Section 2.4.
Note(s). The Revolving Credit Note or Notes.
Notice of Borrowing. See Section 2.6.
Obligations. All indebtedness, obligations and liabilities of the
Borrower and its Subsidiaries to the Bank under this Agreement or any of the
other Loan Documents or in respect of any of the Loans or the Note or other
instruments at any time evidencing any thereof, whether existing on the date of
this Agreement or arising or incurred hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law of
otherwise.
Operating Cash Flow means for any period on a consolidated basis, the
total of: (i) EBITDA minus (ii) income taxes paid in cash for such period, minus
(iii) Capital Expenditures.
Outstanding or outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
Paydown Restriction Agreement. That paydown restriction agreement dated
the date hereof by and among the Bank and Summit and Borrower's Key Officers.
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PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Property. All interests of the Borrower in real or personal property
now owned or hereafter acquired, including, without limitation, all property in
which the Borrower grants a security interest in the Security Agreement.
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 any Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by the
Bank with respect to any Revolving Credit Loan.
Release. See Section 6.18(c)(iii).
Reserve Adjusted LIBOR. Applicable to any Interest Period, shall mean a
rate per annum determined pursuant to the following formula:
[LIBOR]
-----------
RAL = [1.00- RP]
The amount in brackets shall be rounded upwards, if necessary, to the
next higher 1/100 of 1%.
RAL = Reserved Adjusted LIBOR
LIBOR = as defined herein
RP = Reserve Percentage
Reserve Adjusted Libor shall be adjusted automatically as of the
effective date of any change in the Reserve Percentage.
"Reserve Percentage" applicable to any Interest Period means the rate
(expressed as a decimal) applicable to the Bank during such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency or marginal
reserve requirement) of the Bank with respect to "Eurocurrency Liabilities" as
that term is defined under such regulations.
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Revolving Credit Loans. Revolving credit loans made or to be made by
the Bank to the Borrower pursuant to Section 2.
Revolving Credit Note Record. A Record with respect to the Revolving
Credit Note.
Security Agreement. The Pledge and Security Agreement - All Assets by
and between the Borrower and the Bank, pursuant to which the Borrower has
conveyed the Collateral as security for the Obligations.
Security Documents. The Security Agreement, the Contract Assignment,
and the Lease Collateral Agreements, including, without limitation, UCC-1
financing statements, executed and delivered in connection therewith.
Senior Debt shall mean:
(i) Indebtedness in respect of borrowed money other than the
Subordinated Debt;
(ii) Indebtedness in respect of Capitalized Lease Obligations;
(iii) Indebtedness in respect of the deferred purchase price of assets
(other than normal trade accounts payable in the ordinary course of business);
and
(iv) Indebtedness in respect of unfunded pension liabilities.
Senior Debt Service means, for any period, (i) the sum of Senior
Interest Expense for such period, plus (ii) $1,000,000.00, plus (iii) the
aggregate amount of principal other than that referred to in (ii) immediately
preceding, paid or to be paid under the Senior Debt for such period, but
excluding the Cash Flow Commitment Reduction Payments.
Senior Interest Expense means, for any period, the aggregate amount of
interest paid or to be paid in cash under the Senior Debt for such period.
Series A Preferred Stock. The Series A Redeemable Preferred Stock
issued by the Borrower.
Series B Preferred Stock. The Series B Redeemable Preferred Stock
issued by the Borrower.
Stated Maximum. See Section 2.1(c).
Subordinated Debt. Any Indebtedness of Borrower or any Subsidiaries
(including, for purposes of determining payments which are subordinate to the
Senior Debt, any payments made or to be made under the Series A Preferred Stock
or the Series B Preferred Stock) which is permitted hereunder or otherwise
permitted, in writing, by the Bank, and is expressly made subordinate to and
made junior to the payment and performance in full of the Obligations and
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evidenced as such by a written instrument containing subordination provisions in
form and substance approved by the Bank in writing.
Subsidiary. Any corporation, association, partnership, 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 or controlling interests) of the outstanding Voting Interests.
Summit. Collectively, Summit Ventures IV, L.P., Summit Investors III,
L.P. and Summit Subordinated Debt Fund, L.P.
Total Debt shall mean total Indebtedness minus the redemption price
(including all accrued and unpaid dividends) of the Series A Preferred Stock and
the Series B Preferred Stock.
Total Debt Service. For any period, the sum of (i) Total Interest
Expense for such period plus (ii) $1,000,000.00, (iii) the aggregate amount of
principal other than that referred to in (ii) immediately preceding, paid or to
be paid under the Senior Debt for such period, but excluding the Cash Flow
Commitment Reduction Payments and any voluntary principal payments to
irrevocably reduce the Commitment under Section 2.3 plus (iv) all payments made
or required to be made under the Subordinated Debt including, without
limitation, any Distributions made or required to be made under any preferred
stock of the Borrower or otherwise permitted hereunder for such period
(excluding those already included in Total Interest Expense).
Total Interest Expense. For any period, the aggregate amount of (i)
Senior Interest Expense paid or to be paid in cash, including payments in the
nature of interest under Capitalized Leases, accrued by the Borrower on a
consolidated basis (whether such interest is reflected as an item of expense or
capitalized) and (ii) interest on any Subordinated Indebtedness, including,
without limitation, under the Subordinated Debt, but excluding any dividends
accrued on the Series A Preferred Stock and the Series B Preferred Stock which
are not paid in cash.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a LIBOR Rate Loan.
UCC. The Uniform Commercial Code as in effect in the Commonwealth of
Massachusetts or any other applicable jurisdiction, provided, however, that with
respect to the perfection of the Bank's Lien in the Collateral and the effect or
non-perfection thereof, the term Uniform Commercial Code shall mean the Uniform
Commercial Code as in effect in any jurisdiction, the laws of which are made
applicable by Section 9-103 of the Uniform Commercial Code as in effect in the
Commonwealth of Massachusetts.
Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or
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conduct the business of the corporation, partnership, association, trust or
other business entity involved.
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 Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, have the meanings assigned to
them therein.
(h) Reference to a particular "section" or "Section" refers to that
numbered section of this Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1 Commitment to Lend.
(a) Upon the terms and subject to the conditions set forth in this
Agreement and in reliance upon the representations and warranties and covenants
of the Borrower herein, and so long as no Default exists, the Bank agrees to
lend to the Borrower and the Borrower may borrow, repay, and reborrow from time
to time between the Closing Date and the Maturity Date upon notice by the
Borrower to the Bank given in accordance with Section 2.6, such sums as are
requested by the Borrower up to a maximum aggregate principal amount outstanding
(after giving effect to all amounts requested) at any one time in an amount
equal to the lesser of (a) the Stated
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Maximum (defined below) for the applicable period as set forth below, and (b)
the reduced Commitment amount specified by Borrower pursuant to Section 2.3,
provided that the sum of the outstanding amount of the Revolving Credit Loans
shall not at any time exceed the Commitment. Each request for a Revolving Credit
Loan hereunder shall constitute a representation and warranty by the Borrower
that the conditions set forth in Sections 10 and 11, in the case of the initial
Revolving Credit Loan, and Section 11, in the case of all other Revolving Credit
Loans, have been satisfied on the date of such request.
(b) The term "Base Amount" shall mean, during any period, an amount
equal to the amount specified in the table below for such period.
Period Base Amount
------ -----------
the Closing Date -
September 25, 1997 $15,000,000.00 ("Base Amount 1")
("Period One")
September 26, 1997 -
September 25, 1998 $14,000,000.00 ("Base Amount 2")
("Period Two")
September 26, 1998 -
September 25, 1999 $13,000,000.00 ("Base Amount 3")
("Period Three")
September 26, 1999 -
September 25, 2000 $12,000,000.00 ("Base Amount 4")
("Period Four")
September 26, 2000 -
September 26, 2001 $11,000,000.00 ("Base Amount 5")
("Period Five")
(c) The term "Stated Maximum" shall mean, during any period, an amount
set forth as follows:
Stated Maximum for Period One shall equal Base Amount 1;
Stated Maximum for Period Two shall equal Base Amount 2, minus the Cash
Flow Commitment Reduction for Fiscal Year ending December 31, 1997 effective the
Calculation Date thereof;
Stated Maximum for Period Three shall equal the lesser of (x) Base
Amount 3 and (y) the Stated Maximum for Period Two, minus the Cash Flow
Commitment Reduction for Fiscal Year ending December 31, 1998 effective the
Calculation Date thereof;
Stated Maximum for Period Four shall equal the lesser of (x) Base
Amount 4 and (y) the Stated Maximum for Period Three, minus
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the Cash Flow Commitment Reduction for Fiscal Year ending December 31, 1999
effective the Calculation Date thereof;
Stated Maximum for Period Five shall equal the lesser of (x) Base
Amount 5 and (y) the Stated Maximum for Period Four, minus the Cash Flow
Commitment Reduction for Fiscal Year ending December 31, 2000 effective the
Calculation Date thereof.
