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Exhibit 10
EXECUTION COPY
CREDIT AGREEMENT
by and among
COMPUTER TASK GROUP, INCORPORATED ("CTG"),
AND
CERTAIN SUBSIDIARIES OF CTG NAMED HEREIN,
AS BORROWERS,
COMPUTER TASK GROUP (U.K.) LTD.
AS GUARANTOR,
THE LENDING INSTITUTIONS PARTY HERETO,
AS LENDERS,
and
▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP., ACTING THROUGH
THE CHASE MANHATTAN BANK,
as Administrative, Documentation, Collateral and Syndication Agent
Dated as of May 11, 2001
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EXECUTION COPY
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 11, 2001 among COMPUTER TASK GROUP,
INCORPORATED, a New York corporation ("CTG"), CTG SERVICES, INC., a New York
corporation ("CTG Services"), COMPUTER TASK GROUP INTERNATIONAL, INC., a
Delaware corporation ("CTG International"), CTG HEALTHCARE SOLUTIONS, INC., a
Delaware corporation ("CTG Healthcare"), and CTG HEALTHCARE SOLUTIONS (KANSAS),
INC., a Kansas corporation ("CTG Healthcare Kansas"), as joint and several
borrowers, COMPUTER TASK GROUP (U.K.), LTD., a corporation organized under the
laws of the United Kingdom ("CTG (UK) Ltd"), as guarantor, the financial
institutions identified on Schedule 2.01(a) hereto (the "Initial Lenders"), and
such other financial institutions as may from time to time become parties
hereto, as lenders, and THE CHASE MANHATTAN BANK, as administrative,
documentation, collateral and syndication agent for the Lenders (in such
capacities, together with its successors in such capacities, the "Agent").
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS
Section 1.01. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"Account" means any account receivable or right of the Borrowers or any
of their Subsidiaries to payment for goods sold or leased or for services
rendered, regardless of how such right is evidenced and whether or not it has
been earned by performance, whether secured or unsecured, now existing or
hereafter arising, and the proceeds thereof.
"Acquisition" means any transaction pursuant to which the Borrowers or
any of their Subsidiaries: (a) acquires equity securities (or warrants, options
or other rights to acquire such securities) of any corporation (other than the
Borrowers or any corporation which is then a Subsidiary of any Borrower),
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing; (b) makes any corporation a Subsidiary of
any Borrower, or causes any such corporation to be merged into any Borrower or
any Subsidiary, in any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
corporation's then outstanding securities, in exchange for such securities, of
cash or securities of any Borrower or any Subsidiary, or a combination thereof;
or (c) purchases all or substantially all of the business or assets of any
corporation.
"Additional Credit Commitment Amount" means $15,000,000.
"Adjusted Base Rate" means, for any day, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day, and (b) the Federal Funds Rate in
effect on such day plus -1/2 of 1%. Any change in the Adjusted Base Rate due to
a change in the Prime Rate or the Federal Funds Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
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"Adjusted Borrowing Base" means, as of any date of determination
thereof, the remainder of (a) the Borrowing Base at such time minus (b) the
difference (only if positive) between the Overadvance Amount at such time and
the Availability Block Amount at such time.
"Adjusted Eurodollar Rate" means, with respect to any Borrowing for any
Eurodollar Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such
Eurodollar Interest Period multiplied by (b) the Statutory Reserve Rate.
"Affiliate" means any Person which directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common Control
with, any Borrower.
"Affiliate Subordination Agreement" means the Affiliate Subordination
Agreement dated as of the Closing Date among the Foreign Subsidiaries and the
Agent, substantially in the form of Exhibit L annexed hereto, as the same may be
amended, supplemented or otherwise modified from time to time
"Agent" has the meaning set forth in the preamble to this Agreement.
"Agreement" means this Credit Agreement, as amended or supplemented
from time to time. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Applicable Commitment Fee Rate" means a rate of interest per year
(expressed in basis points), equal to:
(a) For the period from the date hereof through the first Banking Day
of the month following the date on which the Agent receives the Compliance
Certificate required to be delivered by the Borrowers pursuant to Section
6.08(e) of this Agreement and the corresponding financial statements required to
be delivered by the Borrowers pursuant to Section 6.08(b) for the Fiscal Quarter
ending March 30, 2001, fifty (50) basis points; and.
(b) For each Applicable Commitment Fee Rate Period (as defined below)
thereafter, the Applicable Commitment Fee Rate set forth below which corresponds
to the Total Funded Debt/EBITDA Ratio of the Borrowers as of the commencement of
the Applicable Commitment Fee Rate Period:
TOTAL FUNDED APPLICABLE COMMITMENT FEE
DEBT/EBITDA RATIO RATE IN BASIS POINTS PER YEAR
Greater than or equal to 2.00:1.00 50
Less than 2.00:1.00 37.5
Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default, the Applicable
Commitment Fee Rate shall equal fifty (50) basis points.
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"Applicable Commitment Fee Rate Period" means each period beginning on
the first Banking Day of the month following the date on which the Agent
receives the Compliance Certificate required to be delivered by the Borrowers
pursuant to Section 6.08(e) and the corresponding financial statements required
to be delivered by the Borrowers pursuant to Section 6.08(b) for the most
recently ended Fiscal Quarter, and ending on the day immediately preceding the
commencement of the next Applicable Commitment Fee Rate Period.
"Applicable Margin" means the Base Rate Margin in respect of each Base
Rate Loan and the Eurodollar Margin in respect of each Eurodollar Loan.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee and accepted by the Agent in
accordance with Section 12.05 and in substantially the form of Exhibit J hereto.
"Authorization Letter" means the letter agreement executed by the
Borrowers in the form of Exhibit B hereto.
"Availability" means, as of any date of determination thereof, the
amount by which (a) the lesser of (i) the Borrowing Base at such time and (ii)
the aggregate amount of the Revolving Credit Commitments at such time, exceeds
(b) the Total Exposure at such time.
"Availability Block Amount" means, as of any date of determination
thereof, the sum of the following: (a) an amount equal to 75% of the difference
(only if positive) between (i) the aggregate appraised Fair Market Value of all
parcels of Qualified Real Estate as set forth in the appraisals delivered to the
Agent pursuant to this Agreement and (ii) $5,000,000, plus, (b) the Palm Beach
Amount, plus (c) 100% of the aggregate amount of Net Cash Payments received by
the Borrowers after the Closing Date from the incurrence of Indebtedness (other
than Indebtedness permitted to be incurred under Sections 7.11(a),
7.11(b), 7.11(d), and 7.11(g)), plus (d) 50% of the aggregate amount of Net Cash
Payments received by the Borrowers after the Closing Date from the issuance of
equity securities; provided that unless and until such time as either (i) the
Palm Beach Litigation shall be settled or final judgment shall be entered or
(ii) the Borrowers shall incur Indebtedness (other than Indebtedness permitted
to be incurred under Sections 7.11(a), 7.11(b), 7.11(d), and 7.11(g)) or
issue equity securities, the Availability Block Amount shall equal $0.
"Available Funds" means all deposits in any Lockbox Account maintained
by the Borrowers at Chase which shall have been made by 2:00 p.m. on a Banking
Day, or such later time in any Banking Day as to which the Agent shall have
expressly consented.
"Banking Day" means any day on which commercial banks are not
authorized or are not required to be closed in New York, New York and whenever
such day relates to a Eurodollar Loan or notice with respect to any Eurodollar
Loan, a day on which dealings in Dollar deposits are also carried out in the
London interbank market.
"Base Rate Loan" means any Loan hereunder bearing interest at a rate
based upon the Adjusted Base Rate.
"Base Rate Margin" means a rate of interest per year (expressed in
basis points) equal to:
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(a) For the period from the date hereof through the first Banking Day
of the month following the date on which the Agent receives the Compliance
Certificate required to be delivered by the Borrowers pursuant to Section
6.08(e) of this Agreement and the corresponding financial statements required to
be delivered by the Borrowers pursuant to Section 6.08(b) for the Fiscal Quarter
ending March 30, 2001, two hundred (200) basis points; and
(b) For each Base Rate Margin Period (as defined below) thereafter, the
Base Rate Margin set forth below which corresponds to the Total Funded
Debt/EBITDA Ratio of the Borrowers as of the commencement of such Base Rate
Margin Period:
TOTAL FUNDED BASE RATE MARGIN IN BASIS
DEBT/EBITDA RATIO POINTS PER YEAR
Greater than or equal to 3.00:1.00 200
Greater than or equal to 2.75:1.00 but 150
less than 3.00:1.00
Greater than or equal to 2.50:1.00 but 125
less than 2.75:1.00
Greater than or equal to 2.00:1.00 but 100
less than 2.50:1.00
Less than 2.00:1.00 75
Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default and following a
written demand of the Agent to the Borrowers at the request of the Required
Lenders, interest shall accrue on all Loans at the Default Rate.
"Base Rate Margin Period" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Compliance Certificate required to be delivered by the Borrowers pursuant to
Section 6.08(e) and the corresponding financial statements required to be
delivered by the Borrowers pursuant to Section 6.08(b) for the most recently
ended Fiscal Quarter, and ending on the day immediately preceding the
commencement of the next Base Rate Margin Period.
"Belgian Pledge Agreement" means a pledge agreement executed and
delivered by CTG Europe, in form and substance satisfactory to the Agent,
pursuant to which CTG Europe shall grant to the Agent for the benefit of the
Lenders a First Priority Lien on 65% of the issued and outstanding stock of
Computer Task Group Belgium N.V. as security for the Obligations, as such
agreement may be amended, supplemented or otherwise modified from time to time.
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"Blocked Account Agreement" means with respect to any deposit or other
bank account (other than a Lockbox Account) maintained by the Borrowers with any
financial institution other than Chase, an agreement among the Borrowers, the
depository institution at which such account is maintained and the Agent in form
and substance satisfactory to the Agent that provides for the Agent to have
dominion and control over the funds from time to time on deposit in such
account.
"Borrowers" means CTG, CTG Services, CTG International, CTG Healthcare
and CTG Healthcare Kansas, jointly and severally, together with (i) any
Subsidiary of CTG which, upon the request of CTG and upon the approval of the
Agent and the Required Lenders, becomes a co-borrower hereunder pursuant to such
documentation as the Agent shall reasonably request, and (ii) all of their
respective successors and assigns; and "Borrower" means any one of the
Borrowers.
"Borrowing Base" means the sum in United States Dollars of the
following determined as of the latest Borrowing Base Certificate delivered to
the Agent (provided that the Overadvance Amount shall be as of the current
fiscal month):
(a) up to 85% of the aggregate amount of Qualified Domestic
Accounts; plus
(b) the lesser of (i) up to 75% of the aggregate amount of
Qualified Domestic Unbilled Accounts and (ii) the Qualified Domestic
Unbilled Cap Amount; plus
(c) the lesser of (i) up to 50% of the aggregate amount of
Qualified Domestic Over 90 Day Accounts and (ii) the Qualified Domestic
Over 90 Day Cap Amount; plus
(d) the lesser of (i) up to 75% of the Fair Market Value of
Qualified Real Estate and (ii) $4,800,000; plus
(e) the lesser of (i) up to 75% of the aggregate amount of
Qualified UK Accounts and (ii) the Qualified UK Cap Amount; plus
(f) the Overadvance Amount; minus
(g) the Availability Block Amount;
in each case as calculated by the Agent from time to time; provided, however,
that the Agent, in its commercially reasonable discretion, may from time to time
on not less than three days' prior notice to the Borrowers, adjust the Borrowing
Base by reducing the percentages of Qualified Domestic Accounts, Qualified
Domestic Unbilled Accounts, Qualified Domestic Over 90 Day Accounts, Qualified
Real Estate or Qualified UK Accounts, by reducing the Qualified Domestic
Unbilled Cap Amount, the Qualified Domestic Over 90 Day Cap Amount, the
Qualified Real Estate Cap Amount, the Qualified UK Cap Amount or the Overadvance
Amount, or by setting up such reserves or other reductions in the amount of the
Borrowing Base as the Agent deems appropriate in its reasonable credit judgment
from time to time.
"Borrowing Base Certificate" means the Borrowing Base Certificate
delivered by the Borrowers to the Agent in substantially the form of Exhibit C,
as such form may be modified from time to time in such a manner as the Agent may
reasonably require.
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"Capitalized Lease" means any lease the obligation for Rentals with
respect to which is required to be capitalized on a consolidated or combined
balance sheet of the lessee and its subsidiaries or related entities in
accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate present value of future
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated or
combined balance sheet of such Person in accordance with GAAP.
"Cash Equivalents" means any of the following, to the extent owned by
the Borrowers or any of their Subsidiaries free and clear of all Liens other
than Liens created under the Security Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than 360 days from the date of issuance thereof: (b) insured
certificates of deposit of, or time deposits having a maturity of not greater
than 360 days from the date of issuance thereof with, any commercial bank that
is a Lender or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c), is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1 billion; or (c) commercial paper having a
maturity of not greater than 180 days from the date of issuance thereof in an
aggregate amount of no more than $4,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇
Investors Service, Inc. or "A-1" (or the then equivalent grade) by Standard &
Poor's Ratings Group.
"Casualty Event" means with respect to any property or asset of any
person, any loss of or damage to, or any condemnation or other taking of, such
property or asset for which such person receives insurance proceeds, or proceeds
of a condemnation award or other compensation.
"Change of Control" means the occurrence of any of the following: (a)
any person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 30% or more of the outstanding shares of
common stock of CTG or (b) during any period of twelve consecutive calendar
months, individuals who were directors of CTG on the first day of such period
(together with any new directors whose election by such board of directors or
whose nomination for reelection by the shareholders of CTG was approved by a
vote of a majority of the directors of CTG then still in office who where either
directors on the first day of such period or whose election or nomination for
election was previously so approved) shall cease to constitute a majority of the
board of directors of CTG.
"Chase" means The Chase Manhattan Bank.
"Chase Office" means the office of Chase at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
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"Closing Date" means the date this Agreement has been executed by the
Borrowers, CTG (UK) Ltd., the Initial Lenders and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means, collectively, all of the Property (including
capital stock and other beneficial interests) in which Liens are purported to be
granted pursuant to the Security Documents as security for all Obligations of
the Borrowers and the Guarantors hereunder.
"Collection Account" means, collectively, any account of the Borrowers
maintained at Chase as an account to which all proceeds of Collateral deposited
in all Lockbox Accounts shall be remitted pursuant to and under the Security
Agreement and the Lockbox Account Agreements.
"Control" and "Controls" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of Voting Stock, by contract or holding
or owning the power to vote, or possessing the power to direct any right to
vote, or as an officer, director, employee or management consultant or other
arrangement where there is the power to direct or cause the direction of the
management and policies of a Person, and "Controlled" means to be under the
Control of another Person.
"Copyrights" means all copyrights, whether statutory or common law,
owned by or assigned to the Borrowers, and all exclusive and nonexclusive
licenses to the Borrowers from third parties or rights to use copyrights owned
by such third parties, including, without limitation, the registrations,
applications and licenses listed on Schedule 5.11 hereto, along with any and all
(a) renewals and extensions thereof, (b) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign copyrights and any other rights
corresponding thereto throughout the world.
"CTG Europe" means Computer Task Group Europe B.V., an entity organized
under the laws of the Netherlands.
"Days in Receivables" means, as of the last day of any Fiscal Month, an
amount equal to (a) the quotient of (i) the aggregate amount of Accounts of the
Borrowers and the Guarantors as of such day divided by (ii) the aggregate amount
of all payments on the Accounts of the Borrowers and the Guarantors collected by
the Borrowers and the Guarantors during the period of two consecutive Fiscal
Months ending on such day multiplied by (b) the number of days contained in such
period of two consecutive Fiscal Months.
"Default" means any event, condition or act which, with the giving of
notice or lapse of time, or both, would become an Event of Default.
"Default Rate" means for any Loan a rate per annum equal to the rate
which is then in effect for such Loan plus 2%.
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"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means for any fiscal period and in respect of any Person, the
sum of (a) the net income of such Person for such period computed in accordance
with GAAP, plus (b) the interest expense, of such Person for such period as
reported on such Person's financial statements for such period, plus (c) the
income tax expense of such Person for such period as reported on such Person's
financial statements for such period, plus (d) the amount reported on the
financial statements of such Person as the depreciation of the assets of such
Person for such period computed in accordance with GAAP, plus (e) the amount
reported on the financial statements of such Person as the amortization of
intangibles assets of such Person for such period computed in accordance with
GAAP, and plus (f) all extraordinary non-cash charges, expenses and losses and
all other non-cash charges, expenses and losses of such Person for such period
computed in accordance with GAAP, minus (g) all cash and non-cash extraordinary
or non-operating income and gains of such Person for such period, in each case
as such item is used in the computation of such Person's net income for such
period. To the extent deducted in calculating EBITDA of the Borrowers and their
Subsidiaries for any period, the amount of fees and expenses paid by the
Borrowers for the financial consultant retained by the Lenders pursuant to
Section 4.01(s) shall be added back to EBITDA for such period.
"Effective Date" means the date on which all conditions under Article 4
shall be fully satisfied.
"Eligible Assignee" means: (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; (d) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$1,000,000,000; (e) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of $1,000,000,000, so long
as such bank is acting through a branch or agency located in the United States;
(f) the central bank of any country that is a member of the OECD; (g) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $1,000,000,000; and (h) any
other Person approved by the Agent and the Borrowers, such approval not to be
unreasonably withheld or delayed; provided that no such approval of the
Borrowers shall be required after the occurrence and during the continuance of a
Default); and provided further, that none of the Borrowers or any of their
Affiliates shall qualify as an Eligible Assignee under this definition.
"Environmental Law" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601-9657, as
amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.
99-499, 100 Stat. 1613 (October 17, 1986), the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6991-6991i, as amended by the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613
(October 17, 1986), as the same may be amended from time to time, and any
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other presently existing or hereafter enacted or decided federal, state or local
statutory or common laws relating to pollution or protection of the environment,
including without limitation, any common law of nuisance or trespass, and any
law or regulation relating to emissions, discharges, releases or threatened
release of pollutants, contaminants or chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants
or chemicals, or industrial, toxic or hazardous substances or wastes.
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with any Borrower.
"Eurodollar Loan" means any Loan Tranche when and to the extent the
interest rate therefor is determined on the basis of the "Eurodollar Rate."
"Eurodollar Interest Payment Date" means with respect to any Eurodollar
Loan the last day of the Eurodollar Interest Period applicable to such
Eurodollar Loan.
"Eurodollar Interest Period" means the period of time commencing on the
day a Eurodollar Rate is made applicable to a Loan Tranche and ending on the
numerically corresponding day in the first or second calendar month thereafter,
as the Borrowers may select pursuant to Sections 2.07 and 2.08, provided
that each such Eurodollar Interest Period which commences on the last Banking
Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate calendar month.
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"Eurodollar Margin" means a rate of interest per year (expressed in
basis points) equal to:
(a) For the period from the date hereof through the first Banking Day
of the month following the date on which the Agent receives the Compliance
Certificate required to be delivered by the Borrowers pursuant to Section
6.08(e) of this Agreement and the corresponding financial statements required to
be delivered by the Borrowers pursuant to Section 6.08(b) for the Fiscal Quarter
ending March 30, 2001, three hundred (300) basis points; and
(b) For each Eurodollar Margin Period (as defined below) thereafter,
the Eurodollar Margin set forth below which corresponds to the Total Funded
Debt/EBITDA Ratio of the Borrowers as of the commencement of such Eurodollar
Margin Period:
EURODOLLAR MARGIN
TOTAL FUNDED IN BASIS POINTS
DEBT/EBITDA RATIO PER YEAR
Greater than or equal to 3.00:1.00 300
Greater than or equal to 2.75:1.00 but 250
less than 3.00:1.00
Greater than or equal to 2.50:1.00 but 225
less than 2.75:1.00
Greater than or equal to 2.00:1.00 but 200
less than 2.50:1.00
Less than 2.00:1.00 175
To the extent that a Eurodollar Margin Period commences during the
pendency of a Eurodollar Interest Period for an existing Eurodollar Loan, the
Eurodollar Margin shall remain the same for the remainder of the Eurodollar
Interest Period for such existing Eurodollar Loan. Anything in the Agreement to
the contrary notwithstanding, after the occurrence and during the continuance of
any Event of Default and following a written demand of the Agent to the
Borrowers at the request of the Required Lenders, interest shall accrue on all
Loans at the Default Rate.
"Eurodollar Margin Period" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Compliance Certificate required to be delivered by the Borrowers pursuant to
Section 6.08(e) and the corresponding financial statements required to be
delivered by the Borrowers pursuant to Section 6.08(b) for the most recently
ended Fiscal Quarter, and ending on the day immediately preceding the
commencement of the next Eurodollar Margin Period.
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"Eurodollar Rate" means, with respect to any Eurodollar Loan for any
Eurodollar Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period, as the rate for dollar deposits
with a maturity comparable to such Eurodollar Interest Period. In the event that
such rate is not available at such time for any reason, then the "Eurodollar
Rate" with respect to such Eurodollar Loan for such Eurodollar Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Eurodollar Interest Period are offered by the Agent's
principal London office in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period.
"Event of Default" has the meaning given such term in Section 9.01.
"Existing Letters of Credit" mean the Letters of Credit issued by Chase
under the Existing Senior Credit Facility and outstanding on the Effective Date,
all of which Existing Letters of Credit are identified on Schedule 2.01(c)
hereto.
"Existing Senior Credit Facility" means the credit facility under that
certain Credit Agreement dated as of August 11, 2000 among CTG, the lenders
party thereto and Chase, as Administrative Agent, as amended.
"Facility Documents" means this Credit Agreement, the Notes, the
Authorization Letter, all Letter of Credit documents, all Security Documents,
and any other agreement between any of the Borrowers or Guarantors and the Agent
or the Lenders which by its terms provides that it is to be deemed a Facility
Document hereunder.
"Fair Market Value" means with respect to any particular parcel of
Qualified Real Estate, the average fair market value of such parcel of Qualified
Real Estate as set forth in a recent appraisal report prepared by an independent
appraiser reasonably satisfactory to the Agent; provided that during the 30 day
period following the Effective Date, the aggregate Fair Market Value of all
parcels of Qualified Real Estate shall be deemed to be $5,000,000.
"Federal Funds Rate" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation) equal to the weighted average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank of
New York for such day (or for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Security Document, that such Lien is
the most senior Lien (other than Permitted Liens to the extent not perfected by
filing of any UCC financing statements) to which such Collateral is subject.
"Fiscal Month" means each fiscal month of the Borrowers.
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"Fiscal Quarter" means each of the fiscal three month periods
commencing on the first day of the Fiscal Year and on the first day of each
subsequent fiscal three month period.
"Fiscal Year" means the fiscal year period of the Borrowers, each of
which shall end on the 31st day of December of each year. "FY" followed by a
year means the Fiscal Year ending in that year.
"Flood Hazard Property" means a Mortgaged Property the improvements on
which are located in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards.
"Florida Property" means the real property owned by CTG and located at
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"Foreign Exchange Obligations" means all obligations of the Borrowers
or their Subsidiaries pursuant to and under any and all foreign exchange
contracts and agreements to which any Borrower or any Subsidiary is a party as
of any date of computation as if such foreign exchange agreement were to be
terminated or declared to be in default on such date (after giving effect to any
netting provisions).
"Foreign Subsidiaries" means collectively (i) CTG (UK) Ltd., a
corporation organized under the laws of the United Kingdom, (ii) CTG Europe,
(iii) Computer Task Group Nederland B.V., an entity organized under the laws of
the Netherlands, (iv) Computer Task Group Belgium N.V., an entity organized
under the laws of Belgium, (v) Computer Task Group of Luxembourg S.A., an entity
organized under the laws of Luxembourg, and (vi) Computer Task Group of Canada,
Inc., a corporation organized under the laws of Canada, and such other
corporations, partnerships or limited liability companies organized under the
laws of any jurisdiction other than the United States, as may become
Subsidiaries of the Borrowers from time to time with the approval of the
Required Lenders, other than Inactive Subsidiaries.
"Funded Indebtedness" means, for the Borrowers and their Subsidiaries,
without duplication (a) all Indebtedness of the Borrowers and their Subsidiaries
under this Agreement and the Notes (other than undrawn Letters of Credit), (b)
all other Indebtedness of the Borrowers and their Subsidiaries for borrowed
money to the extent such Indebtedness has a final maturity of one or more than
one year from the date of origin thereof (or which is renewable or extendible at
the option of the obligor for a period or periods more than one year from the
date of origin), (c) all Indebtedness of the Borrowers and their Subsidiaries
which has been incurred in connection with the acquisition of assets (excluding
leases defined as "operating leases" under GAAP), in each case having a final
maturity of one or more than one year from the date of origin thereof (or which
is renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin), (d) all payments in respect of
items (b) and (c) above that were required to be made within one year prior to
the date of any determination of Funded Indebtedness, if the obligation to make
such payments shall constitute a current liability of the obligor under GAAP and
(e) all Capitalized Rentals of the Borrowers and their Subsidiaries.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of
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the financial statements referred to in Section 5.05 (except for changes
concurred in by the Borrowers' independent public accountants).
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation, or
(ii) to maintain working capital or other balance sheet condition or otherwise
to advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (c) to lease property or to purchase securities or
other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (d) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Guarantors" means CTG (UK) Ltd. and any other direct or indirect
Subsidiary of CTG who from time to time agrees to guaranty the obligations of
the Borrowers hereunder by executing and delivering to the Agent a Loan
Guaranty, together with all of their successors and assigns.
"Hazardous Materials" means any contaminants, hazardous substances,
regulated substances, or hazardous wastes which may be the subject of liability
pursuant to any Environmental Law.
"Hazardous Materials Indemnity Agreement" means the Hazardous Materials
Indemnity Agreement substantially in the form of Exhibit H annexed hereto,
executed and delivered by each of the Borrowers at the Effective Date, as such
agreement may be amended, supplemented or otherwise modified from time to time.
