EXHIBIT 10.18
CREDIT AGREEMENT
DATED AS OF DECEMBER 24, 1996
BY AND AMONG
ESQUIRE COMMUNICATIONS LTD.
AS BORROWER
ANTARES LEVERAGED CAPITAL CORP.
AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
AS LENDERS
TABLE OF CONTENTS
ARTICLE I - THE CREDITS
1.1 Amount and Terms of Commitment.................................1
(a) Intentionally Omitted ...................................1
(b) The Revolving Credit ....................................1
(c) Lender Letters of Credit and Letter of Credit
Participation Agreements.................................2
1.2 Notes ........................................................4
1.3 Interest .....................................................4
1.4 Loan Accounts ................................................5
1.5 Procedure for Revolving Credit Borrowing .....................5
1.6 Conversion and Continuation Elections ........................6
1.7 Optional Prepayments .........................................7
1.8 Mandatory Prepayments of Loans ...............................7
1.9 Fees .........................................................8
(a) Arrangement Fees ....................................8
(b) Commitment Fee ......................................8
(c) Letter of Credit Participation Fee .................8
1.10 Payments by the Borrower .....................................9
1.11 Payments by the Lenders to the Agent .........................9
1.12 Disbursements of Advances; Settlements Among Agent and
Lenders; Payments of Interest and Fees; Disgorgement
Obligations...................................................10
1.13 Security .....................................................12
ARTICLE II - CONDITIONS PRECEDENT
2.1 Conditions of Initial Loans ..................................13
(a) Credit Agreement and Notes ...............................13
(b) Secretary's Certificates; Resolutions; Incumbency .......13
(c) Articles of Incorporation; By-laws and Good Standing ....13
(d) Collateral Documents ....................................14
(e) Legal Opinions ..........................................15
(f) Payment of Fees .........................................15
(g) Certificate .............................................15
(h) Financial Statements ....................................15
(i) Insurance Policies ......................................15
(j) Environmental Review ....................................15
(k) Due Diligence ...........................................16
(l) Accountants' Review .....................................16
(m) Insurance Review ........................................16
(n) Availability Certificate ................................16
(o) Related Transactions ....................................16
(p) Prior Indebtedness ......................................16
(q) Subordination ...........................................16
(r) Other Documents .........................................16
2.2 Conditions to All Borrowings .................................16
(a) Notice of Borrowing or Continuation/Conversion ..........16
(b) Continuation of Representations and Warranties ..........17
(c) No Existing Default .....................................17
2.3 Conditions to Certain Revolving Loans.........................17
(a) Evidence of Perfected First Priority Security
Interests ...............................................17
(b) Approval. ..............................................17
(c) Availability Certificate. ..............................18
(d) Additional Documentation ............................18
ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1 Corporate Existence and Power ................................18
3.2 Corporate Authorization; No Contravention ....................19
3.3 Governmental Authorization ...................................19
3.4 Binding Effect ...............................................19
3.5 Litigation ...................................................20
3.6 No Default ...................................................20
3.7 ERISA Compliance .............................................20
3.8 Use of Proceeds; Margin Regulations ..........................21
3.9 Title to Properties ..........................................21
3.10 Taxes ........................................................21
3.11 Financial Condition ..........................................21
3.12 Environmental Matters ........................................22
3.13 Collateral Documents .........................................22
3.14 Regulated Entities ...........................................22
3.15 No Burdensome Restrictions ...................................22
3.16 Solvency .....................................................22
3.17 Labor Relations ..............................................22
3.18 Copyrights, Patents, Trademarks and Licenses, etc. ...........23
3.19 Subsidiaries .................................................23
3.20 Brokers' Fees; Transaction Fees ..............................23
3.21 Insurance ....................................................23
3.22 Full Disclosure ..............................................23
ARTICLE IV - AFFIRMATIVE COVENANTS
4.1 Financial Statements .........................................24
4.2 Certificates; Borrowing Base Certificates; Other Information .24
4.3 Notices ......................................................26
4.4 Preservation of Corporate Existence, Etc .....................28
4.5 Maintenance of Property ......................................28
4.6 Insurance ....................................................28
4.7 Payment of Obligations .......................................28
4.8 Compliance with Laws .........................................29
4.9 Inspection of Property and Books and Records .................29
4.10 Use of Proceeds ..............................................29
4.11 Solvency .....................................................29
4.12 Further Assurances ...........................................30
ARTICLE V - NEGATIVE COVENANTS
5.1 Limitation on Liens ..........................................30
5.2 Disposition of Assets ........................................31
5.3 Consolidations and Mergers ...................................32
5.4 Loans and Investments ........................................32
5.5 Limitation on Indebtedness ...................................33
5.6 Transactions with Affiliates .................................33
5.7 Management Fees and Compensation .............................33
5.8 Use of Proceeds ..............................................33
5.9 Contingent Obligations .......................................34
5.10 Compliance with ERISA ........................................34
5.11 Operating Lease Obligations ..................................34
5.12 Restricted Payments ..........................................34
5.13 Change in Business ...........................................35
5.14 Change in Structure ..........................................35
5.15 Accounting Changes ...........................................35
5.16 Amendments to Related Agreements .............................35
5.17 Acquisitions .................................................36
ARTICLE VI - FINANCIAL COVENANTS
6.1 Capital Expenditures .........................................37
6.2 Leverage Ratio ...............................................37
6.3 Interest Coverage Ratio ......................................37
6.4 EBIDAT .......................................................37
ARTICLE VII - EVENTS OF DEFAULT
7.1 Event of Default .............................................37
(a) Non-Payment .............................................37
(b) Representation or Warranty ..............................37
(c) Specific Defaults .......................................38
(d) Other Defaults ..........................................38
(e) Cross-Default ...........................................38
(f) Insolvency; Voluntary Proceedings .......................38
(g) Involuntary Proceedings .................................38
(h) ERISA ...................................................39
(i) Monetary Judgments ......................................39
(j) Non-Monetary Judgments ..................................39
(k) Collateral ..............................................40
(l) Ownership ...............................................40
(m) Subsidiary Guaranty......................................40
(n) Invalidity of Subordination Provisions ..................40
7.2 Remedies .....................................................40
7.3 Rights Not Exclusive .........................................41
7.4 Cash Collateral for Letters of Credit ........................41
ARTICLE VIII - THE AGENT
8.1 Appointment and Authorization ................................41
8.2 Delegation of Duties......................................... 42
8.3 Liability of Agent ...........................................42
8.4 Reliance by Agent ............................................42
8.5 Notice of Default ............................................42
8.6 Credit Decision ..............................................43
8.7 Indemnification ..............................................43
8.8 Agent in Individual Capacity .................................44
8.9 Successor Agent ..............................................44
8.10 Collateral Matters ...........................................44
ARTICLE IX - MISCELLANEOUS
9.1 Amendments and Waivers .......................................45
9.2 Notices ......................................................46
9.3 No Waiver; Cumulative Remedies ...............................47
9.4 Costs and Expenses ...........................................47
9.5 Indemnity ....................................................47
9.6 Marshalling; Payments Set Aside ..............................48
9.7 Successors and Assigns .......................................49
9.8 Assignments, Participations, etc. ............................49
9.9 Confidentiality ..............................................51
9.10 Set-off; Sharing of Payments .................................52
9.11 Automatic Debits of Fees .....................................52
9.12 Notification of Addresses, Lending Offices, Etc. .............52
9.13 Counterparts .................................................53
9.14 Severability .................................................53
9.15 Captions .....................................................53
9.16 Independence of Provisions ...................................53
9.17 Interpretation ...............................................53
9.18 No Third Parties Benefited ...................................53
9.19 Governing Law and Jurisdiction ...............................53
9.20 Waiver of Jury Trial .........................................54
9.21 Entire Agreement; Release ....................................54
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
10.1 Taxes ........................................................55
10.2 Illegality ...................................................58
10.3 Increased Costs and Reduction of Return ......................58
10.4 Funding Losses............................................... 59
10.5 Inability to Determine Rates .................................60
10.6 Reserves on LIBOR Rate Loans .................................60
10.7 Certificates of Lenders ......................................60
10.8 Survival .....................................................60
10.9 Replacement of Lender in Respect of Increased Costs ..........60
ARTICLE XI - DEFINITIONS
11.1 Defined Terms ................................................61
11.2 Other Interpretive Provisions ................................77
(a) Defined Terms ...........................................77
(b) The Agreement ...........................................77
(c) Certain Common Terms ....................................77
(d) Performance; Time .......................................77
(e) Contracts ...............................................78
(f) Laws ....................................................78
11.3 Accounting Principles ........................................78
SCHEDULES
Schedule 1.1(b) Revolving Loan Commitments
Schedule 3.2 Capitalization
Schedule 3.5 Litigation
Schedule 3.7 ERISA
Schedule 3.11 Liabilities
Schedule 3.12 Environmental Matters
Schedule 3.18 Intellectual Property
Schedule 3.19 Subsidiaries and Equity Investments
Schedule 5.1 Liens
Schedule 5.5 Indebtedness
Schedule 5.8 Contingent Obligations
Schedule 11.1 Prior Indebtedness
EXHIBITS
Exhibit A Availability Certificate
Exhibit B Notice of Borrowing
Exhibit C Notice of Continuation/Conversion
Exhibit D Revolving Note
CREDIT AGREEMENT
This CREDIT AGREEMENT (this "Agreement") is entered into as of December 24,
1996, by and among Esquire Communications Ltd., a Delaware corporation (the
"Borrower"), Antares Leveraged Capital Corp., a Delaware corporation, as agent
(the "Agent") for the several financial institutions from time to time party to
this Agreement (collectively, the "Lenders" and individually each a "Lender")
and for itself as a Lender.
W I T N E S S E T H:
WHEREAS, the Borrower has requested, and the Lenders have agreed to make
available to the Borrower, a revolving credit facility (including a letter of
credit subfacility) upon and subject to the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I - THE CREDITS
1.1 AMOUNT AND TERMS OF COMMITMENT.
(a) INTENTIONALLY OMITTED.
(b) THE REVOLVING CREDIT. Each Lender with a Revolving Loan Commitment
severally and not jointly agrees, on the terms and conditions hereinafter set
forth, to make Loans to the Borrower (each such Loan, a "REVOLVING LOAN") from
time to time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount set forth opposite the Lender's name in SCHEDULE 1.1(b)
under the heading "Revolving Loan Commitment" (such amount as the same may be
reduced from time to time as a result of one or more assignments pursuant to
Section 9.8, being referred to herein as such Lender's "REVOLVING LOAN
COMMITMENT"); PROVIDED, HOWEVER, that, after giving effect to any Borrowing of
Revolving Loans, the aggregate principal amount of all outstanding Revolving
Loans shall not exceed the Maximum Revolving Loan Balance. Within the limits of
each Lender's Revolving Loan Commitment, and subject to the other terms and
conditions hereof, amounts borrowed under this subsection 1.1(b) may be repaid
and reborrowed from time to time. The "MAXIMUM REVOLVING LOAN BALANCE" from time
to time will be the lesser of:
(i) the product obtained by multiplying four (4), times Adjusted EBIDAT, or
(ii) the Aggregate of all Revolving Loan Commitments then in effect;
less, in either case, any Letter of Credit Reserve then in effect. If at any
time the Revolving Loans exceed the Maximum Revolving Loan Balance, then
Revolving Loans must be repaid immediately in an amount sufficient to eliminate
such excess.