(d) Effective on each Calculation Date a Cash Flow Commitment Reduction
amount for the Fiscal Year then ending shall be determined. The Stated Maximum
for each applicable period set forth above shall be reduced on each Calculation
Date and a mandatory repayment made on each Calculation Date in the amount
necessary to reduce the outstanding amount of the Loan to the Stated Maximum
then determined. Such payment reflects the reduced amount of the Commitment. The
Commitment in any period shall not exceed the applicable Base Amount for such
period. The payment which reduces the Commitment shall not relieve the Borrower
of the obligation to pay any future Cash Flow Commitment Reduction payment.
2.2 Commitment Fee. The Borrower shall pay to the Bank a commitment fee
calculated at the rate of one-quarter of one percent (0.25%) per annum on the
average daily amount during each calendar quarter or portion thereof from the
date hereof to the Maturity Date by which the Commitment 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 (meaning, the first payment is due on
January 1, 1997), with a final payment on the Maturity Date or any earlier date
on which the Commitment shall terminate.
2.3 Reduction of Commitment.
Subject to the payment of any fees indemnitees, costs and expenses
required hereunder for prepaying any LIBOR Rate Loans, the Borrower shall have
the right at any time and from time to time upon five (5) Business Days' prior
written irrevocable notice to the Bank to reduce by $250,000.00 or an integral
multiple of $100,000.00 in excess thereof or terminate entirely the unborrowed
portion of the Commitment, whereupon the Commitment shall irrevocably be reduced
by the amount specified in such notice or, as the case may be, terminated. Upon
the effective date of any such reduction or termination, the Borrower shall pay
to the Bank the full amount of any commitment fee derived pursuant to Section
2.2 and then accrued on the amount of the reduction. No reduction or termination
of the Commitment may be reinstated.
2.4 The Revolving Credit Note. The Revolving Credit Loans shall be
evidenced by a promissory note of the Borrower in substantially the form of
Exhibit A hereto (the "Note"), dated as of the Closing Date and completed with
appropriate insertions. The Borrower irrevocably authorizes the Bank to make or
cause to be
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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 the Note, an appropriate
notation on the Bank's 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 the Bank's 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 Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Note to make payments of principal of or
interest on any Note when due.
2.5 Interest on Revolving Credit Loans.
Unless an Event of Default shall have occurred and the Default Rate
applies as provided in Section 4.7, and subject to the limitation as to the
number of different maturities of LIBOR Rate Loans outstanding at any one time,
set forth in Section 2.6, all Revolving Credit Loans shall bear interest per
annum, at the election of the Borrower, of either:
(i) the Base Rate plus the Base Rate Applicable Margin; or
(ii) Reserve Adjusted LIBOR plus the LIBOR Rate Applicable Margin.
2.6 Requests for Revolving Credit Loans; Type of Loan.
(a) Whenever Borrower desires to obtain or continue a Revolving Credit
Loan hereunder or convert an outstanding Revolving Credit Loan into a Revolving
Credit Loan of another type pursuant to Section 2.1(c), Borrower shall notify
("Notice of Borrowing) in the form annexed hereto as Exhibit C as of the date of
the Notice of Borrowing, Bank by written notice (which notice shall be
irrevocable and may be provided by telecopy) received no later than 12:00 p.m.
noon Boston time on the Business Day on which the requested Revolving Credit
Loan is to be made or continued as or converted to a Base Rate Loan and in the
case of a LIBOR Rate Loan received no later than 10:00 a.m. Boston time on the
date three (3) Business Days before the day on which the requested Revolving
Credit Loan is to be made or continued as or converted to a LIBOR Rate Loan. For
purposes of the Notice of Borrowing for a LIBOR Rate Loan, such notice must
specify: (i) the Interest Period of one, two, three or six months, provided
LIBOR Rate Loans shall be limited to not more than six (6) different maturities
at any time; and (ii) the minimum of the outstanding principal Borrower wishes
the LIBOR Rate to apply to, provided such borrowing shall be in the minimum
amounts of $500,000.00 and in integrals of $50,000.00 above such amount. If Bank
does not receive a Notice of Borrowing containing an Interest Period for a LIBOR
Rate Loan within the applicable time limits set forth herein, or if when a
Notice of Borrowing must be given, a Default exists, Borrower shall be deemed to
have elected to borrow or to convert such Revolving Credit Loan,
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in whole, into a Base Rate Loan on the last day of the then current Interest
Period. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit Loan
requested from the Bank on the applicable Drawdown Date. Each Revolving Credit
Loan will be made at the Bank's Head Office by depositing the amount thereof to
a demand deposit account of the Borrower with the Bank.
(b) Provided that no Default shall have occurred and be continuing or
no Event of Default has occurred, Borrower may convert all or any part of (in
the minimum amount of $500,000.00 and in integral multiples of $50,000.00 above
such amount) of any Base Rate Loan into a LIBOR Rate Loan (provided no more than
six (6) Interest Periods for a LIBOR Rate Loan shall be outstanding at any
time), or any LIBOR Rate Loan into a Base Rate Loan on any Business Day (which,
in the case of a conversion of a LIBOR Rate Loan shall be the last day of the
Interest Period applicable to such LIBOR Rate Loan).
2.7 One Loan. All extensions of credit by the Bank to Borrower under
the Revolving Credit Note and all other Obligations to the Bank under this
Agreement and any of the Loan Documents shall constitute one general obligation
secured by the security interest in all of the Collateral and by all other
security interests, liens, claims, and encumbrances heretofore, now, or at any
time or times hereafter granted by Borrower and its Subsidiaries to the Bank.
Borrower agrees that all of the rights of the Bank set forth in this Agreement
shall apply to any modification of or supplement to this Agreement, any
supplements or exhibits hereto, and other agreements, unless otherwise agreed in
writing.
2.8 Letter of Credit Arrangements.
(a) Subject to the terms and conditions set forth in this Agreement, if
the Borrower desires the Bank to issue a standby letter of credit on the
Borrower's behalf, the Borrower shall make such request in writing to the Bank
on such forms as the Bank then requires and Bank may, in its sole discretion, at
any time thereafter issue, standby letter of credit applied for. In connection
with the issuance of any standby letter of credit, the Bank shall require the
Borrower and the Borrower shall execute and deliver to the Bank, the Bank's
standard and customary documentation then in effect and deliver any other
documentation reasonably requested by the Bank. The Borrower shall, prior to the
issuance of any standby letter of credit, pay the customary fees for issuance of
any standby letter of credit then charged by the Bank. Any draws on any issued
outstanding standby letters of credit made after the Maturity Date shall be paid
by the Borrower to the Bank on demand.
(b) Prior to the Maturity Date, the face amount of all issued and
outstanding standby letters of credit and all amounts drawn thereunder, shall
constitute Advances and principal amounts outstanding under the Revolving Note,
provided, however, interest
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shall be paid by the Borrower only on the amounts drawn. For any standby letter
of credit application requesting the Bank to issue a letter of credit with an
expiry date which would be a date after the Maturity Date, the Borrower shall,
at the time of such application, pledge and deposit with the Bank, in cash, U.S.
Dollars, the full face amount of such letter of credit and execute such
additional pledge agreements and documents as the Bank then reasonably requests.
The liability of the Borrower under this Agreement or under any other
documentation executed by the Borrower to repay the Bank in respect of drawings
under letters of credit shall be Obligations secured by the Security Documents
and shall be absolute and unconditional under any and all circumstances. Without
limiting the generality of the foregoing, the Borrower's obligation in respect
of drawings under any letters of credit shall not be subject to any defense
based upon any dispute, alleged or actual, between the beneficiary and the
Borrower or the non-application or misplacement by the beneficiary of the
proceeds of any such payment, or the legality, validity, regularity or
enforceability of the letter of credit or any renewal or extension thereof. The
Borrower's request for issuance of each letter of credit hereunder shall
constitute a representation by the Borrower that the applicable conditions set
forth in Section 10 and 11 have been satisfied on the date of such request.
3. REPAYMENT OF THE LOANS.
3.1 Maturity. The Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of the
Revolving Credit Loans outstanding on such date, together with any and all
accrued and unpaid interest thereon and costs, expenses and charges due under
the Loan Documents.
3.2 Mandatory Repayments of Revolving Credit Loans. If at any time the
sum of the outstanding amount of the Revolving Credit Loans exceeds the
Commitment (as the same may be reduced by changes in the Stated Maximum,
including, without limitation, by reductions in the Commitment as provided in
Section 2.3), then the Borrower shall immediately, without demand therefor, pay
the amount of such excess to the Bank for application to the Revolving Credit
Loans.
3.3 Optional Repayments of Loans. The Borrower shall have the right, at
its election, to repay the outstanding amount of the Base Rate Loans, as a whole
or in part, at any time without penalty or premium. Not later than 1:00 p.m.