"Inactive Subsidiaries" means Computer Task Group of Delaware, Inc., a
Delaware corporation, Computer Task Group of Kansas, Inc., a Missouri
corporation, Computer Task Group (Holdings) Ltd., a United Kingdom corporation,
Rendeck Macro-4 Software B.V., an
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entity organized under the laws of the Netherlands, and CTG of England, Ltd., an
entity organized under the laws of the United Kingdom.
"Indebtedness" of any Person means and includes all obligations of such
Person which in accordance with GAAP shall be classified upon a balance sheet of
such Person as liabilities of such Person, and in any event shall include all
(a) obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property or assets, (b) obligations secured
by any Lien upon property or assets owned by such Person, even though such
Person has not assumed or become liable for the payment of such obligations, (c)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (d) Capitalized Rentals, (e) Guaranties of obligations of
others of the character referred to in this definition and (f) Foreign Exchange
Obligations.
"Interest Coverage Ratio" means, as at any date of determination, the
ratio of (a) EBITDA for the period of four consecutive fiscal quarters ending on
or most recently ended prior to such date to (b) cash interest expense for such
period.
"Interest Rate Protection Agreement" means any interest rate cap, swap,
collar or other, similar protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement to which any Borrower or
any Subsidiary is a party or for which any Borrower or any Subsidiary is liable.
"IP Collateral" means, collectively, the Collateral relating to
intellectual property rights of the Borrowers under the Collateral Documents.
"Landlord's Waiver and Consent" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in form approved by the Agent in its reasonable
discretion.
"Leasehold Property" means any leasehold interest of any Borrower as
lessee under any lease of real property.
"Lenders" means the Initial Lenders and each Person, if any, that shall
become a Lender hereunder pursuant to Section 12.05 other than any Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance.
"Lending Office" means, for each Lender and for each type of Loan, the
lending office of such Lender (or of an Affiliate of such Lender) designated by
such Lender on the signature pages hereto, as the lending office of such Lender
for such type of Loan, or such other office of such Lender (or of an Affiliate
of such Lender) as such Lender may from time to time specify to the Agent and
the Borrowers as the office by which such Lender's Loans of such type are to be
made and maintained.
"Letters of Credit" means any letters of credit issued from time to
time by Chase for any Borrower as the account party.
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"Letter of Credit Exposure" means the maximum amount available to be
drawn under all outstanding Letters of Credit (converted to U.S. Dollars based
on the exchange rate in effect at the time the Letter of Credit Exposure is
determined).
"Letter of Credit Sublimit" means $5,000,000, provided that upon the
expiration or termination of that certain Letter of Credit issued by Chase for
the account of Computer Task Group, Incorporated in respect of the Palm Beach
Litigation, the Letter of Credit Sublimit shall be automatically reduced to
$1,000,000.
"Lien" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Borrowers and their Subsidiaries shall be deemed to be the owner
of any property which they have acquired or hold subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Loan Guaranties" means any future Guaranties executed and delivered to
the Agent by any Person, pursuant to which such Person guaranties all or any
part of the debts, liabilities and obligations of the Borrowers under the
Facility Documents, and all modifications and amendments thereto.
"Loan Tranche" means any portion of the Loans outstanding under the
Notes as Base Rate Loans or any portion of the Loans outstanding under the Notes
as a Eurodollar Loan having a particular Eurodollar Interest Period. Each
Eurodollar Loan outstanding under the Notes having a different Eurodollar
Interest Period shall constitute a separate Loan Tranche, all Base Rate
Revolving Credit Loans shall constitute a single Loan Tranche, and all Base Rate
Term Loans shall constitute a separate single Loan Tranche. Although there will
be separate Notes issued to each Lender, all Notes taken together shall
constitute a single Loan Tranche in respect of each corresponding Loan
outstanding under all Notes.
"Loans" means and includes the Revolving Credit Loans, the Term Loans
and the Reimbursement Obligations under Section 2.01(c); and "Loan" means any of
the Loans.
"Lockbox" means a post office box into which customers of the Borrowers
and certain of their Subsidiaries remit payments of Accounts and over which the
Agent shall have exclusive dominion, control and access pursuant to a Lockbox
Account Agreement or other agreement in form and substance satisfactory to the
Agent.
"Lockbox Accounts" means the accounts of the Borrowers maintained at
the Lockbox Banks into which all collections and proceeds of Collateral received
in the lock boxes maintained
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by each Lockbox Bank on behalf of the Borrowers shall be deposited pursuant to
the Lockbox Account Agreements.
"Lockbox Account Agreements" means an agreement among a Lockbox Bank,
the Borrowers and the Agent pursuant to which the Lockbox Bank maintains a
Lockbox and a Lockbox Account over which the Agent shall exclusive dominion,
control and access and agrees to remit to the Agent on a daily basis all
collections and proceeds of Collateral deposited in the Lockbox Account.
"Lockbox Banks" means, collectively, First Union National Bank and Key
Bank National Association, together with any other depository institution which,
upon the prior approval of the Agent, maintains a Lockbox and Lockbox Account
pursuant to a Lockbox Account Agreement.
"Material Adverse Effect" means: (a) a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole; (b) a material adverse effect on the
ability of the Borrowers or any Guarantor to perform or comply with any of the
terms and conditions contained herein or in any other Facility Document; or (c)
a material adverse effect on the legality, validity, binding effect,
enforceability or admissibility into evidence of any Facility Document, or the
ability of the Agent or the Lenders to enforce any rights or remedies under or
in connection with any Facility Document.
"Material Indebtedness" means (i) Indebtedness (other than the Loans or
Letters of Credit), or (ii) obligations in respect of one or more Interest Rate
Protection Agreements, in the case of (i) and (ii) of any one or more of the
Borrowers or their Subsidiaries in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Interest Rate
Protection Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Person would be required to pay if
such Interest Rate Protection Agreement were terminated at such time.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by the Agent to be of material value as Collateral or of material
importance to the operations of the Borrowers or their Subsidiaries.
"Maximum Facility Amount" means $65,000,000.
"Mortgage" means a security instrument (whether designated as a deed of
trust or a mortgage, leasehold mortgage, assignment of leases and rents or by
any similar title) executed and delivered by any Borrower in such form as may be
approved by the Agent in its sole and reasonable discretion, in each case with
such changes thereto as may be recommended by the Agent's local counsel based on
local laws or customary local practices, as such security instrument or
amendment may be amended, supplemented or otherwise modified from time to time.
"Mortgage Policy" has the meaning set forth in Section 4.01(e).
"Mortgaged Property" has the meaning set forth in Section 4.01(e).
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"Multiemployer Plan" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by any Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Net Cash Payments" means:
(a) with respect to any Casualty Event, the aggregate amount
of proceeds of insurance, condemnation awards and other compensation received by
the Borrowers or any of their Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by the Borrowers or any of their
Subsidiaries in connection therewith and (B) contractually required repayments
of Indebtedness to the extent secured by a Lien on such property and any income
and transfer taxes payable by the Borrowers or any of their Subsidiaries in
respect of such Casualty Event;
(b) with respect to any sale or other disposition of assets,
the aggregate amount of all cash payments received by the Borrowers or any of
their Subsidiaries directly or indirectly in connection with such sale or other
disposition, whether at the time of such sale or disposition or thereafter under
deferred payment arrangements, including all cash payments received in respect
of investments entered into or received in connection with any such sale or
other disposition of assets; provided that
(i) Net Cash Payments shall be net of (A) the amount
of any legal, title, transfer and recording tax expenses,
commissions and other fees and expenses payable by the
Borrowers or any of their Subsidiaries in connection with such
sale or other disposition and (B) any federal, state and local
income or other taxes estimated to be payable by the Borrowers
or any of their Subsidiaries as a result of such sale or other
disposition, but only to the extent that such estimated taxes
are in fact paid to the relevant federal, state or local
governmental authority within twelve months of the date of
such sale or other disposition; and
(ii) Net Cash Payments shall be net of any repayments
by the Borrowers or any of their Subsidiaries of Indebtedness
to the extent that (I) such Indebtedness is secured by a Lien
on the property that is the subject of such sale or other
disposition and (II) the transferee of (or holder of a Lien
on) such property requires that such Indebtedness be repaid
as a condition to the purchase of such property; and
(c) with respect to any sale of debt or equity securities or
any incurrence of Indebtedness, the aggregate amount of all cash proceeds
received by the Borrowers or any of their Subsidiaries therefrom less all legal,
underwriting, and similar fees and expenses incurred in connection therewith.
"Netherlands Pledge Agreements" means, collectively, (a) a pledge
agreement executed and delivered by CTG International, in form and substance
satisfactory to the Agent, pursuant to which CTG International shall grant to
the Agent for the benefit of the Lenders a First Priority Lien on 65% of the
issued and outstanding stock of CTG Europe as security for the Obligations and
(b) a pledge agreement executed and delivered by CTG Europe, in form and
substance
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satisfactory to the Agent, pursuant to which CTG Europe shall grant to the Agent
for the benefit of the Lenders a First Priority Lien on 65% of the issued and
outstanding stock of Computer Task Group Nederland B.V., in each case, as such
agreements may be amended, supplemented or otherwise modified from time to time;
and "Netherlands Pledge Agreement" means any one of the Netherlands Pledge
Agreements.
"New York Properties" means, collectively, (i) the real property owned
by CTG and located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ and (ii) the real
property owned by CTG and located at 685 and ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇.
"Notes" means the notes evidencing the Loans hereunder; and "Note"
means any one of the Notes.
"Obligations" means all obligations of the Borrowers to the Lenders and
the Agent under this Agreement or any of the other Facility Documents,
including, without limitation, all indebtedness evidenced by the Notes, all
obligations under or in respect of the Letters of Credit and all Reimbursement
Obligations, together with all accrued and unpaid interest, fees, expenses and
charges payable by Borrowers or the Guarantors hereunder or under any of the
other Facility Documents.
"Overadvance Amount" means, at any time of determination during the
periods set forth below, the amount set forth opposite such period below:
FISCAL PERIOD AMOUNT
From Effective Date through May 16, 2001 $1,500,000
From May 17, 2001 through the last day of the
Fiscal Month of May 2001 (05/25/01) $ 0
Fiscal Month of June 2001 (05/26/01 - 06/29/01) $2,000,000
Fiscal Month of July 2001 (06/30/01 - 07/27/01) $ 0
Fiscal Month of August 2001 (07/28/01 - 08/24/01) $3,000,000
Fiscal Month of September 2001 (08/25/01 -09/28/01) $4,000,000
Fiscal Month of October 2001 (09/29/01 - 10/26/01) $3,500,000
October 27, 2001 and all times thereafter $ 0
"OverLoan" means a loan, advance, or providing of credit support (such
as the issuance of any Letter of Credit) to the extent that, immediately after
its having been made, Availability is less than zero.
"OECD" means the Organization for Economic Cooperation and Development.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ▇▇▇▇▇.
▇▇
▇▇
"▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇" means, with respect to any settlement of or
judgment entered in respect of the Palm Beach Litigation pursuant to which
damages are awarded against any Borrower or any Subsidiary of any Borrower or
any Borrower or any Subsidiary shall be obligated to pay any settlement amount,
an amount equal to 75% of the difference between (i) $4,300,000 and (ii) the
amount of such damages or settlement amount, as applicable.
"Palm Beach Litigation" means the contract litigation dispute between
the Borrowers and Palm Beach County, Florida.
"Patents" means all patents issued or assigned to and all patent
applications made by the Borrowers and, to the extent that the grant of a
security interest does not cause a breach or termination thereof, all exclusive
and nonexclusive licenses to the Borrowers from third parties or rights to use
patents owned by such third parties, including, without limitation, the patents,
patent applications and licenses listed on Schedule 5.11 hereto, along with any
and all (a) inventions and improvements described and claimed therein, (b)
reissues, divisions, continuations, extensions and continuations-in-part
thereof, (c) income, royalties, damages, claims and payments now and hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, (d)
rights to ▇▇▇ for past, present and future infringements thereof, and (e) any
other rights corresponding thereto throughout the world.
"Permissible OverLoans" means Revolving Credit Loans which are
OverLoans, but as to which each of the following conditions is satisfied: (a)
the aggregate amount of the Revolving Credit Commitments is not exceeded; (b)
when aggregated with all other Permissible OverLoans, such Revolving Credit
Loans do not aggregate more than five percent (5%) of the aggregate of the
Borrowing Base; (c) the Permissible OverLoans shall not remain outstanding for
more than forty-five (45) consecutive days; and (d) such Revolving Credit Loans
are made or undertaken in the Agent's discretion to protect and preserve the
interests of the Revolving Credit Lenders.
"Permitted Liens" has the meaning set forth in Section 7.05.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or to which Section
412 of the Code applies.
"Pledge Agreement" means the Stock Pledge Agreement substantially in
the form of Exhibit E-1 annexed hereto, executed and delivered by each of the
Borrowers at the Effective Time, as such agreements may be amended, supplemented
or otherwise modified from time to time.
"Prime Rate" means that variable per annum rate of interest from time
to time announced by the Agent at its principal office as its prime commercial
lending rate. The Prime Rate is a
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reference rate and does not necessarily represent the lowest or best rate being
charged to any customer of the Agent.
"Prohibited Transaction" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"Property" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"Qualified Domestic Accounts" means Accounts owing to any Borrower, now
existing or hereafter arising, each of which Accounts met the following
specifications at the time it came into existence and continues to meet the same
until it is collected in full:
(a) An invoice (in form and substance satisfactory to the
Agent) with respect to such Account has been sent to the applicable account
debtor and bears an invoice date contemporaneous with or later than the date of
the sale of goods or rendering of services giving rise to such invoice;
(b) The Account is due and payable in full within 90 days, is
not subject to ▇▇▇▇ and hold, and not more than 90 days have elapsed since the
invoice/mail date with respect thereto;
(c) The Account arose from the performance of services by any
Borrower; such services have been performed; the Account is evidenced by such
invoices, shipping documents or other instruments ordinarily used in the trade
as shall be reasonably satisfactory to the Agent; and no rejection or dispute
has occurred;
(d) The Account debtor is a resident of the United States;
(e) The Account is not subject to any assignment, claim, lien,
or security interest, except in favor of the Agent and the Lenders;
(f) The Account is a valid and legally enforceable obligation
of the Account debtor and is not subject to a claim for credit, allowance,
defense, offset, chargeback, counterclaim or adjustment by the Account debtor,
other than any discount allowed for prompt payment;
(g) The Account arose in the ordinary course of business of
the Borrowers and no notice of the bankruptcy, insolvency, failure, or
suspension or termination of business of the Account debtor has been received by
the Borrowers;
(h) The Account debtor is not an Affiliate of the Borrowers or
any of their Subsidiaries or a supplier (or an Affiliate of a Supplier) of goods
or services to the Borrowers or any of their Subsidiaries;
(i) The Account otherwise conforms to all representations,
warranties and other provisions of this Agreement;
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(j) The Account is not due from an individual;
(k) The Account is not due from the federal government of the
United States unless all requirements of the Federal Assignment of Claims Act
shall have been fully complied with to the satisfaction of the Agent;
(l) The Account is subject to an enforceable, perfected, first
priority Lien in favor of the Agent;
(m) The total unpaid Accounts owing from such Account debtor
do not exceed 25% of all Accounts of the Borrowers and their Subsidiaries
(excluding Accounts as to which International Business Machines Corporation is
the Account debtor); and
(n) The Agent in its discretion, reasonably exercised, has not
deemed the credit worthiness of the Account or Account debtor unsatisfactory;
provided, however, that (i) all Accounts due from an Account debtor which would
otherwise constitute Qualified Domestic Accounts will be excluded from Qualified
Domestic Accounts if either of the following applies: (x) the sum in United
States Dollars of all Accounts due from such Account debtor exceeds $1,000,000
and 50% or more of such Accounts have remained outstanding for more than 90 days
past the invoice/mail date with respect thereto or fail to meet any other
criteria for Qualified Domestic Accounts or (y) the sum in United States Dollars
of all Accounts due from such Account debtor is $1,000,000 or less and 50% or
more or such Accounts have remained outstanding for more than 180 days past the
invoice/mail date with respect thereto or fail to meet any other criteria for
Qualified Domestic Accounts.
"Qualified Domestic Over 90 Day Accounts" means Accounts owing to any
Borrower which (a) would constitute Qualified Domestic Accounts but for their
failure to comply with clause (b) of the definition of "Qualified Domestic
Accounts" and (b) have remained outstanding for less than 180 days after the
invoice/mail date with respect thereto; provided that all Accounts due from an
Account debtor which would otherwise constitute Qualified Domestic Over 90 Day
Accounts will be excluded from Qualified Domestic Over 90 Day Accounts if 50% or
more of such Accounts have remained outstanding for more than 180 days past the
invoice/mail date with respect thereto.
"Qualified Domestic Over 90 Day Cap Amount" means $3,000,000.
"Qualified Domestic Unbilled Accounts" means amounts owing to any
Borrower for services rendered which have not been billed but which will be
billed within 30 days and, when billed, will constitute Qualified Domestic
Accounts.
"Qualified Domestic Unbilled Cap Amount" means $7,500,000.
"Qualified Real Estate" means real property owned by one of the
Borrowers that satisfies each of the following requirements:
(a) one of the Borrowers is the record owner of the fee title
to such real property;
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(b) the Agent has a First Priority Lien on such real property
securing the obligations of the Borrowers under this Agreement;
(c) such real property is not subject to any Lien of any kind,
except for Permitted Liens (other than Permitted Liens specified in
clause (i) of Section 7.05) and the Lien of the Agent securing
obligations under this Agreement;
(d) such real property is not subject to any agreement (other
than the Mortgages) which would by its terms restrict the Agent's
ability to sell or otherwise dispose of such real property;
(e) the Agent has received environmental reports reasonably
satisfactory to the Agent with respect to such real property, which
reports shall be prepared by environmental engineering firms reasonably
acceptable to the Agent;
(f) the Agent has received an appraisal report with respect to
such real property from an independent appraiser reasonably
satisfactory to the Agent setting forth the Fair Market Value of such
real property (provided that if the Agent has not received an appraisal
report for any property as of the Effective Date, such property shall
continue to constitute "Qualified Real Estate" for a period not to
exceed 30 days after the Effective Date so long as such property meets
all of the other criteria set forth in the definition of "Qualified
Real Estate");
(g) the Agent has received ALTA mortgagee's title insurance
policies with all endorsements reasonably requested by the Agent (or
commitments for the issuance of same) with respect to such real
property from insurers reasonably acceptable to the Agent;
(h) the Agent has received evidence satisfactory to the Agent
that the improvements on such real property are not located in a flood
plain (or if any such improvements are located in a flood plain, an
acceptable flood hazard insurance policy);
(i) the Agent has received evidence satisfactory to the Agent
that there are no outstanding taxes, water and sewer charges, levies,
assessments or impositions of any kind which have been due and payable
for more than thirty (30) days, subject to contest rights;
(j) the Agent has received opinions of local counsel to the
Borrowers in each jurisdiction in which such real property is located
with respect to the validity and enforceability of the Agent's Lien on
such real property securing the obligations of the Borrowers and the
Guarantors under this Agreement, all in form and substance satisfactory
to the Agent;
(k) the Agent has received evidence satisfactory to the Agent
in the form of coverage in the applicable title insurance policies or
local counsel opinions, at the Borrowers' option, that such real
property complies with the use limitations of all applicable zoning
ordinances and by-laws; and
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(l) in the case of the Florida Property, the Agent has
received a Subordination, Non-Disturbance and Attornment Agreement,
duly executed by the tenant at such property, in form and substance
satisfactory to the Agent (the "Tenant Subordination"); provided that
if the Agent has not received the Tenant Subordination as of the
Effective Date, the Florida Property shall continue to constitute
"Qualified Real Estate" so long as such property meets all of the other
criteria set forth in the definition of "Qualified Real Estate" and
provided that the Tenant Subordination Agreement is received by the
Agent within 60 days after the Effective Date;
provided, however, that the Agent may in the exercise of its reasonable credit
judgment based upon (i) the discovery or occurrence of any material liability or
any risk of material liability affecting any particular parcel of real property
that was not previously disclosed to the Agent (including without limitation,
any of the foregoing revealed by any environmental report delivered to the Agent
in respect of any particular parcel of real property after the Effective Date),
or (ii) any material increase in the amount of any liability or any material
increase in the risks posed by any liability affecting any particular parcel of
real property, exclude such particular parcel of real property from, or reduce
the value of such particular parcel of real property to the extent it is
included within, the definition of Qualified Real Estate.
"Qualified UK Accounts" means Accounts owing to CTG (UK) Ltd. (a) which
would constitute Qualified Domestic Accounts but for the fact that (i) they are
owed to CTG (UK) Ltd. and not the Borrowers and (ii) they fail to comply with
clause (d) of the definition of "Qualified Domestic Accounts" and (b) as to
which the account debtor is a resident of the United Kingdom.
"Qualified UK Cap Amount" means $4,000,000.
"Real Property Asset" means, at any time of determination, any fee
ownership or leasehold interest owned by any Borrower in any real property.
"Register" has the meaning specified in Section 12.05.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement in United States federal, state, municipal or foreign
laws or regulations (including Regulation D) or the adoption or making after
such date of any interpretations, directives or requests applying to a class of
banks including such Lender of or under any United States federal, state,
municipal or foreign laws or regulations (whether or not having the force of
law) by any court, or governmental, or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligation" means any obligation of the Borrowers to
reimburse the issuer of a Letter of Credit for any amount paid by such issuer
from time to time pursuant to and under any Letter of Credit.
"Rentals" means and includes as of the date of any determination
thereof all payments (including as such all payments which the lessee is
obligated to make to the lessor on termination
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of the lease or surrender of the property, and all payments, if any, required to
be paid by the lessee regardless of sales volume or gross revenues) payable by
the Borrowers or any of their Subsidiaries, as lessee or sublessee under a lease
of real or personal property, but shall be exclusive of any amounts required to
be paid by the Borrowers or any of their Subsidiaries (whether or not designated
as rents or additional rents) on account of maintenance, repairs, insurance,
taxes and similar charges.
"Reportable Event" has the same meaning as defined in ERISA.
"Required Lenders" means, at any time, Lenders having Loans and unused
Revolving Credit Commitments representing at least 662/3% of the aggregate
amount of all Loans and unused Revolving Credit Commitments Outstanding at such
time.
"Revolving Credit Commitments" means the commitments of the Lenders to
make Revolving Credit Loans to the Borrowers as in effect from time to time
hereunder. The aggregate amount of the Revolving Credit Commitments shall
initially equal $45,000,000 and may be (a) reduced pursuant to Sections
2.05, 2.11 or 2.18, or (b) increased pursuant to Section 2.01(d).
"Revolving Credit Commitment Amount" means, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder,
as such commitment may be (a) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.05, (b) reduced from
time to time pursuant to Sections 2.05, 2.11 or 2.18 and (c) increased
from time to time pursuant to Section 2.01(d). The initial Revolving Credit
Commitment Amount of each Lender is the amount set forth opposite such Initial
Lender's name as such Lender's "Revolving Credit Commitment Amount" on Schedule
2.01(a) hereto, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Revolving Credit Commitment, as applicable.
"Revolving Credit Commitment Percentage" means for each Lender the
percentage determined by dividing such Lender's Revolving Credit Commitment
Amount by the aggregate amount of Revolving Credit Commitments, as such
Revolving Credit Commitments may be (a) reduced from time to time pursuant to
Sections 2.05, 2.11 or 2.18 and (b) increased from time to time pursuant
to Section 2.01(d). The initial Revolving Credit Commitment Percentage of each
Lender is as set forth opposite such Lender's name on Schedule 2.01(a) hereto,
or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Revolving Credit Commitment, as applicable.
"Revolving Credit Loan" means a Base Rate Loan or a Eurodollar Loan
made pursuant to Section 2.01 hereof.
"Revolving Credit Note" means a Note of the Borrowers issued to a
Lender in substantially the form of Exhibit A-1 hereto.
"Revolving Credit Obligations" means all Obligations of the Borrowers
hereunder in respect of the Revolving Credit Loans and the Revolving Credit
Commitments.
"Revolving Credit Termination Date" means May 31, 2002, as such date
may be extended pursuant to Section 2.19; provided that if such date is not a
Banking Day, such date shall be
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the next succeeding Banking Day (or, if such next succeeding Banking Day falls
in the next calendar month, the immediately preceding Banking Day).
"Security Agreement" means the Security Agreement granted by the
Borrowers to the Agent, for the benefit of the Lenders, in substantially the
form of Exhibit D-1 hereto, together with any and all future Security Agreements
executed and delivered to the Agent by any Person which shall secure any part of
the debts, liabilities and obligations of the Borrowers under the Facility
Documents, and all modifications and amendments thereto.
"Security Documents" means the Security Agreement, the UK Security
Agreement, the Pledge Agreement, the UK Charge Agreement, the Netherlands Stock
Pledge Agreements, the Belgian Stock Pledge Agreement, the Mortgages, the
Lockbox Account Agreements, the Blocked Account Agreements and all other
instruments or documents delivered by any Borrower or any Guarantor or any
shareholder of a Borrower or Guarantor pursuant to this Agreement or any of the
other Facility Documents in order to grant to the Agent, on behalf of the
Lenders, a Lien on any real, personal or mixed property of that Borrower or
Guarantor as security for any of the Obligations of the Borrowers and Guarantors
hereunder.
"Security Document Party" means each party to a Security Document other
than the Borrowers or the Guarantors.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve to which the Agent
is subject with respect to the Adjusted Eurodollar Rate for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board of Governors of the Federal Reserve). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held by the parent, or (b) that is, as of
such date, otherwise Controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. As used
herein without reference to any "parent", the terms "Subsidiary" and
"Subsidiaries" shall mean a Subsidiary or Subsidiaries, respectively, of the
Borrowers.