For purposes of this Agreement, the following terms shall have the
following meanings:
"ADJUSTED EBIDAT" means, as of any determination date, the sum of the
following:
(1) with respect to court reporting businesses/companies owned by Borrower
for twelve (12) months or more for which Agent has received financial
statements for not less than a twelve (12) month period, (a) EBIDAT
for the trailing twelve (12) month period ending on the last day of
the immediately preceding month for which Agent has received financial
statements, minus (b) Capital Expenditures for such period, plus (c)
in Majority Lenders' discretion, verifiable expense reductions
expected to be realized and for which Borrower has provided evidence
satisfactory to Majority Lenders of such expense reductions, minus (d)
increases in expenses which are reasonably anticipated to occur, plus
(e) Capital Expenditures for such period which Capital Expenditures
Majority Lenders have agreed to add back to EBIDAT; plus
(2) with respect to court reporting businesses/companies owned by Borrower
for twelve (12) months or less for which Agent has not received from
Borrower financial statements for at least a twelve (12) month period,
(a) EBIDAT for each full month owned by Borrower for which Agent has
received financial statements, plus (b) EBIDAT for that number of
months immediately prior to Borrower's acquisition equal to twelve
minus the number of full months owned by Borrower for which Agent has
received financial statements, as calculated by Borrower in good faith
based on financial statements delivered by the former owner/seller and
approved by Majority Lenders (provided, however, that in the event
such financial statements are not on a monthly basis, Borrower and
Majority Lenders will work together in good faith to allocate EBIDAT
over the period covered by such financial statements), plus (c) Excess
Owner's Compensation, less (d) Capital Expenditures for such twelve
(12) month period, including Capital Expenditures expended during such
period but prior to Borrower's acquisition of such court reporting
business/company, plus (e) in Majority Lenders' discretion, verifiable
expense reductions expected to be realized and for which Borrower has
provided evidence satisfactory to Majority Lenders of such expense
reductions, minus (f) increases in expenses which are reasonably
anticipated to occur, plus (g) Capital Expenditures for such period
which Capital Expenditures Majority Lenders have agreed to add back to
EBIDAT.
"EXCESS OWNER'S COMPENSATION" means the net compensation, salaries and
benefits paid prior to Borrower's acquisition of the court reporting
business/company to former owners, sellers and former management personnel which
are no longer required to be paid by Borrower or any of its Subsidiaries, to the
extent deducted in computing EBIDAT pursuant to clause 2(a) above in the
definition of Adjusted EBIDAT, minus the compensation, salaries and benefits
Borrower would have had to pay had Borrower owned such court reporting
business/company during such period.
(c) LENDER LETTERS OF CREDIT AND LETTER OF CREDIT PARTICIPATION AGREEMENTS.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrower herein set forth, the Revolving Loan
Commitment may, in addition to advances under the Revolving Loan, be utilized,
upon the request of Borrower, for (i) the issuance of letters of credit by Agent
(each such letter of credit, a "LENDER LETTER OF CREDIT") or (ii) the issuance
of letter of credit participation agreements by Agent (each such letter of
credit participation, a "LETTER OF CREDIT PARTICIPATION AGREEMENT") to confirm
payment to banks (whether or not such banks are Lenders) which issue letters of
credit for the account of Borrower on behalf of each Lender having a Revolving
Loan Commitment (severally and not jointly) according to such Lender's Revolving
Loan Commitment.
The aggregate amount of Letter of Credit Participation Liability with
respect to all Lender Letters of Credit and Letter of Credit Participation
Agreements outstanding at any time shall not exceed $1,000,000.
The Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to
reimburse the Agent for any amounts paid by the Agent under any Lender Letter of
Credit or Letter of Credit Participation Agreement. The Borrower hereby
authorizes and directs the Lenders, at the Agent's option, to make a Revolving
Loan in the amount of any payment made by the Agent with respect to any Lender
Letter of Credit or Letter of Credit Participation Agreement. All amounts paid
by the Agent with respect to any Lender Letter of Credit or Letter of Credit
Participation Agreement that are not immediately repaid by Borrower with the
proceeds of a Revolving Loan or otherwise shall bear interest at the interest
rate then applicable to Revolving Loans, calculated using the Base Rate and the
Applicable Margin in effect. Each Lender agrees to fund its Commitment
Percentage of any Revolving Loan made pursuant to this subsection 1.1(c) and, if
no such Revolving Loans are made, each Lender agrees to purchase, and shall be
deemed to have purchased, a participation in such Lender Letter of Credit or
Letter of Credit Participation Agreement in an amount equal to its ratable share
of such Lender Letter of Credit or Letter of Credit Participation Agreement
based upon the Revolving Loan Commitments then in effect and each Lender agrees
to pay to the Agent such share of any payments made by the Agent under such
Lender Letter of Credit or Letter of Credit Participation Agreement. The
obligations of each Lender under the preceding two (2) sentences shall be
absolute and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 2.2 hereof.
In addition to all other terms and conditions set forth in this Agreement,
the issuance by Agent of any Lender Letter of Credit or Letter of Credit
Participation Agreement shall be subject to the conditions precedent that the
Lender Letter of Credit, Letter of Credit Participation Agreement or the letter
of credit or written contract for which Borrower requests a Letter of Credit
Participation Agreement shall support a transaction entered into by Borrower in
the ordinary course of its business and shall be in such form, be for such
amount, and contain such terms as are reasonably satisfactory to Agent.
The expiration date of each Lender Letter of Credit shall be on a date
which is the earlier of (a) one year from its date of issuance, or (b) the
thirtieth day before the Revolving Termination Date. Each Letter of Credit
Participation Agreement shall provide that the Letter of Credit Participation
Agreement terminates and all demands or claims for payment must be presented by
a date certain, which date will be the earlier of (a) one year from its date of
issuance, or (b) the thirtieth day before the Revolving Termination Date.
Borrower shall give Agent at least ten (10) Business Days prior notice
specifying the date a Lender Letter of Credit or Letter of Credit Participation
Agreement is to be issued, identifying the beneficiary and describing the nature
of the transactions proposed to be supported thereby. The notice shall be
accompanied by the form of the Lender Letter of Credit or the letter of credit
or other written contract to be guarantied.
1.2 NOTES. The Revolving Loans made by each Lender shall be evidenced by a
Revolving Note payable to the order of such Lender in an amount equal to such
Lender's Revolving Loan Commitment.
1.3 INTEREST. (a) Subject to subsections 1.3(c) and 1.3(d), each Loan shall
bear interest on the outstanding principal amount thereof from the date when
made at a rate per annum equal to the LIBOR or the Base Rate, as the case may
be, plus the Applicable Margin, as the same may be adjusted pursuant to the
provisions of the definition of Applicable Margin. Commencing on the first day
of the first full month after the Closing Date, and continuing thereafter, the
Applicable Margin for Loans shall be subject to adjustment as set forth in the
definition of Applicable Margin. Any change in the interest rate on a Loan
resulting from a change in the Applicable Margin shall become effective as of
the first day of the month immediately succeeding the month in which such change
in the Applicable Margin becomes effective. The Agent will with reasonable
promptness notify the Borrower and the Lenders of the effective date and the
amount of each such change, provided that any failure to do so shall not relieve
the Borrower of any liability hereunder or provide the basis for any claim
against the Agent. Each determination of an interest rate by the Agent shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. All computations of fees and interest payable under this
Agreement shall be made on the basis of a 360-day year and actual days elapsed.
Interest and fees shall accrue during each period during which interest or such
fees are computed from the first day thereof to the last day thereof.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any payment or prepayment of
Loans in full pursuant to Section 1.7 and/or 1.8, and, during the existence of
any Event of Default, interest shall be payable on demand of the Agent.
(c) At the election of the Agent or the Majority Lenders while any Event of
Default exists, the Borrower shall pay interest (after as well as before entry
of judgment thereon to the extent permitted by law) on the principal amount of
all Obligations due and unpaid, at a rate per annum which is determined by
adding two percent (2.0%) per annum to the Applicable Margin then in effect for
such Loans (plus the LIBOR or Base Rate, as the case may be) and, in the case of
Obligations not subject to an Applicable Margin (other than the fees described
in Section 1.9), at a rate per annum equal to the Base Rate plus two percent
(2.0%); provided, however, that, on and after the expiration of any Interest
Period applicable to any LIBOR Rate Loan outstanding on the date of occurrence
of such Event of Default, the principal amount of such Loan shall, during the
continuation of such Event of Default, bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin plus two percent (2.0%).
(d) Anything herein to the contrary notwithstanding, the obligations of the
Borrower hereunder shall be subject to the limitation that payments of interest
shall not be required, for any period for which interest is computed hereunder,
to the extent (but only to the extent) that contracting for or receiving such
payment by the respective Lender would be contrary to the provisions of any law
applicable to such Lender limiting the highest rate of interest which may be
lawfully contracted for, charged or received by such Lender, and in such event
the Borrower shall pay such Lender interest at the highest rate permitted by
applicable law.
1.4 LOAN ACCOUNTS. The Agent, on behalf of the Lenders, shall record on its
books and records the amount of each Loan made, the interest rate applicable,
all payments of principal and interest thereon and the principal balance thereof
from time to time outstanding, and such record shall, absent manifest error be
conclusive evidence of the amount of the Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder (and under any Note) to pay any amount owing with
respect to the Loans.
1.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. (a) Each Borrowing under the
Revolving Loan shall be made upon the Borrower's irrevocable written notice
delivered to the Agent in the form of a Notice of Borrowing (which notice must
be received by the Agent prior to 10:30 a.m. (Chicago time) (x) on the requested
Borrowing date in the case of each Base Rate Loan equal to or less than
$1,000,000, (y) on the day which is one (1) Business Day prior to the requested
Borrowing date in the case of each Base Rate Loan in excess of $1,000,000 but
equal to or less than $3,000,000 and (z) on the day which is three (3) Business
Days prior to the requested Borrowing date in the case of each LIBOR Rate Loan
and each Base Rate Loan in excess of $3,000,000; provided, that with respect to
Loans subsequent to the initial Loans, the Borrower may give notice of the
requested Borrower to the Agent by telephone call, with such notice confirmed
within 24 hours by delivery to the Agent of a signed Notice of Borrowing. Such
Notice of Borrowing shall specify:
(i) the amount of the Borrowing (which, in the case of a Borrowing of
LIBOR Rate Loans, shall be in an aggregate minimum principal amount of
$100,000 and multiples of $100,000 in excess thereof and in the case of
Base Rate Loans, shall be in a minimum principal amount of $100,000 and
multiples of $50,000 in excess thereof);
(ii) the requested Borrowing date, which shall be a Business Day;
(iii) whether the Borrowing is to be comprised of LIBOR Rate Loans or
Base Rate Loans; and
(iv) if the Borrowing is to be LIBOR Rate Loans, the Interest Period
applicable to such Loans.