(Boston time) on the requested date of prepayment, the Borrower shall give to
the Bank notice (which may be given by a telephone call and promptly confirmed
in writing) of any prepayment pursuant to this Section
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3.3, specifying the proposed date of payment and the principal amount to be
paid. Each such partial prepayment of the Base Rate Loans shall be in an
integral multiple of $50,000.00. Borrower shall not be permitted to prepay, in
whole or in part, any LIBOR Rate Loans unless Borrower shall simultaneously with
such prepayment pay to the Bank the breakage fee set forth in Section 4.10.
4. CERTAIN GENERAL PROVISIONS.
4.1 Facility Fee. The Borrower agrees to pay to the Bank at the Closing
a facility fee in the amount of Fifty-Six Thousand Two Hundred Fifty Dollars
($56,250.00). Such amount shall be deemed fully earned at the Closing and shall
not be subject to rebate or return, in whole or in part.
4.2 Funds for Payments.
(a) All payments of principal, interest, commitment fees, facility fees
and any other amounts due hereunder or under any of the other Loan Documents
shall be made to the Bank at Bank's Head Office, in each case in immediately
available funds.
(b) 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 Bank 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 Bank to receive the same net amount which the Bank would have received on
such due date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Bank 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.
4.3 Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. 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, except as otherwise provided in the case of a
LIBOR Rate Loan, be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Revolving
Credit Loans as reflected on the Revolving Credit Note Records from time to time
shall be considered correct and binding on the Borrower unless within ten (10)
Business Days
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after receipt by the Borrower of any notice from the Bank of such outstanding
amount, the Borrower shall notify the Bank to the contrary.
4.4 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 the Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject the Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, the Bank's Commitment or the Loans (other than taxes based upon
or measured by the income or profits of the Bank or taxes in lieu thereof), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to the Bank of the principal of or the
interest on any Loans or any other amounts payable to the Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this 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 commitments of an office of the Bank, or
(d) impose on the Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, the Commitment,
or any class of loans or commitments of which any of the Loans or the Commitment
forms a part;
and the result of any of the foregoing is
(i) to increase the cost to the Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or the
Commitment, or
(ii) to reduce the amount of principal, interest or other amount
payable to the Bank hereunder on account of the Commitment or
any of the Loans, or
(iii) to require the Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is
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calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand made by the Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to the Bank such additional amounts as will be sufficient to compensate the
Bank for such additional cost, reduction, payment or foregone interest or other
sum. The Bank shall allocate such cost increases among its customers in good
faith and on an equitable basis.
4.5 Capital Adequacy. If any present or future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof by a court or governmental authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by the Bank or any corporation controlling the Bank determines
that the amount of capital required to be maintained by it is increased by or
based upon the existence of such Loans made or deemed to be made pursuant hereto
or the issuance of any letter of credit, then the Bank may notify the Borrower
of such fact, and the Borrower shall pay to the Bank from time to time on
demand, as an additional fee payable hereunder, such amount as the Bank shall
determine in good faith and certify in a notice to the Borrower to be an amount
that will adequately compensate the Bank in light of these circumstances for its
increased costs of maintaining such capital. The Bank shall allocate such cost
increases among its customers in good faith and on an equitable basis.
4.6 Certificate. A certificate setting forth any additional amounts
payable pursuant to Sections 4.4 or 4.5 and a brief explanation of such amounts
which are due, submitted by the Bank to the Borrower, shall be prima facie
evidence that such amounts are due and owing.
4.7 Interest on 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
payable on demand at a rate ("Default Rate") per annum equal to four percent
(4%) above the Base Rate until such amount shall be paid in full (after as well
as before judgment).
4.8 Inability to Determine LIBOR. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Bank
shall determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR that would otherwise determine the rate of interest to be
applicable to any LIBOR Rate Loan during any Interest Period, the Bank shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower) to the Borrower. In such event (a) any Loan Request
with respect to LIBOR Rate Loans shall be automatically withdrawn and shall be
deemed a request for Base Rate Loans, (b) each LIBOR Rate Loan will
automatically, on the last day of the
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then current Interest Period thereof, become a Base Rate Loan, and (c) the
obligations of the Bank to make LIBOR Rate Loans shall be suspended until the
Bank determines that the circumstances giving rise to such suspension no longer
exist, whereupon the Bank shall so notify the Borrower.
4.9 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 Bank to make or maintain LIBOR
Rate Loans, Bank shall forthwith give notice of such circumstances to the
Borrower and thereupon (a) the commitment of Bank to make LIBOR Rate Loans or
convert Loans of another Type to LIBOR Rate Loans shall forthwith be suspended
and (b) the LIBOR Rate Loans then outstanding shall be converted automatically
to Base Rate Loans on the last day of each Interest Period applicable to such
LIBOR Rate Loans or within such earlier period as may be required by law. The
Borrower hereby agrees promptly to pay the Bank for the account of Bank, upon
demand by Bank, any additional amounts necessary to compensate the Bank for any
costs incurred by such Bank in making any conversion as such payments are
described in accordance with 4.10, including any interest or fees payable by
Bank to lenders of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder.
4.10 Indemnity. If the Borrower shall at any time (a) repay or prepay
any principal of any LIBOR Rate Loan on a date other than the last day of an
Interest Period with respect thereto (as a consequence of acceleration, a
mandatory repayment to reduce the principal outstanding to the Stated Maximum,
or otherwise) or (b) for any reason fail to borrow or convert a LIBOR Rate Loan
on the date specified therefor in any notice delivered by the Borrower to the
Bank pursuant to Section 2.6. The Borrower shall indemnify the Bank, on demand
made by the Bank, at any time and as often as the occasion therefor may arise,
against all losses, costs or expenses which the Bank may at any time or from
time to time occur as a consequence of such repayment, prepayment or failure to
borrow. The amount of such losses, costs or expenses shall be an amount equal to
the remainder, if any, of:
(a) the total amount of interest which would otherwise have
accrued hereunder on the principal so paid, not borrowed or
converted at a rate equal to the interest rate which otherwise
would have been applicable to such principal during the period
(the "Reemployment Period").
(i) in the case of any such repayment or prepayment,
beginning on the date of such payment and ending on the last
day of the applicable Interest Period of the amount so paid,
or
(ii) in the case of any such failure to borrow or
convert, beginning on the date for the borrowing or conversion
that shall have been requested in any notice of borrowing
relating thereto and ending on the date that
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would have been the applicable last day of the Interest Period
if such amount had been borrowed or converted; minus
(b) an amount equal to the aggregate interest to be earned by the
Bank by reinvesting the amount prepaid, repaid or not borrowed
or converted, or the Reemployment Period at the yield to
maturity on a United States treasury security selected by the
Bank equal in amount to the amount prepaid, repaid, or not
borrowed or converted and having a maturity approximately
equal to the Reemployment Period.
5. COLLATERAL SECURITY. The Obligations shall be secured by a perfected
first priority security interest to be held by the Bank (subject only to
Permitted Liens) in the Property of the Borrower, pursuant to the terms of the
Security Documents.
6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Bank as follows (except as set forth on the respective Schedules attached
hereto).
6.1 Corporate Authority; Etc.
(a) Incorporation; Good Standing. The Borrower (i) is a Mississippi
corporation, duly organized and existing pursuant to articles of incorporation
as amended filed with the Mississippi Secretary of State on July 24, 1996, and
is validly existing and in good standing under the laws of the State of
Mississippi, (ii) has all requisite 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 entity and is duly authorized to do business in each other
jurisdiction, including, without limitation, Mississippi where such
qualification is necessary except where a failure to be so qualified in such
other jurisdiction would not have a materially adverse effect on the business,
assets or financial condition of the Borrower.
(b) Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is to become a
party and the repayment of the Loan (i) are within the authority of the
Borrower, (ii) have been duly authorized by all necessary proceedings on the
part of Borrower, (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 is subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower, and (iv) do not conflict with any provision of the
restated articles of organization or bylaws of, or any material agreement or
other material instrument binding upon, the Borrower.
(c) Enforceability. The execution and delivery of this Agreement and
the other Loan Documents to which the Borrower is or is to become a party will
result in valid and legally binding obligations of the Borrower enforceable
against it in accordance
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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.
6.2 Governmental Approvals. The execution, delivery and performance by
the Borrower of this Agreement and the other Loan Documents to which the
Borrower 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 and the
filing of financing statements in the appropriate records offices with respect
thereto and other than set forth in Schedule 6.2 hereof.
6.3 Title to Properties; Leases. Except as indicated on Schedule 6.3
hereto, the Borrower owns all of the assets relating to the Property reflected
in the consolidated balance sheet of the Borrower 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,
security interests, title retention agreements, liens or other encumbrances
except Permitted Liens.