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"Subordinated Indebtedness" means Indebtedness of the Borrowers
incurred after the Effective Date with the prior written consent of the Required
Lenders, which matures in its entirety later than the Loans and by its terms (or
by the terms of a subordination agreement) is made subordinate and junior in
right of payment to the Loans and all other Obligations of the Borrowers and
their Subsidiaries under the Facility Documents. Notwithstanding anything herein
to the contrary, the Indebtedness of the Borrowers set forth in Section 7.11(g)
shall not constitute "Subordinated Indebtedness" for purposes of this Agreement.
"Term Loan" means a Base Rate Loan or a Eurodollar Loan made by a
Lender pursuant to Section 2.04 hereof.
"Term Loan Maturity Date" means May 31, 2002, as such date may be
extended pursuant to Section 2.19; provided that if such date is not a Banking
Day, such date shall be the next succeeding Banking Day (or, if such next
succeeding Banking Day falls in the next calendar month, the immediately
preceding Banking Day).
"Term Loan Note" means a Note of the Borrowers issued to a Lender in
substantially the form of Exhibit A-2 hereto.
"Term Loan Obligations" means all Obligations of the Borrowers
hereunder in respect of the Term Loans.
"Term Loan Percentage" means, for each Lender at any time, the
percentage determined by dividing the outstanding principal balance of the Term
Loan of such Lender at such time, by the aggregate outstanding principal balance
of all Term Loans at such time. The Term Loan Percentage for each Initial Lender
as of the Closing Date is set forth opposite such Initial Lender's name on
Schedule I hereto, and for each Lender at any subsequent time, to the extent
that one or more Assignments and Acceptances have been entered into, the
percentage amount set forth for each Lender in the Register maintained by the
Agent pursuant to Section 12.05 as such Lender's "Term Loan Percentage."
"Title Company" means one or more other title insurance companies
reasonably satisfactory to the Agent.
"Total Exposure" means, at any time, the aggregate outstanding
principal amount of Revolving Credit Loans and Term Loans, accrued and unpaid
interest, fees and charges, Letter of Credit Exposure and Reimbursement
Obligations of all of the Lenders and the Agent at such time.
"Total Funded Debt/EBITDA Ratio" means the ratio of the following
computed for any period of four consecutive fiscal quarters then ended in
respect of the Borrowers and their Subsidiaries on a consolidated basis in
accordance with GAAP: (a) the aggregate amount of Funded Indebtedness as of the
end of such period to (b) EBITDA for such fiscal period.
"Trademarks" means all trademarks (including service marks), federal
and state trademark registrations and applications made by the Borrowers, common
law trademarks and trade names owned by or assigned to the Borrowers, all
registrations and applications for the foregoing and all exclusive and
nonexclusive licenses from third parties of the right to use
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trademarks of such third parties, including, without limitation, the
registrations, applications, unregistered trademarks, service marks and licenses
listed on Schedule 5.11 hereto, along with any and all (a) renewals thereof, (b)
income, royalties, damages and payments now and hereafter due and/or payable
with respect thereto, including, without limitation, damages, claims and
payments for past or future infringements thereof, (c) rights to ▇▇▇ for past,
present and future infringements thereof, and (d) foreign trademarks, trademark
registrations, and trade name applications for any thereof and any other rights
corresponding thereto throughout the world.
"UK Charge Agreement" means the Share Mortgage substantially in the
form of Exhibit E-2 annexed hereto, executed and delivered by CTG Europe at the
Effective Date, as such agreement may be amended, supplemented or otherwise
modified from time to time.
"UK Security Agreement" means the Security Deed substantially in the
form of Exhibit D-2 annexed hereto, executed and delivered by the CTG (UK) Ltd.
at the Effective Date, as such agreement may be amended, supplemented or
otherwise modified from time to time.
"Uncollected Funds" means all deposits of items which shall be on
deposit in any Lockbox Account maintained by the Borrowers at Chase from time to
time during the period from the date on which such deposits became Available
Funds to the beginning of the second following Banking Day.
"Uncollected Funds Compensation" means the compensation payable to
Chase pursuant to Section 2.10 hereof.
"Unfunded Vested Liabilities" means, with respect to any Plan, the
amount (if any) by which the present value of all vested benefits under the Plan
exceeds the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrowers
or any ERISA Affiliate to PBGC or the Plan under Title IV of ERISA.
"Unused Facility Amount" means, at any time of determination, the
difference between (a) the Maximum Facility Amount and (b) the sum of the
outstanding principal amount of all Loans and Letter of Credit Exposure at such
time.
"Voting Stock" means securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-Owned Subsidiary" means, with respect to any person, any
corporation or other entity of which all of the Voting Stock is at the time of
determination owned directly or indirectly by such Person.
Section 1.02. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined, or any consolidation, combination or other accounting computation is
required to be made, for the purposes of this Agreement, the same shall be done
in accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
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Section 1.03. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken or not to be taken by any Person, such
provision shall be applicable whether the action in question is taken directly
or indirectly by such Person.
Section 1.04. Construction. In the event of any inconsistency between
the covenants contained in the Security Documents and the covenants contained in
this Agreement, the provisions of this Agreement shall govern and be
controlling.
Section 1.05. Joint and Several Obligations; Borrowers' Agent.
(a) All obligations of the Borrowers hereunder shall be joint
and several. Any notice, request, waiver, consent or other action made, given or
taken by any Borrower shall bind all of the Borrowers.
(b) Each of the Borrowers hereby authorizes CTG and each of
the designated financial officers of CTG listed on Schedule 1.05 hereto, to act
as agent for all of the Borrowers, and to execute and deliver on behalf of any
Borrower such notices, requests, waivers, consents, certificates, and other
documents, and to take any and all actions, required or permitted to be
delivered or taken by the Borrowers hereunder.
ARTICLE 2. THE CREDIT
Section 2.01. The Revolving Credit Loans.
(a) Subject to the terms and conditions of this Agreement,
each of the Lenders severally agrees to make Revolving Credit Loans to the
Borrowers from time to time from and including the date hereof to but excluding
the Revolving Credit Termination Date in an aggregate principal amount at any
one time outstanding up to but not exceeding its Revolving Credit Commitment
Amount; provided that the obligation of each Lender to make Revolving Credit
Loans hereunder is subject to the condition that the Total Exposure (after
giving effect to the funding of such Revolving Credit Loans) shall not exceed
the Borrowing Base.
(b) The Revolving Credit Loans shall be evidenced by Revolving
Credit Notes of the Borrowers issued to the Initial Lenders in the form of
Exhibit A-1, dated as of the Effective Date, payable to the order of the Initial
Lenders in the aggregate principal amount equal to the aggregate initial amount
of the Revolving Credit Commitments as of the Effective Date. The Revolving
Credit Loans may be assigned to, and the corresponding Revolving Credit
Commitments may be assumed by, one or more Eligible Assignees pursuant to
Section 12.05, whereupon the amounts payable to each such Lender in respect of
Revolving Credit Loans shall be evidenced by a Note in the form of Exhibit A-1
issued to each such Lender in accordance with Section 12.05 dated as of the date
of the corresponding Assignment and Acceptance and duly completed and executed
by the Borrowers.
(c) Subject to the terms and conditions of this Agreement, the
Agent may issue Letters of Credit from time to time from and including the date
hereof to but excluding the Revolving Credit Termination Date up to but not
exceeding the lesser of (i) the difference between (A) the lesser of (x) the
aggregate amount of all Revolving Credit Commitments and (y) the Borrowing Base
and (B) the Total Exposure immediately prior to the issuance of such Letter
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of Credit and (ii) the difference between (A) the Letter of Credit Sublimit and
(B) the aggregate amount of the Letter of Credit Exposure which exists
immediately prior to the issuance of such Letter of Credit. No Letter of Credit
shall have an expiration date which is more than 360 days from its date of
issuance in the case of standby Letters of Credit or more than 180 days from its
date of issuance in the case of commercial Letters of Credit, and in each case,
not later than five (5) days prior to the Revolving Credit Termination Date.
Each Reimbursement Obligation shall be deemed to be a Revolving Credit Loan from
each of the Lenders in accordance with each Lender's Revolving Credit Commitment
percentage. The Agent shall notify the Lenders of the creation of any
Reimbursement Obligation within two Banking Days of any payment made by the
Agent pursuant to and under any Letter of Credit. The Existing Letters of Credit
identified on Schedule 2.01(c) hereto shall, from and after the Effective Date,
be deemed to be Letters of Credit outstanding under this Agreement, without the
necessity for any further action on the part of Chase, the Agent or the
Borrowers.
(d) Subject to the terms and conditions of this Agreement, the
aggregate amount of the Revolving Credit Commitments may be increased by an
aggregate amount not to exceed the Additional Credit Commitment Amount as
provided in subparagraphs (i) and (ii) of this Section 2.01(d):
(i) Effective on the second Banking Day following the date on
which the Agent has received the Compliance Certificate delivered by
the Borrowers pursuant to and in accordance with Section 6.08(e) and
the corresponding financial statements delivered by the Borrower
pursuant to and in accordance with Section 6.08(b) for the Fiscal
Quarter ended March 30, 2001, the aggregate amount of the Revolving
Credit Commitments shall be increased by $5,000,000, provided that (A)
at the time of and immediately after giving effect thereto, no Default
or Event of Default exists, (B) such Compliance Certificate
demonstrates that the Borrowers are in compliance with each financial
covenant set forth in Sections 8.01, 8.02 and 8.03, (C) the Borrowers
have executed and delivered to the Agent new Revolving Credit Notes
for each Lender in an original principal amount equal to each such
Lender's Revolving Credit Commitment Amount after giving effect to
such increase, such new Revolving Credit Notes to be issued in
exchange for (but not in satisfaction of the Indebtedness evidenced
by) the existing Revolving Credit Notes then held by the Lender and
(D) the Borrowers shall have executed and delivered, or cause to be
executed and delivered, such other documents, instruments, amendments
or agreements and taken, or cause to be taken, such other actions as
the Agent may reasonably require in connection with such increase to
protect, preserve or perfect the interests of Agent and the Lenders
hereunder or under the Security Documents.
(ii) Effective on the second Banking Day following the date on
which the Agent has received the Compliance Certificate delivered by
the Borrowers pursuant to and in accordance with Section 6.08(e) and
the corresponding financial statements delivered by the Borrower
pursuant to and in accordance with Section 6.08(b) for the Fiscal
Quarter ended June 29, 2001, the aggregate amount of the Revolving
Credit Commitments shall be increased by an amount equal to the
difference between (1) the Additional Credit Commitment Amount and (2)
the amount of any increase in the Revolving Credit Commitments effected
pursuant to subparagraph (i) of this Section 2.01(d), provided that (A)
at the time of and immediately after giving effect thereto, no Default
or Event of Default
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exists, (B) such Compliance Certificate demonstrates that the Borrowers
are in compliance with each financial covenant set forth in
Sections 8.01, 8.02 and 8.03, (C) the Borrowers have executed and
delivered to the Agent new Revolving Credit Notes for each Lender in an
original principal amount equal to each such Lender's Revolving Credit
Commitment Amount after giving effect to such increase, such new
Revolving Credit Notes to be issued in exchange for (but not in
satisfaction of the Indebtedness evidenced by) the existing Revolving
Credit Notes then held by the Lender and (D) the Borrowers shall have
executed and delivered, or cause to be executed and delivered, such
other documents, instruments, amendments or agreements and taken, or
cause to be taken, such other actions as the Agent may reasonably
require in connection with such increase to protect, preserve or
perfect the interests of Agent and the Lenders hereunder or under the
Security Documents.
Any increase in the aggregate Revolving Credit Commitments pursuant to this
Section 2.01(d) shall be allocated to the Lenders pro rata according to each
Lender's Revolving Credit Commitment Percentage. Promptly following its receipt
of a replacement Revolving Credit Note pursuant to subparagraph (i) or (ii)
above, as applicable, each Lender shall return to CTG the Revolving Credit Note
being replaced by such replacement Revolving Credit Note.
(e) No Lender has any obligation to make any Revolving Credit
Loan, or otherwise to provide any credit to or for the benefit of the Borrowers
where the result of such Revolving Credit Loan or credit is an OverLoan;
provided that the Agent is permitted (but not obligated) to make Permissible
OverLoans and to be reimbursed therefor by the Revolving Credit Lenders pursuant
to Section 2.14. The Agent's or the Lenders' providing of an OverLoan on any one
occasion does not affect the obligations of each Borrower hereunder (including
each Borrower's obligation to immediately repay any amount which otherwise
constitutes an OverLoan) nor obligate the Agent or the Lenders to do so on any
other occasion.
Section 2.02. Making the Revolving Credit Loans. Subject to the terms
and conditions of this Agreement, upon the Agent's receipt of a notice of
borrowing given by the Borrowers in accordance Section 2.12 requesting the
making of Revolving Credit Loans, the Agent will disburse the proceeds of such
Revolving Credit Loans to such account of the Borrowers as is specified by the
Borrowers in such notice. The Revolving Credit Loans shall be deemed to be made
by each Lender and to be outstanding to each Lender under the Revolving Credit
Note issued to such Lender as of the date that such proceeds are disbursed by
the Agent to the Borrowers pursuant to this Section 2.02 without regard to the
settlement procedures between the Agent and the Lenders pursuant to Section
2.14.
Section 2.03. Principal Repayment of Revolving Credit Loans.
(a) Each Revolving Credit Loan shall mature and be payable in
full on the Revolving Credit Termination Date.
(b) Except to the extent otherwise expressly provided in any
Security Agreement, the Agent shall, not later than as of 1:00 p.m. on each
Banking Day, withdraw from the Collection Account all moneys on deposit therein
and shall apply such moneys to the outstanding principal amount of the Revolving
Credit Loans (including all Revolving Credit
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Loans made or to be made that day). All such payments shall be applied first to
the outstanding principal amount of all Base Rate Loans. Except upon the
occurrence and during the continuance of an Event of Default, no payment of a
Eurodollar Loan shall be made under this section on a date other than the last
day of an Interest Period or the Revolving Credit Termination Date. To the
extent that a payment hereunder creates a credit balance under the Revolving
Credit Obligations, such credit balance shall bear interest and Agent shall
credit the Revolving Credit Obligations at a rate per annum equal to the Prime
Rate minus three percent (3%).
(c) If at any time (i) the Total Exposure exceeds (ii) the
Borrowing Base, then immediately upon a demand by the Agent, the Borrowers shall
either (A) prepay Revolving Credit Loans by an amount equal to such excess, or
(B) provide the Agent and the Lenders with Cash Equivalents as security for the
payment of such excess.
Section 2.04. The Term Loans.
(a) Each Initial Lender shall, on the terms and subject to the
conditions of this Agreement, and in reliance upon the representations and
warranties of the Borrowers hereinafter set forth, make a Term Loan to the
Borrowers on the Effective Date in an amount equal to such Lender's Term Loan
Percentage of the $5,000,000 aggregate principal amount of Term Loans to be
funded on the Effective Date, by depositing such amount, in immediately
available funds, to an account of the Borrowers maintained with the Agent.
Nothing herein shall be construed to permit the Borrowers to repay and reborrow
any portion of the Term Loans. To the extent the entire $5,000,000 aggregate
principal amount of Term Loans is not funded on the Effective Date, the
obligation of the Initial Lenders to fund the unfunded portion of the Term Loans
shall expire and the Borrowers shall have no right to request that the unfunded
portion of the Term Loans be funded at any later date.
(b) The Term Loans shall be evidenced by Term Loan Notes of
the Borrowers in substantially the form of Exhibit A-2 hereto issued to the
Initial Lenders, dated as of the Effective Date, payable to the order of each
Initial Lender in a principal amount equal to such Lender's Term Loan Percentage
of the $5,000,000 aggregate principal amount of Term Loans to be funded on the
Effective Date. The Term Loans may be assigned to one or more Eligible Assignees
pursuant to Section 12.05, whereupon the amounts payable to each Lender in
respect of its Term Loan shall be evidenced by a Term Loan Note issued to each
such Lender in accordance with Section 12.05 dated as of the date of the
corresponding Assignment and Acceptance and duly completed and executed by the
Borrowers.
(c) The principal amount of the Term Loans shall mature and be
payable in full on the Term Loan Maturity Date.
Section 2.05. Mandatory Prepayments. In addition to the payments
required under Section 2.03(c), the Borrowers shall make the following mandatory
prepayments of the Loans:
(a) Casualty Events. Within 90 days following the receipt by
the Borrowers or any of their Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any property of the Borrowers or any of
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their Subsidiaries (or upon such earlier date as the Borrowers or any of their
Subsidiaries, as the case may be, shall have determined not to repair or replace
the property affected by such Casualty Event), the Borrowers shall prepay the
Revolving Credit Loans and the Revolving Credit Commitments shall be irrevocably
reduced (and, after all of the Revolving Credit Loans have been fully paid, the
Borrowers shall prepay the Term Loans) by an aggregate amount, if any, equal to
100% of the Net Cash Payments from such Casualty Event not theretofore applied
or committed to be applied to the repair or replacement of such property (it
being understood that if Net Cash Payments committed to be applied are not in
fact applied within 90 days of the respective Casualty Event, then such Proceeds
shall be applied to the prepayment of the Revolving Credit Loans and to the
irrevocable reduction of the Revolving Credit Commitments (and, after all of the
Revolving Credit Loans have been fully paid, to the prepayment of the Term
Loans) as provided in this clause (a) at the expiration of such 90 day period)
but only if and to the extent that the aggregate amount of such proceeds
received after the Effective Date on account of all Casualty Events is greater
than $250,000 in excess of the aggregate amount applied or committed to be
applied during any Fiscal Year to the repair or replacement of such property,
such prepayment (and corresponding reductions in Revolving Credit Commitments)
to be effected in each case in the manner and to the extent specified in
paragraph (e) of this Section 2.05.
(b) Incurrence of Indebtedness. Without limiting the
obligation of the Borrowers to obtain the consent of the Lenders in accordance
with Section 12.01 with respect to any incurrence of Indebtedness not otherwise
permitted hereunder, the Borrowers agree, on or prior to the closing of any
incurrence of Indebtedness by the Borrowers or any of their Subsidiaries (other
than Indebtedness permitted to be incurred under Sections 7.11(a),
7.11(b), 7.11(d) and Section 7.11(f)), to deliver to the Agent a statement
certified by the Chief Financial Officer of CTG, in form and detail reasonably
satisfactory to the Agent, of the estimated amount of the Net Cash Payments of
such incurrence of Indebtedness that will (on the date of such incurrence) be
received by the Borrowers or their Subsidiaries in cash, and upon the date of
such incurrence, the Borrowers shall prepay the Revolving Credit Loans and the
Revolving Credit Commitments shall be irrevocably reduced (and, after all of the
Revolving Credit Loans have been fully paid, the Borrowers shall prepay the Term
Loans) by an aggregate amount equal to 100% of the Net Cash Payments of such
incurrence of Indebtedness received by the Borrowers or their Subsidiaries, such
prepayment (and corresponding reductions in Revolving Credit Commitments) to be
effected in each case in the manner and to the extent specified in paragraph (e)
of this Section 2.05.
(c) Sale of Equity Securities. Without limiting the obligation
of the Borrowers to obtain the consent of the Lenders in accordance with Section
12.01 with respect to any sale of equity securities not otherwise permitted
hereunder, the Borrowers agree, on or prior to the closing of any sale of equity
securities by the Borrowers or any of their Subsidiaries (other than the
issuance of equity securities to employees in accordance with stock option and
related employee benefit programs), to deliver to the Agent a statement
certified by the Chief Financial Officer of CTG, in form and detail reasonably
satisfactory to the Agent, of the estimated amount of the Net Cash Payments of
such sale of equity securities that will (on the date of such sale) be received
by the Borrowers or their Subsidiaries in cash, and, upon the date of such sale
of equity securities, the Borrowers shall prepay the Revolving Credit Loans
(and, after all of the Revolving Credit Loans have been fully paid, the Borrower
shall prepay the Term Loans) by an aggregate amount equal to 100% of the Net
Cash Payments of such sale of equity securities received by the
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Borrowers or their Subsidiaries and the Revolving Credit Commitments shall be
irrevocably reduced by an aggregate amount equal to 50% of such Net Cash
Payments, such prepayment (and corresponding reductions in Revolving Credit
Commitments) to be effected in each case in the manner and to the extent
specified in paragraph (e) of this Section 2.05.
(d) Sale of Assets. Without limiting the obligation of the
Borrowers to obtain the consent of the Lenders in accordance with Section 12.01
with respect to any sale or other disposition of assets not otherwise permitted
hereunder, the Borrowers agree, on or prior to the occurrence of any sale or
other disposition of assets by the Borrowers or any of their Subsidiaries (other
than Dispositions permitted under Section 7.01), to deliver to the Agent a
statement certified by the Chief Financial Officer of CTG, in form and detail
reasonably satisfactory to the Agent, of the estimated amount of the Net Cash
Payments of such sale or other disposition that will (on the date of such sale
or other disposition) be received by the Borrowers or their Subsidiaries in cash
and the Borrowers shall prepay the Revolving Credit Loans and Revolving Credit
Commitments shall be irrevocably reduced (and, after all of the Revolving Credit
Loans have been fully paid, the Borrowers shall prepay the Term Loans), as
follows:
(i) within ten (10) days of the date of such sale or other
disposition, by an aggregate amount equal to 100% of such estimated
amount of the Net Cash Payments of such sale or other disposition
received by the Borrowers or their Subsidiaries in cash on the date of
such sale or other disposition; and
(ii) thereafter, quarterly, on the date of the delivery of the
financial statements for any Fiscal Quarter or Fiscal Year by the
Borrowers to the Agent pursuant to Sections 6.08(a) and 6.08(b),
to the extent the Borrowers or any of their Subsidiaries shall receive
Net Cash Payments during the fiscal period ending on the date of such
financial statements in cash under deferred payment arrangements or in
respect of investments entered into or received in connection with any
such sale or disposition, by an amount equal to (A) 100% of the
aggregate amount of such Net Cash Payments minus (B) any transaction
expenses associated with such sale or dispositions and not previously
deducted in the determination of Net Cash Payments plus (or minus, as
the case may be) (C) any other adjustment received or paid by the
Borrowers or any of their Subsidiaries pursuant to the respective
agreements giving rise to such sale or dispositions and not previously
taken into account in the determination of the Net Cash Payments.
Prepayments of the Loans (and corresponding reductions in the Revolving Credit
Commitments), resulting from any sale or other disposition of assets shall be
effected in each case in the manner and to the extent specified in paragraph (e)
of this Section 2.05.
(e) Application. In the event of any mandatory prepayment
pursuant to this Section 2.05, such prepayment shall be applied, first, to the
payment of accrued interest in respect of outstanding Base Rate Revolving Credit
Loans, second, to the principal amount of outstanding Base Rate Revolving Credit
Loans, third, to interest in respect of outstanding Eurodollar Revolving Credit
Loans, fourth, to the principal amount of outstanding Eurodollar Revolving
Credit Loans, fifth, to interest in respect of outstanding Base Rate Term Loans,
sixth, to the principal amount of outstanding Base Rate Term Loans in inverse
order of maturity, seventh, to interest in respect of outstanding Eurodollar
Term Loans, eighth, to the principal amount of
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outstanding Eurodollar Term Loans in inverse order of maturity. If the Borrowers
shall be required to make any prepayment of the principal amount of outstanding
Revolving Credit Loans pursuant to this Section 2.05, the Revolving Credit
Commitments shall be irrevocably reduced by the amount of such required
prepayment of the principal amount of outstanding Revolving Credit Loans.
Notwithstanding anything to the contrary in this paragraph (e), (i) the first
$15,000,000 of Net Cash Payments received by the Borrowers from the issuance of
equity securities after the Effective Date, shall be applied to the repayment of
outstanding Revolving Credit Loans (and, after all of the Revolving Credit Loans
have been fully paid, to the prepayment of the Term Loans) without any mandatory
corresponding reduction in the Revolving Credit Commitments, and if, after
giving effect to the repayment in full of all Revolving Credit Loans and all
Term Loans, there shall remain any portion of such Net Cash Payments, the
Borrowers shall be permitted to utilize such remaining Net Cash Payments for
working capital and/or general corporate purposes and (ii) Net Cash Payments
received by the Borrowers from the incurrence of Indebtedness permitted under
Section 7.11(g) shall be applied to the repayment of outstanding Revolving
Credit Loans without any mandatory corresponding reduction in the Revolving
Credit Commitments and if, after giving effect to the repayment in full of all
Revolving Credit Loans, there shall remain any portion of such Net Cash Payments
from the incurrence of Indebtedness under Section 7.11(g) , the Borrowers shall
not be obligated to apply such remaining Net Cash Payments to prepay the Term
Loans.
Section 2.06. Interest.
(a) Interest shall accrue on the outstanding and unpaid
principal amount of each Loan for the period from and including the date of such
Loan to but excluding the date such Loan is due, at the following rates per
year: (i) for a Loan Tranche which is outstanding as a Base Rate Loan, at a
variable rate per annum equal to the Adjusted Base Rate plus the Applicable
Margin; and (ii) for a Loan Tranche which is outstanding as a Eurodollar Loan,
at a fixed rate during the applicable Eurodollar Interest Period equal to the
corresponding Eurodollar Rate plus the Applicable Margin; provided however that
(x) during any period when the Total Exposure exceeds the Adjusted Borrowing
Base, a portion of the Loans equal to such excess shall bear interest at a
variable rate per annum equal to the Adjusted Base Rate plus two hundred and
fifty (250) basis points, (y) any and all Permissible OverLoans shall bear
interest at a variable rate per annum equal to the Adjusted Base Rate plus two
hundred and fifty (250) basis points and (z) after the occurrence and during the
continuance of any Event of Default and a written demand of the Agent to the
Borrowers at the request of the Required Lenders, interest shall accrue on all
Loans at the Default Rate.
(b) Interest on each Eurodollar Loan shall be calculated on
the basis of a year of 360 days for the actual number of days elapsed. Interest
on each Base Rate Loan shall be calculated on the basis of a year of 365 days
for the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrowers and the Lenders thereof.
(c) Accrued interest on each Base Rate Loan shall be due and
payable to the Agent for account of each Lender in arrears on the first Banking
Day of each calendar month, regardless of any payment of the principal thereof.