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:30 a.m. (Chicago time) one Business Day before the Closing Date and such
Borrowing will consist of Base Rate Loans only.
(b) Upon receipt of the Notice of Borrowing, the Agent will promptly notify
each Lender with a Commitment affected thereby of such Notice and of the amount
of such Lender's Commitment Percentage of the Borrowing.
(c) Unless Agent is otherwise directed in writing by Borrower, the proceeds
of each requested Borrowing after the Closing Date will be made available to the
Borrower by the Agent by wire transfer (or ACH transfer) of such amount to the
Borrower at Chase Manhattan Bank, N.A., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ABA
Number 021-000021 for the account of Esquire Communications Ltd., Account No.
▇▇▇-▇-▇▇▇▇▇▇.
1.6 CONVERSION AND CONTINUATION ELECTIONS. (a) The Borrower may upon
irrevocable written notice to the Agent in accordance with subsection 1.6(b):
(i) elect to convert on any Business Day, any Base Rate Loans (or any
part thereof in an amount not less than $100,000, or that is in an integral
multiple of $100,000 in excess thereof) into LIBOR Rate Loans or;
(ii) elect to convert on the last day of the applicable Interest
Period any LIBOR Rate Loans having Interest Periods maturing on such day
(or any part thereof in an amount not less than $100,000, or that is in an
integral multiple of $100,000 in excess thereof) into Base Rate Loans; or
(iii) elect to renew on the last day of the applicable Interest Period
any LIBOR Rate Loans having Interest Periods maturing on such day (or any
part thereof in an amount not less than $100,000, or that is in an integral
multiple of $100,000 in excess thereof);
PROVIDED, that if the aggregate amount of LIBOR Rate Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $100,000, such LIBOR Rate Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of the
Borrower to continue such Loans as, and convert such Loans into, LIBOR Rate
Loans, as the case may be, shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation to be
received by the Agent not later than 10:30 a.m. (Chicago time) at least three
(3) Business Days in advance of the requested Conversion Date or continuation
date, if the Loans are to be converted into or continued as LIBOR Rate Loans and
on the requested Conversion Date, if the Loans are to be converted into Base
Rate Loans, specifying:
(i) the proposed Conversion Date or continuation date;
(ii) the aggregate amount of Loans to be converted or renewed; and
(iii) the duration of the requested Interest Period with respect to
any Loans to be converted or continued as LIBOR Rate Loans.
(c) If upon the expiration of any Interest Period applicable to LIBOR Rate
Loans, the Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Rate Loans, as the case may be, or if any Default or
Event of Default shall then exist, the Borrower shall be deemed to have elected
to convert such LIBOR Rate Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the Agent will
promptly notify each Lender thereof, or, if no timely notice is provided by the
Borrower, the Agent will promptly notify each Lender of the details of any
automatic conversion. All conversions and continuations shall be made pro rata
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Lender.
(e) Unless the Majority Lenders shall otherwise agree, during the existence
of a Default or Event of Default, the Borrower may not elect to have a Loan
converted into or continued as a LIBOR Rate Loan.
(f) Notwithstanding any other provision contained in this Agreement, after
giving effect to any Borrowing, or to any continuation or conversion of any
Loans, there shall not be more than five (5) different Interest Periods in
effect.
(g) The Agent will, with reasonable promptness, notify the Borrower and the
Lenders of each determination of a LIBOR Rate; provided that any failure to do
so shall not relieve the Borrower of any liability hereunder or provide the
basis for any claim against the Agent.
1.7 OPTIONAL PREPAYMENTS. (a) Subject to Section 10.4, the Borrower may,
(i) at any time, upon at least three (3) Business Days' written notice to the
Agent, prepay the Loans in full or prepay the Loans in part in an amount of not
less than $500,000 and (ii) at any time prepay the Loans in amounts less than
$500,000 but greater than or equal to $100,000, without notice. Optional
prepayment in amounts less than $100,000 shall not be permitted.
(b) The notice of any prepayment shall not thereafter be revocable by the
Borrower and the Agent will promptly notify each Lender thereof and of such
Lender's Commitment Percentage of such prepayment. The payment amount specified
in such notice shall be due and payable on the date specified therein, together
with (i) accrued interest to such date on the amount prepaid, and (ii) any
amounts required to be paid in connection therewith pursuant to Section 10.4.
(c) Amounts prepaid shall be applied first to any Base Rate Loans then
outstanding and then to outstanding LIBOR Rate Loans with the shortest Interest
Periods remaining; provided, however, that if the amount of Base Rate Loans then
outstanding is not sufficient to satisfy the entire prepayment requirement and
if no Default or Event of Default has occurred and is then continuing, the
Borrower may, at its option, place any amounts which it would otherwise be used
to prepay LIBOR Rate Loans on a day other than the last day of the Interest
Period(s) therefor in an interest-bearing account pledged to the Agent for the
benefit of the Lenders until the end of such Interest Period(s) at which time
such pledged amounts will be applied to prepay such LIBOR Rate Loans.
1.8 MANDATORY PREPAYMENTS OF LOANS. The Borrower shall repay to the Lenders
in full on the Revolving Termination Date the aggregate principal amount of the
Revolving Loans outstanding on the Revolving Termination Date, all accrued and
unpaid interest and all other amounts due and payable hereunder and under the
other Loan Documents.
1.9 FEES.
(a) ARRANGEMENT FEE. The Borrower shall pay to the Agent for the Agent's
own account, on the Closing Date, an arrangement fee in the amount of $200,000.
(b) COMMITMENT FEE. From and after the execution and delivery of this
Agreement, Borrower shall pay to Agent, for the ratable benefit of the Lenders,
a fee (the "Commitment Fee") in an amount equal to
(i) the Aggregate Revolving Loan Commitment, less
(ii) the sum of (x) the average daily balance of all Revolving Loans
outstanding plus (y) the average daily face amount of the Letter of Credit
Reserve during the preceding month,
multiplied by one-half of one percent (0.50%) per annum (or, after the GTCR
Event has occurred, three-quarters of one percent (0.75%) per annum), such fee
to be payable monthly in arrears on the first day of the month following the
Closing Date and the first day of each month thereafter. The Commitment Fee
provided in this subsection 1.9(b) shall accrue at all times after execution and
delivery of this Agreement, including at any time during which one or more
conditions in Article II hereof are not met.
(c) LETTER OF CREDIT PARTICIPATION FEE. Borrower shall pay to Agent, for
the ratable benefit of the Lenders having Revolving Loan Commitments, fees for
each Lender Letter of Credit and each Letter of Credit Participation Agreement
(the "Letter of Credit Participation Fee") for the period from and including the
date of issuance of same to and excluding the date of expiration or termination,
equal to the daily average face amount of Letter of Credit Participation
Liability multiplied by three percent (3.00%) per annum (or, after the GTCR
Event has occurred, three and one-quarter percent (3.25%) per annum); provided,
however, at Agent's or Majority Lenders' option, while an Event of Default
exists, such percent shall be increased to five percent (5.00%) per annum (or,
after the GTCR Event has occurred, five and one-quarter percent (5.25%) per
annum), such fees to be payable monthly in advance on the Closing Date and the
first day of each month thereafter. Borrower shall also reimburse Agent for any
and all out-of-pocket fees and expenses, if any, paid by Agent to the issuer of
the letter of credit guarantied.
1.10 PAYMENTS BY THE BORROWER. (a) All payments (including prepayments) to
be made by the Borrower on account of principal, interest, fees and other
amounts required hereunder shall be made without set-off, recoupment or
counterclaim, shall, except as otherwise expressly provided herein, be made to
the Agent for the ratable account of the Lenders at the Agent's Payment Office,
and shall be made in dollars and in immediately available funds, no later than
10:30 a.m. (Chicago time) on the date specified herein. The Agent will promptly
distribute to each Lender its Commitment Percentage (or other applicable share
as expressly provided herein) of such principal, interest, fees or other
amounts, in like funds as received. Any payment which is received by the Agent
later than 10:30 a.m. (Chicago time) shall be deemed to have been received on
the immediately succeeding Business Day and any applicable interest or fee shall
continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, if any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Lenders hereunder that the Borrower
will not make such payment in full as and when required hereunder, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
in immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have made such payment in full to the Agent, each
Lender shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent, at the Agent's cost of funds.
1.11 PAYMENTS BY THE LENDERS TO THE AGENT. (a) Unless the Agent shall have
received notice from a Lender on the Closing Date or, with respect to each
Borrowing after the Closing Date, at least one Business Day prior to the date of
any proposed Borrowing, that such Lender will not make available to the Agent as
and when required hereunder for the account of the Borrower the amount of that
Lender's Commitment Percentage of the Borrowing, the Agent may assume that each
Lender has made such amount available to the Agent in immediately available
funds on the applicable Borrowing date and the Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to the Agent in immediately available funds and
the Agent in such circumstances has made available to the Borrower such amount,
that Lender shall on the next Business Day following the date of such Borrowing
make such amount available to the Agent, together with interest at the Agent's
cost of funds for and determined as of each day during such period. A notice of
the Agent submitted to any Lender with respect to amounts owing under this
subsection 1.11(a) shall be conclusive, absent manifest error. If such amount is
so made available, such payment to the Agent shall constitute such Lender's Loan
on the date of Borrowing for all purposes of this Agreement. If such amount is
not made available to the Agent on the next Business Day following the date of
such Borrowing, the Agent shall notify the Borrower of such failure to fund and,
upon demand by the Agent, the Borrower shall pay such amount to the Agent for
the Agent's account, together with interest thereon for each day elapsed since
the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any date of Borrowing
shall not relieve any other Lender of any obligation hereunder to make a Loan on
the date of such Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender on the date
of any Borrowing. Without limiting the generality of the foregoing, each Lender
shall be obligated to fund its Commitment Percentage of any Revolving Loan made
after any acceleration of the Obligations with respect to any draw on any Lender
Letter of Credit or any payment made under any Letter of Credit Participation
Agreement.