6.4 Financial Statements. The following shall be furnished to the Bank:
(a) a consolidated balance sheet of the Borrower and its Subsidiaries
(if any) as of the Balance Sheet Date and consolidated financial statements of
the Borrower for the Fiscal Year ended December 31, 1995 and the six months
ended June 30, 1996, accompanied by an auditor's report prepared without
qualification by Borrower's independent certified public accountant together
with such other information as set forth on Schedule 6.4 attached. Such balance
sheet and statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present in all material respects the
financial condition of the Borrower as at the close of business on the date
thereof and the results of operations for the period covered by such financial
statements. 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 or any of its Subsidiaries not disclosed in the balance sheet
and the related notes thereto of a nature required by generally accepted
accounting principles to be disclosed on a balance sheet and the notes thereto;
(b) the Borrower (after giving affect to the transactions contemplated
by the Loan Documents) (i) is "solvent" as such term is defined in the United
States Bankruptcy Code, (ii) the aggregate value of all assets and properties of
Borrower, at a fair valuation, will be greater than the total amount of its
liabilities on claims, including contingent claims, and (iii) the aggregate
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present fair saleable value of its assets will be greater than the amount that
will be required to pay its probable liabilities on its debts, including
Contingent Liabilities, as they become absolute and mature. Borrower has (and
has no reason to believe it will not have) sufficient capital or access to
adequate capital for the conduct of its business. Borrower does not intend to
incur, and does not believe it has incurred, debts beyond its ability to pay as
they mature.
6.5 No Material Changes, Etc. Since August 31, 1996, there has occurred
no materially adverse change in the financial condition or business of the
Borrower or its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower as of August 31, 1996, other than changes in the
ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Borrower.
6.6 Intellectual Property Rights. Except as listed on Schedule 6.6: (a)
Borrower owns all "Intellectual Property" necessary for the conduct of its
business, subject to no third party rights, license of any interest therein, or
other agreement and has listed on Schedule 6.6 each such trademark, patent or
other item of Intellectual Property so owned; (b) no Intellectual Property is
subject to any pending or, to Borrower's knowledge, threatened challenge; (c) no
claims, demands, suits, or proceedings are pending or, to Borrower's knowledge,
threatened which challenge, or may impair Borrower's rights in, any Intellectual
Property used in the conduct of Borrower's business; (d) as of the date of this
Agreement, to the best of Borrower's knowledge Borrower is not infringing any
Intellectual Property of other rights of any person, and the present conduct of
Borrower's business does not infringe any Intellectual Property or rights of any
Person; (e) all patents, patent applications, registered trademarks (including
service marks), and trademark applications for the United States or other
jurisdictions owned by Borrower are listed on Schedule 6.6 and Borrower's Key
Officers own no such patents, patent applications, registered trademarks or
trademark applications.
6.7 Litigation. Except as stated on Schedule 6.7, 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 or materially impair the
right of the Borrower and its Subsidiaries to carry on business substantially as
now conducted by it, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
balance sheet of the Borrower, or which question the validity of this
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32
Agreement or any of the other Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
6.8 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 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. 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 its Subsidiaries.
6.9 Compliance With Other Instruments, Laws, Etc. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its articles of
organization, charter or other organization documents, or by-laws, or any
material agreement or material 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 its Subsidiaries.
6.10 Tax Status. The Borrower (a) has made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject, (b) has paid all taxes and other
governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) has set aside on its 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 other than those set forth on Schedule 6.10.
6.11 No Event of Default. No Default or Event of Default has occurred
and is continuing.
6.12 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.
6.13 Absence of UCC 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
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33
other public office, that purports to cover, affect or give notice of any
present or possible future lien on, or security interest in, any Collateral of
the Borrower or rights thereunder.
6.14 Setoff, Etc. The Collateral and the rights of the Bank with
respect to the Collateral are not subject to any setoff, claims, withholdings or
other defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
6.15 Certain Transactions. Except as set forth on Schedule 6.15, 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,
trustee, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, trustee,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
6.16 Employee Benefit Plans; Multiemployer Plans; Guaranteed Pension
Plans. Except as set forth on Schedule 6.16, neither the Borrower nor any ERISA
Affiliate maintains or contributes to any Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan.
6.17 Regulations U and X. No portion of any Loan is to be used 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.
6.18 Environmental Compliance. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, makes the following representations and warranties.
(a) None of the Borrower, its Subsidiaries or any operator of the Real
Estate, or any operations thereon 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
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34
violation involves any of the Real Estate and would have a material adverse
effect on the environment or the business, assets or financial condition of the
Borrower or 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 it 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 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇ (1986); (ii) that any hazardous waste, as
defined by 42 U.S.C. 9601(5), any hazardous substances as defined by 42 U.S.C.
9601(14), any pollutant or contaminant as defined by 42 U.S.C. 9601(33) or any
toxic substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which it has
generated, transported or disposed of have been found at any site at which a
federal, state or local agency or other third party has conducted or has ordered
that the Borrower or any of its Subsidiaries conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or (iii)
that it is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
(c) The Borrower further represents and warrants with respect to any
Real Estate:
(i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except
in accordance with applicable Environmental Laws; and no
underground tank or other underground storage receptacle for
Hazardous Substances is located on any portion of the Real
Estate;
(ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or the operators of its properties, no Hazardous
Substances have been generated or are being used on the Real
Estate except in accordance with applicable Environmental
Laws;
(iii) there has been no release i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a
"Release") or threatened Release of Hazardous Substances on,
upon, into or from the Real Estate, which Release would in the
case of such other properties have a material adverse effect
on the value of any of the Real Estate or adjacent properties
or the environment;
(iv) 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
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35
have come to be located on, and which would have a material
adverse effect on the value of, the Real Estate; and
(v) any Hazardous Substances that have been generated on any
of the Real Estate have been transported off-site 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 operating in compliance with such
permits and applicable Environmental Laws.
(d) Neither the Borrower nor the Real Estate currently leased or used
by Borrower 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 as a condition to the effectiveness of any
transactions contemplated hereby.
6.19 Subsidiaries. The Borrower has one Subsidiary which is Triton
Systems International, Inc. which Subsidiary conducts no business.
6.20 Loan Documents. All of the representations and warranties of the
Borrower made in the Security Agreement and the other Loan Documents or any
document or instrument delivered to the Bank pursuant to or in connection with
any of such Loan Documents are true, accurate and correct in all material
respects.
6.21 Acquisition Agreement; Debenture Agreement. The representations
and warranties of the Borrower in the Acquisition Agreement and the Debenture
Agreement were true, accurate and complete in all material respects as of the
date they were made.
6.22 Real Property; Leases. Neither the Borrower, nor any of its
Subsidiaries is the fee owner of any real property or has any beneficial
interest in any fee owner. Borrower is the lessee under the Leases as described
on Schedule 6.22. The Leases reflected on such schedule constitute the sole
agreements and understandings relating to leasing or licensing of space by the
Borrower or its Subsidiaries. The Borrower has delivered to the Bank a true and
complete copy of all Leases. Except as set forth in Schedule 6.22, the Leases
are in full force and effect, in accordance with their respective terms, without
any payment default or any other material default by the Borrower thereunder,
and the Borrower has not given or made, or received, any notice of default, or
any claim, which remains uncured or unsatisfied, with respect to any of the
Leases and, to the best of the Borrower's knowledge there is no basis for any
such claim or notice of default by any lessor. No leasing, brokerage or like
commissions, fees or payments are due from the Borrower in respect of the
Leases.
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36
6.23 Chief Place of Business; Locations of Property. As of the date
hereof (i) the chief executive office of Borrower is located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; (ii) the principal place of business
of Borrower is at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; (iii) the
principal books and records of the Borrower and all records of Accounts are
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇; (iv) all other
property of the Borrower, including, without limitation, all Inventory and
Equipment are located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ and
at such locations as set forth on Schedule 6.22 annexed; and (v) there is no
other office or place of business at which Borrower conducts business.
6.24 Authorized and Outstanding Stock. The authorized capital stock of
the Borrower consists of (i) 10,000,000 shares on Common Stock, of which
7,520,177 shares are validly issued and outstanding and held of record and owned
beneficially by the shareholders as set forth on Schedule 6.24 attached hereto,
free and clear of all liens, security interests, restrictions on transfer, and
other encumbrances; (ii) 1,000,000 shares of Non-Voting Stock, par value, $1.00
per share, of which no shares are issued and outstanding; and (iii) 214,000
shares of preferred Stock of which (x) 114,000 shares have been designated as
Series A Preferred Stock with the rights, terms and privileges set forth in
Exhibit A to the Acquisition Agreement, and of which 114,000 shares are issued
and outstanding; and 100,000 shares have been designated as Series B Preferred
Stock, par value $.01 per share with the rights, terms and privileges set forth
in Exhibit A to the Acquisition Agreement, and of which 100,000 are validly
issued and outstanding and held of record and owned beneficially by the
shareholders of the Borrower as set forth on Schedule 6.24, free and clear of
all liens, security interests, restrictions on transfer and other encumbrances.