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(d) Accrued interest on each Eurodollar Loan shall be due and
payable to the Agent for account of each Lender in arrears upon any payment of
principal and on each corresponding Eurodollar Interest Payment Date.
Section 2.07. Eurodollar Interest Periods. In the case of each Loan
other than a Base Rate Loan, the Borrowers shall select a Eurodollar Interest
Period of any duration in accordance with the definition of Eurodollar Interest
Period in Section 1.01, subject to the following limitations: (a) no Eurodollar
Interest Period shall have a duration of less than one month, and if any such
proposed Eurodollar Interest Period would otherwise be for a shorter period (as
a result of the Revolving Credit Termination Date or otherwise), such Eurodollar
Interest Period shall not be available; and (b) if a Eurodollar Interest Period
would end on a day which is not a Banking Day, such Eurodollar Interest Period
shall be extended to the next Banking Day, unless such next Banking Day would
fall in the next calendar month in which event such Eurodollar Interest Period
shall end on the immediately preceding Banking Day. All elections of a
Eurodollar Interest Period shall be made by the Borrowers upon three Banking
Days' notice to the Agent, and the Agent shall quote to the Borrowers the actual
Eurodollar Rate to take effect for such Eurodollar Interest Period (based upon
the rate quotation described in the definition of Eurodollar Rate) on the next
Banking Day. Notwithstanding anything to the contrary set forth herein, the
Borrowers shall not be permitted to request any Eurodollar Loans until the Agent
has completed its initial syndication of the credit facilities hereunder.
Section 2.08. Conversions. Except to the extent specified to the
Initial Lenders prior to the Effective Date, each Loan shall be deemed to be a
Base Rate Loan unless and until converted to a Eurodollar Loan in accordance
with terms of this Section 2.08. The Borrowers shall have the right to make
payments of principal, or to convert a Loan Tranche from a Base Rate Loan to a
Eurodollar Loan or from a Eurodollar Loan to a Base Rate Loan at any time or
from time to time, provided that: (a) if the Loan Tranche is outstanding as a
Eurodollar Loan, it may be converted only on the last day of the applicable
Eurodollar Interest Period; (b) if the Loan Tranche is outstanding as a
Eurodollar Loan, it shall automatically convert to a Base Rate Loan on the last
day of the applicable Eurodollar Interest Period, unless the Borrowers give
notice to the Agent three (3) Banking Days prior to the last day of the
corresponding Eurodollar Interest Period specifying a new Eurodollar Interest
Period to apply to such Loan Tranche; (c) no Loan Tranche comprising a
Eurodollar Loan may be in a principal amount less than $1,000,000; (d) there may
be no more than six (6) Loan Tranches comprising Eurodollar Loans outstanding at
any one time; and (e) no Loan Tranche comprising a Eurodollar Loan may be
created (or continued after the last day of the applicable Eurodollar Interest
Period) while any Default or Event of Default exists and continues.
Section 2.09. Voluntary Prepayments. In addition to repayments made
pursuant to Section 2.03(b), the Borrowers shall have the right to prepay Loans
at any time or from time to time; provided that: (i) the Borrowers shall give
the Agent notice of each such prepayment as provided in Section 2.12; and (ii)
the Borrowers shall be responsible for the payment of such amounts as provided
in Section 3.05 with respect to the prepayment of any Eurodollar Loans prepaid
on any date other than the last day of the corresponding Eurodollar Interest
Period. In addition, but subject to the foregoing, as a condition to giving
effect to any termination of the Revolving Credit Commitments pursuant to
Section 2.11, the aggregate principal of all Revolving Credit Loans shall be
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fully prepaid, together with interest thereon accrued to the date of such
payment and all amounts payable pursuant to Section 2.15(c) and/or Section 3.05
in connection therewith.
Section 2.10. Uncollected Funds Compensation. Any credit extended by
Chase to the Borrowers by allowing the Uncollected Funds in any Lockbox Account
maintained by the Borrowers at Chase to be immediately available funds to the
Borrowers shall not be deemed to be Loans hereunder. Uncollected Funds
Compensation to Chase shall accrue on the amount of the Uncollected Funds in
existence from time to time at a variable rate per annum equal to the Adjusted
Base Rate plus the Applicable Margin for Base Rate Loans for two (2) full days.
Upon making such computation, the Agent is authorized to make a Revolving Credit
Loan to the Borrowers for the amount thereof (or during the continuance of an
Event of Default, debit such Lockbox Account maintained at Chase) for the
payment thereof to Chase. The Agent shall notify the Borrowers of the amount of
the Uncollected Funds Compensation for the preceding calendar month in the next
monthly statement rendered by the Agent to the Borrowers.
Section 2.11. Termination of Revolving Credit Commitments. The
Borrowers shall have the right to terminate the amount of Revolving Credit
Commitments in whole or in part at any time, provided that (a) the Borrowers
shall give notice of such termination to the Agent as provided in Section 2.12
and (b) each reduction of the Revolving Credit Commitments shall be in an amount
that is at least equal to $1,000,000 or any greater multiple of $1,000,000. Any
portion of the Revolving Credit Commitments that has been terminated may not be
reinstated.
Section 2.12. Certain Notices. Notices by the Borrowers to the Agent of
borrowings, each prepayment of a Loan pursuant to Section 2.09 (which does not
include repayments pursuant to Section 2.03(b)) or of termination of the
Revolving Credit Commitments pursuant to Section 2.11 shall be irrevocable and
shall be effective only if received by the Agent in writing on a Banking Day and
(a) in the case of Base Rate Loans and prepayments of Base Rate Loans given not
later than 11:00 a.m. New York City time on the date of such Base Rate Loan or
such prepayment; (b) in the case of Eurodollar Loans and prepayments of
Eurodollar Loans, given not later than 11:00 a.m. New York City time three (3)
Banking Days prior to the date of such Eurodollar Loan or such prepayment and
(c) in the case of termination of the Revolving Credit Commitments, given not
later than 12:00 noon New York City time four Banking Days prior thereto. Each
such notice of borrowing or prepayment shall specify the amount of the Loans to
be borrowed or prepaid, the date of borrowing or prepayment (which shall be a
Banking Day) and, in the case of a notice of borrowing, the location and number
of the Borrower's account to which funds are to be disbursed.
Section 2.13. Calculation of Borrowing Base. The Agent shall calculate
from time to time the amount of the Borrowing Base, based upon the most recent
Borrowing Base Certificate, and such amount shall be the "Borrowing Base"
hereunder; provided, however, that the Agent, in its reasonable discretion, may
on written notice to the Borrowers, establish additional reserves against the
Borrowing Base, taking into account, among other things, but without limitation
in any way, changes in the collectibility of receivables as shown in periodic
field examinations.
Section 2.14. Settlement Between Agent and Lenders. The Agent and the
Lenders shall settle on an aggregated and netted basis (the "Settlement Amount")
on a weekly basis or with such greater frequency as the Agent may determine
(each such date on which such a settlement
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occurs being a "Settlement Date") for all amounts which shall have become due to
and due from the Agent and the Lenders since the immediately preceding
Settlement Date with respect to any Obligations, other than the Settlement
Amount which became due on the immediately preceding Settlement Date. The Agent
shall notify the Lenders by 11:00 A.M. on each Settlement Date of the Settlement
Amount which is payable by the Agent or the Lenders, and the Agent or the
Lenders, as the case may be, shall make payment of the Settlement Amount by an
electronic funds transfer not later than 5:00 P.M. on the Settlement Date.
Nothing in this Section 2.14 or the settlement procedures made pursuant to this
Section 2.14 shall be deemed to change, as between the Borrowers and the
Lenders, the amount of the Loans which are outstanding under the Notes to each
of the Lenders or the accrual of interest due to each of the Lenders on such
Loans.
Section 2.15. Fees.
(a) The Borrowers agrees to pay to the Agent monthly after the
date hereof through the Revolving Credit Termination Date and on the Revolving
Credit Termination Date for the account of each of the Lenders a commitment fee
which shall accrue on the daily average Unused Facility Amount for the period
from and including the date hereof to the earlier of the date the Revolving
Credit Commitments are terminated in their entirety or the Revolving Credit
Termination Date. The commitment fee shall be calculated on the basis of a 360
day year for the actual number of days elapsed at a rate per year equal to the
Applicable Commitment Fee Rate. The commitment fee shall be due and payable in
arrears monthly on the first Banking Day of each calendar month and shall be
computed by Agent. On each such payment date, the Agent is authorized to make a
Revolving Credit Loan to the Borrowers for the amount thereof (or during the
continuance of an Event of Default, debit the Collection Account) for the
payment thereof to the Lenders. The Agent shall notify the Borrowers of the
amount of the commitment fee for the preceding quarter in the next monthly
statement rendered by the Agent to the Borrowers.
(b) The Borrowers agree to pay, with respect to Letters of
Credit issued hereunder, the following fees: (i) to the Agent for the benefit of
the Lenders (according to each Lender's Revolving Credit Commitment Percentage),
a letter of credit fee in respect of each Letter of Credit issued hereunder
which accrues at a rate equal to (x) the face amount of such Letter of Credit
multiplied by (y) the applicable Eurodollar Margin, such fees to be calculated
on the basis of a 360 day year for actual number of days elapsed and paid by the
Borrowers monthly in advance on the first Banking Day of each calendar month,
and (ii) to the Agent for its own account, a letter of credit fronting fee
payable in advance on the issuance date of each Letter of Credit in an amount
equal to twelve and one-half (12.5) basis points multiplied by the face amount
of such Letter of Credit. Upon making a computation of the amount of such Letter
of Credit fee, the Agent is authorized to make a Revolving Credit Loan to the
Borrowers for the amount thereof. The Agent shall notify the Borrowers of the
amount of such Letter of Credit fee in the next monthly statement rendered by
the Agent to the Borrowers.
(c) The Borrowers agree to pay to the Agent for the benefit of
the Lenders (according to each Lender's Revolving Credit Commitment Percentage)
a success fee in the aggregate amount of $250,000 upon the earliest to occur of
(i) the Revolving Credit Commitment Termination Date, (ii) the date on which the
Revolving Credit Commitments are terminated, whether pursuant to Section 2.05,
Section 2.11 or otherwise, and (iii) the date on which the Lenders agree to
extend the Revolving Credit Commitment Termination Date pursuant to Section
2.19.
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(d) The Borrowers agrees to pay the Agent (for its own
account) such fees payable in such amounts and at the times separately agreed in
writing between the Borrowers and the Agent.
Section 2.16. Payments Generally. All payments under this Agreement or
the Notes shall be made in United States Dollars in funds which are immediately
available not later than 1:00 p.m. New York City time on the relevant dates
specified above (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Banking Day) at the Chase Office
for the account of each Lender, and all such payments may be made by making a
Revolving Credit Loan to the Borrowers for the amount thereof (or during the
continuance of an Event of Default, debiting the Collection Account for the
payment thereof to the Lenders). The Agent, or any Lender for whose account any
such payment is to be made, may (but shall not be obligated to) debit the amount
of any such payment which is not made by such time to any ordinary deposit
account of the Borrowers with the Agent or such Lender, as the case may be, and
any Lender so doing shall promptly notify the Agent. Subject to Section 11.16,
the Borrowers shall, at the time of making each payment under this Agreement or
the Notes, specify to the Agent the principal or other amount payable by the
Borrowers under this Agreement or the Notes to which such payment is to be
applied and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing, the Agent may, subject to Section
11.16, apply such payment as it may elect in its sole discretion. If the due
date of any payment under this Agreement or the Notes would otherwise fall on a
day which is not a Banking Day, such date shall be extended to the next
succeeding Banking Day and interest shall be payable for any principal so
extended for the period of such extension. Each payment received by the Agent
hereunder or under any Note for the account of a Lender shall be paid promptly
to such Lender, in immediately available funds, for the account of such Lender's
Lending Office.
Section 2.17. Purpose. The Borrowers shall use the proceeds of the
Loans (a) to refinance the Indebtedness of the Borrowers listed on Schedule 2.17
hereto, (b) for working capital requirements of the Borrowers and their
Subsidiaries (subject to the limitations set forth in Section 7.06 and Section
7.10), and (c) for other general corporate purposes.
Section 2.18. Reduction in Revolving Credit Commitments in respect of
Palm Beach Litigation. In the event that the Palm Beach Litigation is settled or
reduced to judgment, and the amount the Borrowers are required to pay pursuant
to such settlement or judgment is less than $4,300,000, effective immediately
upon the consummation of such settlement or the entry of such judgment, as
applicable, the aggregate amount of the Revolving Credit Commitments shall be
permanently reduced by an amount equal to the Palm Beach Amount.
Section 2.19. Extension of Revolving Credit Termination Date and Term
Loan Maturity Date. The Borrowers may request a one time extension of the
Revolving Credit Termination Date and the Term Loan Maturity Date by submitting
a written request for an extension to the Agent (an "Extension Request") not
more than 60 days and not less than 30 days prior to the Revolving Credit
Termination Date. The Extension Request must specify the new Revolving Credit
Termination Date and new Term Loan Maturity Date (it being understood that the
new Revolving Credit Termination Date and new Term Loan Maturity Date requested
by the Borrower shall be the same date) requested by the Borrowers which date
shall be not more than 364 days (the "Extension Period") after the Revolving
Credit Termination Date in effect at the
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time the Extension Request is received, including the Revolving Credit
Termination Date as one of the days in the calculation of the days elapsed.
Promptly upon receipt of an Extension Request, the Agent shall notify each
Lender of the contents thereof. If, (a) at the time such Extension Request is
received, at all times thereafter up to and including the Revolving Credit
Termination Date, and immediately after giving effect to such extension, no
Default or Event of Default exists, (b) the Total Funded Debt/EBITDA Ratio as of
the last day of the Fiscal Quarter ending on or about March 31, 2002 is less
than or equal to 2.50 to 1.00, and (c) the Interest Coverage Ratio as of the
last day of the Fiscal Quarter ending on or about March 31, 2002 is greater than
or equal to 3.00 to 1.00, the Agent and the Lenders shall enter into an
amendment to this Credit Agreement with the Borrowers and the Guarantor, which
amendment (i) shall extend the Revolving Credit Termination Date and the Term
Loan Maturity Date until the last day of the Extension Period, (ii) shall
exclude from the Borrowing Base the Overadvance Amount, Qualified UK Accounts,
Qualified Domestic Over 90 Day Accounts, and Qualified Domestic Unbilled
Accounts, and (iii) shall amend Article 8 of the Credit Agreement to include the
following new financial covenants: (x) a maximum Total Funded Debt/EBITDA Ratio
of not more 2.50 to 1.00 at all times, (y) a minimum Interest Coverage Ratio of
not less than 3.00 to 1.00 at all times, and (z) a minimum Availability covenant
equal to not less than (A) $2,000,000 for the period from June 1, 2002 through
August 31, 2002, (B) $4,000,000 for the period from September 1, 2002 through
November 30, 2002 and (C) $6,000,000 at all times from and after December 1,
2002. In connection with such amendment to this Credit Agreement, the Borrowers
and the Guarantors shall execute and deliver, or caused to be executed and
delivered, such other documents, instruments or agreements and taken, or caused
to be taken, such other actions, as the Agent or any Lender may reasonably
require in connection with such amendment to protect, preserve or perfect the
interest of the Agent and the Lenders under this Agreement, any Security
Document and any other Facility Document.
Section 2.20. Exchange Rate for UK Accounts. For purposes of
determining the value in United States Dollars of the Accounts of CTG (UK) Ltd
on any date of determination, the rate of exchange used shall be the rate of
exchange published in The Wall Street Journal for the exchange of British Pounds
Sterling into United States Dollars as of the Banking Day immediately preceding
such date of determination or, if such rate is not available, such other rate of
exchange as the Agent may reasonably determine.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs.
(a) The Borrowers shall pay directly to each Lender from time
to time within five Banking Days of demand therefor such amounts as such Lender
may reasonably determine to be necessary to compensate it for any costs which
such Lender determines are attributable to its making or maintaining any
Eurodollar Loans under this Agreement or its Note or its obligation to make any
such Loans hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which: (i) changes the basis of
taxation of any amounts payable to such Lender under this Agreement or its Note
in respect of any of such Loans (other than taxes imposed on the overall net
income of such Lender or of its Lending Office for any of such Loans
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by the jurisdiction in which such Lender has its principal office or such
Lending Office); or (ii) imposes or modifies any reserve, special deposit,
deposit insurance or assessment, minimum capital, capital ratio or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender; or (iii) imposes any other
condition affecting this Agreement or its Note (or any of such extensions of
credit or liabilities). Each Lender will notify the Borrowers of any event
occurring after the date of this Agreement which will entitle such Lender to
compensation pursuant to this Section 3.01(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation. If any
Lender requests compensation from the Borrowers under this Section 3.01(a), or
under Section 3.01(c), the Borrowers may, by notice to such Lender with a copy
to the Agent, suspend the obligation of such Lender to make Loans of the type
with respect to which such compensation is requested (in which case the
provisions of Section 3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 3.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Borrowers with a copy to the Agent, the obligation of
such Lender to make Loans of such type hereunder shall be suspended until the
date such Regulatory Change ceases to be in effect (in which case the provisions
of Section 3.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 3.01 (but without duplication), the Borrowers shall pay directly to
each Lender from time to time within five Banking Days of request therefor such
amounts as such Lender may determine to be necessary to compensate such Lender
for any costs which it determines are attributable to the maintenance by the
Lender or its bank holding company or any of its Affiliates, pursuant to any law
or regulation of any jurisdiction or any interpretation, directive or request
(whether or not having the force of law) of any court or governmental or
monetary authority, whether in effect on the date of this Agreement or
thereafter, of capital in respect of its Loans hereunder or its obligation to
make Loans hereunder (such compensation to include, without limitation, an
amount equal to any reduction in return on assets or equity of such Lender or
its bank holding company or any of its Affiliates to a level below that which it
could have achieved but for such law, regulation, interpretation, directive or
request). Each Lender will notify the Borrowers if such Lender is entitled to
compensation pursuant to this Section 3.01(c) as promptly as practicable after
it determines to request such compensation.
(d) Determinations and allocations by a Lender for purposes of
this Section 3.01 of the effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained pursuant to subsection (c),
on its costs of making or maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it in respect of Loans or
such obligation, and of the additional amounts required to compensate such
Lender under this Section 3.01, shall be conclusive absent manifest error,
provided that such determinations and allocations are made on a reasonable
basis. Each Lender demanding payment from the
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Borrowers pursuant to this Section 3.01 shall furnish to the Borrowers at the
time of such demand a statement showing the basis for and the method of
calculation of such demand.
Section 3.02. Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Agent reasonably determines (which determination shall
be conclusive absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Eurodollar Rate" in Section
1.01 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for any type of
Eurodollar Loans as provided in this Agreement; or
(b) any Lender reasonably determines (which determination
shall be conclusive absent manifest error) and notifies the Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate" in
Section 1.01 upon the basis of which the rate of interest for any type of
Eurodollar Loans is to be determined do not adequately cover the cost to such
Lender of making or maintaining such Loans;
then the Agent shall give the Borrowers and each Lender prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under no
obligation to make Loans of such type.
Section 3.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrowers thereof (with a copy to the
Agent) and such Lender's obligation to make or maintain Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain such affected Loans (in which case the provisions of Section 3.04 shall
be applicable).
Section 3.04. Certain Base Rate Loans pursuant to Sections 3.01
and 3.03. If the obligations of any Lender to make Loans of a particular type
(Loans of such type being herein called "Affected Loans" and such type being
herein called the "Affected Type") shall be suspended pursuant to Sections
3.01 or 3.03, all Loans which would otherwise be made by such Lender as Loans of
the Affected Type shall be made instead as Base Rate Loans and, if an event
referred to in Section 3.01(b) or 3.03 has occurred and such Lender so requests
by notice to the Borrowers with a copy to the Agent, all Affected Loans of such
Lender then outstanding shall be automatically converted into Base Rate Loans on
the date specified by such Lender in such notice, and, to the extent that
Affected Loans are so made as (or converted into) Base Rate Loans, all payments
of principal which would otherwise be applied to such Lender's Affected Loans
shall be applied instead to its Base Rate Loans.
Section 3.05. Certain Compensation. The Borrowers shall pay to the
Agent for the account of each Lender, upon the request of such Lender through
the Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost or expense which
such Lender determines is attributable to:
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(a) any payment of a Eurodollar Loan made by the Borrowers on
a date other than the last day of a Eurodollar Interest Period or the maturity
date, respectively, for such Loan (whether by reason of acceleration or
otherwise) (other than pursuant to Section 3.04); or
(b) any failure by the Borrowers to borrow any Loan to be made
by such Lender on the date specified therefor in the relevant notice
under Section 2.12.
Without limiting the foregoing, such compensation shall include an amount equal
to the excess, if any, of (i) the amount of interest which otherwise would have
accrued on the principal amount so paid or not borrowed for the period from and
including the date of such payment or failure to borrow to but excluding the
last day of the Eurodollar Interest Period for such Loan (or, in the case of a
failure to borrow, to but excluding the last day of the Eurodollar Interest
Period for such Loan which would have commenced on the date specified therefor
in the relevant notice) at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest (as reasonably determined
by such Lender) such Lender would have bid in the London interbank market for
Dollar deposits for amounts comparable to such principal amount and maturities
comparable to such period. A determination of any Lender as to the amounts
payable pursuant to this Section 3.05 shall be conclusive, provided that such
determination is made on a reasonable basis.
Section 3.06. Mitigation Obligations. If any Lender requests
compensation under Section 3.01, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the reasonable judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 3.01 in the future and (ii) would not subject such Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
ARTICLE 4. CONDITIONS PRECEDENT
Section 4.01. Conditions Precedent to the Initial Loans. The
obligations of the Initial Lenders to make the Loans constituting the initial
borrowings are subject to the condition precedent that on or before the
Effective Date each of the following documents shall have been delivered to the
Agent and, where so required below in this Section 4.01, to the Lenders, in form
and substance satisfactory to the Agent and its counsel, and each of the
following actions shall have been performed to the satisfaction of the Agent and
its counsel:
(a) The Agent shall have received the Facility Documents
(including this Agreement, the Notes and the Security Documents) duly executed
by each of the parties thereto, and in full force and effect;
(b) The Agent shall have received a certificate of the
Secretary/Clerk or Assistant Secretary/Clerk of each of the Borrowers, dated the
Effective Date, attesting to all corporate action taken by such Borrower,
including resolutions of its Board of Directors authorizing the execution,
delivery and performance of the Facility Documents to which such
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Borrower is a party and each other document to be executed and delivered by such
Borrower pursuant to this Agreement and certifying the names and true signatures
of the officers of such Borrower authorized to sign the Facility Documents and
the other documents to be executed and delivered by such Borrower under this
Agreement;
(c) The Agent shall have received a certificate of the
Secretary or Assistant Secretary (or equivalent) of each Guarantor and each
Security Document Party, dated the Effective Date, attesting to all corporate
action taken by such Guarantor and such Security Document Party, including
resolutions of their Board of Directors (or equivalent) authorizing the
execution, delivery and performance of the Facility Documents to which such
Guarantor or Security Document Party is a party and each other document to be
executed and delivered by such Guarantor or Security Document Party pursuant to
this Agreement and certifying the names and true signatures of the officers of
such Guarantor or Security Document Party authorized to sign the Facility
Documents and the other documents to be executed and delivered by such Guarantor
or Security Document Party under this Agreement;
(d) The Agent shall have received evidence satisfactory to it
that the Borrowers, the Guarantors and any Security Document Parties shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items delivered to the Agent for filing contemporaneous with the
funding of the initial Loans on the Closing Date) that may be necessary or, in
the opinion of the Agent, desirable in order to create in favor of the Agent,
for the benefit of the Lenders, a valid and (upon such filing and recording)
perfected First Priority security interest in the entire personal and mixed
property Collateral. Such actions shall include, without limitation, the
following: (i) delivery to the Agent of all the Security Documents, duly
executed by the applicable Borrower, Guarantor or Security Document Party,
together with accurate and complete schedules to all such Security Documents;
(ii) delivery to the Agent of (A) except in the case of equity interests of
Foreign Subsidiaries not represented by certificates, certificates (which
certificates shall be accompanied by irrevocable undated stock powers, duly
endorsed in blank and otherwise reasonably satisfactory in form and substance to
the Agent) representing all capital stock and other equity interests pledged
pursuant to the Security Documents and (B) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner reasonably
satisfactory to the Agent) evidencing any Collateral; (iii) delivery to the
Agent of (A) the results of a recent search, by one or more Persons satisfactory
to the Agent, of all effective UCC financing statements and (as to the New York
Properties and Florida Properties only) fixture filings and all judgment and tax
lien filings (or, in the case of the Collateral subject to the UK Security
Agreement, the United Kingdom equivalent of such filings) which may have been
made with respect to any Collateral, together with copies of all such filings
disclosed by such search, (B) UCC termination statements (or, in the case of the
Collateral subject to the UK Security Agreement, the United Kingdom equivalent
of such termination statements) duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements, fixture filings or comparable filings
disclosed in such search (other than any such financing statements or fixture
filings in respect of Liens permitted to remain outstanding pursuant to the
terms of this Agreement) or if UCC termination statements (or, in the case of
the Collateral subject to the UK Security Agreement, the United Kingdom
equivalent of such termination statements) cannot be
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obtained from a creditor whose debt is to be repaid with the proceeds of the
Initial Loans, an agreement to deliver such termination statements upon receipt
by such creditor of payment in full of the amounts due such creditor, and (C)
UCC financing statements and (as to the New York Properties and Florida
Properties only) fixture filings (or, in the case of the Collateral subject to
the UK Security Agreement, the United Kingdom equivalent of such filings), duly
executed by each applicable Borrower, Guarantor and Security Document Party with
respect to all Collateral of such party, for filing in all jurisdictions as may
be necessary or, in the opinion of the Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Security Documents; (iv)
delivery to the Agent of all cover sheets or other documents or instruments
required to be filed in order to create or perfect Liens in respect of any IP
Collateral; and (v) delivery to the Agent of opinions of counsel (which counsel
shall be reasonably satisfactory to the Lender) under the local laws of each
jurisdiction where the Borrowers, the Guarantor or any Security Document Party
is organized or maintains an office or facility with respect to the creation and
perfection of the security interests in favor of the Agent in the Collateral and
such other matters governed by the laws of such jurisdiction regarding such
security interests as the Agent may reasonably request, in each case in form and
substance reasonably satisfactory to the Agent.