1.12 DISBURSEMENTS OF ADVANCES; SETTLEMENTS AMONG AGENT AND LENDERS;
PAYMENTS OF INTEREST AND FEES; DISGORGEMENT OBLIGATIONS. (a) The Revolving Loan
balance may fluctuate from day to day through the Agent's disbursement of funds
to, and receipt of funds from, the Borrower. In order to minimize the frequency
of transfers of funds between the Agent and each Lender, Revolving Loan advances
and payments will be settled according to the procedures described in this
Section 1.12. Notwithstanding these procedures, each Lender's obligation to fund
its portion of any advances made by the Agent to the Borrower will commence on
the date such advances are made by the Agent. Such payments will be made by each
Lender without setoff, counterclaim or reduction of any kind.
(b) On the second Business Day of each week, or more frequently (including
daily) if the Agent so elects (each such day being a "Settlement Date"), the
Agent will advise each Lender by telephone, telex or telecopy of the amount of
each such Lender's Commitment Percentage of the Revolving Loan balance as of the
close of business of the second Business Day immediately preceding the
Settlement Date. In the event that payments are necessary to adjust the amount
of such Lender's share of the Revolving Loan balance to equal such Lender's
Commitment Percentage of the Revolving Loan Obligations as of any Settlement
Date, such Lender will pay to the Agent, or the Agent will pay to such Lender
(as applicable) the amount necessary in same day funds by wire transfer to the
other's account not later than 2:00 p.m. Chicago time on the Business Day
following the Settlement Date.
(c) Notwithstanding the foregoing, the Agent, at its option, may elect to
require that each Lender provide funds in connection with any requested
Borrowing hereunder on the scheduled Borrowing date, and in such event the Agent
shall advise each Lender by telephone, telex or telecopy of the amount to be
funded by such Lender no later than one (1) Business Day prior to the Borrowing
date applicable thereto, and each such Lender shall pay to the Agent such
Lender's Commitment Percentage of the Borrowing in same day funds by wire
transfer to the Agent's account not later than 10:30 a.m. Chicago time on such
Borrowing date.
(d) For purposes of this subsection 1.12(d), the following terms will have
the meanings indicated:
"COMMITMENT FEE RATIO" means a number calculated by dividing
the total amount of Commitment Fees received by the Agent during the
immediately preceding calendar month by the total amount of Commitment
Fees due from the Borrower during the immediately preceding month.
"DAILY LOAN BALANCE" means, as to any Lender and any
particular Loan, an amount calculated as of the end of each calendar
day by subtracting (i) the cumulative principal amount paid by the
Agent to a Lender on such Loan from and including the Closing Date
through and including such calendar day from (ii) the cumulative
principal amount on such Loan advanced by such Lender to the Agent on
that Loan from and including the Closing Date through and including
such calendar day.
"DAILY INTEREST RATE" means, as to any Loan, an amount
calculated by dividing the interest rate payable on such Loan,
determined pursuant to Section 1.3, as of each calendar day by three
hundred and sixty (360).
"DAILY INTEREST AMOUNT" means, as to any Loan, an amount
calculated by multiplying the Daily Loan Balance of a Loan by the Daily
Interest Rate applicable to such Loan.
"INTEREST RATIO" means, as to any Loan, a number calculated by
dividing the total amount of the interest on such Loan received by the
Agent during the immediately preceding calendar month by the total
amount of interest on that Loan due from the Borrower during the
immediately preceding month.
"LETTER OF CREDIT PARTICIPATION FEE RATIO" means a number
calculated by dividing the total amount of Letter of Credit
Participation Fees received by the Agent during the immediately
preceding calendar month by the total amount of Letter of Credit
Participation Fees due from the Borrower during the immediately
preceding month.
On the first Business Day of each month (each, an "Interest Settlement Date"),
the Agent will advise each Lender by telephone, telex or telecopy of the amount
of such Lender's Commitment Percentage of interest and fees on each Loan as of
the end of the last day of the immediately preceding month. Provided that such
Lender has made all payments required to be made by it under this Agreement, the
Agent will pay to such Lender, by wire transfer to such Lender's account (as
specified by such Lender on the signature page of this Agreement or the
applicable Assignment and Acceptance) not later than 2:00 p.m. Chicago time on
the next Business Day following the Interest Settlement Date, such Lender's
Commitment Percentage of:
(A) interest on each Loan in which such Lender has a
Commitment received by the Agent during the immediately preceding
month, calculated by (1) adding together the Daily Interest Amounts for
each such Loan for each calendar day of the preceding month and (2)
multiplying the total thereof by the Interest Ratio for that Loan for
such month; and
(B) Commitment Fees in respect of such Lender's Commitment
Percentage of the Revolving Loan received by the Agent during the
immediately preceding month, calculated by (1) multiplying the total
amount of all Commitment Fees payable by the Borrower for such calendar
month by the Commitment Fee Ratio for such month, and (2) multiplying
the result thereof by the Lender's Commitment Percentage of the
aggregate Revolving Loan Commitment in effect during such immediately
preceding month; and
(C) Letter of Credit Participation Fees in respect of such
Lender's Commitment Percentage of the Revolving Loan received by the
Agent during the immediately preceding month, calculated by (1)
multiplying the total amount of all Letter of Credit Participation Fees
payable by the Borrower for such calendar month by the Letter of Credit
Participation Fee Ratio for such month, and (2) multiplying the result
thereof by the Lender's Commitment Percentage of the aggregate
Revolving Loan Commitment in effect during such immediately preceding
month.
(e) If the Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by the
Agent from the Borrower and such related payment is not received by the Agent,
the Agent shall be entitled to recover such amount from such Lender, without
setoff, counterclaim or deduction of any kind. If the Agent determines at any
time that any amount received by the Agent under this Agreement must be returned
to the Borrower or paid to any other Person pursuant to any solvency, fraudulent
conveyance or similar law or otherwise, then, notwithstanding any other term or
condition of this Agreement, the Agent will not be required to distribute any
portion of such payment to any Lender. In addition, each Lender will repay to
the Agent on demand any portion of such amount that the Agent has distributed to
such Lender, together with interest thereon at such rate, if any, as the Agent
is required to pay to the Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
1.13 SECURITY. All obligations of the Borrower under this Agreement, the
Notes and all other Loan Documents shall be secured in accordance with the
Collateral Documents.
ARTICLE II - CONDITIONS PRECEDENT
2.1 CONDITIONS OF INITIAL LOANS. The obligation of each Lender to make its
initial Loan and of the Agent to issue the initial Lender Letter of Credit or
Letter of Credit Participation Agreement hereunder is subject to the condition
that the Agent shall have received on or before the Closing Date all of the
following, in form and substance satisfactory to the Agent and each Lender and
(except for the Notes and any instruments or documents which are Pledged
Collateral) in sufficient counterparts for each Lender, duly executed by all
parties thereto:
(a) CREDIT AGREEMENT AND NOTES. This Agreement executed by the Borrower,
the Agent and each of the Lenders and the Notes executed by the Borrower;
(b) SECRETARY'S CERTIFICATES; RESOLUTIONS; INCUMBENCY. A certificate of the
Secretary or Assistant Secretary of the Borrower, and each Subsidiary of the
Borrower which is a party to any Loan Documents, certifying:
(i) the names and true signatures of the officers of
the Borrower and each such Subsidiary authorized to execute, deliver
and perform, as applicable, this Agreement, and all other Loan
Documents to be delivered hereunder; and
(ii) Copies of the resolutions of the board of
directors of the Borrower and each such Subsidiary approving and
authorizing the execution, delivery and performance by the Borrower or
such Subsidiary of this Agreement and the other Loan Documents to be
executed or delivered by it hereunder;
(c) ARTICLES OF INCORPORATION; BY-LAWS AND GOOD STANDING. Each of the
following documents:
(i) the articles or certificate of incorporation of the Borrower and
each Subsidiary of the Borrower which is party to any Loan Documents as in
effect on the Closing Date, certified by the Secretary of State (or
similar, applicable Governmental Authority) of the state of incorporation
of the Borrower or such Subsidiary as of a recent date, and the bylaws of
the Borrower and each such Subsidiary as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of the Borrower or such
Subsidiary as of the Closing Date; and
(ii) a good standing and, if available, tax good standing certificate
for the Borrower and each Subsidiary of the Borrower from the Secretary of
State (or similar, applicable Governmental Authority) of its state of
incorporation and each state where the Borrower or such Subsidiary is
qualified to do business as a foreign corporation as of a recent date;
(d) COLLATERAL DOCUMENTS. The Collateral Documents, executed by the
Borrower and each Subsidiary, as applicable, in appropriate form for recording,
where necessary, together with:
(i) acknowledgment copies of all UCC-l financing statements filed,
registered or recorded to perfect the security interests of the Agent for
the benefit of the Lenders, or other evidence satisfactory to the Agent
that there has been filed, registered or recorded all financing statements
and other filings, registrations and recordings necessary and advisable to
perfect the Liens of the Agent for the benefit of the Lenders in accordance
with applicable law;
(ii) written advice relating to such Lien and judgment searches as the
Agent shall have requested of the Borrower and each Subsidiary, and such
termination statements or other documents as may be necessary to confirm
that the Collateral is subject to no other Liens in favor of any Persons
(other than Permitted Liens);
(iii) all certificates and instruments representing the Pledged
Collateral, irrevocable proxies and stock transfer powers executed in blank
or other executed endorsements satisfactory to the Agent, with signatures
guaranteed as the Agent may require;
(iv) evidence that all other actions necessary or, in the opinion of
the Agent, desirable to perfect and protect the Liens created by the
Collateral Documents have been taken;
(v) funds sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 financing statements;
(vi) if required by the Agent, flood insurance and earthquake
insurance on terms satisfactory to the Agent; and
(vii) such consents, estoppels, subordination agreements and other
documents and instruments executed by landlords, tenants and other Persons
party to material contracts relating to any Collateral as to which the
Agent shall be granted a Lien for the benefit of the Lenders, as requested
by the Agent;
(e) LEGAL OPINIONS. Such opinions of counsel to the Borrower and its
Subsidiaries, addressed to the Agent and the Lenders, in form and substance
reasonably satisfactory to Agent;
(f) PAYMENT OF FEES. The Borrower shall have paid all accrued and unpaid
fees, costs and expenses to the extent then due and payable on the Closing Date,
together with Attorney Costs of the Agent;
(g) CERTIFICATE. A certificate signed by a Responsible Officer, dated as of
the Closing Date, stating that:
(i) the representations and warranties contained in Article III hereof
are true and correct on and as of the Closing Date or such other date as
indicated in such representations and warranties, as though made on and as
of such date;
(ii) no Default or Event of Default exists or would result from the
initial Borrowing or issuance of the initial Lender Letter of Credit or
Letter of Credit Participation Agreement; and
(iii) there has occurred since December 31, 1995, no event or
circumstance that has resulted or could reasonably be expected to result in
a Material Adverse Effect;
(h) FINANCIAL STATEMENTS. Copies of all of the financial statements of the
Borrower and its Subsidiaries referred to in Section 3.11 together with pro
forma financial statements giving effect to the transactions contemplated hereby
and by the Related Agreements, certified by a Responsible Officer;
(i) INSURANCE POLICIES. Standard lenders' loss payable endorsements in
favor of the Agent with respect to the insurance policies or other instruments
or documents evidencing insurance coverage on the properties of the Borrower and
its Subsidiaries in accordance with Section 4.6 and endorsements to all
liability insurance policies naming the Agent and the Lenders as additional
insureds thereunder;
(j) ENVIRONMENTAL REVIEW. At Agent's request, an environmental site
assessment with respect to any real property as to which the Agent is granted a
Lien for the benefit of the Lenders, if any, dated as of a recent date prior to
the Closing Date, prepared by a qualified firm acceptable to the Agent and the
Lenders, stating, among other things, that such real property is free from
Hazardous Materials and that operations conducted thereon are in compliance with
all Environmental Laws;
(k) DUE DILIGENCE. Evidence of completion to the satisfaction of the Agent
of such investigations, reviews and audits with respect to the Borrower and the
transactions contemplated by the Related Agreements as the Agent or any Lender
may deem appropriate;
(l) ACCOUNTANTS' REVIEW. An accountants' review of the books and records of
the Borrower and its Subsidiaries prepared by Ernst & Young, dated September
1996 and entitled Due Diligence Report;
(m) INSURANCE REVIEW. A review of the Borrower's and its Subsidiaries'
insurance coverages, prepared by a qualified firm acceptable to the Agent, dated
as of a recent date prior to the Closing Date and otherwise in form and
substance satisfactory to the Agent;
(n) AVAILABILITY CERTIFICATE. A duly completed Availability Certificate
setting forth the availability as of a date not more than five (5) days prior to
the Closing Date;
(o) RELATED TRANSACTIONS. The Related Transactions shall have closed in the
manner contemplated by the Related Agreements and shall otherwise be in form and
substance satisfactory to the Agent;
(p) PRIOR INDEBTEDNESS. A payoff letter from each lender of any Prior
Indebtedness in form and substance satisfactory to the Agent, together with such
UCC-3 termination statements, releases of Liens and other instruments, documents
and/or agreements necessary or appropriate to terminate any Liens in favor of
such lenders securing Prior Indebtedness which is to be paid off on the Closing
Date as the Agent may reasonably request, duly executed and in form and
substance satisfactory to the Agent;
(q) SUBORDINATION. Subordination agreements with each holder of
Indebtedness, other than Prior Indebtedness, in form and substance satisfactory
to Agent; and
(r) OTHER DOCUMENTS. Such other approvals, opinions, documents or materials
as the Agent or any Lender may request.