All issued and outstanding shares of capital stock are duly and validly
authorized, validly issued and fully paid and non-assessable and free from any
restrictions on transfer, except for restrictions imposed by federal or state
securities or "blue-sky" laws and except for those imposed pursuant to the
Acquisition Agreement or any Related Agreement (as defined in the Acquisition
Agreement). Except as set forth on Schedule 6.24, there are no outstanding
warrants, options, commitments, preemptive rights, rights to acquire or
purchase, conversion rights or demands of any character relating to the capital
stock or other securities of the Borrower. All issued and outstanding shares of
capital stock of the Borrower were issued (i) in transactions exempt from the
registration provisions of the Act (as defined in the Acquisition Agreement),
and (ii) in compliance with or in transactions exempt form the registration
provision of applicable state securities or "blue-sky" laws.
7. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Revolving Credit Loan shall remain in effect or the
Note is outstanding or the Bank has any obligation to make any Revolving Credit
Loans and the principal of and interest on each Revolving Credit Loan, all fees
and all other expenses or amounts payable under any Loan Documents shall have
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37
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder shall have been reimbursed in full:
7.1 Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all interest and
fees provided for in this Agreement, all in accordance with the terms of this
Agreement and the Note, as well as all other sums owing pursuant to the Loan
Documents.
7.2 Maintenance of Office; Business Name. The Borrower will maintain
its chief executive office in at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, or at such other place in the United States of America as the
Borrower shall designate upon written notice to the Bank, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents may be given or made. As of the date of this Agreement, the Borrower
conducts business only under its own name. Except as provided below, the
Borrower will not change its name, identity or structure in any manner which
might make any financing or continuation statement filed in respect of the
Collateral ineffective or misleading within the meaning of Section 9-402(7) (or
any other applicable provision) of the UCC, unless the Borrower shall have given
the Bank at least thirty (30) days' prior written notice thereof.
7.3 Records and Accounts. The Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation and amortization of its
properties and the properties of its Subsidiaries, contingencies, and other
reserves.
7.4 Financial Statements, Certificates and Information. The Borrower
will deliver to the Bank:
(a) as soon as practicable, but in any event not later than one hundred
twenty (120) days after the end of each Fiscal Year, the audited consolidated
balance sheet of the Borrower and its Subsidiaries at the end of such year, and
the related audited consolidated statements of income and changes in
shareholders' equity and cash flows for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and accompanied by an auditor's report prepared
without qualification by an independent certified public accountant acceptable
to the Bank, together with a written statement from such accountants to the
effect that they have read a copy of Sections 8.1 (Restrictions on Indebtedness,
8.2 (Restrictions on Liens), 8.3 (Restrictions on Investments), 8.4 (Merger;
Consolidation), 8.5 (Sale Leaseback), 8.7 (Distributions), 8.8 (Change to Fiscal
Year), 9.1 (Minimum Net Income), 9.2 (Total Debt Service Coverage), 9.3
(Leverage Ratio) and 9.4 ("Capital Expenditures") (collectively, the "Accounting
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38
Review Sections") of this Agreement (and such other provisions of this Agreement
to which reference is made in such sections or which define terms used therein
and the definitions of "Default" and "Event of Default"), and that, in making
the examination necessary to said certification, they have obtained no knowledge
of any Default or Event of Default with respect to the provisions of the
Accounting Review Sections, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default with respect to the
Accounting Review Sections they shall disclose in such statement any such
Default or Event of Default, together with a certification by the Borrower's
chief financial officer, substantially in the form annexed as Exhibit B, that
the information contained in such statements is true, correct and complete and
fairly presents the operations of the Borrower in all material respects for such
period;
(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the first three (3) fiscal quarters of each
Fiscal Year of the Borrower, copies of the unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such quarter, and the
related unaudited consolidated statements of income and cash flows for the
portion of the Borrower's fiscal year then elapsed, all in reasonable detail and
prepared in a manner as will fairly and consistently state the financial
condition and operations of Borrower consistent with the annual audited balance
sheets and statement and previously-submitted quarterly statements, 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 in all
material respects on the date thereof (subject to year-end accruals and
adjustments);
(c) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the first three (3) fiscal quarters of each
Fiscal Year and within ninety (90) days after the end of Borrower's Fiscal Year,
copies of a statement of Consolidated Net Income and Operating Cash Flow for
such fiscal quarter, prepared on a basis consistent with the statement furnished
pursuant to Section 6.4(c) together with a certification by the Borrower's chief
financial officer, substantially in the form annexed as Exhibit B, that the
information contained in such statement is true, correct, and complete in all
material respects, and fairly presents the operations of the Borrower for such
period;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement in form and substance
reasonably acceptable to the Bank signed by the principal financial or
accounting officer of the Borrower and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in Sections 9.1
through 9.4 (as applicable) and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since June 30, 1996;
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(e) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the shareholders of the Borrower; and
(f) from time to time such other financial data and information
(including accountants' management letters) as the Bank may reasonably request.
7.5 Notices.
(a) Defaults. The Borrower will promptly notify the Bank 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 Agreement or under any 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 or surety, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on the Borrower, the
Borrower shall forthwith give written notice thereof to the Bank, describing the
notice or action and the nature of the claimed default.
(b) Environmental Events. The Borrower will promptly give notice to the
Bank (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) of any inquiry,
proceeding, investigation, or other action, including a notice from any agency
of potential environmental liability, or any federal, state or local
environmental agency or board, that in either case involves the Real Estate or
has the potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower and its Subsidiaries taken as a whole,
or the Bank's security interests pursuant to the Security Documents.
(c) Notification of Claims against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Bank 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
rights of the Bank with respect to the Collateral, are subject.
(d) Notice of Litigation and Judgments. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Bank 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 is to become 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 and
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its Subsidiaries taken as a whole, 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 Bank, in writing, in form and detail
reasonably satisfactory to the Bank, 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 $50,000.00.
7.6 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 existence as a Mississippi corporation. The Borrower will do or cause to be
done all things necessary to preserve and keep in full force all of its rights
and franchises and those of its Subsidiaries material to the business and
financial affairs of the Borrower. The Borrower (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order, reasonable wear and tear excepted, and
supplied with all necessary equipment, (b) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by it and in related businesses.
7.7 Insurance. The Borrower shall keep adequately insured by
financially sound and responsible insurers (a) all property owned or leased by
it and all property of an insurable nature, such insurance to be in at least
such amounts and covering loss or damage from at least such risks and hazards
(including, without limitation, business interruption insurance and use and
occupancy insurance) as are usually insured against in the same geographic areas
by companies engaged in similar businesses and such other insurance as is
reasonably required by the Bank, (b) all liabilities of Borrower for damage to
property, death or bodily injury, including, without limitation, product
liability insurance, insurance required under all applicable workmen's
compensation laws, and insurance for such liabilities resulting from, caused by
or arising out of any product manufactured or sold by any predecessor of
Borrower or by Borrower, all such insurance to be in at least such amounts as
are usually insured against by companies engaged in the same or similar
businesses and in any event as reasonably required by the Bank. (The Bank
acknowledges that the insurance coverage maintained by the Borrower on the date
hereof is acceptable to the Bank for closing the transaction.)
All property, fire and casualty policies of insurance shall (i)
provide that no cancellation, reduction in amount or change in coverage thereof
shall be effective until at least thirty (30) days after receipt by the Bank of
written notice thereof; (ii) waive any right of subrogation of the insurer
against, or any right of set-off, counterclaim or any other deduction in respect
of any liability of, the Bank to such insurer; and (iii) be otherwise
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satisfactory in all respects to the Bank. The Borrower shall provide the Bank
promptly copies of all notices to the Borrower of any default or other act or
omission by the Borrower which might invalidate or render unenforceable, in
whole or in part, such policy or result in the lapse thereof.
Each liability policy shall be primary without right of
contribution from any other insurance policy which is carried by the Borrower or
any other Person to the extent that such other insurance policy provides the
Borrower or other Person with contingent or excess insurance with respect to its
interest in the insured property and shall expressly provide that all of the
provisions thereof, except the limits on liability, shall operate in the same
manner as if there were a separate policy covering each insured. Borrower shall,
if so requested by the Bank, deliver to the Bank as often as the Bank may
reasonably request a report of a reputable insurance broker with respect to the
insurance on the property insured. Borrower shall upon request of the Bank at
any time furnish to Bank insurance certificates for such insurance.
The Borrower shall name the Bank, its successors and assigns,
ATIMA, as loss-payee on such policies of insurance.
7.8 Taxes. The Borrower will 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 with respect to
real property 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.
7.9 Inspection of Properties and Books. The Borrower shall permit the
Bank, through the Bank or any of the Bank's other designated representatives, at
the Borrower's expense to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries during normal business hours of the Borrower
as the Bank may reasonably request, 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 officers,
all at such reasonable times and intervals as the Bank may reasonably request,
provided, however, that so long as no Event of Default shall have occurred, the
Bank shall conduct a commercial field audit exam at Borrower's expense, no more
frequently than once every twelve (12) consecutive months.