(e) The Agent shall have received from the Borrowers:
(i) A fully executed and notarized Mortgage, in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering each New York Property and the Florida
Property (each such parcel, a "Mortgaged Property");
(ii) With respect to each Mortgaged Property, copies
of all existing surveys, surveyors certificates and such additional
surveys or surveyor certificates as the Agent may reasonably require;
(iii) Copies of all deeds with respect to each
Mortgaged Property;
(iv) In the case of each Material Leasehold Property
existing as of the Closing Date, copies of all leases between any
Borrower and any landlord or tenant;
(v) In the case of each Material Leasehold Property
existing as of the Closing Date, a Landlord's Waiver and Consent with
respect thereto;
(vi) (A) Evidence reasonably acceptable to the Agent
as to whether any Mortgaged Property is a Flood Hazard Property, and
(B) if there are any such Flood Hazard Properties, evidence that the
applicable Borrower has obtained flood hazard insurance with respect to
each Flood Hazard Property in reasonable amounts approved by the Agent,
or evidence reasonably acceptable to the Agent that such insurance is
not available;
(vii) A Hazardous Materials Indemnity Agreement from
each of the Borrowers with respect to the indemnification of the Agent
and the Lenders for any liabilities that may be imposed on or incurred
by any of them as a result of any Hazardous Materials that may be
located on any Real Property Asset;
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(viii) (A) An ALTA mortgagee title insurance policy
or unconditional commitment therefor (the "Mortgage Policy") issued by
the Title Company with respect to each Mortgaged Property, in an amount
not less than the appraised fair market value of such Mortgaged
Property, insuring fee simple title to the Mortgaged Property vested in
such Borrower and assuring the Agent that the Mortgage creates a valid
and enforceable First Priority mortgage Lien on the Mortgaged Property,
subject only to any standard exceptions as may be reasonably acceptable
to the Agent, which Mortgage Policy (I) shall include all endorsements
for matters reasonably requested by the Agent and (II) shall provide
for affirmative insurance and such reinsurance as the Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent; and (B) evidence satisfactory to
the Agent that such Borrower has (I) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Mortgage Policy and (II) paid to the Title
Company or to the appropriate Governmental Authorities all expenses and
premiums of the Title Company in connection with the issuance of the
Mortgage Policy and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording
the Mortgage;
(ix) With respect to each Mortgaged Property, a title
report issued by the Title Company with respect thereto, dated not more
than 90 days prior to the Closing Date (or such longer period as shall
be reasonably acceptable to the Agent) and satisfactory in form and
substance to the Agent;
(x) Copies of all recorded documents listed as
exceptions to title or otherwise referred to in the Mortgage Policy or
in the title reports delivered pursuant to Section 4.01(e)(ix);
(xi) Evidence satisfactory to the Agent to the effect
that appraisals have been ordered concerning each Mortgaged Property
from one or more independent real estate appraisers satisfactory to the
Agent, which appraisals shall be in form, scope and substance
satisfactory to the Agent and shall satisfy the requirements of any
applicable laws and regulation; and
(xii) An opinion of counsel (which counsel shall be
reasonably satisfactory to the Agent) in each state in which any
Mortgaged Property is located with respect to the enforceability of the
form of the Mortgage to be recorded in such state and such other
matters as the Agent may reasonably request, in each case in form and
substance reasonably satisfactory to the Agent.
(f) The Agent shall have received reports and other
information, in form, scope and substance satisfactory to the Agent, from one or
more environmental consulting firms reasonably satisfactory to the Agent
regarding such environmental matters relating to such Mortgaged Properties as
the Administrative Agent shall require, which reports shall include Phase I
and/or Phase II environmental assessments as reasonably specified by the Agent
for each such Real Property Asset, which conform to the ASTM Standard Practice
for Environmental Site Assessment.
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(g) The Borrowers shall have obtained all required
environmental permits, licenses, authorizations and consents that are necessary
in connection with the transactions contemplated by the Facility Documents from
the appropriate Governmental Authorities, and each of the foregoing permits,
licenses, authorizations and consents shall be in full force and effect. The
Credit Parties shall have also obtained all other permits, licenses,
authorizations and consents from all other Governmental Authorities and all
consents of other Persons with respect to Material Indebtedness, Liens and
material agreements, in each case that are necessary or advisable in connection
with the transactions contemplated by the Facility Documents, and each of the
foregoing shall be in full force and effect.
(h) The Agent and the Lenders shall have received and
shall be satisfied with the certified financial statements referred to in
Section 5.05 hereof, including, without limitation, the audited consolidated
financial statements of the Borrowers for the three most recent fiscal years of
the Borrowers and the unaudited interim consolidated financial statements of the
Borrowers for the Fiscal Months ended January 26, 2001 and February 23, 2001;
(i) The Agent and the Lenders shall have received and
shall be satisfied with its review of (i) estimated opening balance sheets for
the Borrowers and their Subsidiaries (including all Foreign Subsidiaries),
prepared in accordance with GAAP (subject to year-end adjustments and the
absence of footnotes), and (ii) consolidated and consolidating quarterly profit
and loss statements and balance sheets and consolidated cash flow projections
for the Borrowers and their Subsidiaries (including all Foreign Subsidiaries),
prepared in accordance with GAAP (subject to year-end adjustments and the
absence of footnotes), for the 2001 Fiscal Year, and on an annual basis for
Fiscal Years 2002 and 2003, together with the written assumptions on which such
projections are based;
(j) The Agent shall have received a certificate of a duly
authorized officer of the Borrowers dated the Effective Date, stating that the
representations and warranties in Article 5 are true and correct on such date as
though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default;
(k) The Agent shall have received (i) a favorable opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel for the Borrowers, dated the Effective Date, in
substantially the form of Exhibit J hereto, and covering such matters as the
Agent or any Lender may reasonably request, (ii) a favorable opinion of local
North Carolina counsel for the Borrowers covering such matters as the Agent or
any Lender may reasonably request, (iii) a favorable opinion of local Kansas
counsel to CTG Healthcare Kansas covering such matters as the Agent or any
Lender may reasonably request, (iv) a favorable opinion of United Kingdom
counsel for the CTG (UK) Ltd. regarding the UK Security Agreement and the UK
Charge Agreement and covering such other matters as the Agent or any Lender may
reasonably request, (v) a favorable opinion of local Netherlands counsel to
certain of the Borrowers and their Subsidiaries covering such matters as the
Agent or any Lender may reasonably request and (vi) a favorable opinion of local
Belgian counsel to certain of the Borrowers and their Subsidiaries covering such
matters as the Agent or any Lender may reasonably request;
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(l) The Agent shall have received a certificate of a duly
authorized officer of CTG in the form of Exhibit F annexed hereto certifying as
to the solvency of the Borrowers and their Subsidiaries after giving effect to
the funding of the initial Loans.
(m) The Agent shall have received insurance certificates
in form satisfactory to the Agent evidencing casualty, all-risk, product
liability and other insurance of the Borrowers, their Subsidiaries and their
properties and assets having coverages and issued by insurance companies
satisfactory to the Agent and naming the Agent as a lender's loss payee and (as
appropriate) an additional insured.
(n) The Agent shall have received an initial Borrowing
Base Certificate, remittance, debit and credit reports, and a statement of
accounts in a form acceptable to the Agent with respect to the Borrowers and
consistent with the requirements of Section 6.09 hereof, dated as of not more
than 30 days prior to the date of the Loan;
(o) The Agent shall be satisfied with its due diligence
review of the Borrowers and their Subsidiaries, including, but not limited to,
satisfactory review by the Agent of the projections of the Borrowers and their
Subsidiaries;
(p) The Agent shall be satisfied with the cash management
arrangements (including domestic lock box arrangements) and management
information systems in place with respect to the Borrowers and their
Subsidiaries;
(q) Immediately following the funding of the initial
loans hereunder, the Borrowers shall have caused to be repaid in full all
outstanding Indebtedness set forth on Schedule 2.17 annex hereto and shall have
caused to be released all liens in favor of the holders of such Indebtedness;
(r) Not earlier than three (3) Banking Days prior to the
Closing Date, the Agent shall have completed a takedown field examination of the
Borrowers and the results thereof shall be satisfactory to the Agent and shall
demonstrate, among other things, that the Availability hereunder is sufficient
to meet the ongoing working capital needs of the Borrowers and their
Subsidiaries;
(s) The Lenders shall have retained a financial
consultant mutually acceptable to the Lenders and the Borrowers to provide
advice with respect to such financial and operational matters concerning the
Borrowers as the Lenders may reasonably require for a term of not less than one
year, with all fees and expenses of such financial consultant to be paid by the
Borrowers;
(t) The Agent shall have received counterparts of the
Lockbox Account Agreements duly executed by all parties thereto and such Lockbox
Account Agreements shall be in full force and effect and in form and substance
satisfactory to the Agent;
(u) Except as otherwise expressly provided on Schedule
6.14, the Agent shall have received counterparts of the Blocked Account
Agreements with respect to each deposit or other bank account (other than a
Lockbox Account) maintained by the Borrowers with any financial institution
other than Chase, duly executed by all parties thereto and such Blocked
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Account Agreements shall be in full force and effect and in form and substance
satisfactory to the Agent;
(v) The Agent shall have received counterparts of the
Affiliate Subordination Agreement duly executed by the Borrowers and the Foreign
Subsidiaries;
(w) The Agent and the Lenders shall have received all
fees and other amounts due and payable to such Persons at or prior to the
Effective Date, including, to the extent invoiced, reimbursement or payment of
all out-of-pocket expenses required to be reimbursed or paid by the Borrowers
hereunder;
(x) The Agent shall have received all material contracts
and such other documents as the Agent or any Lender shall have reasonably
requested and the same shall be reasonably satisfactory to each of them; and
(y) The Agent shall have received evidence (which
evidence shall include a certificate of the chief financial officer of CTG as to
such matters) satisfactory to it that all investments credited to and other
funds on deposit in the Borrowers' investment account with Blackrock Provident
Institutional Funds have been liquidated and that all of the proceeds of such
investments and all other funds credited to such account have been applied to
fund the Borrowers' payroll and, after funding such payroll, to repay
Indebtedness of the Borrowers under the Existing Senior Credit Facility.
Section 4.02. Additional Conditions Precedent. The obligations of the
Lenders to make any Loans (including the initial Loans) and of the Agent to
issue, amend, renew or extend any Letter of Credit, shall be subject to the
further conditions precedent that on the date of such Loan or the date of
issuance, amendment, renewal or extension of such Letter of Credit:
(a) The following statements shall be true:
(i) the representations and warranties contained
in Article 5 of this Agreement are true and correct on and as of the
date of such Loan, or (as applicable) the date of issuance, amendment,
renewal or extension of such Letter of Credit, as though made on and as
of such date (except to the extent that such representations and
warranties are updated to reflect transactions expressly permitted by
this Agreement and not resulting in or constituting a Default or Event
of Default, provided such any update is specified in a certificate
delivered by the Borrower to the Agent before such date, and except to
the extent that such representations and warranties relate expressly to
an earlier date); and
(ii) No Default or Event of Default has occurred
and is continuing, or would result from such Loan;
(b) The Agent shall have received such approvals,
opinions or documents as the Agent or any Lender may reasonably request;
(c) At or before the time of making the first Revolving
Credit Loans hereunder and as of the date of each subsequent Revolving Credit
Loan hereunder, the Agent
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shall determine that the making of such Revolving Credit Loan will not cause the
amounts outstanding hereunder to exceed the Borrowing Base, and there shall be
delivered or in the possession of the Agent all documents pertaining to the
Qualified Domestic Accounts, the Qualified Domestic Over 90 Day Accounts,
Qualified Domestic Unbilled Accounts, Qualified UK Accounts and Qualified Real
Estate, as the Agent shall reasonably require, dated as of not more than 30 days
prior to the date of the Loan;
(d) The Borrowers shall have paid to the Agent all
accrued fees and expenses payable to the Agent in connection with this
Agreement, including all reasonable fees and disbursements of legal counsel to
the Agent.
Section 4.03. Deemed Representations. Each notice of a Loan or Letter
of Credit and acceptance by the Borrowers of the proceeds of such Loan or
issuance of a Letter of Credit shall constitute a representation and warranty
that the conditions set forth in Subsection (a) of Section 4.02 are true and
correct as of the date of each such Loan. The Agent may from time to time
require certificate(s) of duly authorized officer(s) of one or more of the
Borrowers, stating that the representations and warranties in Article 5 are true
and correct on such date as though made on and as of such date and that no event
has occurred and is continuing which constitutes a Default or an Event of
Default.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
The Borrowers and the Guarantors hereby jointly and severally represent
and warrant, as of the date hereof and as of the date of each Loan, that:
Section 5.01. Incorporation, Good Standing and Due Qualification. Each
of the Borrowers and each of their Subsidiaries is an entity which is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which such qualification is required.
Section 5.02. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance of the Facility Documents: (a) have been
duly authorized by all necessary corporate action by the Borrowers, the
Guarantors and the Security Document Parties party thereto and do not and will
not require any consent or approval of the equityholders of the Borrowers, the
Guarantors or such Security Document Parties or contravene their charters or
by-laws; (b) will not violate any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrowers
or any of their Subsidiaries; (c) will not result in a breach of or constitute a
default in any material respect or require any consent which has not been
obtained under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrowers, the Guarantors or any Security
Document Party is a party or by which the properties of the Borrowers, the
Guarantors or any Security Document Party may be bound or affected; (d) will
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not result in, or require, the creation or imposition of any Lien, upon or with
respect to any of the properties now owned or hereafter acquired by the
Borrowers or any of their Subsidiaries, except as provided in the Security
Documents; or (e) will not cause the Borrowers or any Guarantor or any Security
Document Party, as the case may be, to be in default in any material respect
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
Section 5.03. Legally Enforceable Agreements. Each Facility Document
is, or when delivered under this Agreement will be, a legal, valid and binding
obligation of the Borrowers, each Guarantor and each Security Document Party,
enforceable against the Borrowers, each Guarantor and each such Security
Document Party, in accordance with its terms, except to the extent that
enforceability may be subject to limitations imposed by general principles of
equity or applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.
Section 5.04. Litigation. Except as set forth on Schedule 5.04 hereto,
there are no actions, suits or proceedings pending or, to the knowledge of the
Borrowers, threatened, against or affecting the Borrowers or any of their
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of the Borrowers and their
Subsidiaries taken as a whole or the ability of any Borrower, any Guarantor or
any Security Document Party to perform its obligations under the Facility
Documents.
Section 5.05. Financial Statements. (a) The Borrowers have heretofore
delivered to the Lenders the following financial statements:
(i) the consolidated balance sheets and statements of
operations, shareholders' equity and cash flows of the Borrowers and
their Subsidiaries, as of and for the fiscal years ended December 31,
1998, December 31, 1999, and December 31, 2000, audited and accompanied
by an opinion of the Borrowers' independent public accountants;
(ii) the unaudited consolidated balance sheet and
statement of operations of the Borrowers and their Subsidiaries, as of
and for the Fiscal Months ended January 26, 2001 and February 23, 2001,
certified by the chief financial officer of CTG that such financial
statements fairly present the financial condition of the Borrowers and
their Subsidiaries as at such dates and the results of the operations
of the Borrowers and their Subsidiaries for the period ended on such
dates and that all such financial statements, including the related
schedules and notes thereto have been prepared in all material respects
in accordance with GAAP applied consistently throughout the periods
involved; and
(iii) consolidated quarterly profit and loss statements,
balance sheets and cash flow projections for the Borrowers and their
Subsidiaries (including all Foreign Subsidiaries), prepared in
accordance with GAAP, for the 2001 Fiscal Year, and on an annual basis
for Fiscal Years 2002 and 2003, together with the written assumptions
on which such projections are based.
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Except as disclosed on Schedule 5.05, such financial statements (except
for the projections) present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the
respective entities as of such respective dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of such unaudited or pro forma statements. The projections
were prepared by the Borrowers in good faith and were based on assumptions that
were reasonable when made.
(b) Except as disclosed on Schedule 5.05, since December
31, 2000, there has been no material adverse change in the business, assets,
operations or condition, financial or otherwise, of the Borrowers or any of
their Subsidiaries (other than Inactive Subsidiaries) from that set forth in the
December 31, 2000 financial statements referred to in clause (i) of paragraph
(a) above.
(c) None of the Borrowers or any of their Subsidiaries
has on the date hereof any contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments in each case that are material, except as
referred to or reflected or provided for in the balance sheets as at the end of
their respective fiscal years ended in 2000, referred to above, as provided for
in Schedule 5.05 annexed hereto, or as otherwise permitted pursuant to this
Agreement, or as referred to or reflected or provided for in the financial
statements described in this Section 5.05.
Section 5.06. Ownership and Liens. The Borrowers and their Subsidiaries
have title to, or valid leasehold interests in, all of its properties and
assets, real and personal, including the properties and assets, and leasehold
interests reflected in the financial statements referred to in Section 5.05
(other than any properties or assets disposed of in the ordinary course of
business), except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes, and none of the properties and assets
owned by the Borrowers or any of their Subsidiaries (excluding any of its
leasehold interests) is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder or as listed in Schedule
5.06 hereto.
Section 5.07. Existing Indebtedness. None of the Borrowers nor any of
their Subsidiaries owes Indebtedness as of the Effective Date for borrowed money
or under any title retention agreements (including conditional sale contracts
and Capital Leases) except as listed on Schedule 5.07 hereto.
Section 5.08. Taxes. Except as set forth on Schedule 5.08 hereto, the
Borrowers and each of their Subsidiaries have filed all tax returns (federal,
state and local) required to be filed and have paid all taxes, assessments and
governmental charges and levies thereon to be due, including interest and
penalties, except for such taxes which are not material in amount and are being
contested by the Borrowers in good faith in appropriate proceedings.
Section 5.09. ERISA. Except as set forth on Schedule 5.09 hereto, the
Borrowers and their Subsidiaries have no Plans. The Borrowers and their
Subsidiaries are in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred with respect to any Plan; no notice of intent to terminate a
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Plan has been filed nor has any Plan been terminated; no circumstance exists
which constitutes grounds under Section 4042 of ERISA entitling the PBGC to
institute proceedings to terminate, or appoint a trustee to administer, a Plan,
nor has the PBGC instituted any such proceedings; none of the Borrowers nor any
ERISA Affiliate has completely or partially withdrawn under Sections 4201 or
4204 of ERISA from a Multiemployer Plan; the Borrowers and each of their ERISA
Affiliates have met all minimum funding requirements under ERISA with respect to
all of their Plans and there are no Unfunded Vested Liabilities in excess of
$250,000; and none of the Borrowers nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA in excess of $250,000.
Section 5.10. Subsidiaries and Affiliates. Set forth on Schedule 5.10
is a complete and correct list of all Subsidiaries of CTG as of the date hereof,
together with, for each such Subsidiary, (a) the jurisdiction of organization of
such Subsidiary, (b) each Person holding ownership interests in such Subsidiary
and (c) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 5.10, (i) each Borrower and its
respective Subsidiaries owns, free and clear of Liens (other than Liens
permitted hereunder), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule 5.10, (ii)
all of the issued and outstanding capital stock of each such Person organized as
a corporation is validly issued, fully paid and nonassessable and (iii) there
are no outstanding Equity Rights with respect to such Person. As of the
Effective Date, the authorized, issued and outstanding capital stock of the
Borrowers and their Subsidiaries consists of the capital stock described on
Schedule 5.10, all of which is duly and validly issued and outstanding, fully
paid and nonassessable. The Inactive Subsidiaries do not engage in any business
or activity of any kind and no Inactive Subsidiary owns assets having a total
book value in excess of $250,000 in the aggregate (other than intercompany
receivables reflected on the books of such Inactive Subsidiaries as to which no
cash has been or will be paid by the Borrowers or any Subsidiary to such
Inactive Subsidiaries).
Section 5.11. Operation of Business. (a) The Borrowers and each of
their Subsidiaries possess all licenses, permits, franchises, Patents,
Copyrights, Trademarks and trade names, or rights thereto, to conduct their
business substantially as now conducted and as presently proposed to be
conducted, and none of the Borrowers nor any of their Subsidiaries is in
violation of any rights of others with respect to any of the foregoing, except
for any such violations that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. Set forth on
Schedule 5.11 hereto is a complete list of all Patents, Trademarks and
Copyrights (each of the foregoing, together with any other intellectual property
material to the business of the Borrowers and their Subsidiaries being referred
to herein as "Proprietary Rights"). Schedule 5.11 clearly identifies all
Patents, Trademarks and Copyrights that have been duly registered in, filed in
or issued by the PTO or the United States Register of Copyrights (collectively,
the "Registered Proprietary Rights"). The Registered Proprietary Rights have
been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States, as
applicable. The Borrowers have taken commercially reasonable steps to protect
their Registered Proprietary Rights and to maintain the confidentiality of all
Proprietary Rights that are not generally in the public domain.
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(b) As of the date hereof, Schedule 5.11 annexed hereto
contains a true, accurate and complete list of (i) all Real Property Assets,
whether owned or leased, and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Material Leasehold Property,
regardless of whether such Borrower is the landlord or tenant (whether directly
or as an assignee or successor in interest) under such lease, sublease or
assignment. Except as specified in Schedule 5.11, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and the Borrowers have no knowledge of any default that has occurred and is
continuing thereunder, and each such agreement constitutes the legal, valid and
binding obligation of each applicable Borrower, enforceable against such
Borrower in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
Section 5.12. No Default on Outstanding Judgments or Orders. The
Borrowers and each of their Subsidiaries have satisfied all judgments and none
of the Borrowers nor any of their Subsidiaries is in default with respect to any
judgment, writ, injunction, decree, rule or regulation of any court, arbitrator
or federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign, except for judgments
which are not material in amount and are being contested in good faith by the
Borrowers in appropriate proceedings.
Section 5.13. No Defaults on Other Agreements. Schedule 5.13 hereto is
a complete and correct list, as of the date of this Agreement of each contract
and arrangement to which any Borrower or Guarantor is a party for which breach,
nonperformance, cancellation or failure to renew would have a Material Adverse
Effect. True and complete copies of each agreement listed on the appropriate
part of Schedule 5.13 have been delivered to the Agent, together with all
amendments, waivers and other modifications thereto. All such agreements are
valid, subsisting, in full force and effect, are currently binding and will
continue to be binding upon each Borrower or Guarantor that is a party thereto
and, to the best knowledge of the Borrowers, binding upon the other parties
thereto in accordance with their terms. None of the Borrowers nor any of their
Subsidiaries is a party to any indenture, loan or credit agreement or any lease
or other agreement or instrument or subject to any charter or corporate
restriction which could reasonably be expected to have a Material Adverse
Effect. None of the Borrowers nor any of their Subsidiaries is in default in any
material respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.
Section 5.14. Labor Matters. (a) Except as set forth on Schedule 5.14
as of the Effective Time (i) no employee of any Borrower of any Subsidiary is
represented by a labor union, no labor union has been certified or recognized as
a representative of any such employee, and no Borrower or Subsidiary has any
obligation under any collective bargaining agreement or other agreement with any
labor union or any obligation to recognize or deal with any labor union, and
there are no such contracts or other agreements pertaining to or which determine
the terms or conditions of employment of any employee of any Borrower or
Subsidiary thereof; (ii) there are no pending or threatened representation
campaigns, elections or proceedings; (iii) no Borrower has any knowledge of any
strikes, slowdowns or work stoppages of any kind, or threats thereof,
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and no such activities occurred during the 24-month period preceding the date
hereof; (iv) no Borrower or Subsidiary has engaged in, admitted committing or
been held to have committed any unfair labor practice; and (v) there are no
controversies or grievances between any Borrower or Subsidiary and any of its
employees or representatives thereof, except, in the case of this clause (v),
for any such controversies or grievances which, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.14, each of the
Borrowers and their Subsidiaries has at all times complied in all material
respects, and are in material compliance with, all applicable laws, rules and
regulations respecting employment, wages, hours, compensation, benefits, and
payment and withholding of taxes in connection with employment.
(c) Except as set forth on Schedule 5.14, the Borrowers
and their Subsidiaries have at all times complied with, and are in compliance
with, all applicable laws, rules and regulations respecting occupational health
and safety, whether now existing or subsequently amended or enacted, including,
without limitation, the Occupational Safety & Health Act of 1970, 29 U.S.C.
Section 651 et seq. and the state analogies thereto, all as amended or
superseded from time to time, and any common law doctrine relating to worker
health and safety.
Section 5.15. Investment Company Act. None of the Borrowers nor any of
their Subsidiaries is an "investment company" within the meaning of the United
States Investment Company Act of 1940, as amended.
Section 5.16. Environmental Matters. Except as set forth on Schedule
5.16 hereto, no real property currently or previously owned or leased by the
Borrowers or any of their Subsidiaries is in violation of any Environmental
Laws, no Hazardous Materials are present on said real property other than
Hazardous Materials used, generated, treated, stored, disposed of or otherwise
introduced compliance with all applicable Environmental Laws. Except as set
forth on Schedule 5.16 hereto, none of the Borrowers nor any of their
Subsidiaries has been identified in any litigation, administrative proceedings
or investigation as a responsible party or potentially responsible party for any
liability under any Environmental Laws.
Section 5.17. Regulation U. None of the Borrowers nor any of their
Subsidiaries owns, directly or indirectly any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System, as
supplemented from time to time). The proceeds of the Loans are not being used
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock".