2.2 CONDITIONS TO ALL BORROWINGS. The obligation of each Lender to make any
Loan and of the Agent to issue any Lender Letter of Credit or Letter of Credit
Participation Agreement, or to continue or convert any Loan hereunder, is
subject to the satisfaction of the following conditions precedent on the
relevant borrowing or continuation or conversion date:
(a) NOTICE OF BORROWING OR CONTINUATION/CONVERSION. The Agent shall have
received (with, in the case of the initial Loan only, a copy for each Lender) a
Notice of Borrowing or a Notice of Continuation/Conversion, as applicable, in
accordance with Section 1.5 or Section 1.6;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrower contained in Article III shall be true and
correct on and as of such Borrowing, or continuation or conversion date with the
same effect as if made on and as of such Borrowing or continuation or conversion
date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they shall be true and correct as of such
earlier date);
(c) OWNERSHIP BY GTCR. GTCR shall directly own and control at least 60% of
the number of shares of capital stock of Borrower (i) owned by GTCR on the
Closing Date plus (ii) acquired by GTCR after the Closing Date (without double
counting any shares of capital stock which have been converted from preferred
stock to common stock), in each case free and clear of all liens, claims and
encumbrances; and
(d) NO EXISTING DEFAULT. No Default or Event of Default shall exist or
shall result from such Borrowing or continuation or conversion.
Each Notice of Borrowing and Notice of Continuation/ Conversion submitted by the
Borrower hereunder shall constitute a representation and warranty by the
Borrower hereunder, as of the date of each such notice or application and as of
the date of each Borrowing or continuation or conversion, as applicable, that
the conditions in Section 2.2 are satisfied.
2.3 CONDITIONS TO CERTAIN REVOLVING LOANS. In the event the proceeds of the
Revolving Loan are to be used to finance all or a portion of the purchase price
of an Acquisition, the obligations of each Lender to make such Loan is subject
to the satisfaction of the following conditions precedent on the relevant
Borrowing date:
(a) EVIDENCE OF PERFECTED FIRST PRIORITY SECURITY INTEREST. With respect to
the Target acquired or court reporting business/company financed with the
proceeds of a Revolving Loan, and prior to the funding of such Loan, Agent shall
have been granted, for the benefit of Lenders, a first priority lien on and
security interest in such Target (including any equity security acquired by
Borrower or any of its Subsidiaries), or court reporting business/company, and
shall have received evidence of the proper filing in all required filing offices
of duly executed UCC financing statements or amendments to existing financing
statements with respect to such Target, in form and substance satisfactory to
Agent and perfecting the first priority security interest of Agent for the
benefit of Lenders, in such property. In the event real property is being
acquired in connection with such Acquisition, Agent shall have received a fully
executed Mortgage, in form and substance reasonably satisfactory to Agent
together with an ALTA lender's title insurance policy issued by a title insurer
reasonably satisfactory to Agent, in form and substance and in an amount
reasonably satisfactory to Agent insuring that the Mortgage is a valid and
enforceable first priority lien on the respective property, free and clear of
all defects, encumbrances and Liens, other than Permitted Liens. In addition,
Agent shall have received then current surveys, certified by a licensed surveyor
sufficient to allow the issuer of the lender's title insurance policy to issue
such policy without a survey exception. In the event the Acquisition is
structured as a stock purchase, or other purchase of equity securities, the
Person so acquired shall be required to guaranty the Obligations and pledge all
of its assets to secure such guaranty.
(b) APPROVAL. Majority Lenders shall have approved such Acquisition in
accordance with Section 5.17;
(c) AVAILABILITY CERTIFICATE. Agent shall have received an Availability
Certificate as required pursuant to subsection 4.2(d) and, after giving effect
to such Loan, the outstanding principal balance of Revolving Loans does not
exceed the Maximum Revolving Loan Balance; and
(d) ADDITIONAL DOCUMENTATION.
(i) Agent shall have received complete executed or conformed copies of
each document, instrument and agreement executed in connection with such
Acquisition (collectively, "Acquisition Documents"), all of which shall be
subject to Lenders' review and approval;
(ii) such Acquisition Documents shall be in full force and effect and
no material term or condition thereof shall have been amended, modified or
waived after the execution thereof (other than solely to extend the date by
which the Acquisition is required to occur) except with the prior written
consent of Majority Lenders;
(iii) none of the parties to any of such Acquisition Documents shall
have failed to perform any material obligation or covenant required to be
performed or complied with on or before the date of Borrowing; and
(iv) Agent shall have received, for the benefit of Lenders, a
collateral assignment of the seller's representations, warranties and
indemnities to Borrower under the Acquisition Documents.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender that the
following are, and after giving effect to the Related Transactions will be,
true, correct and complete:
3.1 CORPORATE EXISTENCE AND POWER. The Borrower and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and execute, deliver, and perform its obligations under, the Loan Documents and
the Related Agreements to which it is a party;
(c) is duly qualified as a foreign corporation, and licensed and in good
standing, under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law;
except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
3.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. (a) The execution, delivery
and performance by the Borrower and its Subsidiaries of this Agreement, and any
other Loan Document and Related Agreement to which such Person is party, have
been duly authorized by all necessary corporate action, and do not and will not:
(i) contravene the terms of any of that Person's Organization
Documents;
(ii) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual
Obligation to which such Person is a party or any order, injunction, writ
or decree of any Governmental Authority to which such Person or its
Property is subject; or
(iii) violate any Requirement of Law.
(b) SCHEDULE 3.2 sets forth the authorized capital stock of Borrower and
each of its Subsidiaries. All issued and outstanding shares of capital stock of
Borrower and each of its Subsidiaries are duly authorized and validly issued,
fully paid, non-assessable. To the best of Borrower's knowledge, all capital
stock of Borrower owned by GTCR, Investor Stockholders and Management
Stockholders is owned by GTCR, Investor Stockholders, Management Stockholders
and Borrower, as applicable, free and clear of all Liens. All of the outstanding
capital stock of Borrower's Subsidiaries is owned by Borrower, free and clear of
all Liens other than those in favor of Agent, for the benefit of Lenders. All
shares of capital stock of Borrower and each of its Subsidiaries were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities. The outstanding capital stock of Borrower's Subsidiaries is owned by
Borrower. As of the Closing Date, the capital stock of Borrower owned by GTCR,
Investor Stockholders and Management Stockholders is owned of record by such
Persons in the amounts set forth on Schedule 3.2. Except as set forth on
Schedule 3.2, to the best of Borrower's knowledge there are no pre-emptive or
other outstanding rights, options, warrants, conversion rights or other similar
agreements or understandings for the purchase or acquisition of any shares of
capital stock or other securities of any such entity.
3.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except for recordings and filings in connection with the
Liens granted to the Agent under the Collateral Documents) is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Borrower or any of its Subsidiaries of this Agreement,
any other Loan Document or Related Agreement.
3.4 BINDING EFFECT. This Agreement and each other Loan Document and Related
Agreement to which the Borrower or any of its Subsidiaries is a party constitute
the legal, valid and binding obligations of the Borrower and each Subsidiary
which is a party thereto, enforceable against such Person in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
3.5 LITIGATION. Except as specifically disclosed in Schedule 3.5, there are
no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Borrower, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Borrower, or its
Subsidiaries or any of their respective Properties which:
(a) purport to affect or pertain to this Agreement, any other
Loan Document or Related Agreement, or any of the transactions
contemplated hereby or thereby; or
(b) if determined adversely to the Borrower or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse
Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement, any other
Loan Document or any Related Agreement, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.
3.6 NO DEFAULT. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Borrower or the grant or perfection of
the Agent's Liens on the Collateral. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
in any respect which, individually or together with all such defaults, could
reasonably be expected to have a Material Adverse Effect or that would, if such
default had occurred after the Closing Date, create an Event of Default under
subsection 7.1(e).
3.7 ERISA COMPLIANCE. (a) Schedule 3.7 lists all Plans and separately
identifies Plans intended to be Qualified Plans and Multiemployer Plans.