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7.10 Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will comply with, and will cause each of its Subsidiaries to comply in
all material respects with (a) all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its articles of organization and other
charter documents and by-laws, (c) all agreements and instruments to which it is
a party or by which it or any of its properties may be bound and (d) all
applicable decrees, orders, and judgments. If at any time while any Revolving
Credit Loan or the Note is outstanding or the Bank shall have any obligation to
make Loans hereunder, 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 may fulfill any of its
obligations hereunder, the Borrower will immediately take or cause to be taken
all reasonable steps within the power of the Borrower to obtain such
authorization, consent, approval, permit or license and furnish the Bank with
evidence thereof.
7.11 Use of Proceeds. The Borrower will use the proceeds of the Loans
solely for working capital and other corporate purposes, to support the issuance
of Letters of Credit and for the repayment of Six Million Dollars
($6,000,000.00) in the aggregate of the Redemption Notes, (as defined in the
Acquisition Agreement) and Five Million Five Hundred Thousand Dollars
($5,500,000.00) of the Borrowers 12% Subordinated Debentures issued as of July
25, 1996.
7.12 Further Assurances. The Borrower will cooperate with, and will
cause each of its Subsidiaries to cooperate with the Bank and execute such
further instruments and documents as the Bank shall reasonably request to carry
out to its satisfaction the transactions contemplated by this Agreement and the
other Loan Documents. In the event that Borrower registers any trademark or
service ▇▇▇▇ or any other Intellectual Property with any federal or state
office, Borrower shall promptly thereafter notify Bank, in writing, and Borrower
shall include with such written notice a copy of such filing. Borrower shall
execute and deliver to the Bank documentation in such form as reasonably
requested by Bank necessary or convenient for the Bank to perfect is lien in
such Intellectual Property.
7.13 Maintenance of Liens of Security Documents. Without limitation on
the provisions of the Security Agreement: Borrower shall promptly, upon the
reasonable request of the Bank and at Borrower's expense, execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in an appropriate governmental office, any
document or instrument supplemental to or confirmatory of the Security Documents
or otherwise necessary or desirable in the opinion of the Bank for the creation,
preservation and/or perfection of the liens purported to be created by the
Security Documents, if any. If any of Borrower's property shall be or become
evidenced by any negotiable document of title, promissory note or other
instrument, such document, note or instrument shall immediately be delivered to
the Bank, duly endorsed in a manner satisfactory to the Bank.
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Borrower shall, at the Bank's request, defend the right, title and interest of
the Bank in and to any of the property which is the subject of the Security
Documents against the claims and demands of all Persons except claims of Persons
with liens permitted hereunder.
7.14 Equipment Not to Become Fixtures. At the request of the Bank,
Borrower will use its best efforts to obtain waivers or subordinations of lien,
in form satisfactory to the Bank, from each lessor and each lessor's mortgagee
of real property on which any material amount of the equipment is or may be
located.
7.15 Verification of Accounts. After the occurrence of an Event of
Default, the Bank shall have the right, at any time or times, to verify the
validity, amount or any other matter relating to any Account, by mail,
telephone, or in person.
7.16 Key Man Life Insurance. The Borrower, if it purchases any key man
life insurance ("Key Man Life Insurance Policies") on the lives of Borrower's
Key Officers or any other employee of the Borrower, shall forthwith assign, on
such forms as reasonably requested by the Bank, the Key Man Life Insurance
Policies as additional collateral for the Obligations. The Borrower shall within
sixty (60) days thereafter deliver the acknowledgment of such assignment by the
insurance carrier. The Borrower shall pay all premiums when such are due and
payable and maintain and preserve the Key Man Life Insurance Policies. The
proceeds of the Key Man Life Insurance shall be applied by the Bank to reduce
the amount outstanding under the Loan.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Revolving Credit Loan shall remain in effect or the
Note is outstanding or the Bank has any obligation to make any Revolving Credit
Loans and the principal of and interest on each Revolving Credit Loan, all fees
and all other expenses or amounts payable under any Loan Documents shall have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder shall have been reimbursed in full:
8.1 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) the Obligations;
(b) current liabilities of the Borrower or its Subsidiaries incurred in
the ordinary course of business but not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
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(c) Indebtedness in respect of taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance with
the provisions of Section 7.8;
(d) Indebtedness 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 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) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(f) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by the Borrower or any Subsidiary
of the Borrower or in respect of any Capitalized Leases, provided that the
aggregate principal amount of such Indebtedness of the Borrower and its
Subsidiaries shall not exceed the aggregate amount of $500,000.00 outstanding at
any one time.
(g) Indebtedness in respect of obligations outstanding on the Closing
Date and described on Schedule 8.1 and any refinancing or extension thereof
which is no more onerous in any material respect to the Borrower than the then
outstanding Indebtedness and which does not increase the principal amount of
such Indebtedness.
(h) Indebtedness with respect to deferred compensation in the ordinary
course of business and Indebtedness with respect to employee benefit programs
(including liabilities in respect of deferred compensation, pension or severance
benefits, early termination benefits, disability benefits, vacation benefits and
tuition benefits) incurred in the ordinary course of business;
(i) Indebtedness in respect of customer advances and deposits, deferred
income, deferred taxes and other deferred credits arising in the ordinary course
of business;
(j) Indebtedness relating to deferred gains and deferred taxes existing
as of the Closing Date or arising in connection with sales of assets which are
permitted hereunder; and
(k) Subordinated Debt acceptable to the Bank.
8.2 Restrictions on Liens, Etc.
A. The Borrower will not, and will not permit any of its Subsidiaries
to:
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(a) create or incur or suffer to be created or incurred or to exist any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of its property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors;
(c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement (except as permitted in Section 8.1 above);
(d) subject to Section 7.8, suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or
(e) sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles, chattel paper or instruments, with or without
recourse;
B. Provided that the Borrower and any Subsidiary of the Borrower may
create or incur or suffer to be created or incurred or to exist:
(i) liens created in favor of the Bank;
(ii) liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect
of obligations not overdue or being contested in accordance
with Section 7.8;
(iii) 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;
(iv) landlord's or lessor's liens under leases to which the
Borrower or a Subsidiary of the Borrower is a party;
(v) presently outstanding Liens listed on Schedule 8.2 hereto and
renewals and extensions thereof, but not any increase thereof
and on terms no more onerous than existing on the date hereof,
provided, however, that the perfecting of any security
interest by any Person listed on Schedule 8.2 is not
permitted;
(vi) 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
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type and amount permitted by Section 8.1(f), incurred in
connection with the acquisition of such property, which
security interests or mortgages cover only the real or
personal property so acquired and renewals and extensions
thereof, but not any increase thereof and on terms no more
onerous than existing on the date hereof;
(vii) liens of carriers, warehouseman, mechanics and similar Liens
or deposits to secure the release thereof;
(viii) capitalized lease obligations incurred after the Closing Date
and purchase money security interests in or purchase money
mortgages on real or personal property acquired after the
Closing Date to secure purchase money Indebtedness to the
extent permitted by Section 8.1(f) incurred in connection with
the acquisition of such property, which security interests or
mortgages cover only the real or personal property so acquired
and proceeds thereof and reasonable attachments and accessions
thereto.
(ix) other liens and encumbrances expressly permitted under the
terms of the Security Agreement; and
(x) Liens in respect of endorsements, utility and other deposits
and bonds posted in the ordinary course of business.
8.3 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;
(b) demand deposits, certificates of deposit and time deposits of: (x)
any United States Bank that is a commercial bank having capital and surplus in
excess of $1,000,000,000.00 and whose short-term commercial paper rating from
Standard & Poor's Corporation is at least A-1 or the equivalent thereof or from
Moodys Investors Services, Inc. of at least P-1 or the equivalent thereof;
(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
Services, Inc., and not less than "A 1" if rated by Standard and Poor's;
(d) trade or customer accounts or notes receivable for inventory sold
or leased or services rendered in the ordinary course of business;
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(e) advances to employees, agents and consultants in the ordinary
course of business, including, but not limited to, travel, payroll and other
expenses incurred in the ordinary course of business, up to an aggregate amount
at any one time outstanding of $200,000.00; and
(f) money market and similar funds that invest exclusively in the
securities referred to in clauses (a), (b) and (c) of this Section 8.3.
8.4 Merger, Consolidation. 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 or disposition
(other than the acquisition or disposition of assets in the ordinary course of
business consistent with past practices) except (i) the merger or consolidation
of one or more of the Subsidiaries of the Borrower with and into the Borrower,
or (ii) the merger or consolidation of two or more Subsidiaries of the Borrower.
The Borrower shall not create any Subsidiaries without the prior written consent
of the Bank which shall not be unreasonably withheld, conditioned or delayed.