Section 5.18. No Guaranties or Indemnities. Except as set forth on
Schedule 5.07 hereto, none of the Borrowers nor any of their Subsidiaries is
obligated on any Guaranty or any indemnification of any kind for the debts,
liabilities or obligations of any Person, including without limitation any
Affiliate, other than indemnities and hold harmless provisions entered into in
favor of customers, bonding agencies and sureties in the ordinary course of
business.
Section 5.19. Bank Accounts. Schedule 5.19 lists all banks and other
financial institutions at which any Borrower maintains deposits and/or other
accounts as of the Closing Date, and such Schedule correctly identifies the
name, address and telephone number of each
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depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number.
Section 5.20. Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any modification or change in,
the business relationship between any Borrower or any Subsidiary and any
customer or any group of customers whose purchases of goods or services
individually or in the aggregate are material to the business of such Borrower
or such Subsidiary, or with any material supplier, and there exists no present
condition or state of facts or circumstances which would materially adversely
affect the Borrowers or their Subsidiaries or prevent the Borrowers or their
Subsidiaries from conducting their businesses after the consummation of the
transactions contemplated by this Agreement in substantially the same manner in
which such businesses heretofore have been conducted.
ARTICLE 6. AFFIRMATIVE COVENANTS
So long as any of the Loans or Letters of Credit remain outstanding or
any Lender shall have any Revolving Credit Commitment under this Agreement, each
of the Borrowers shall:
Section 6.01. Maintenance of Existence. Except as permitted by Section
7.03, preserve and maintain, and cause each of their Subsidiaries to preserve
and maintain, its legal existence and good standing in the jurisdiction of its
organization, and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, qualify and remain qualified, and cause each of its Subsidiaries to
qualify and remain qualified, as a foreign organization in each jurisdiction in
which such qualification is required.
Section 6.02. Conduct of Business. Continue, and cause each of their
Subsidiaries to continue, to engage in an efficient and economical manner in a
business of the same general type as conducted by it on the date of this
Agreement.
Section 6.03. Maintenance of Properties. Maintain, keep and preserve,
and cause each of their Subsidiaries to maintain, keep and preserve, all of its
properties, (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 6.04. Maintenance of Records; Fiscal Year. Keep, and cause each
of their Subsidiaries to keep, adequate records and books of account, in which
complete entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrowers and their Subsidiaries. To enable the ready and
consistent determination of compliance with the covenants set forth in Article 8
of this Agreement, each of the Borrowers shall maintain, and shall cause each of
their Subsidiaries (including each Foreign Subsidiary) to maintain, December
31st of each year as the end of such Borrower's or such Subsidiary's Fiscal
Year.
Section 6.05. Maintenance of Insurance. Maintain, and cause each of
their Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
the Agent reasonably deems appropriate. The Agent will be named "Lender's Loss
Payable" and/or "Additional Named Insured," as appropriate, on all insurance
policies.
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Section 6.06. Payment of Taxes; Compliance with Laws. Comply, and cause
each of their Subsidiaries to comply, with (a) all applicable laws, rules,
regulations and orders relating to the payment of taxes, assessments and
governmental charges, such compliance to include, without limitation, paying all
taxes, assessments and governmental charges imposed upon it or upon its property
before the same become delinquent, except for such taxes, assessments, and
governmental charges which are not material in amount and which are being
contested by the Borrowers in appropriate proceedings (it being understood that,
without limiting the generality of the foregoing and for avoidance of doubt, any
taxes set forth on Schedule 5.08 shall be deemed to be material in amount) and
(b) all applicable laws, rules, regulations and orders (including ERISA and
Environmental Laws) other than those referred in clause (a) of this Section
6.06, except, in the case of this clause (b), where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
Section 6.07. Right of Inspection. At any reasonable time and from time
to time during regular business hours and upon reasonable prior notice (except
that no such prior notice shall be required after the occurrence and during the
continuance of a Default or Event of Default), permit the Agent or any agent or
representative thereof, to examine and make copies and abstracts from the
records and books of account of, and visit the properties of, the Borrowers and
any of their Subsidiaries, and the Borrowers hereby give to the Agent and to any
of its agents or representatives the Borrowers' irrevocable permission to
discuss to the extent necessary the affairs, finances and accounts of the
Borrowers and any of their Subsidiaries with the Borrowers' or their
Subsidiaries' respective officers and directors and the Borrowers' independent
accountants.
Section 6.08. Reporting Requirements. Furnish to the Agent which shall
in turn furnish to each of the Lenders:
(a) As soon as available and in any event within 90 days
after the end of each Fiscal Year of the Borrowers, consolidated and
consolidating balance sheets of the Borrowers and their Subsidiaries as of the
end of such Fiscal Year, consolidated and consolidating statements of income and
stockholders' equity of the Borrowers and their Subsidiaries for such Fiscal
Year and consolidated statements of cash flows of the Borrowers and their
Subsidiaries for such Fiscal Year, all in reasonable detail and all prepared in
accordance with GAAP (subject to the absence of footnotes, in the case of the
consolidating statements), and as to the consolidated statements, accompanied by
an opinion thereon by Deloitte & Touche LLP or other independent accountants of
national standing selected by the Borrowers and reasonably acceptable to Agent,
which opinion shall not be qualified by reason of audit limitations imposed by
the Borrowers;
(b) As soon as available and in any event within 45 days
after the end of each Fiscal Quarter of the Borrowers (including the Fiscal
Quarter ending December 31 of each Fiscal Year), consolidated and consolidating
balance sheets of the Borrowers and their Subsidiaries as of the end of such
Fiscal Quarter, consolidated and consolidating statements of income and
consolidated statements of cash flows of the Borrowers and their Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter, all in reasonable detail and stating in
comparative form the respective consolidated figures for the corresponding date
in the previous Fiscal Year, and all prepared in accordance
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with GAAP and certified by the chief financial officer of CTG (subject to
year-end adjustments and the absence of footnotes);
(c) As soon as available and in any event within 17 days
after the end of each Fiscal Month of the Borrowers (other than the last Fiscal
Month of each Fiscal Year), consolidated balance sheets of the Borrowers and
their Subsidiaries as of the end of such Fiscal Month and consolidated
statements of income, and estimated cash flows of the Borrowers and their
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Month, all in reasonable detail and,
except in the case of statements of estimated cash flows, stating in comparative
form the respective consolidated figures for the corresponding date in the
previous Fiscal Year, and all prepared in accordance with GAAP and certified by
the chief financial officer of CTG (subject to year-end adjustments and the
absence of footnotes);
(d) With respect to the last Fiscal Month of the
Borrower's Fiscal Year (i) as soon as available and in any event within 20 days
after the end of such Fiscal Month, an estimated consolidated income statement
for such Fiscal Month, prepared in accordance with GAAP (subject to year-end
adjustments and the absence of footnotes) and certified by the chief financial
officer of CTG of the Borrowers and (ii) as soon as available and in any event
within 40 days after the end of such Fiscal Month, consolidated and
consolidating balance sheets of the Borrowers and their Subsidiaries as of the
end of such Fiscal Month, consolidated and consolidating statements of income,
and consolidated cash flows of the Borrowers and their Subsidiaries for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Month, all in reasonable detail and stating in comparative form
the respective consolidated figures for the corresponding date in the previous
Fiscal Year, and all prepared in accordance with GAAP and certified by the chief
financial officer of CTG (subject to year-end adjustments and the absence of
footnotes);
(e) Simultaneously with the delivery of the financial
statements referred to above for each Fiscal Year and each Fiscal Quarter of the
Borrowers, a certificate of the chief financial officer of CTG in substantially
the form of Exhibit K hereto (a "Compliance Certificate") (i) certifying that to
the best of his knowledge no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is continuing,
a statement as to the nature thereof and the action which is proposed to be
taken with respect thereto, (ii) with computations set forth in reasonable
detail satisfactory to the Lenders which demonstrate compliance with the
covenants contained in Article 8, (iii) with a schedule listing all Liens of
which they have knowledge on the assets of the Borrowers and their Subsidiaries
which are in addition to those in favor of the Agent and Lenders or those listed
on Schedule 5.16 hereto; and (iv) with a schedule listing all environmental
matters of the type described in Section 5.16 which are in addition to those
listed on Schedule 5.16 hereto if the aggregate amount of all liabilities,
losses, damages, costs and expenses of such additional environmental matters,
including but not limited to clean-up or remediation costs, is estimated to
exceed an aggregate amount of $500,000;
(f) As soon as available and in any event within 17 days
after the end of each Fiscal Month, consolidated cash flow projections for the
Borrowers and their Subsidiaries (including all Foreign Subsidiaries), prepared
in accordance with GAAP (subject to year-end
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adjustments and the absence of footnotes), for the 13-week period commencing at
the end of such Fiscal Month;
(g) Promptly after the commencement thereof, notice of
all actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
against any of the Borrowers or any of their Subsidiaries which, if determined
adversely to the Borrowers or their Subsidiaries, could reasonably be expected
to have a Material Adverse Effect;
(h) As soon as possible and in any event within 3 days
after the occurrence of each Default or Event of Default, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrowers with respect thereto;
(i) Promptly after the receiving thereof, copies of all
reports and notices which the Borrowers or any of their Subsidiaries receives
from the PBGC or the U.S. Department of Labor under ERISA; and as soon as
possible and in any event within 10 days after the Borrowers or any of their
Subsidiaries know or have reason to know that any Reportable Event or Prohibited
Transaction has occurred with respect to any Plan or that the PBGC or the
Borrowers or any of their Subsidiaries have instituted or will institute
proceedings under Title IV of ERISA to terminate any Plan, the Borrowers will
deliver to each of the Lenders a certificate of the chief financial officer of
CTG setting forth details as to such Reportable Event or Prohibited Transaction
or Plan termination and the action the Borrowers propose to take with respect
thereto;
(j) Within 90 days of the end of each Fiscal Year, a
forecast of the balance sheet, income statement and statement of cash flows for
the then current Fiscal Year of the Borrowers and their Subsidiaries in a form
reasonably acceptable to the Agent and prepared by management and computed in
accordance with GAAP;
(k) Contemporaneously with the filing, copies of all
material and reports filed with the Securities and Exchange Commission; and
(l) Such other information respecting the condition or
operations, financial or otherwise, of the Borrowers or any of their
Subsidiaries as the Agent at the request of any Lender may from time to time
reasonably request.
Section 6.09. Special Periodic Reports. The Borrowers shall execute and
deliver to the Agent the following documents compiled as of the last day of the
applicable fiscal period, and the Borrowers acknowledge that the Agent and the
Lenders will rely on such documents in making loans hereunder:
(a) Within 10 days after the last Banking Day of each
week, weekly updates in form reasonably satisfactory to the Agent and covering
such matters as the Agent may reasonably request, including without limitation,
weekly measurements of utilization and billed hours, all as of the end of such
week
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(b) Monthly (or with such greater frequency as the Agent
may request), within 17 calendar days after the end of each Fiscal Month (or by
such other date as the Agent may specify in the event the Agent requests that
such information be provided more frequently than monthly):
(i) a declaration or statement of: (A) Accounts
(identifying both Qualified Domestic Accounts, Qualified Domestic Over
90 Day Accounts, Qualified Domestic Unbilled Accounts, Qualified UK
Accounts and ineligible Accounts), (B) sales, (C) aging of Accounts,
(D) aging of accounts payable, (E) approval or comments on the loan
reconciliation provided to the Borrowers by the Agent, and (F) an
accounts receivable reconciliation; all as of the last day of the
Fiscal Month then most recently ended and certified by the chief
financial officer of CTG and in form reasonably acceptable to the Agent
and computed in accordance with such procedures and principles as may
be reasonably acceptable to the Agent; and
(ii) a Borrowing Base Certificate.
(c) At the Agent's reasonable request, and within ten
(10) days of any such request, certified true copies of customer's invoices, or
the equivalent, for all services rendered;
(d) At the Agent's reasonable request, and within a
reasonable time period, certified true copies of all contracts, security
agreements, mortgages and other documents executed by the customers in
connection with all services rendered and any other information, reports,
reconciliations, Account debtor's addresses or documents the Agent may call upon
the Borrowers to submit from time to time; and
(e) Within 5 days after receipt thereof by the Borrowers,
copies of all account statements provided by any depository bank party to a
Lockbox Account Agreement or Blocked Account Agreement to the extent that such
bank is not then obligated to provide such statements directly to the Agent
pursuant to the terms of such Lockbox Account Agreement or Blocked Account
Agreement.
The failure by the Agent or the Lenders to request any or all of the foregoing
or the failure of the Borrowers to perform the same shall not affect the
security interest of the Agent or the Lenders in or rights to any of the
Collateral. The pledge and assignment of each Account under the Security
Agreement or the UK Security Agreement, as applicable, shall constitute and be a
transaction separate from and independent of each other, but all such
transactions shall be subject to and governed by each and every one of the terms
and provisions of this Agreement. In addition to any and all representations and
warranties contained in any such documents or otherwise made or deemed to be
made hereunder or in connection herewith by the Borrowers with respect thereto,
the delivery by the Borrowers of each of the documents set forth in Section
6.09(a) and (b) shall be deemed to constitute a representation by the Borrowers
that the representation and warranty set forth in Section 5.08 is true and
correct as of the date that each such document is delivered.
Section 6.10. Reports on Disputes and Federal Contracts. The Borrowers
shall notify the Agent:
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(a) within ten days after any Borrower's acquiring
knowledge of the occurrence of any material dispute or claim involving Accounts
in the amount of $500,000 for any one Account or $1,000,000 in the aggregate for
all Accounts; and
(b) immediately in writing of each Account which arises
out of contracts with the United States of America or any department, agency, or
instrumentality thereof.
Section 6.11. Field Audits. The Borrowers will permit the Agent to
conduct field audit examinations of, among other things, the Borrowers' and
their Subsidiaries' assets, liabilities, books, records, billing and collection
processes and management information systems once each Fiscal Quarter; provided
further that the Borrowers will permit the Agent to conduct such examinations at
any time and with any reasonable frequency upon the occurrence and during the
continuance of a Default or Event of Default. The Borrowers will reimburse the
Agent for the expense of each field audit examination at a rate per person per
day equal to the prevailing rate then charged by the Agent for performing
comparable field audit examinations, plus reasonable out-of-pocket expenses. In
connection with such field audits, the Borrowers will permit the Agent to make
test verifications of the Accounts with the Borrowers' and their Subsidiaries'
customers.
Section 6.12. Cooperation and Further Assurance. At all times until the
Loans are repaid in full, the Borrowers shall, and shall cause each of their
Subsidiaries to, cooperate with the Agent and the Lenders to effectuate the
intent and purposes of the Facility Documents. Without limiting the foregoing,
the Borrowers agree to execute and deliver any financing statements or other
instruments and do such other acts and things, as Agent may reasonably deem
necessary or advisable to effectuate the intent and purposes of this Agreement,
and shall cause their Subsidiaries to do likewise.
Section 6.13. Deposits Into Collection Account. The Borrowers shall
remit immediately to the Agent upon receipt, and shall hold in trust for the
Agent and the Lenders until so remitted, any and all moneys received from any
source for deposit into the Collection Account, including without limitation any
proceeds from any equity investment or extraordinary transaction. The Borrowers
shall take all actions necessary to maintain, preserve and protect the rights
and interests of the Agent with respect to all cash deposits of the Borrowers
and all other proceeds of Collateral and shall not, without the Agent's prior
written consent, open any deposit or other bank account.
Section 6.14. Cash Management System. The Borrowers shall establish and
maintain a cash management system pursuant to the terms of Schedule 6.14 hereto
and shall comply in all respects with Schedule 6.14.
Section 6.15. Certain Obligations Respecting Foreign and Inactive
Subsidiaries. In the event that the Agent at any time determines in its
reasonable discretion that a Foreign Subsidiary not theretofore deemed to be a
material Subsidiary has become a material Subsidiary or that an Inactive
Subsidiary is engaged in any business or activity or owns assets having a total
book value of $250,000 or more in the aggregate (other than intercompany
receivables reflected on the books of such Inactive Subsidiaries as to which no
cash has been or will be paid by the Borrowers or any Subsidiary to such
Inactive Subsidiaries), as soon as possible but in any event
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no later than fifteen (15) days after receipt of written notice from the Agent
as to such determination, the Borrowers shall (a) in the case of a Foreign
Subsidiary, execute and deliver to the Agent such pledge agreements and take
such other action (including delivery to the Agent of the certificates
representing such shares) as shall be necessary to create and perfect valid and
enforceable First Priority Liens in favor of the Agent on 65% of the issued and
outstanding stock of such Subsidiary and deliver to the Agent such proof of
corporate action, incumbency certificates and opinions of counsel as are
consistent with those delivered under Section 4.01 with respect to those Foreign
Subsidiaries whose stock is pledged to the Agent on the Effective Date, all of
the foregoing to be in form and substance satisfactory to the Agent, and (b) in
the case of an Inactive Subsidiary, without in any way limiting the Borrowers'
obligation to obtain the consent of the Lenders with respect to such
Subsidiary's engaging in such business or activity or ownership of such assets,
take or cause to be taken the actions set forth in Section 7.09(b)(i) and (ii)
with respect to such Subsidiary
Section 6.16. Blackrock Provident Investment Account. Within 30 days
after the Effective Date, the Borrowers shall close the Borrowers' investment
account at Blackrock Provident Institutional Funds and deliver to the Agent a
copy of the final account statement with respect to such account evidencing the
closing of such account and the matters specified in Section 4.01(y).
ARTICLE 7. NEGATIVE COVENANTS
So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Revolving Credit Commitment under this
Agreement, each of the Borrowers covenants and agrees that it shall not (unless
waived in accordance with the provisions of Section 12.01 hereof):
Section 7.01. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any Subsidiary to sell, lease, assign, transfer
or otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of any
Subsidiary, receivables and leasehold interests); except: (a) for inventory
disposed of, or other assets consumed, in the ordinary course of business; (b)
any sale, lease, assignment or other transfer by any Borrower of its assets to
any other Borrower; (c) any sale or other disposition of assets no longer used
or useful in the conduct of its business; and (d) any other sale, lease,
assignment, or other transfer of assets by any Borrower or any Subsidiary
following the Agent's receipt of the Compliance Certificate and corresponding
financial statements required to be delivered by the Borrowers pursuant to
Sections 6.08(e) and (b) for the Fiscal Quarter ended June 29, 2001, provided
that (i) such Compliance Certificate and financial statements demonstrate that
the Borrowers are in compliance with the covenants set forth in Article 8, (ii)
the aggregate value of such assets, together with all assets of the type
described in clause (c) above, shall not exceed $250,000 during any fiscal year
and (iii) 100% of the Net Cash Payments from such sale, lease, assignment or
other transfer are utilized by the Borrowers or their Subsidiaries to replace
the property disposed of within 90 days of such sale, lease, assignment or other
transfer.
Section 7.02. Stock of Subsidiaries, Etc. Sell or otherwise dispose of
any shares of capital stock of any Subsidiary, or permit any Subsidiary to do
so, except in connection with a
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transaction permitted under Section 7.03, or permit any such Subsidiary to issue
any additional share of its capital stock, except (a) directors' qualifying
shares, and (b) the issuance of shares by any Subsidiary to any Borrower,
provided that such Borrower shall forthwith deliver to the Agent pursuant to the
applicable Security Documents the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank, and shall take such other
action as the Agent shall request to create a valid and enforceable First
Priority Lien on such shares pursuant to such Security Documents.
Section 7.03. Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or permit any Subsidiary to do so, except
that (a) any Borrower may merge into any other Borrower (so long as CTG is the
surviving corporation of any merger involving CTG) and (b) any Borrower may
transfer assets to any other Borrower.
Section 7.04. Dividends. Without the prior written consent of the
Lenders in accordance with Section 12.01, take or permit any Subsidiary to take
any of the following actions: (a) declare or pay any dividends, (b) purchase,
redeem, retire or otherwise acquire for value any of its capital stock now or
hereafter outstanding, or make any distribution of assets to its stockholders as
such whether in cash, assets or in obligations of the Borrowers or any
Subsidiary, (c) allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption or retirement of
any shares of its capital stock, or (d) make any other distribution by reduction
of capital or otherwise in respect of any shares of its capital stock or permit
any Subsidiary to purchase or otherwise acquire for value any stock of the
Borrowers or another Subsidiary, except that:
(i) CTG may declare and deliver dividends and make
distributions payable solely in common stock of CTG;
(ii) CTG may purchase or otherwise acquire shares of its
capital stock from employees or directors in connection with the termination of
their employment or affiliation with CTG, provided that the aggregate cash
consideration paid by CTG to all such employees and directors for such shares
does not exceed $500,000 during any fiscal year;
(iii) Any Subsidiary may declare and deliver dividends or
other distributions directly to any Borrower;
(iv) any Foreign Subsidiary of CTG Europe may declare and
deliver dividends to CTG Europe, provided that, in the case of any dividend by
CTG (UK) Ltd, (i) immediately upon its receipt of any such dividend, CTG Europe
shall distribute the entire amount thereof (except for any portion thereof
required to pay any franchise or like fee then due and payable by CTG Europe
under applicable law in order to maintain its legal existence) to a Borrower and
(ii) at the time of and after giving effect to any such dividend, the Borrowers
shall be in compliance with Section 7.16; and
(v) CTG may purchase or otherwise acquire shares of its
capital stock from employees as consideration for the contemporaneous issuance
by CTG of shares of its capital
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stock to such employees in connection with the exercise of stock options held by
such employees, provided that no cash payments are made by CTG or any other
Borrower in connection with any such transaction.
Section 7.05. Liens. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
except (the following being called "Permitted Liens"):
(a) Liens in favor of the Agent on behalf of the Lenders
securing the Loans hereunder;
(b) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or, if due and payable, if they are
being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business which
are not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance
of bids, tenders, contracts (other than contracts for the payment of money),
leases (permitted under the terms of this Agreement), public or statutory
obligations, surety, stay, appeal, indemnity, performance or other similar
bonds, or other similar obligations arising in the ordinary course of business;
(f) Judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;
(g) Easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower or any of its Subsidiaries of
the property or assets encumbered thereby in the normal course of its business
or materially impair the value of the property subject thereto;
(h) Liens in existence on the Effective Date and listed
on Schedule 5.06 hereto; or
(i) Liens on fixed or capital assets, including real or
personal property, acquired, constructed or improved by any Borrower, provided
that (A) such Liens secure Indebtedness (including Capitalized Leases) permitted
by Section 7.11(b), (B) such Liens and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement or were in effect at the time the Borrowers
acquired the assets or stock, (C) the Indebtedness secured thereby does not
exceed the cost of
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acquiring, constructing or improving such fixed or capital assets and reasonable
costs of collection in connection therewith, (D) such security interests shall
not apply to any other property or assets of any Borrower; and (E) the Borrowers
shall be in compliance with Article 8 of this Agreement after giving effect to
such transactions.
Section 7.06. Transactions with Affiliates. Except as expressly
permitted by this Agreement, take any of the following actions or permit any
Subsidiary to take any of the following actions: (a) make any loan, advance or
investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any property to an Affiliate; (c) merge into or consolidate with an
Affiliate, or purchase or acquire property from an Affiliate; or (d) enter into
any other transaction directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, guarantees and assumptions of
obligations of an Affiliate); provided that the Borrowers may engage in and
continue the transactions with or for the benefit of Affiliates which are
described in Schedule 7.06 so long as the terms of such transactions are not
less favorable to the Borrowers than the terms of a commercially reasonable,
arms' length transaction between non-affiliated parties.
Section 7.07. Hazardous Materials . Use, generate, treat, store,
dispose of or otherwise introduce, or permit any Subsidiary to use, generate,
treat, store, dispose of or otherwise introduce, any Hazardous Materials into or
on any real property owned or leased by any of them and will not cause, suffer,
allow or permit anyone else to do so, except in compliance with all applicable
Environmental Laws.
Section 7.08. Acquisitions. Make or permit any Subsidiary to make any
Acquisition.
Section 7.09. Subsidiaries. Create, or permit any Subsidiary to create,
any Subsidiary after the date hereof unless the Borrowers shall (a) have
obtained the Agent's prior written consent and (b) as soon as possible but in
any case not later than fifteen (15) days subsequent to the creation of such
Subsidiary (i) cause such Subsidiary (other than a Foreign Subsidiary) to (x)
execute and deliver to the Agent a counterpart to this Agreement (and thereby to
become a party to this Agreement, as a "Borrower" hereunder), a counterpart to
the Security Agreement, a counterpart to the Pledge Agreement and such other
documentation in such form as the Lenders may reasonably require, (y) take such
other action as shall be necessary to create and perfect valid and enforceable
First Priority Liens in favor of the Agent on all or substantially all of the
assets of such Subsidiary consistent with the provisions of the applicable
Security Documents and (z) deliver proof of corporate action, incumbency of
officers and other documents and opinions as is consistent with those delivered
by each Borrower pursuant to Section 4.01 as of the Effective Date and (ii)
execute and deliver to the Agent such amendments to the Pledge Agreement or such
new pledge agreements and take such other actions (including delivering the
certificates representing such shares of stock to the Agent) as shall be
necessary to create and perfect valid and enforceable First Priority Liens in
favor of the Agent on all of the issued and outstanding stock of such Subsidiary
(other than a Foreign Subsidiary) and (iii) execute and deliver to the Agent
such pledge agreements and take such other action (including delivery of the
certificates representing such shares to the Agent) as shall be necessary to
create and perfect valid and enforceable First Priority Liens in favor of the
Agent on 65% of the issued and outstanding stock of any such Subsidiary which is
a Foreign Subsidiary (unless the Agent has determined in its reasonable
discretion that such Foreign Subsidiary is not a material Subsidiary)
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and deliver to the Agent such proof of corporate action, incumbency certificates
and opinions of counsel as are consistent with those delivered under Section
4.01 with respect to those Foreign Subsidiaries whose stock is pledged to the
Agent on the Effective Date, all of the foregoing to be in form and substance
satisfactory to the Agent.