Borrower and each of its Subsidiaries is in compliance with all requirements of
each Plan, and each Plan complies with and is operated in compliance with all
applicable provisions of law in all respects. Each Qualified Plan and each
related trust has been determined by the IRS to qualify and will continue to
qualify under, and be exempt from tax under, the IRC. Nothing has occurred or
will be permitted to occur which would cause the loss of such qualification or
tax-exempt status. All required contributions have been and will be made in
accordance with the provisions of each Plan, and with respect to Borrower or any
ERISA Affiliate, there are and will be no Unfunded Pension Liabilities or
Withdrawal Liabilities. Neither Borrower nor any ERISA Affiliate has engaged or
will engage in a prohibited transaction, as defined in Section 4975 of the IRC
or Section 406 of ERISA.
(b) No ERISA Event has occurred or is expected to occur with respect to any
Plan. No liability under any Title IV Plan has been or will be funded, nor has
such obligation been (nor will it be) satisfied with, the purchase of a contract
from an insurance company that is not rated AAA by Standard & Poor's Corporation
and the equivalent by each other nationally recognized rating agency.
(c) Except as specifically disclosed in Schedule 3.7, no member of the
Controlled Group has ever represented, promised or contracted (whether in oral
or written form) to any current or former employee (either individually or to
employees as a group) that such current or former employee(s) would be provided,
at any cost to any member of the Controlled Group, with life insurance or
employee welfare plan benefits (within the meaning of section 3(1) of ERISA)
following retirement or termination of employment.
(d) Members of the Controlled Group have complied in all material respects
with the notice and continuation coverage requirements of Section 4980B of the
Code. No member of the Controlled Group has engaged, directly or indirectly, in
a non-exempt prohibited transaction (as defined in Section 4975 of the Code or
Section 406 of ERISA) in connection with any Plan which could reasonably be
expected to have a Material Adverse Effect.
3.8 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
intended to be and shall be used solely for the purposes set forth in and
permitted by Section 4.10, and are intended to be and shall be used in
compliance with Section 5.8. Neither the Borrower nor any of its Subsidiaries is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
3.9 TITLE TO PROPERTIES. The Borrower and each of its Subsidiaries have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real Property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. As of the
Closing Date, the Property of the Borrower and its Subsidiaries is subject to no
Liens, other than Permitted Liens.
3.10 TAXES. The Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Borrower or any of its Subsidiaries which
would, if the assessment were made, have a Material Adverse Effect.
3.11 FINANCIAL CONDITION. (a) Each of (i) the audited consolidated annual
financial statements of financial condition of the Borrower and its Subsidiaries
dated December 31, 1995, and the related audited consolidated statements of
income, shareholders' equity and cash flows for the fiscal year ended on that
date and (ii) the unaudited interim consolidated financial statements of
Borrower and its Subsidiaries dated September 30, 1996 and the related unaudited
consolidated statements of income and cash flows for the nine (9) months then
ended:
(x) were prepared in accordance with GAAP consistently applied
throughout the respective periods covered thereby, except as otherwise
expressly noted therein, subject to, in the case of the unaudited
interim financial statements, normal year-end adjustments and the lack
of footnote disclosures;
(y) present fairly the consolidated financial condition of the
Borrower and its Subsidiaries as of the dates thereof and results of
operations for the periods covered thereby; and
(z) except as specifically disclosed in Schedule 3.11, show
all material indebtedness and other liabilities, direct or contingent
of the Borrower and its consolidated Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since December 31, 1995, there has been no Material Adverse
Effect.
3.12 ENVIRONMENTAL MATTERS. The on-going operations of the Borrower and
each of its Subsidiaries comply in all material respects with all Environmental
Laws.
3.13 COLLATERAL DOCUMENTS. All representations and warranties of the
Borrower, any of its Subsidiaries or any other party to any Collateral Document
(other than the Agent and/or any Lender) contained in the Collateral Documents
are true and correct.
3.14 REGULATED ENTITIES. None of the Borrower, any Person controlling the
Borrower, or any Subsidiary of the Borrower, is (a) an "Investment Company"
within the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
3.15 NO BURDENSOME RESTRICTIONS. Neither the Borrower nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any charter or corporate restriction, or any Requirement of Law, which could
reasonably be expected to have a Material Adverse Effect.
3.16 SOLVENCY. The Borrower and each of its Subsidiaries, other than Esq.
Com CSD, Inc. for which no representation is hereby made, is Solvent.
3.17 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Borrower or any of its Subsidiaries, or, to the best of
the Borrower's knowledge, threatened against or affecting the Borrower or any of
its Subsidiaries, and no significant unfair labor practice complaint is pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them before any Governmental Authority.
3.18 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Schedule 3.18
identifies all United States and foreign patents, trademarks, service marks,
trade names and copyrights, and all registrations and applications for
registration thereof and all licenses thereof, owned or held by Borrower or any
of its Subsidiaries on the Closing Date after giving effect to the Related
Transactions, and identifies the jurisdictions in which such registrations and
applications have been filed. Except as otherwise disclosed in Schedule 3.18, as
of the Closing Date, Borrower and its Subsidiaries are the sole beneficial
owners of, or have the right to use, free from any restrictions, claims, rights
encumbrances or burdens, the intellectual property referred to in Schedule 3.18
and all other processes, designs, formulas, computer programs, computer software
packages, trade secrets, inventions, product manufacturing instructions,
technology, research and development, know-how and all other intellectual
property that are necessary for the operation of Borrower's and its
Subsidiaries' businesses as being operated on the Closing Date after giving
effect to the Related Transactions. Each patent, trademark, service ▇▇▇▇, trade
name, copyright and license listed on Schedule 3.18 is in full force and effect
except to the extent the failure to be in effect will not have a Material
Adverse Effect. Except as set forth in Schedule 3.18, to the best knowledge of
Borrower, as of the Closing Date (a) none of the present or contemplated
products or operations of Borrowers or its Subsidiaries infringes any patent,
trademark, service ▇▇▇▇, trade name, copyright, license or other right owned by
any other Person, and (b) there is no pending or threatened claim or litigation
against or affecting Borrower or any of its Subsidiaries contesting the right of
any of them to manufacture, process, sell or use any such product or to engage
in any such operation except for claims and/or litigation which will not have a
Material Adverse Effect.
3.19 SUBSIDIARIES. The Borrower has no Subsidiaries or equity investments
in any other corporation or entity other than those specifically disclosed in
Schedule 3.19.
3.20 BROKERS' FEES; TRANSACTION FEES. Neither the Borrower nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with the transactions
contemplated hereby.
3.21 INSURANCE. The Properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar Properties in localities where the Borrower or such Subsidiary operates.
A true and complete listing of such insurance, including, issuers, coverages and
deductibles, has been provided to the Agent.
3.22 FULL DISCLOSURE. None of the representations or warranties made by the
Borrower or any of its Subsidiaries in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in each exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any of its Subsidiaries in connection with
the Loan Documents (including the offering and disclosure materials delivered by
or on behalf of the Borrower to the Lenders prior to the Closing Date), contains
any untrue statement of a material fact or omits any material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading as of the time when
made or delivered.
ARTICLE IV - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any Lender shall have
any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied, unless the Majority Lenders waive compliance in writing:
4.1 FINANCIAL STATEMENTS. The Borrower shall maintain, and shall cause each
of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit the
preparation of financial statements in conformity with GAAP (provided that
monthly financial statements shall not be required to have footnote disclosure).
The Borrower shall deliver to the Agent in form and detail satisfactory to the
Agent and the Majority Lenders, with sufficient copies for each Lender:
(a) as soon as available, but not later than ninety (90) days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of the
Borrower as at the end of such year and the related consolidated statements of
income or operations, shareholders' equity and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, and accompanied by the opinion of KPMG Peat Marwick or another
nationally-recognized independent public accounting firm acceptable to the Agent
which report shall state that such consolidated financial statements present
fairly the financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion shall not be
qualified or limited because of a restricted or limited examination by such
accountant of any material portion of the Borrower's or any Subsidiary's
records; and
(b) as soon as available, but not later than thirty (30) days after the end
of each fiscal month of each year (other than March, June, September and
December) and not later than forty-five (45) days after the end of each March,
June, September and December, (i) a copy of the unaudited consolidated and
consolidating balance sheets of the Borrower and each of its Subsidiaries, and
the related consolidated and consolidating statements of income, shareholders'
equity and cash flows, and (ii) without duplication of the statements required
to be delivered pursuant to clause (i) above, a copy of unaudited statements of
income and cash flows with respect to each court reporting business/company as
of the end of such month and for the portion of the fiscal year then ended, in
each instance in clause (i) and (ii), all certified by an appropriate
Responsible Officer of the Borrower as being complete and correct and fairly
presenting, in accordance with GAAP, the financial position and the results of
operations of the Borrower and the Subsidiaries, subject to normal year-end
adjustments and absence of footnote disclosure.
4.2 CERTIFICATES; BORROWING BASE CERTIFICATES; OTHER INFORMATION. The
Borrower shall furnish to the Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the annual financial statements
referred to in subsection 4.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in subsections 4.1(a) and 4.1(b) above, a certificate of a Responsible Officer
(i) stating that, to the best of such officer's knowledge, the Borrower, during
such period, has observed and performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement to be
observed, performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified (by applicable
subsection reference) in such certificate, and (ii) showing in detail the
calculations supporting such statement in respect of Article VI hereof;
(c) promptly after the same are sent, copies of all financial statements
and reports which the Borrower sends to its shareholders; and promptly after the
same are filed, copies of all financial statements and regular, periodical or
special reports which the Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or similar Governmental Authority;
(d) (i) as soon as available and in any event within thirty (30) days after
the end of each calendar month, and at such other times at the Agent may
require, and (ii) not later than ten (10) Business Days prior to the
consummation of an Acquisition (whether or not such Acquisition is to be
financed, in whole or in part, with proceeds of Loans), an Availability
Certificate, certified by a Responsible Officer, as at the end of the
most-recently ended fiscal month or as at such other date as the Agent may
reasonably require;
(e) together with each delivery of financial statements pursuant to
subsection 4.1(b) for the months of March, June, September and December, a
management report, in reasonable detail, signed by the chief financial officer
of the Borrower, describing the operations and financial condition of the
Borrower and its Subsidiaries for the quarter and the portion of the fiscal year
then ended (or for the fiscal year then ended in the case of annual financial
statements), and setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year and the corresponding
figures from the most recent projections for the current fiscal year delivered
to the Agent pursuant to subsection 4.2(g) and discussing the reasons for any
significant variations;
(f) intentionally omitted;
(g) as soon as available and in any event no later than the last day of
each fiscal year of the Borrower, projections of the Borrower's (and its
Subsidiaries') consolidated and consolidating financial performance for the
forthcoming fiscal year on a month by month basis;
(h) annually, concurrently with the Borrower's delivery of the projections
under subsection 4.2(g), the Borrower shall supplement in writing and deliver to
the Agent revisions of and supplements to Schedules 3.5, 5.1, 5.5 and 5.9 hereto
to the extent necessary to disclose new or changed facts or circumstances after
the Closing Date; provided that delivery or receipt of such subsequent
disclosure shall not constitute a waiver by the Agent or any Lender or a cure of
any Default or Event of Default resulting in connection with the matters
disclosed;
(i) promptly upon receipt thereof, copies of any reports submitted by the
Borrower's certified public accountants in connection with each annual, interim
or special audit or review of any type of the financial statements or internal
control systems of the Borrower made by such accountants, including any comment
letters submitted by such accountants to management of the Borrower in
connection with their services; and
(j) promptly, such additional business, financial, corporate affairs and
other information as the Agent, at the request of any Lender, may from time to
time reasonably request.