8.5 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.
8.6 Compliance with Environmental Laws. The Borrower will not, and will
not permit any of its Subsidiaries to, do any of the following: (a) use any of
the Real Estate or any portion thereof as a facility for the handling,
processing, storage or disposal of Hazardous Substances, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances except in compliance in all material
respects with Environmental Laws, (c) generate any Hazardous Substances on any
of the Real Estate except in compliance in all material respects with
Environmental Laws, or (d) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause a Release.
8.7 Distributions.
Borrower shall not make any Distributions, provided, however, that so
long as no Default exists or would be created thereby, and no Event of Default
has occurred, the Borrower may make the following:
(a) Distributions on Subordinated Debt to the extent permitted by the
Bank.
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(b) Distributions in respect of the redemption of capital stock of the
Borrower from management employees of the Borrower; provided, however, that the
amount of all such Distributions shall not exceed in the aggregate $200,000.00
in any Fiscal Year.
(c) Intentionally Deleted.
(d) Distribution of dividends payable only in shares of common stock of
the Borrower;
(e) Distributions to employees for travel expenses and related business
entertainment and business expenses incurred in the ordinary course of business
not to exceed in the aggregate $50,000.00 at any one time.
(f) Distributions to Borrower's Key Officers for bonuses in the
ordinary course of business or under any employee agreements with the Borrower.
8.8 Change to Fiscal Year. The Borrower shall not change its Fiscal
Year without the prior consent of the Bank.
9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants and agrees
that, so long as any Revolving Credit Loan shall remain in effect or the Note is
outstanding or the Bank has any obligation to make any Revolving Credit Loans
and until the principal or any interest on each Revolving Credit Loan, all fees
and all other expenses on amounts payable under any Loan Documents shall have
been in full and all Letters of Credit have been canceled or expired and all
amounts drawn thereunder shall have been paid in full:
9.1 Minimum Net Income. The Borrower shall have Consolidated Net Income
for each of its fiscal quarters commencing with the fiscal quarter ending
September 30, 1996 (treated as a single accounting period) of at least $1.00.
9.2 Total Debt Service Coverage. On the last day of each fiscal quarter
of the Borrower, the ratio of Operating Cash Flow to Total Debt Service for the
period of the four (4) consecutive quarters of Borrower then ending (including,
to the extent necessary, fiscal quarters that shall have ended prior to the date
hereof) shall not be less than 1.75:1.0.
9.3 Leverage Ratio. At all times, the ratio of (x) Total Debt to (y)
the sum of EBITDA for the period of the twelve (12) consecutive months of the
Borrower ending with the month immediately preceding the month of the
calculation, shall not be more than 3.0:1.0 (including, to the extent necessary,
fiscal quarters that shall have ended prior to the date hereof).
9.4 Capital Expenditures. The Borrower shall not spend in excess of
Seven Hundred Thousand Dollars ($700,000.00) on Capital Expenditures during any
Fiscal Year.
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10. CLOSING CONDITIONS. The obligations of the Bank to make the initial
Revolving Credit Loans shall be subject to the satisfaction of the following
conditions precedent.
10.1 Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto and, shall be in full
force and effect and shall be in form and substance satisfactory to the Bank,
and the Bank shall have received a fully executed original of each such
document.
10.2 Certified Copies of Organization Documents. The Bank shall have
received from the Borrower a copy, certified as of a recent date by the
appropriate officer of the Secretary of State of Mississippi to be true and
complete, of the articles of organization and any other organization documents
of Borrower as in effect on such date of certification.
10.3 By-laws; Resolutions. All action on the part of the Borrower
necessary for the valid execution, delivery and performance by the Borrower of
this 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 Bank shall have been provided to the Bank. The Bank shall
have received from the Borrower true copies of its by-laws and the resolutions
adopted by its shareholders and board of directors authorizing the transactions
described herein, each certified by its secretary as of a recent date to be true
and complete.
10.4 Incumbency Certificate; Authorized Signers. The Bank shall have
received from the Borrower an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of the Borrower and giving the name
and bearing a specimen signature of each individual who shall be authorized: (a)
to sign, in the name and on behalf of the Borrower, each of the Loan Documents
to which the Borrower is or is to become a party; (b) to make Loan Requests; and
(c) to give notices and to take other action on behalf of the Borrower under the
Loan Documents.
10.5 Validity of Liens. The Security Documents shall be effective to
create in favor of the Bank a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
the Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Bank to protect and
preserve such security interests shall have been duly effected. The Bank shall
have received evidence thereof in form and substance satisfactory to the Bank.
10.6 UCC Searches. The Bank shall have received UCC searches of records
of applicable jurisdictions with respect to the Borrower, satisfactory to the
Bank and showing no liens or encumbrances on the Collateral other than Permitted
Liens.
10.7 Leases. The Bank shall have received from the Borrower true copies
of all Leases.
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10.8 Lease Collateral Agreements. The Bank shall have received the
Lease Collateral Agreements, in form and substance satisfactory to the Bank.
10.9 Certificates of Insurance. The Bank shall have received (a)
certified copies of all policies of insurance maintained by Borrower evidencing
such insurance (or certificates therefor signed by the insurer or an agent
authorized to bind the insurer, identifying insurers, types of insurance,
insurance limits, and policy terms) which name the Bank as Loss Payee; and (b)
such further information and certificates from Borrower, its insurers and
insurance brokers as the Bank may request.
10.10 Opinion of Counsel Concerning Organization and Loan Documents.
(a) The Bank shall have received a favorable opinion from Borrower's
counsel addressed to the Bank and dated as of the Closing Date, in form and
substance satisfactory to the Bank and its counsel, as to the matters requested
by the Bank.
(b) The Bank shall have received a favorable opinion from Mississippi
counsel addressed to the Bank and dated as of the Closing Date, in form and
substance satisfactory to the Bank, and its counsel, as to the matters requested
by the Bank.
10.11 Payment of Fees. The Borrower shall have paid to the Bank the
facility fee pursuant to Section 4.1, the Bank's Special Counsel fees and
expenses and any expenses of the Bank's local counsel.
10.12 Permit Assurances. The Bank shall have received evidence
satisfactory to the Bank that all activities being conducted by the Borrower and
its Subsidiaries which require federal, state or local licenses or permits have
been duly licensed and that such licenses or permits are in full force and
effect.
10.13 Other Documents. The Borrower shall have executed and delivered
or caused others to execute and deliver such other certificates, affidavits,
agreements or documents as the Bank or its counsel may reasonably require.
11. CONDITIONS TO ALL BORROWINGS. The obligations of the Bank to make any
Loan, whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
11.1 Representations True; No Event of Default. Each of the
representations and warranties of the Borrower and its Subsidiaries contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true in all
material respects as of the date as of which they were made and shall also be
true in all material respects at and as of the time of the making of such Loan,
with the same effect as if made at and as of that time (except to the extent of
changes resulting from transactions contemplated or
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permitted by this 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 except further for matters about which the Borrower has
previously given the Bank adequate written notice and further except 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.
The Bank, if requested, shall have received a certificate of the Borrower signed
by an authorized officer of the Borrower to such effect substantially in the
form annexed hereto as Exhibit C.
11.2 No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of the Bank would make it illegal for the Bank to make such Loan.
11.3 Governmental Regulation. The Bank shall have received such
statements in substance and form reasonably satisfactory to the Bank as the 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.
11.4 Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement, the other Loan Documents and all
other documents incident thereto shall be satisfactory in substance and in form
to the Bank and to the Bank's counsel, and the Bank and such counsel shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Bank may reasonably request.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1 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 make any payment in respect of:
(i) interest or any fee on or in respect of any of the Loan
Documents, including, without limitation, the Note, as the
same shall become due and payable, and such failure shall
continue for a period of three (3) Business Days; or
(ii) principal of any of the Loan Documents owed by it as the same
shall become due and payable, whether at the Maturity Date, or
after acceleration, or the pay-down of amounts outstanding
under the Note to the Stated Maximum;
(b) [intentionally not used];
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(c) the Borrower shall fail to comply with any of its covenants
contained in 7.4, 7.5, 7.6, 7.7, 7.9, 7.11, 7.12, 7.13, 7.14, 8.1, 8.2, 8.3,
8.4, 8.5, 8.7, 9.1, 9.2, 9.3, or 9.4, or any of the covenants contained in the
Security Agreement within any applicable grace period contained in the Security
Agreement;
(d) the Borrower or any of its Subsidiaries shall fail to perform any
other term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this Section 12), and such
failure shall not be rectified or cured to the written satisfaction of the Bank
within thirty (30) days after notice thereof by the Bank to the Borrower;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Agreement or any of the other Loan Documents or in any
other document or instrument delivered pursuant to or in connection with this
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) [Intentionally not used];
(g) the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of the Borrower or any of its Subsidiaries or of any substantial part
of the assets of the Borrower or any of its Subsidiaries or shall commence any
case or other proceeding relating to the Borrower or any of its Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application shall be filed or
any such case or other proceeding shall be commenced against the Borrower or any
of its Subsidiaries and the Borrower or any of its Subsidiaries shall indicate
its approval thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted, which remains undischarged for
a period of sixty (60) days;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than sixty (60) days, whether or not consecutive, any
uninsured final judgment against the Borrower or any of its Subsidiaries that,
with other outstanding uninsured final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate of $100,000.00;
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(j) if any of the Loan Documents shall be canceled, terminated, revoked
or rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Bank, 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, 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 (but the foregoing shall not apply to any such determination,
judgment, order, decree or ruling invalidating any provision of the Loan
Documents or severing such provision from such Loan Documents, provided that it
does not materially adversely affect the rights, remedies and relationships
established by the Loan Documents);
(k) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Bank shall have determined in its reasonable
discretion that such event reasonably 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 $100,000.00 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan; and
(l) one or more changes in the capital stock of the Borrower which
would result in Summit having beneficial ownership and control of less than a
majority of the Voting Interests of the Borrower except for changes resulting
from a public offering of equity securities of the Borrower; and
then, and in any such event, so long as the same may be continuing, the Bank may
by notice in writing to the Borrower declare all amounts owing with respect to
this Agreement, the Note and the other Loan Documents 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 Sections 12.1(g) or 12.1(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Bank.