Section 7.10. Certain Investments. Make or permit to remain
outstanding, or permit any Subsidiary to make or permit to remain outstanding,
any loans, advances, capital contributions or investments of any kind in or make
any distributions of cash or other assets of any kind to any other Person,
except that (a) any Borrowers may make loans to or investments in any other
Borrower, (b) any Borrower may make loans to a Foreign Subsidiary to the extent
(but only to the extent) permitted by Section 7.11(f), (c) any Foreign
Subsidiary may make loans to any Borrower to the extent (but only to the extent)
permitted by Section 7.11(g) and (d) the Borrowers and their Subsidiaries may
continue to own their existing equity investments in their respective
Subsidiaries, to the extent (but only to the extent) such investments are
outstanding as of the date of this Agreement.
Section 7.11. Indebtedness. Create, incur, assume or suffer to exist,
or permit any Subsidiary to create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement or
the Notes;
(b) other Indebtedness of the Borrowers (determined on a
consolidated basis without duplication in accordance with GAAP) consisting of
Capitalized Leases and/or secured by Liens permitted under Section 7.05(i), in
an aggregate principal amount at any time outstanding not in excess of
$1,000,000 at any one time outstanding, provided that the Borrowers shall be in
compliance with Article 8 of this Agreement after giving effect to such
transactions;
(c) Subordinated Indebtedness;
(d) Trade debt incurred in the ordinary course of
business;
(e) Indebtedness existing on the date hereof which is set
forth on Schedule 7.11 annexed hereto and has been designated on such schedule
as Indebtedness that will remain outstanding following the funding of the
initial Loans;
(f) Indebtedness of the Foreign Subsidiaries to the
Borrowers, provided that (i) the aggregate principal amount of all Indebtedness
of the Foreign Subsidiaries to the Borrowers does not exceed $500,000 in the
aggregate at any one time outstanding and (ii) no such Indebtedness shall remain
outstanding for more than 45 days after the date on which it is incurred; and
(g) Indebtedness of the Borrowers to the Foreign
Subsidiaries, provided that (i) such Indebtedness shall be unsecured, (ii)
subject to the terms of Section 7.17 and the Affiliate Subordination Agreement,
no such Indebtedness shall remain outstanding for more than 45 days after the
date on which it is incurred, (iii) no such Indebtedness shall accrue interest
at a rate exceeding the then prevailing market rate for loans made in arms'
length transactions between non-affiliated parties and (iv) such Indebtedness
shall be subordinated to the Obligations pursuant to the Affiliate Subordination
Agreement.
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Section 7.12. Guarantees, Etc. Except as set forth in Section 5.18 or
otherwise expressly permitted by Section 7.06 assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any Subsidiary to assume, guarantee, endorse or otherwise be or become directly
or contingently responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, assets, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except (a) guarantees by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business and (b) guarantees by any Subsidiary of Indebtedness of the
Borrowers permitted hereunder.
Section 7.13. Subordinated Indebtedness. Purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make, or permit any Subsidiary to do any of the foregoing in
respect of any voluntary payment or prepayment of the principal of or interest
on, or other amount owing in respect of, any Subordinated Indebtedness.
Section 7.14. Restrictive Agreements. Enter into, incur or permit to
exist, or permit any Subsidiary to enter into, incur or permit to exist, any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets in favor of
the Agent or the Lenders, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Borrowers or the ability of the
Guarantors to Guarantee Indebtedness of the Borrowers; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.14 hereto (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition) and (iii) clause (a)
of the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted to be incurred by the
Borrowers or their Subsidiaries under the terms of this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness.
Section 7.15. Special Restrictions on Foreign Subsidiaries and Inactive
Subsidiaries. Notwithstanding anything herein to the contrary, take any of the
following actions or permit any Subsidiary to take any of the following actions:
(a) make any loan, advance, capital contribution or investment in a Foreign
Subsidiary or an Inactive Subsidiary; (b) transfer, sell, lease, assign or
otherwise dispose of any property to a Foreign Subsidiary or an Inactive
Subsidiary; (c) merge into or consolidate with a Foreign Subsidiary or an
Inactive Subsidiary, or purchase or acquire property from a Foreign Subsidiary
or an Inactive Subsidiary; (d) enter into any other transaction directly or
indirectly with or for the benefit of a Foreign Subsidiary or an Inactive
Subsidiary; or (e) permit any Inactive Subsidiary to engage in any business or
activity of any kind or own assets having a total book value in excess of
$250,000 in the aggregate (other than intercompany receivables reflected on the
books of such Inactive Subsidiaries as to which no cash has been or will be paid
by the Borrowers or any Subsidiary to such Inactive Subsidiaries); provided that
(i) the Borrowers may make loans to Foreign Subsidiaries to the extent (but only
to the extent)
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permitted by Section 7.11(f) and (ii) the Foreign Subsidiaries may make loans to
the Borrowers to the extent (but only to the extent) permitted by Section
7.11(g).
Section 7.16. CTG Europe. Notwithstanding anything herein to the
contrary, permit CTG Europe to (a) engage in any business or activity other than
holding title to all of the capital stock or other equity interests of its
existing Subsidiaries as of the date hereof as set forth on Schedule 5.10, (b)
hold any assets except for the capital stock or other equity interests of its
existing Subsidiaries as of the date hereof as set forth on Schedule 5.10, or
(c) incur or permit to exist any Indebtedness or other liabilities (other than
under the Facility Documents), assume or Guarantee any Indebtedness of any other
Person or create, incur, assume or permit to exist any Liens on any or all of
its assets (other than the Liens created under the Facility Documents).
Section 7.17. Payments on Foreign Subsidiary Loans. Make or permit any
Subsidiary to make any payment or prepayment of principal of, premium, if any,
or interest on, or redemption purchase, retirement, defeasance (including
economic or legal defeasance), sinking fund or similar payment with respect to
any Indebtedness of a Borrower to a Foreign Subsidiary permitted under Section
7.11(g), provided that so long as no Default or Event of Default shall have
occurred and be continuing and no Default or Event of Default shall be caused
thereby, any Borrower may repay the principal amount of any such Indebtedness in
accordance with Section 7.11(g), together with interest thereon at a per annum
rate not exceeding the rate permitted by Section 7.11(g).
ARTICLE 8. FINANCIAL COVENANTS
So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Revolving Credit Commitment under this
Agreement:
Section 8.01. Minimum EBITDA. The Borrowers will not permit EBITDA of
the Borrowers and their Subsidiaries (determined on a consolidated basis in
accordance with GAAP) as of each Quarterly Date set forth below, calculated for
the four Fiscal Quarters of the Borrowers ended on such Quarterly Date, to be
less than the amount set opposite such Quarterly Date below:
QUARTERLY DATE EBITDA
-------------- ------
March 30, 2001 $5,000,000
June 29, 2001 $7,000,000
September 28, 2001 $8,800,000
Section 8.02. Total Funded Debt/ EBITDA Ratio. The Borrowers shall not
permit the Total Funded Debt/EBITDA Ratio for the period of four consecutive
Fiscal Quarters ending on December 31, 2001 to exceed 4.00 to 1.00.
Section 8.03. Maximum Days in Receivables. The Borrowers shall not
permit the Days in Receivables as of the end of any Fiscal Month to exceed 90.
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ARTICLE 9. EVENTS OF DEFAULT
Section 9.01. Events of Default. Any of the following events shall be
an "Event of Default":
(a) The Borrowers shall fail to pay any principal of or
interest on the Loans or any Reimbursement Obligation or any fee or other amount
due hereunder when the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof, by acceleration of such
due or prepayment date, or otherwise;
(b) Any representation or warranty made or deemed made by
the Borrowers or any of their Subsidiaries in this Agreement or in any other
Facility Document or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Facility Document shall prove to have been incorrect in any material respect
on or as of the date made or deemed made;
(c) The Borrowers or any of their Subsidiaries shall fail
to perform or observe (i) any of the covenants set forth in Sections 6.01, 6.06
through 6.09, 6.11, 6.13 or 6.14 or in Articles 7 or 8, or (ii) any term,
covenant or agreement contained in this Agreement (other than those referred to
elsewhere in this Section 9.01) or fail to perform or observe any term, covenant
or agreement on its part to be performed or observed in any other Facility
Document, and, in the case of this clause (ii), such failure shall continue for
30 consecutive days after notice of such failure shall have been made to the
Borrowers by the Agent at the request of the Required Lenders;
(d) Any Borrower or any Subsidiary shall: (i) fail to
make any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness of the Borrowers or such Subsidiary when
due (whether by scheduled maturity, required prepayment, demand or otherwise);
or (ii) fail to perform or observe any term, covenant or condition on its part
to be performed or observed under any agreement or instrument relating to any
such Material Indebtedness, when required to be performed or observed, if the
effect of such failure to pay, perform or observe is to accelerate the maturity
of such Material Indebtedness (or, after the giving of applicable notice or
passage of time, or both, to permit the acceleration of the maturity of such
Material Indebtedness), or any such Material Indebtedness shall be declared to
be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(e) Any Borrower or any Subsidiary: (i) shall generally
not, or be unable to, or shall admit in writing its inability to, pay its debts
as such debts become due; or (ii) shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a custodian,
receiver or trustee for it or a substantial part of its assets; or (iii) shall
commence any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (iv) shall have had any
such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of 60 days or more; or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence
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in any such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any substantial part
of its property; or (vi) shall suffer any such custodianship, receivership or
trusteeship to continue undischarged for a period of 45 days or more;
(f) One or more judgments, decrees or orders for the
payment of money in excess of $750,000 in the aggregate shall be rendered
against any Borrower or any Subsidiary and such judgments, decrees or orders
shall continue unsatisfied and in effect for a period of 45 consecutive days
without being vacated, discharged, satisfied or stayed or bonded pending appeal;
(g) Any of the following events shall occur or exist with
respect to any Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; or (ii) any Reportable Event shall occur with respect to any
Plan; or (iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; or (iv) any event or
circumstance exists which might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of, or for
the appointment of a trustee to administer, any Plan, or the institution by the
PBGC of any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of any Multiemployer Plan; and in each case above,
such event or condition, together with all other events or conditions, if any,
could subject the Borrower to any tax, penalty, or other liability to a Plan,
Multiemployer Plan, the PBGC, or otherwise (or any combination thereof) which in
the aggregate exceed or may exceed $500,000;
(h) Any Change of Control shall occur;
(i) The Security Documents shall at any time or for any
reason cease: (i) to create a valid and perfected security interest or lien in
and to the property purported to be subject to the same; or (ii) to be in full
force and effect or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto or any party
thereto shall deny it has any further liability or obligations to the secured
parties thereunder;
(j) Any Facility Document shall at any time or for any
reason cease to be in full force and effect or shall be declared null and void,
or the validity or enforceability thereof shall be contested by any Borrower or
any Subsidiary, or any Borrower or any Subsidiary shall deny it has any further
liability or obligations thereunder; or
(k) The Agent shall have reasonably determined that an
event or condition has occurred which has had, or which could be expected to
have, a Material Adverse Effect.
Section 9.02. Remedies. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Lenders, by a written
notice to the Borrowers: (a) declare the Revolving Credit Commitments to be
terminated, whereupon the same shall forthwith terminate, and (b) declare the
outstanding principal of the Loans, all interest thereon and all other amounts
payable under this Agreement and the Loans to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
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forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided that, in the case of an Event of Default referred to in Section 9.01(e)
above, the Revolving Credit Commitments shall be immediately terminated, and the
Loans, all interest thereon and all other amounts payable under this Agreement
and the Notes shall be immediately due and payable without notice, presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrowers. Further, upon the occurrence and during the
continuance of an Event of Default, the Agent, acting on behalf of and at the
direction of the Required Lenders (and subject to the provisions of Section
11.17), may then exercise any and all rights and remedies available under the
Facility Documents or at law or in equity.
ARTICLE 10. GUARANTY
Section 10.01. The Guarantee. The initial Guarantors as of the
Effective Date, and each other Person who may from time to time become a
Guarantor hereunder, hereby jointly and severally guarantees to each Lender and
the Agent and its respective successors and assigns the prompt payment in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the Borrowers, all
fees and other amounts from time to time owing from the Borrowers to the Lenders
hereunder, and all other Obligations of the Borrowers and each of their
Subsidiaries under the Facility Documents (such obligations being herein
collectively called the "Guaranteed Obligations"). Each Guarantor hereby further
agrees that if the Borrowers or any Subsidiary shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, such Guarantor shall promptly pay the same upon demand
therefor by the Agent or the Lenders, without any further demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
Section 10.02. Obligations Unconditional. The obligations of each
Guarantor under Section 10.01 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of this Agreement,
the other Facility Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 10.02 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not, to the extent permitted by applicable law, alter or
impair the liability of each Guarantor and each other Guarantor under this
Article 10 which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to
such Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
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(b) any of the acts mentioned in any of the provisions
hereof or of the other Facility Documents or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under the
other Facility Documents or any other agreement or instrument referred to herein
or therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor
of, the Agent or the Lenders as security for any of the Guaranteed Obligations
shall fail to be perfected.
Each Guarantor hereby expressly waives, to the extent permitted by applicable
law, diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or the Lenders exhaust any right,
power or remedy or proceed against the Borrowers hereunder or under the other
Facility Documents or any other agreement or instrument referred to herein or
therein, or against any other Person under other guarantee of, or security for,
any of the Guaranteed Obligations.
Section 10.03. Reinstatement. The obligations of each Guarantor under
this Article 10 shall be automatically reinstated if and to the extent that for
any reason any payment in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, and each Guarantor agrees that it will indemnify the Agent and each
Lender on demand for all reasonable costs and expenses (including reasonable
fees and expenses of counsel) incurred by the Agent or any Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
Section 10.04. Subrogation. Unless and until all of the Loans have been
repaid in full and the Revolving Credit Commitments have been irrevocably
terminated, no Guarantor shall have any rights of subrogation, whether arising
by contract or operation of law (including, without limitation, any such right
arising under the Federal Bankruptcy Code of 1978, as amended) or otherwise by
reason of any payment by it pursuant to the provisions of this Article 10.
Section 10.05. Remedies. Each Guarantor agrees that, as between such
Guarantor and the Lenders, the obligations of the Borrowers hereunder may be
declared to be forthwith due and payable as provided in Section 9.01 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9.01) for purposes of Section 10.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrowers and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable),
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such obligations (whether or not due and payable by the Borrowers) shall
forthwith become due and payable by such Guarantor for purposes of Section
10.01.
Section 10.06. Instrument for the Payment of Money. Each Guarantor
hereby acknowledges that the guarantee in this Article 10 constitutes an
instrument for the payment of money, and consents and agrees that the Agent and
the Lenders, in the event of a dispute by any Guarantor in the payment of any
moneys due hereunder, shall have the right to summary judgment or such other
expedited procedure as may be available for a suit on a note or other instrument
for the payment of money.
Section 10.07. Continuing Guarantee. The guarantee in this Article 10
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 10.08. General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 10.01
would otherwise, taking into account the provisions of Section 10.08, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section
10.01, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by any Guarantor, any
Lender, the Agent or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
Section 10.09. Specific Limitation on Guarantee Obligations of CTG (UK)
Ltd.. Notwithstanding anything in this Article 10 to the contrary, the liability
of CTG (UK) Ltd. under this Article 10 shall not exceed the sum of (i) all
Guaranteed Obligations up to but not exceeding $5,000,000 in principal amount in
the aggregate plus, without limitation as to the amounts thereof, (ii) all
interest, banking charges, commissions, fees, costs and expenses chargeable to
the Borrowers in respect of such Guaranteed Obligations, and (iii) all interest
and other costs and expenses payable by the Guarantor pursuant to Section 12.03
hereof. Each payment made by the Guarantor hereunder that is applied against the
Guaranteed Obligations shall reduce such liability by a like amount.
ARTICLE 11. THE AGENT; RELATIONS AMONG LENDERS AND BORROWER
Section 11.01. Appointment, Powers and Immunities of Agent. Each Lender
hereby irrevocably (but subject to removal by the Required Lenders pursuant to
Section 11.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee for any Lender. The Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrowers or any officer or official of the Borrowers or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any
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of them under, this Agreement or any other Facility Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Facility Document or any other document or
instrument referred to or provided for herein or therein, for the perfection or
priority of any collateral security for the Loans, or for any failure by the
Borrowers to perform any of their obligations hereunder or thereunder. The Agent
may employ agents and attorneys-in-fact and shall not be responsible, except as
to money or securities received by it or its authorized agents, for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither the Agent nor any of its directors, officers,
employees or agents shall be liable or responsible for any action taken or
omitted to be taken by it or them hereunder or under any other Facility Document
or in connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
Section 11.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram, telecopier or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Lender as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Lender shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Lender. As to any matters not expressly
provided for by this Agreement or any other Facility Document, the Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Lenders, and
such instructions of the Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and any other holder of
all or any portion of any Loan.
Section 11.03. Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to Section 11.08) take such action with respect to such Default
or Event of Default which is continuing as shall be directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders; and provided further that the Agent shall not
be required to take any such action which it determines to be contrary to law.
Section 11.04. Rights of Agent as a Lender. With respect to any
Revolving Credit Commitment and the Loans made by it, the Agent in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as the
Agent, and the term "Lenders" shall, unless the context otherwise indicates,
include the Agent in its capacity as a Lender. The Agent and its Affiliates
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may (without having to account therefor to any Lender) accept deposits from,
lend money to (on a secured or unsecured basis), and generally engage in any
kind of banking, trust or other business with, the Borrowers (and any of their
Affiliates) as if it were not acting as the Agent, and the Agent may accept fees
and other consideration from the Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Although the Agent and its Affiliates may in the course of such relationships
and relationships with other Persons acquire information about the Borrowers,
their Affiliates and such other Persons, the Agent shall have no duty to
disclose such information to the Lenders.
Section 11.05. Indemnification of Agent. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03 or under the
applicable provisions of any other Facility Document, but without limiting the
obligations of the Borrower under Section 12.03 or such provisions), ratably in
accordance with the aggregate unpaid principal amount of the Loans made by the
Lenders (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Revolving Credit
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, any
other Facility Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrowers are obligated to pay
under Section 12.03 or under the applicable provisions of any other Facility
Document but excluding, unless a Default or Event of Default has occurred,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.
Section 11.06. Documents. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender.
Section 11.07. Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and their
Subsidiaries and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or any other Facility Document. The Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrowers of this Agreement or any other Facility Document or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Borrowers or any Subsidiary. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrowers or any of their Subsidiaries
which may come into the possession of the Agent or any of its Affiliates. The
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Agent shall not be required to file this Agreement, any other Facility Document
or any document or instrument referred to herein or therein, for record or give
notice of this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, to anyone.
Section 11.08. Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 11.05 in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 11.09. Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers, and the Agent may be removed at any time with or without cause by the
Required Lenders; provided that the Borrowers and the other Lenders shall be
promptly notified thereof. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank which has an office in the United States. The Required Lenders
or the retiring Agent, as the case may be, shall upon the appointment of a
successor Agent promptly so notify the Borrower and the other Lenders. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
Section 11.10. Amendments Concerning Agency Function. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 11.11. Liability of Agent. The Agent shall not have any
liabilities or responsibilities to the Borrowers on account of the failure of
any Lender to perform its obligations hereunder or to any Lender on account of
the failure of the Borrowers to perform their obligations hereunder or under any
other Facility Document. The Agent shall have no liability to the Borrowers or
to any Lender by reason of any error in the computation of the Borrowing Base.
Section 11.12. Transfer of Agency Function. Without the consent of the
Borrowers or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrowers and the Lenders
thereof.
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Section 11.13. Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the Borrowers (any such party as
appropriate being the "Payor") prior to the date on which such Lender is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrowers are to
make payment to the Agent, as the case may be (either such payment being a
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment (and if such
recipients are the Borrowers and the Payor Lender fails to pay the amount
thereof to the Agent upon demand, the Borrowers) shall, on demand, repay to the
Agent the amount made available to the Borrowers together with interest thereon
for the period from the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period; provided further that as used
in this Section 11.13, "Required Payment" does not include any amounts due from
a Lender to the Agent which are to be settled on the next Settlement Date
pursuant to Section 2.14, but "Required Payment" shall include as of each
Settlement Date any amounts due from a Lender to the Agent as part of the
Settlement Amount to be paid on such Settlement Date pursuant to Section 2.14.
Section 11.14. Withholding Taxes. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Lender is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrowers is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the Agent Form
4224 or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of U.S. tax
with respect thereto. The Agent shall not be obligated to make any payments
hereunder to such Lender in respect of any Loan or such Lender's Revolving
Credit Commitment until such Lender shall have furnished to the Agent the
requested form, certification, statement or document.
Section 11.15. Several Obligations and Rights of Lenders. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 11.16. Pro Rata Treatment of Loans, Etc.
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(a) Each Lender shall at all times maintain a uniform,
and not a varying, undivided percentage of all rights and obligations under and
in respect of the Revolving Credit Commitments, Revolving Credit Loans and Term
Loans. The Revolving Credit Commitment Percentage of each Lender and the Term
Loan Percentage of each Lender shall be equivalent at all times.
(b) Except to the extent otherwise provided, (i) each
borrowing under Section 2.02 shall be made from the Lenders and each payment of
commitment fees accruing under Section 2.15 shall be made for the account of the
Lenders, pro rata according to the relative amounts of the Revolving Credit
Commitments of each Lender, (ii) each increase in the aggregate Revolving Credit
Commitments pursuant to Section 2.01(d) shall be allocated to the Lenders, pro
rata according to each Lender's Revolving Credit Commitment Percentage, (iii)
each prepayment and payment of principal of or interest on Revolving Credit
Loans shall be made for the account of the Lenders, pro rata according to each
Lender's proportionate share of the principal amount of all Revolving Credit
Loans then outstanding, and (iv) each prepayment and payment of principal of or
interest on the Term Loans shall be made for the account of the Lenders, pro
rata according to each Lender's Term Loan Percentage.
(c) If at any time insufficient funds are received by and
available to the Agent to pay fully all amounts of principal, Reimbursement
Obligations, interest and fees then due hereunder during, or as a result of the
exercise by the Agent or the Lenders of remedies under this Agreement, any of
the Security Documents or applicable law, subject to paragraph (b) of this
Section 11.16, such funds shall be applied to the payment of principal,
Reimbursement Obligations, interest, fees and other Obligations in such order as
the Agent may determine. If the Agent receives funds for application to the
Obligations under the Facility Documents under circumstances for which the
Facility Documents do not specify the Loans or other Obligations to which, or
the manner in which, such funds are to be applied, the Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
Loans then outstanding, in repayment or prepayment of such of the outstanding
Loans or other Obligations owed to such Lender, and for application to such
principal installments, as the Agent shall direct.
Section 11.17. Sharing of Payments Among Lenders. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including any receipt of proceeds from the Collection Account), it
shall promptly purchase from the other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans made by the
other Lenders in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders may exercise all rights
of setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise,
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and retain the benefits of exercising, any such right with respect to any other
indebtedness of the Borrower.
Section 11.18. Enforcement of Facility Documents. After the Agent has
received written notice from any Lender that an Event of Default has occurred
and is continuing, the Agent shall, subject to the other provisions of this
Article 11 and to the terms of the Facility Documents (and subject to the
rights, if any, of other persons holding liens on, security interests in or
claims to the Collateral which are prior to those of the Security Agreement),
take such steps toward collection or enforcement of any Facility Document and
the Collateral (or any portion thereof), including without limitation an action
to enforce the Security Agreements, as may be instructed in writing by the
Required Lenders, provided, however, that in no event shall the Agent be
required, and in all cases it shall be fully justified in failing or refusing,
to take any action under or pursuant to this Agreement (including without
limitation this Section 11.18) which, in the reasonable opinion of the Agent,
would be contrary to law or to the terms of this Agreement or any Facility
Document or would subject it or its officers, employees or directors to
liability, unless and until the Agent shall be indemnified or tendered security
to its satisfaction by the Lenders, ratably as provided in Section 11.05 hereof,
against any and all loss, cost, expense or liability in connection therewith,
anything herein or elsewhere contained to the contrary notwithstanding. Except
as expressly provided in this Section 11.18, the Agent shall not be required to
take steps toward the collection of any amounts becoming payable upon any
Collateral, or to take any action towards enforcing any Facility Document or to
institute, appear in or defend any action, suit or other proceeding in
connection therewith. The foregoing provisions of this paragraph shall not be
construed to limit the power of the Agent to take any action permitted under any
Facility Document to be taken by the Agent, and the Agent may, in accordance
with this agreement, take any aforesaid action without the receipt of indemnity
or security or any request therefor and the taking of any such action shall not
be construed as a waiver of any provision of this Agreement. Each Lender agrees
with the other Lenders and the Agent that (i) such Lender will not take any
action whatsoever to enforce any term or provision of any Facility Document or
otherwise to realize the benefits of the Collateral, except through the Agent in
accordance with this Agreement, and (ii) if the Required Lenders shall instruct
the Agent pursuant to this Section 11.18 to commence action to enforce any
Facility Document, such Lender (a) shall not thereafter commence any proceeding
of its own seeking payment of the Loans and/or any other Obligation held by such
Lender so long as such enforcement action is ongoing, and (b) if such a
proceeding shall be pending at the time such instructions are given to the
Agent, shall promptly (but in no event later than the commencement of such
enforcement action) cause such proceeding to be discontinued, provided that if
such Lender shall fail to discontinue such proceeding, the Agent is hereby
authorized and directed by such Lender and the other Lenders to commence and
maintain such foreclosure action on behalf of such other Lenders (excluding such
Lender) and any distribution of amounts required by this Agreement or the
Facility Documents shall be made only to such other Lenders and/or the Agent as
provided therein and, notwithstanding anything herein or in the Security
Agreement to the contrary, such Lender shall not be entitled to share therein.
Section 11.19. Borrowing Base Statements, Etc. The Agent shall provide
to the Lenders and the Borrowers, promptly following the Agent's receipt of the
Borrowers' reports required under Section 6.09(b), a copy of the computations of
the Borrowing Base made by the Agent on the basis of such reports in
substantially the same format which has been furnished to the Lenders as of the
date of this Agreement; provided, however, that the Agent shall not be liable to
the
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Lenders for the accuracy of any information contained in such statements. The
Agent shall provide to the Lenders each Borrowing Base Certificate promptly
after receipt thereof from the Borrowers.