4.3 NOTICES. The Borrower shall promptly notify the Agent and each Lender
of any of the following, promptly (and in no event later than three (3) Business
Days after the Borrower's becoming aware thereof):
(a) the occurrence or existence of any Default or Event of Default, or any
event or circumstance that foreseeably will become a Default or Event of
Default, and any event or circumstance that would cause the condition to
Borrowing set forth in subsection 2.2(b) not to be satisfied if a Borrowing were
requested on or after the date of such event or circumstance;
(b) any breach or non-performance of, or any default under, any Contractual
Obligation of the Borrower or any of its Subsidiaries which could result in a
Material Adverse Effect;
(c) any dispute, litigation, investigation, proceeding or suspension which
may exist at any time between the Borrower or any of its Subsidiaries and any
Governmental Authority which could result in a Material Adverse Effect;
(d) of the commencement of, or any material development in, any litigation
or proceeding affecting the Borrower or any Subsidiary (i) in which the amount
of damages claimed is $250,000 (or its equivalent in another currency or
currencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an injunction or other
stay of the performance of this Agreement, any Loan Document or any Related
Agreement;
(e) any of the following if the same could reasonably be expected to have
or involve a Material Adverse Effect: (i) any enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened
against the Borrower or any of its Subsidiaries or any of their respective
Properties pursuant to any applicable Environmental Laws, (ii) any other
Environmental Claims, and (iii) any environmental or similar condition on any
real property adjoining or in the vicinity of the property of the Borrower or
any Subsidiary that could reasonably be anticipated to cause such property or
any part thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws;
(f) of any of the following if the same could reasonably be expected to
have or involve a Material Adverse Effect, together with a copy of any notice
with respect to such event that may be required to be filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the Borrower
or any member or its Controlled Group with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is subject to Title IV of ERISA
or section 412 of the Code by any member of the Controlled Group;
(iii) the adoption of any amendment to a Plan that is subject to Title
IV of ERISA or section 412 of the Code, if such amendment results in a
material increase in benefits or unfunded liabilities; or
(iv) the commencement of contributions by any member of the Controlled
Group to any Plan that is subject to Title IV of ERISA or section 412 of
the Code;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower delivered to the Lenders pursuant
to this Agreement;
(h) of any change in accounting policies or financial reporting practices
by the Borrower or any of its Subsidiaries; and
(i) of any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Borrower or any of its Subsidiaries if the same could have a
Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a written statement
by a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein, and stating what action the Borrower proposes to take with
respect thereto and at what time. Each notice under subsection 4.3(a) shall
describe with particularity any and all clauses or provisions of this Agreement
or other Loan Document that have been breached or violated.
4.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to:
(a) preserve and maintain in full force and effect its corporate existence
and good standing under the laws of its state or jurisdiction of incorporation
except in connection with transactions permitted by Section 5.3;
(b) preserve and maintain in full force and effect all rights, privileges,
qualifications, permits, licenses and franchises necessary or desirable in the
normal conduct of its business except in connection with transactions permitted
by Section 5.3 and sales of assets permitted by Section 5.2;
(c) use its reasonable efforts, in the Ordinary Course of Business, to
preserve its business organization and preserve the goodwill and business of the
customers, suppliers and others having material business relations with it; and
(d) preserve or renew all of its registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
4.5 MAINTENANCE OF PROPERTY. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, and preserve all its Property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.6 INSURANCE. The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its Properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including workers'
compensation insurance, public liability and property and casualty insurance,
which amounts shall not be reduced by the Borrower in the absence of thirty (30)
days' prior notice to the Agent and business interruption insurance in an amount
not less than $1,000,000. All property damage and casualty insurance shall name
the Agent as loss payee/mortgagee, all liability insurance shall name the Agent
and the Lenders as additional insureds and all business interruption insurance
shall name Agent as assignee. Upon request of the Agent or any Lender, the
Borrower shall furnish the Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than once per calendar year) a certificate of
a Responsible Officer of the Borrower (and, if requested by the Agent, any
insurance broker of the Borrower) setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section 4.6.
4.7 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause its
Subsidiaries to, pay, discharge and perform as the same shall become due and
payable or required to be performed, all their respective obligations and
liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings which stay the enforcement of any Lien and
adequate reserves in accordance with GAAP are being maintained by the Borrower
or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
Property;
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained herein and/or in any instrument or agreement
evidencing such Indebtedness; and
(d) all obligations under any Contractual Obligation, including the Related
Agreements.
4.8 COMPLIANCE WITH LAWS. The Borrower shall comply, and shall cause each
of its Subsidiaries to comply, in all material respects, with all Requirements
of Law of any Governmental Authority having jurisdiction over it or its business
(including, without limitation, all Environmental Laws), except such as may be
contested in good faith by appropriate proceedings without risk of loss of any
Collateral and as to which a bona fide dispute exists and appropriate reserves
have been established on the Borrower's financial statements.
4.9 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Borrower shall
maintain and shall cause each of its Subsidiaries to maintain proper books of
record and account, in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Borrower and such Subsidiaries.
The Borrower shall permit, and shall cause each of its Subsidiaries to permit,
representatives and independent contractors of the Agent (once a year at the
expense of Borrower), or any Lender (at such Lender's expense), to visit and
inspect any of their respective Properties, to examine their respective
corporate, financial and operating records, and make copies thereof or abstracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective directors, officers, and independent public accountants, at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, when an Event of Default exists the Agent or any Lender may do any of
the foregoing at the expense of Borrower at any time during normal business
hours and without advance notice.
4.10 USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans
solely as follows: (a) to repay the Prior Indebtedness, (b) to finance a portion
of the purchase price of Acquisitions permitted hereunder, and (c) for working
capital and other general corporate purposes not in contravention of any
Requirement of Law and not in violation of this Agreement.
4.11 SOLVENCY. The Borrower shall at all times be, and shall cause each of
its Subsidiaries (other than Esq. Com CSD, Inc.) to be, Solvent.
4.12 FURTHER ASSURANCES. (a) The Borrower shall ensure that all written
information, exhibits and reports furnished to the Agent or the Lenders do not
and will not contain any untrue statement of a material fact and do not and will
not omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made,
and will promptly disclose to the Agent and the Lenders and correct any defect
or error that may be discovered therein or in any Loan Document or in the
execution, acknowledgement or recordation thereof.
(b) Promptly upon request by the Agent, the Borrower shall (and shall cause
any of its Subsidiaries to) take such additional actions as the Agent may
reasonably require from time to time in order (i) to carry out more effectively
the purposes of this Agreement or any other Loan Document, including causing any
Subsidiary to guaranty the Obligations and to grant to Agent, for the benefit of
Lenders, a security interest in all assets of such Subsidiary to secure such
guaranty, (ii) to subject to the Liens created by any of the Collateral
Documents any of the Properties, rights or interests covered by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Agent and Lenders the rights granted or now
or hereafter intended to be granted to the Agent and the Lenders under any Loan
Document or under any other document executed in connection therewith.
ARTICLE V - NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as any Lender shall
have any Commitment hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, unless the Majority Lenders waive compliance in writing:
5.1 LIMITATION ON LIENS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, make, create, incur,
assume or suffer to exist any Lien upon or with respect to any part of its
Property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) any Lien (other than Liens on the Collateral) existing on the Property
of the Borrower or its Subsidiaries on the Closing Date and set forth in
Schedule 5.1 securing Indebtedness outstanding on such date and permitted by
Section 5.5;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 4.7, provided that no Notice of Lien
has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the Ordinary Course of Business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the Property subject thereto
and for which adequate reserves in accordance with GAAP are being maintained;
(e) Liens (other than any Lien imposed by ERISA and other than on the
Collateral) consisting of pledges or deposits required in the Ordinary Course of
Business in connection with workers' compensation, unemployment insurance and
other social security legislation;
(f) Liens (other than Liens on the Collateral) consisting of judgment or
judicial attachment liens, provided that the enforcement of such Liens is
effectively stayed and all such Liens in the aggregate at any time outstanding
for the Borrower and its Subsidiaries do not exceed $100,000;
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the Ordinary Course of Business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the businesses of the Borrower and its Subsidiaries;
(h) Purchase money security interests on any Property acquired or held by
the Borrower or its Subsidiaries in the Ordinary Course of Business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such Property and permitted under subsection 5.5(d);
provided that (i) any such Lien attaches to such Property concurrently with or
within twenty (20) days after the acquisition thereof, (ii) such Lien attaches
solely to the Property so acquired in such transaction, and (iii) the principal
amount of the debt secured thereby does not exceed 100% of the cost of such
Property; and
(i) Liens securing Capital Lease Obligations permitted under subsection
5.5(d).
5.2 DISPOSITION OF ASSETS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any Property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or surplus equipment, all
in the Ordinary Course of Business;
(b) the sale of equipment to the extent that such equipment is exchanged
for credit against the purchase price of similar replacement equipment, or the
proceeds of such sale are reasonably promptly applied to the purchase price of
such replacement equipment; and
(c) dispositions of court reporting businesses/companies not otherwise
permitted hereunder which are made for fair market value; provided, that (i) at
the time of any disposition, no Event of Default shall exist or shall result
from such disposition, (ii) the aggregate sales price from such disposition
shall be paid in cash, and (iii) EBIDAT of the court reporting
businesses/companies so sold by the Borrower and its Subsidiaries, together,
shall not exceed, in the aggregate, in any fiscal year ten percent (10%) of
EBIDAT for the twelve (12) month period ending on the last day of the most
recent month for which Agent has received financial statements.
5.3 CONSOLIDATIONS AND MERGERS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, 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 or in favor of any Person, except:
(a) any Subsidiary of the Borrower may merge with the Borrower, provided
that the Borrower shall be the continuing or surviving corporation, or with any
one or more Subsidiaries of the Borrower, provided that if any transaction shall
be between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation; and
(b) any Subsidiary of the Borrower may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Borrower or another
Wholly-Owned Subsidiary of the Borrower.