12.2 Termination of Commitment. If any one or more Events of Default
specified in Sections 12.1(g) or 12.1(h) shall occur, any unused portion of the
credit hereunder shall forthwith terminate and the Bank shall be relieved of all
obligations to make Loans to the Borrower. If any other Event of Default shall
have occurred, then the Bank may by notice to the Borrower, terminate the unused
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portion of the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and the Bank shall
be relieved of all further obligations to make Loans. No termination of the
credit hereunder shall relieve the Borrower of any of the Obligations or any of
its existing obligations to the Bank arising under other agreements or
instruments.
12.3 Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Bank shall have
accelerated the maturity of the Loans pursuant to Section 12.1, the Bank may
proceed to protect and enforce its rights and remedies under this Agreement, the
Note or any of the other Loan Documents by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations to the Bank are evidenced,
including to the full extent 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 the Bank. No remedy herein conferred upon the Bank
or the holder of any Note 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.
12.4 Distribution of Collateral Proceeds. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Bank receives any monies in connection with the enforcement of any of 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 Bank for or in respect of all reasonable costs, expenses, disbursements
and losses which shall have been incurred or sustained by the Bank in connection
with the collection of such monies by the Bank, for the exercise, protection or
enforcement by the Bank of all or any of the rights, remedies, powers and
privileges of the Bank under this 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 Bank against any taxes or liens which by law shall have, or may
have, priority over the rights of the Bank to such monies;
(b) Second, to all other Obligations in such order or preference as the
Bank may determine; and provided, further that the Bank 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 Bank of all of
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the Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the UCC; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
12.5 Event of Default Waiver. If an Event of Default has occurred and
the Bank waives by waiver or amendment, in its sole discretion, the occurrence
of such Event of Default in writing to the Borrower, it shall be treated as in
the same manner for purposes of the Loan Documents as a Default which the
Borrower has cured within an applicable grace period. The foregoing provision
does not obligate the Bank to provide any waivers of any Event of Default to the
Borrower at any time and from time to time.
13. SETOFF. Regardless of the adequacy of any collateral, after the
occurrence of any Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity, or the branch of
where such deposits are held) or other sums credited by or due from the Bank 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 against the payment of
Obligations and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of the
Borrower to such Bank.
14. [Intentionally blank.]
15. EXPENSES. The Borrower agrees to pay:
(a) reserved;
(b) any taxes payable on or with respect to the transactions
contemplated by this Agreement (including any interest and penalties in respect
thereto) payable by the Bank (other than taxes based upon the Bank's income or
profits), including any filing, recording, mortgage, documentary or intangibles
taxes in connection with the Security Agreement and other Loan Documents, or
other taxes payable on or with respect to the transactions contemplated by this
Agreement, including any taxes payable by the Bank after the Closing Date (the
Borrower hereby agreeing to indemnify the Bank with respect thereto);
(c) all title insurance premiums, appraisal fees, engineer's fees, and
the reasonable fees, expenses and disbursements of the Bank's Special Counsel
incurred in connection with the preparation, administration or interpretation of
the Loan Documents and other instruments mentioned herein, each closing
hereunder, and amendments, modifications, approvals, consents or waivers hereto
or hereunder;
(d) the fees, expenses and disbursements of the Bank incurred by the
Bank in connection with the preparation, administration or interpretation of the
Loan Documents and other instruments mentioned herein;
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(e) all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and costs, which attorneys may be employees of the Bank and the
fees and costs of appraisers, engineers, investment bankers or other experts
retained by the Bank in connection with any such enforcement proceedings)
incurred by the Bank in connection with:
(i) the enforcement of or preservation of rights under any of the
Loan Documents against the Borrower or any of its
Subsidiaries or the administration thereof after the
occurrence of a Default or Event of Default; and
(ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Bank's
relationship with the Borrower or any of its Subsidiaries;
and
(f) all reasonable fees, expenses and disbursements of the Bank
incurred in connection with UCC searches, UCC filings or mortgage recordings.
The covenants of this Section 15 shall survive payment or satisfaction of
payment of amounts owing with respect to the Note.
16. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless the
Bank 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 Agreement or any of
the other Loan Documents or the transactions contemplated hereby (except to the
extent such claims, damages, liabilities and expenses result from the Bank's
gross negligence, bad faith or willful misconduct) including, without limitation
(subject to the exceptions set forth above):
(a) any actual or proposed use by the Borrower or any of its
Subsidiaries of the proceeds of any of the Loans;
(b) 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;
(c) the Borrower or any of its Subsidiaries entering into or performing
this Agreement or any of the other Loan Documents; or
(d) with respect to the Borrower and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
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
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other proceeding. In litigation, or the preparation therefor, the Bank shall be
entitled to select its own counsel and, in addition to the foregoing indemnity,
the Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Borrower under this
Section 16 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. The provisions of this Section 16
shall survive the repayment of the Loans and the termination of the obligations
of the Bank hereunder.
17. 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 Bank, notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Bank of any of the Loans, as
herein contemplated, and shall continue in full force and effect so long as any
amount due under this Agreement or the Notes or any of the other Loan Documents
remains outstanding or the Bank has any obligation to make any Loans. The
indemnification obligations of the Borrower provided herein and the other Loan
Documents shall survive the full repayment of amounts due and the termination of
the obligations of the Bank hereunder and thereunder to the extent provided
herein and therein. All statements contained in any certificate or other paper
delivered to the Bank 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.
18. SUCCESSORS. This Agreement shall be binding upon and inure to the
benefit of Borrower, Bank and all future holders of the Note, and their
respective successors and assigns, except that Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Bank. Borrower acknowledges that the Bank may, from time to time, sell
participation interests in the Loan and Borrower's other obligations hereunder,
to third parties, on such terms and conditions as the Bank may determine, and
Borrower specifically consents thereto. The Bank may also from time to time
assign its rights and delegate its obligations, including its obligation to make
part or all of the Loans or grant part or all of any other financial
accommodation under this Agreement, in which event Borrower shall only have
recourse to the assignee for the performance of the Bank's obligation that have
been so delegated. For these purposes the Bank may disclose to an intended or
actual participant or assignee all or any information supplied to the Bank by or
on behalf of Borrower, provided that the Bank shall inform such recipients that
such information is to be held in confidence.
19. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to
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be given pursuant to this Agreement or the Note 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, telefax or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrower, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, Attention: President, or at such other address for notice as the
Borrower shall last have furnished in writing to the Person giving the notice
(and Bank also shall use good-faith efforts to provide a copy of any such notice
to Borrower to the following additional address: Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Summit
Partners, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, but the failure to
give such additional notice shall not affect the effect or validity of any
notice or other communication given to Borrower at the first address set forth
above); and
(b) if to the Bank, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Managing Director, or such other address for
notice as the Bank shall last have furnished in writing to the Borrower.
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.
20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. THIS AGREEMENT AND
EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, 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 SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS 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 THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION
19. 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.
21. HEADINGS. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
22. COUNTERPARTS. This Agreement and any amendment hereof may be executed
in several counterparts and by each party on a separate counterpart, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one
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instrument. In proving this 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.
23. 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
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in Section 25.
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. 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 AGREEMENT, THE NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE
BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Agreement, any consent or approval required or permitted by
this Agreement may be given, and any term of this Agreement or of any other
instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower of any terms of this Agreement 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 Bank. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of the 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.
26. SEVERABILITY. The provisions of this 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 Agreement in any
jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
TRITON SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Hereunto Duly Authorized
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Managing Director
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