ARTICLE 12. MISCELLANEOUS
Section 12.01. Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement or any of the other
Facility Documents may be amended or modified only by an instrument in writing
signed by the Borrowers, the Agent and the Required Lenders, or by the Borrowers
and the Agent acting with the consent of the Required Lenders and any provision
of this Agreement or the other Facility Documents for the benefit of the
Required Lenders or the Agent may be waived by the Required Lenders or by the
Agent acting with the consent of the Required Lenders; provided that no
amendment, modification or waiver shall
(a) increase the Revolving Credit Commitment of any
Lender without the written consent of such Lender and the Agent;
(b) reduce the principal amount of any Loan or
Reimbursement Obligation or reduce the rate of interest thereon (other than the
decision not to charge, or to cease to charge, interest at the Default Rate), or
reduce any fees payable hereunder, without the written consent of each Lender
directly affected thereby;
(c) postpone the scheduled date of payment of the
principal amount of any Loan or Reimbursement Obligation other than mandatory
prepayments of the Loans required under Section 2.05, or any interest thereon,
or any fees payable hereunder, or reduce the amount of any such payment, change
the maturity date of any Loan, or postpone the scheduled date of expiration of
any Revolving Credit Commitment, or extend the ultimate expiration date of any
Letter of Credit beyond the Revolving Credit Termination Date, without the
written consent of each Lender directly affected thereby;
(d) change any of the provisions of this Section 12.01 or
the definition of "Required Lenders", or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or under any other Facility Document or make any determination
or grant any consent hereunder or thereunder, without the written consent of
each Lender;
(e) release any material Guarantor from its obligations
in respect of its Guarantee under Article 10 or release all or substantially all
of the Collateral (or terminate all or substantially all of the Liens in favor
of the Agent on the Collateral), except as expressly permitted in this
Agreement, without the written consent of each Lender;
(f) modify the Borrowing Base to increase the advance
rate percentages applicable to any category of Collateral included therein, to
increase the Overadvance Amount, to add new categories of eligible Collateral or
to make less restrictive the eligibility criteria applicable to any category of
Collateral, without the written consent of each Lender and the Agent;
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(g) waive any Event of Default caused by reason of the
Borrowers' failure to comply with any covenant set forth in Article 8 or any
Event of Default under Section 9.01(a) arising from the Borrowers' failure to
make any principal payment required to be made on the maturity date of any Loan,
without the written consent of each Lender and the Agent; or
(h) amend any covenant set forth in Articles 6 or 7 or
any covenant set forth in Article 8 or the definition of any financial term used
in any such covenant in Article 8, without the written consent of each Lender
and the Agent;
provided, further, that any amendment of Article 11 hereof or any amendment
which increases the obligations of the Agent hereunder shall require the consent
of the Agent. No failure by any party (Agent, any Lender or the Borrowers) to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 12.02. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrowers under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Lender limiting rates of interest which may be charged or collected by such
Lender.
Section 12.03. Expenses; Indemnification. The Borrowers and the
Guarantors jointly and severally agree to pay, or to reimburse the Agent or the
Lenders, as applicable, for paying: (a) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel to the Agent, in connection with the preparation
and administration of this Agreement and the other Facility Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (b) all reasonable out-of-pocket expenses incurred by the Agent in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (b) all reasonable out-of-pocket
expenses incurred by the Agent or any Lender, including the reasonable fees,
charges and disbursements of any counsel for the Agent or any Lender, in
connection with the investigation, enforcement or protection of its rights in
connection with this Agreement and the other Facility Documents, including its
rights under this Section 12.03, or in connection with the Loans made or Letters
of Credit issued hereunder following a Default or Event of Default, including in
connection with any workout, restructuring or negotiations in respect thereof;
(c) all out-of-pocket costs, expenses and advances incurred by the Agent in the
protection of its security interests (including but not limited to reasonable
fees and out-of-pocket expenses incurred in perfection of, or checking the
status of such security interests and examinations to determine the value of
Accounts), (d) all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to this Agreement and the other Facility Documents, all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording, perfection or termination of any security
interest contemplated hereby or by any other Facility Document or any other
document referred to therein; and (e) the amount of any and all out-of-pocket
expenses which Agent may incur in
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connection with the collection of any item received by Agent in connection with
any Collateral, together with interest on any of the above from the date of such
expenditure to the date of repayment in full to Agent at the rate of interest
payable on the Notes. The Borrowers and the Guarantors agree to indemnify the
Agent and each Lender and their respective directors, officers, employees and
agents (each, an "Indemnified Party") from, and hold each of them harmless
against, any and all demands, losses, liabilities, claims, suits, actions, legal
or administrative proceedings, damages, costs or expenses (including the
reasonable fees and disbursements of counsel) asserted against, imposed on or
incurred by any of them arising out of or by reason of (i) any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or proposed use by the
Borrowers or any Subsidiary of the proceeds of the Loans, including without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of any Indemnified Party)
or (ii) the application of any Environmental Law to acts or omissions occurring
at any time on or in connection with any real estate owned or leased by the
Borrowers or any Subsidiary or any business conducted thereon. At its option,
Agent may charge such costs, expenses and amounts as a Revolving Credit Loan
pursuant to this Agreement.
Section 12.04. Survival. The obligations of the Borrowers
under Section 12.03 shall survive the repayment of the Loans and the termination
of the Revolving Credit Commitments.
Section 12.05. Assignment; Participations.
(a) Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or an undivided portion of all of its
Revolving Credit Commitment, Revolving Credit Loans and Term Loans and all Notes
held by it); provided, however, that (i) each such assignment shall be of a
uniform, and not a varying, undivided percentage of all rights and obligations
under and in respect of the Revolving Credit Commitments, Revolving Credit Loans
and Term Loans; (ii) except in the case of an assignment to a Person that,
immediately prior to such assignment, was a Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Revolving Credit Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000;
(iii) each such assignment shall be to an Eligible Assignee; (iv) no such
assignments shall be permitted without the consent of the Agent and the
Borrowers (not to be unreasonably withheld) except that if a Default or Event of
Default shall have occurred and be continuing, the consent of the Borrowers
shall not be required; and (v) the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in such Assignment and
Acceptance, (i) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (ii) the Lender assignor thereunder shall, to the extent that
rights and obligations
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hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or any
of their Subsidiaries or the performance or observance by the Borrowers or their
Subsidiaries of any of their obligations under any Facility Document or any
other instrument or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Sections 5.05 and 6.08(a) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to
in Section 12.06 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Revolving Credit Commitment and principal amount of the
Loans owing to each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any Note or Notes
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed and is in substantially the form of Exhibit K hereto, (i)
accept such Assignment and Acceptance; (ii) record the information contained
therein in the Register; and (iii) give prompt notice thereof to the
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Borrowers. In the case of any assignment by a Lender, within five Banking Days
after its receipt of such notice, the Borrowers, at their own expense, shall
execute and deliver to the Agent in exchange for the surrendered Notes, new
Notes to the order of such Eligible Assignee in amounts equal to the Revolving
Credit Commitment and Term Loans assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving Credit
Commitment or any Term Loans hereunder, new Notes to the order of the assigning
Lender in amounts equal to the Revolving Credit Commitment and Term Loans
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the forms of Exhibits A-1 and
A-2 hereto, respectively.
(f) Each Lender may sell participations to one or more
Persons (other than the Borrowers or any of their Affiliates) in or to all or
any portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Revolving Credit Commitments,
Revolving Credit Loans or Term Loans and any Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment) shall remain
unchanged; (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations; (iii) such Lender shall remain
the holder of any such Note for all purposes of this Agreement; (iv) the
Borrowers, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement; (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Facility Document, or any consent to any departure by the
Borrowers or any of their Subsidiaries therefrom, except to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral; and (vi) the identity of the
participant shall have been approved by the Agent in writing to such Lender.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
12.05, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree in writing to preserve the confidentiality of any confidential
information received by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
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Section 12.06. Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing and,
telecopied, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature page hereof or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 12.07. Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.08. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.09. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 12.10. Governing Law. Pursuant to Section 5-1401 of the New
York General Obligations Law, the whole of this Agreement and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with, the laws of the State of New York without regard to any
conflicts-of-laws rules which would require the application of the laws of any
other jurisdiction.
Section 12.11. Incorporation By Reference; Conflicts. The rights and
remedies of Agent and the Lenders under the other Facility Documents are
incorporated herein by reference and the rights and remedies of the Agent and
the Lenders under this Agreement and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.
Section 12.12. Jurisdiction, Venue and Service. For purposes of this
Agreement, each of the Borrowers and the Guarantors hereby irrevocably consents
and submits to the nonexclusive jurisdiction and venue of all federal and state
courts located in the County of Erie, State of New York and consents that any
order, process, notice of motion or other application to or by any of said
courts or a judge thereof may be served within or without such court's
jurisdiction by registered mail or by personal service, provided a reasonable
time for appearance is allowed, in connection with any action or proceeding
arising out of, under or relating to this Agreement or the Facility Documents.
At the option of the Agent, upon the instructions of the Required
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Lenders, the Borrowers or the Guarantors may be joined in any action or
proceeding commenced by the Agent or the Lenders against any Security Document
Party in connection with or based on the Security Documents, and recovery may be
had against the Borrowers or the Guarantors in such action or proceeding or in
any independent action or proceeding against the Borrowers, without any
requirement that the Agent or the Lenders first assert, prosecute or exhaust any
remedy or claim against any Security Document Party. Each of the Borrowers and
the Guarantors hereby irrevocably waives (to the fullest extent permitted by
applicable law) any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of, under or relating to
this Agreement or any Facility Document brought in any federal or state court
located in the County of Erie, State of New York, and hereby further irrevocably
waives (to the fullest extent permitted by applicable law) any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. CTG (UK) Ltd hereby further irrevocably and unconditionally
waives any immunity to which it or its assets may at any time be or become
entitled, whether characterized as sovereign immunity or otherwise, from any
set-off or legal action in the United States, United Kingdom or elsewhere,
including immunity from service of process, immunity from jurisdiction or any
court or tribunal and immunity of any of its assets from attachment prior to
judgment or from execution of a judgment.
Section 12.13. Right of Setoff. Subject to the provisions respecting
the sharing of payments among Lenders under Section 11.17 hereof, the Borrowers
hereby grant to the Agent and Lenders, a continuing lien, security interest and
right of setoff as security for the Obligations, whether now existing or
hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
the Agent or the Lenders. Upon the occurrence and at any time during the
continuance of a Default or Event of Default, without demand or notice (any such
notice being expressly waived by the Borrowers), the Agent and each Lender may
set off the same or any part thereof and apply the same to any of the
Obligations held by the Agent or such Lender, as applicable, even though
unmatured and regardless of the adequacy of any other collateral security for
any such Obligations. The rights of the Agent and each Lender under this Section
12.13 are in addition to any other rights and remedies (including other rights
of setoff) that the Agent or any such Lender may have hereunder, under any of
the other Facility Documents or otherwise. ANY AND ALL RIGHTS TO REQUIRE THE
AGENT OR ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES ANY OF THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT
OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE
BORROWERS ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
Section 12.14. Integration. This Agreement is intended by the parties
as the final, complete and exclusive statement of the transactions evidenced by
this Agreement. All prior or contemporaneous promises, agreements and
understandings, whether oral or written, are deemed to be superceded by this
Agreement, and no party is relying on any promise, agreement or understanding
not set forth in this Agreement.
Section 12.15. Waiver of Jury Trial.
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EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE BORROWERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY FACILITY DOCUMENT, AND AGREES
THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY AND
AGREES THAT IT WILL NOT SEEK AND CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE BORROWERS AND
GUARANTORS CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR
EACH OF THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR
ANY OF THE LENDERS, WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE AGENT
AND THE LENDERS TO ACCEPT THIS AGREEMENT. IN ADDITION, EACH OF THE AGENT, THE
LENDERS, THE GUARANTORS AND THE BORROWERS WAIVES THE RIGHT TO INTERPOSE ANY
DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF LACHES AND, IN ANY
LEGAL PROCEEDING COMMENCED AGAINST IT OR THEM, ANY SET-OFF OR NON-MANDATORY
COUNTER CLAIM OF ANY NATURE OR DESCRIPTION. EACH OF THE AGENT, THE LENDERS, THE
GUARANTORS AND THE BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE FREELY
MADE.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWERS:
COMPUTER TASK GROUP, INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
CTG SERVICES, INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
COMPUTER TASK GROUP
INTERNATIONAL , INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
89
CTG HEALTHCARE SOLUTIONS, INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
CTG HEALTHCARE SOLUTIONS
(KANSAS), INC.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
GUARANTORS:
COMPUTER TASK GROUP (U.K.) LTD.
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn:
Facsimile #:
90
AGENT:
THE CHASE MANHATTAN BANK, AS
ADMINISTRATIVE, DOCUMENTATION,
COLLATERAL AND SYNDICATION AGENT
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Computer Task Group, Inc.
Account Representative
Telecopier #
91
LENDERS:
THE CHASE MANHATTAN BANK
By:
--------------------------------------
Name:
Title:
Address for Notices:
Attn: Computer Task Group, Inc.
Account Representative
Telecopier #
92
FLEET NATIONAL BANK
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address for Notices:
Attn:
Telecopier #
93
KEY BANK NATIONAL
ASSOCIATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address for Notices:
Attn:
Telecopier #
94
HSBC BANK USA
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address for Notices:
Attn:
Telecopier #
95
MANUFACTURERS AND TRADERS
TRUST COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Address for Notices:
Attn:
Telecopier #
96
EXHIBITS AND SCHEDULES
EXHIBIT A-1 - FORM OF REVOLVING CREDIT NOTE
EXHIBIT A-2 - FORM OF TERM NOTE
EXHIBIT B - FORM OF AUTHORIZATION LETTER
EXHIBIT C - FORM OF BORROWING BASE CERTIFICATE
EXHIBIT D-1 - FORM OF SECURITY AGREEMENT (TOGETHER WITH PERFECTION CERTIFICATE)
EXHIBIT D-2 - FORM OF UK SECURITY AGREEMENT
EXHIBIT E-1 - FORM OF STOCK PLEDGE AGREEMENT
EXHIBIT E-2 - FORM OF UK CHARGE OVER SHARES
EXHIBIT F - FORM OF SOLVENCY CERTIFICATE
EXHIBIT G - FORM OF MORTGAGE
EXHIBIT H - FORM OF HAZARDOUS MATERIALS INDEMNITY AGREEMENT
EXHIBIT I - FORM OF OPINION OF COUNSEL TO CREDIT PARTIES
EXHIBIT J - FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT K - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT L - FORM OF AFFILIATE SUBORDINATION AGREEMENT
SCHEDULE 1.05 - DESIGNATED FINANCIAL OFFICERS
SCHEDULE 2.01(a) - LENDERS AND COMMITMENTS
SCHEDULE 2.01(c) - OUTSTANDING LETTERS OF CREDIT
SCHEDULE 2.17 - INDEBTEDNESS TO BE REFINANCED
SCHEDULE 5.04 - LITIGATION
SCHEDULE 5.05 - FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGES
SCHEDULE 5.06 - OUTSTANDING LIENS
SCHEDULE 5.07 - OUTSTANDING INDEBTEDNESS
SCHEDULE 5.08 - TAXES
SCHEDULE 5.09 - PENSION PLANS
SCHEDULE 5.10 - SUBSIDIARIES AND AFFILIATES; CAPITALIZATION
SCHEDULE 5.11 - PROPERTIES; PROPRIETARY AND REGISTERED RIGHTS
SCHEDULE 5.13 - MATERIAL CONTRACTS
SCHEDULE 5.14 - LABOR AND EMPLOYMENT MATTERS
SCHEDULE 5.16 - ENVIRONMENTAL MATTERS
SCHEDULE 5.19 - BANK ACCOUNTS
SCHEDULE 6.14 - CASH MANAGEMENT SYSTEM
SCHEDULE 7.06 - TRANSACTIONS WITH AFFILIATES
SCHEDULE 7.11 - CERTAIN INDEBTEDNESS PERMITTED TO REMAIN OUTSTANDING
SCHEDULE 7.14 - RESTRICTIVE AGREEMENTS
97
SCHEDULE 2.01(a)
TO
COMPUTER TASK GROUP, INCORPORATED
CREDIT AGREEMENT
LIST OF LENDERS AND COMMITMENTS
REVOLVING CREDIT REVOLVING CREDIT
COMMITMENT COMMITMENT TERM LOAN TERM LOAN
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
NAME OF LENDER
-------------------------------------------------------------------------------------------------
The Chase Manhattan $ 9,000,000 20% $1,000,000 20%
Bank
Fleet National Bank $ 9,000,000 20% $1,000,000 20%
Key Bank National $ 9,000,000 20% $1,000,000 20%
Association
HSBC Bank USA $ 9,000,000 20% $1,000,000 20%
Manufacturers and $ 9,000,000 20% $1,000,000 20%
Traders Trust Company
TOTAL $45,000,000 100.00000000% $5,000,000 100.00000000%
98
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS......................................................... 1
Section 1.01. Definitions.................................................................. 1
Section 1.02. Accounting Principles........................................................ 27
Section 1.03. Directly or Indirectly....................................................... 28
Section 1.04. Construction................................................................. 28
Section 1.05. Joint and Several Obligations; Borrowers' Agent.............................. 28
ARTICLE 2. THE CREDIT............................................................................ 28
Section 2.01. The Revolving Credit Loans................................................... 28
Section 2.02. Making the Revolving Credit Loans............................................ 30
Section 2.03. Principal Repayment of Revolving Credit Loans................................ 30
Section 2.04. The Term Loans............................................................... 31
Section 2.05. Mandatory Prepayments........................................................ 31
Section 2.06. Interest..................................................................... 34
Section 2.07. Eurodollar Interest Periods.................................................. 35
Section 2.08. Conversions.................................................................. 35
Section 2.09. Voluntary Prepayments........................................................ 35
Section 2.10. Uncollected Funds Compensation............................................... 36
Section 2.11. Termination of Revolving Credit Commitments.................................. 36
Section 2.12. Certain Notices.............................................................. 36
Section 2.13. Calculation of Borrowing Base................................................ 36
Section 2.14. Settlement Between Agent and Lenders......................................... 36
Section 2.15. Fees......................................................................... 37
Section 2.16. Payments Generally........................................................... 38
Section 2.17. Purpose...................................................................... 38
Section 2.18. Reduction in Revolving Credit Commitments in respect of Palm Beach Litigation 38
Section 2.19. Extension of Revolving Credit Termination Date and Term Loan Maturity Date... 38
Section 2.20. Exchange Rate for UK Accounts................................................ 39
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC..................................................... 39
Section 3.01. Additional Costs............................................................. 39
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Section 3.02. Limitation on Types of Loans................................................. 41
Section 3.03. Illegality................................................................... 41
Section 3.04. Certain Base Rate Loans pursuant to Sections 3.01 and 3.03................... 41
Section 3.05. Certain Compensation......................................................... 41
Section 3.06. Mitigation Obligations....................................................... 42
ARTICLE 4. CONDITIONS PRECEDENT.................................................................. 42
Section 4.01. Conditions Precedent to the Initial Loans.................................... 42
Section 4.02. Additional Conditions Precedent.............................................. 48
Section 4.03. Deemed Representations....................................................... 49
ARTICLE 5. REPRESENTATIONS AND WARRANTIES........................................................ 49
Section 5.01. Incorporation, Good Standing and Due Qualification........................... 49
Section 5.02. Corporate Power and Authority; No Conflicts.................................. 49
Section 5.03. Legally Enforceable Agreements............................................... 50
Section 5.04. Litigation................................................................... 50
Section 5.05. Financial Statements......................................................... 50
Section 5.06. Ownership and Liens.......................................................... 51
Section 5.07. Existing Indebtedness........................................................ 51
Section 5.08. Taxes........................................................................ 51
Section 5.09. ERISA........................................................................ 51
Section 5.10. Subsidiaries and Affiliates.................................................. 52
Section 5.11. Operation of Business........................................................ 52
Section 5.12. No Default on Outstanding Judgments or Orders................................ 53
Section 5.13. No Defaults on Other Agreements.............................................. 53
Section 5.14. Labor Matters................................................................ 53
Section 5.15. Investment Company Act....................................................... 54
Section 5.16. Environmental Matters........................................................ 54
Section 5.17. Regulation U................................................................. 54
Section 5.18. No Guaranties or Indemnities................................................. 54
Section 5.19. Bank Accounts................................................................ 54
Section 5.20. Trade Relations.............................................................. 55
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ARTICLE 6. AFFIRMATIVE COVENANTS................................................................. 55
Section 6.01. Maintenance of Existence..................................................... 55
Section 6.02. Conduct of Business.......................................................... 55
Section 6.03. Maintenance of Properties.................................................... 55
Section 6.04. Maintenance of Records; Fiscal Year.......................................... 55
Section 6.05. Maintenance of Insurance..................................................... 55
Section 6.06. Payment of Taxes; Compliance with Laws....................................... 56
Section 6.07. Right of Inspection.......................................................... 56
Section 6.08. Reporting Requirements....................................................... 56
Section 6.09. Special Periodic Reports..................................................... 58
Section 6.10. Reports on Disputes and Federal Contracts.................................... 59
Section 6.11. Field Audits................................................................. 60
Section 6.12. Cooperation and Further Assurance............................................ 60
Section 6.13. Deposits Into Collection Account............................................. 60
Section 6.14. Cash Management System....................................................... 60
Section 6.15. Certain Obligations Respecting Foreign and Inactive Subsidiaries............. 60
Section 6.16. Blackrock Provident Investment Account....................................... 61
ARTICLE 7. NEGATIVE COVENANTS.................................................................... 61
Section 7.01. Sale of Assets............................................................... 61
Section 7.02. Stock of Subsidiaries, Etc................................................... 61
Section 7.03. Mergers, Etc................................................................. 62
Section 7.04. Dividends.................................................................... 62
Section 7.05. Liens........................................................................ 63
Section 7.06. Transactions with Affiliates................................................. 64
Section 7.07. Hazardous Materials.......................................................... 64
Section 7.08. Acquisitions................................................................. 64
Section 7.09. Subsidiaries................................................................. 64
Section 7.10. Certain Investments.......................................................... 65
Section 7.11. Indebtedness................................................................. 65
Section 7.12. Guarantees, Etc.............................................................. 66
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Section 7.13. Subordinated Indebtedness.................................................... 66
Section 7.14. Restrictive Agreements....................................................... 66
Section 7.15. Special Restrictions on Foreign Subsidiaries and Inactive Subsidiaries....... 66
Section 7.16. CTG Europe................................................................... 67
Section 7.17. Payments on Foreign Subsidiary Loans......................................... 67
ARTICLE 8. FINANCIAL COVENANTS................................................................... 67
Section 8.01. Minimum EBITDA............................................................... 67
Section 8.02. Total Funded Debt/ EBITDA Ratio.............................................. 67
Section 8.03. Maximum Days in Receivables.................................................. 67
ARTICLE 9. EVENTS OF DEFAULT..................................................................... 68
Section 9.01. Events of Default............................................................ 68
Section 9.02. Remedies..................................................................... 69
ARTICLE 10. GUARANTY.............................................................................. 70
Section 10.01. The Guarantee................................................................ 70
Section 10.02. Obligations Unconditional.................................................... 70
Section 10.03. Reinstatement................................................................ 71
Section 10.04. Subrogation.................................................................. 71
Section 10.05. Remedies..................................................................... 71
Section 10.06. Instrument for the Payment of Money.......................................... 72
Section 10.07. Continuing Guarantee......................................................... 72
Section 10.08. General Limitation on Guarantee Obligations.................................. 72
Section 10.09. Specific Limitation on Guarantee Obligations of CTG (UK) Ltd................. 72
ARTICLE 11. THE AGENT; RELATIONS AMONG LENDERS AND BORROWER....................................... 72
Section 11.01. Appointment, Powers and Immunities of Agent.................................. 72
Section 11.02. Reliance by Agent............................................................ 73
Section 11.03. Defaults..................................................................... 73
Section 11.04. Rights of Agent as a Lender.................................................. 73
Section 11.05. Indemnification of Agent..................................................... 74
Section 11.06. Documents.................................................................... 74
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Section 11.07. Non-Reliance on Agent and Other Lenders...................................... 74
Section 11.08. Failure of Agent to Act...................................................... 75
Section 11.09. Resignation or Removal of Agent.............................................. 75
Section 11.10. Amendments Concerning Agency Function........................................ 75
Section 11.11. Liability of Agent........................................................... 75
Section 11.12. Transfer of Agency Function.................................................. 75
Section 11.13. Non-Receipt of Funds by the Agent............................................ 76
Section 11.14. Withholding Taxes............................................................ 76
Section 11.15. Several Obligations and Rights of Lenders.................................... 76
Section 11.16. Pro Rata Treatment of Loans, Etc............................................. 76
Section 11.17. Sharing of Payments Among Lenders............................................ 77
Section 11.18. Enforcement of Facility Documents............................................ 78
Section 11.19. Borrowing Base Statements, Etc............................................... 78
ARTICLE 12. MISCELLANEOUS......................................................................... 79
Section 12.01. Amendments and Waivers....................................................... 79
Section 12.02. Usury........................................................................ 80
Section 12.03. Expenses; Indemnification.................................................... 80
Section 12.04. Survival..................................................................... 81
Section 12.05. Assignment; Participations................................................... 81
Section 12.06. Notices...................................................................... 84
Section 12.07. Table of Contents; Headings.................................................. 84
Section 12.08. Severability................................................................. 84
Section 12.09. Counterparts................................................................. 84
Section 12.10. Governing Law................................................................ 84
Section 12.11. Incorporation By Reference; Conflicts........................................ 84
Section 12.12. Jurisdiction, Venue and Service.............................................. 84
Section 12.13. Right of Setoff.............................................................. 85
Section 12.14. Integration.................................................................. 85
Section 12.15. Waiver of Jury Trial......................................................... 85
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