5.4 LOANS AND INVESTMENTS. The Borrower shall not purchase or acquire, or
suffer or permit any of its Subsidiaries to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any obligations or
other securities of, or any interest in, any Person, including the establishment
or creation of a Subsidiary, or make or commit to make any Acquisitions, or make
or commit to make any advance, loan, extension of credit or capital contribution
to or any other investment in, any Person including any Affiliate of the
Borrower, except for:
(a) investments in Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the Ordinary
Course of Business;
(c) extensions of credit by the Borrower to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries of the Borrower;
(d) additional purchases of or investments in the stock of Subsidiaries,
Joint Ventures or the capital stock, assets, obligations or other securities of
or interest in other Persons not exceeding, in the aggregate, $250,000 as to all
such purchases and investments;
(e) Acquisitions permitted hereunder; and
(f) the purchase, redemption or other acquisition of Borrower's capital
stock pursuant to Section 5.12.
5.5 LIMITATION ON INDEBTEDNESS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to, any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted pursuant to
Section 5.8;
(c) Indebtedness existing on the Closing Date and set forth in Schedule
5.5;
(d) Indebtedness not to exceed $750,000 in the aggregate at any time
outstanding, consisting of Capital Lease Obligations or secured by purchase
money Liens permitted by subsection 5.1(h);
(e) unsecured Subordinated Indebtedness incurred in connection with
Acquisitions permitted hereunder; provided (i) the holder of such Subordinated
Indebtedness enters into a subordination agreement in form and substance
satisfactory to Majority Lenders; and (ii) no Default or Event of Default shall
exist or shall result from the incurrence of such Subordinated Indebtedness; and
(f) other Indebtedness not exceeding in the aggregate at any time
outstanding $300,000.
5.6 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, enter into any transaction with any
Affiliate of the Borrower or of any such Subsidiary, except:
(a) as expressly permitted by this Agreement;
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of the Borrower or such Subsidiary; or
(c) the payment of reasonable salaries and expenses of officers of Borrower
and de minimis fees and expenses of directors of Borrower, in each case for
actual services rendered in the Ordinary Course of Business;
and, in each case (a) and (b), upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary and which are disclosed in writing to Agent.
5.7 MANAGEMENT FEES AND COMPENSATION. Except as permitted by Section 5.6,
Borrower shall not, and shall not permit any of its Subsidiaries to pay any
management, consulting or similar fees to any Affiliate of the Borrower or to
any officer, director or employee of the Borrower or any of its Subsidiaries or
any Affiliate of the Borrower.
5.8 USE OF PROCEEDS. The Borrower shall not and shall not suffer or permit
any of its Subsidiaries to use any portion of the Loan proceeds, directly or
indirectly, to purchase or carry Margin Stock or repay or otherwise refinance
indebtedness of the Borrower or others incurred to purchase or carry Margin
Stock, or otherwise in any manner which is in contravention of any Requirements
of Law.
5.9 CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the Ordinary Course of
Business;
(b) Rate Contracts entered into in the Ordinary Course of Business; and
(c) Contingent Obligations of the Borrower and its Subsidiaries existing as
of the Closing Date and listed in Schedule 5.9.
5.10 COMPLIANCE WITH ERISA. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to:
(a) terminate any Plan subject to Title IV of ERISA so as to result in any
material liability to the Borrower or any ERISA Affiliate;
(b) permit to exist any ERISA Event or any other event or condition, which
presents the risk of a material liability to any member of the Borrower or any
ERISA Affiliate;
(c) make a complete or partial withdrawal (within the meaning of ERISA
Section 4201) from any Multiemployer Plan so as to result in any material
liability to the Borrower or any ERISA Affiliate;
(d) enter into any new Plan or modify any existing Plan so as to increase
its obligations thereunder which could result in any material liability to
Borrower or any ERISA Affiliate; or
(e) permit the present value of all nonforfeitable accrued benefits under
any Plan (using the actuarial assumptions utilized by the PBGC upon termination
of a Plan) materially to exceed the fair market value of Plan assets allocable
to such benefits, all determined as of the most recent valuation date for each
such Plan.
5.11 OPERATING LEASE OBLIGATIONS. The Borrower shall not, and shall not
suffer or permit any of its Subsidiaries to, create or suffer to exist any
obligations for the payment of rent for any Property under lease or agreement to
lease (other than Capital Leases) if the aggregate annual rental payments for
any one such operating lease shall exceed $800,000 in any fiscal year of the
Borrower.
5.12 RESTRICTED PAYMENTS. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, (a) declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, (b)
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding or (c) make any payment or prepayment of principal of, premium, if
any, redemption, exchange, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, Subordinated Indebtedness (the items described
in clauses (a), (b) and (c) are referred to as "Restricted Payments"); except
that any Wholly-Owned Subsidiary of the Borrower may declare and pay dividends
to the Borrower or any Wholly-Owned Subsidiary of the Borrower, and except that
the Borrower may:
(i) declare and make dividend payments or other distributions payable
solely in its common stock;
(ii) purchase, redeem or otherwise acquire shares of its capital stock
or warrants or options to acquire any such shares; provided (x) at the time
of, and on a proforma basis after giving effect to, such purchase,
redemption or acquisition, no Default or Event of Default shall exist and
(y) the aggregate amount of purchases, redemptions and acquisitions shall
not exceed $1,000,000 (A) from the Closing Date to and including December
31, 1996 and (B) for any fiscal year thereafter;
(iii) pay dividends on its Series A Convertible Preferred Stock at the
rate of 6% per annum on the liquidation value thereof, and if an "Event of
Noncompliance" (as defined in the Certificate of Designations, Preferences
and Relative, Participating, Optional or Other Special Rights of such
stock) has occurred, then at a rate of 8% per annum on the liquidation
value thereof, provided in each case that at the time of, and on a proforma
basis after giving effect to, such payment, no Default or Event of Default
exists; and
(iv) make scheduled payments of principal and interest with respect to
Subordinated Indebtedness permitted hereunder, as required in accordance
with the terms thereof, but only, in each instance, subject to the
subordination provisions contained in the agreement evidencing such
Indebtedness or other subordination agreement executed in connection
therewith, provided at the time of, and on a pro forma basis after giving
effect to, such payment, no Default or Event of Default exists.
5.13 CHANGE IN BUSINESS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, engage in any material line of business substantially
different from those lines of business carried on by it on the date hereof.
5.14 CHANGE IN STRUCTURE. Except as expressly permitted under Section 5.3,
the Borrower shall not and shall not permit any of its Subsidiaries to, make any
changes in its equity capital structure (including in the terms of its
outstanding stock), or amend its certificate of incorporation or by-laws if such
change or amendment could reasonably be expected to have a Material Adverse
Effect.
5.15 ACCOUNTING CHANGES. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Borrower or of any of its consolidated Subsidiaries.
5.16 AMENDMENTS TO RELATED AGREEMENTS. The Borrower shall not (i) amend,
modify, supplement, waive or otherwise modify any provision of, the Related
Agreements the effect of which could reasonably be expected to have a Material
Adverse Effect, or (ii) take or fail to take any action under the Related
Agreements that could reasonably be expected to have a Material Adverse Effect.
5.17 ACQUISITIONS.
(a) When Borrower or any of its Subsidiaries desires to make an
Acquisition, Borrower shall deliver, or cause to be delivered, to Agent and each
Lender an acquisition summary with respect to the Target and such potential
Acquisition, such summary to include a reasonably detailed description of the
Target, its business (including financial information) and operating results
(including financial statements), the scope and results of Borrower's due
diligence inspections and investigations and the terms and conditions, including
economic terms, of the proposed Acquisition. Borrower will not consummate and
will not permit any Subsidiary to consummate any Acquisition without the prior
written consent of Majority Lenders if (i) the sum of the gross purchase price
(including the value of any non-cash component thereof and non-compete payments)
to be paid for the Target and all closing costs to be paid by Borrower and its
Subsidiaries is greater than $1,000,000 or (ii) the aggregate gross purchase
price (including the value of any non-cash component thereof and non-compete
payments) of all Acquisitions during the fiscal year in question equals or
exceeds $5,000,000.
(b) It is understood and agreed that each Lender's decision to consent to
an Acquisition shall be based upon such Lender's evaluation and approval of the
business and financial condition of the Target and review and approval of the
Acquisition Documents in connection with the proposed Acquisition.
(c) Within five (5) Business Days after receipt of the summary, Agent will
notify Borrower if it or any Lender reasonably requires any additional
information with respect to the proposed Acquisition and the Target which is the
subject thereof. No later than the later of (x) ten (10) Business Days after
Agent's receipt of the acquisition summary and additional information as Agent
or any Lender shall reasonably request if the amount of the Revolving Loan to
finance such Acquisition is less than $5,000,000 and (y) twenty (20) Business
Days after such receipt if the amount of the Revolving Loan so required is
$5,000,000 or more, Agent will notify Borrower, in writing, whether or not
Majority Lenders approve or disapprove of the proposed Acquisition on the terms
set forth in the acquisition summary. Any failure on the part of Majority
Lenders either to approve or disapprove, in writing, the proposed Acquisition
within said ten (10) or twenty (20) Business Day period, as applicable, shall
constitute disapproval by Majority Lenders of such Acquisition on the terms and
conditions set forth in the acquisition summary. If there is any material change
to the terms of the proposed Acquisition or any adverse change to the Target
which is the subject of such proposed Acquisition, Borrower shall notify Agent
of the same and further approval will be required, which approval will be
granted or denied within five (5) Business Days of receipt of written notice of
such material change. Any failure on the part of Majority Lenders either to
approve or disapprove within said five (5) Business Day period shall constitute
Majority Lenders' disapproval.
(d) The foregoing provisions do not impair, vitiate or affect the
conditions to Lenders' obligations to fund Loans as provided in Article II of
this Agreement.
ARTICLE VI - FINANCIAL COVENANTS
6.1 CAPITAL EXPENDITURES. The Borrower and its consolidated Subsidiaries
shall not make or commit to make Capital Expenditures (a) for the period from
the Closing Date to December 31, 1996 in excess of $250,000, (b) for fiscal year
1997 in excess of $600,000, and (c) in any fiscal year thereafter in excess of
$500,000 (the "Capital Expenditure Limitation"); provided, however, in the event
Borrower and its Subsidiaries do not expend the entire Capital Expenditure
Limitation in any fiscal year, Borrower and its Subsidiaries may carry forward
to the immediately succeeding fiscal year 100% of the unutilized portion.
6.2 LEVERAGE RATIO. The Borrower shall not permit its Leverage Ratio as
determined as of the end of any fiscal quarter, beginning with the quarter
ending December 31, 1996, to be greater than 5.5.
6.3 INTEREST COVERAGE RATIO. The Borrower shall not permit its ratio of
Cash Flow to Consolidated Net Interest Expense as determined as of the last day
of any fiscal quarter, beginning with the quarter ending December 31, 1996, for
the twelve months then ended to be less than 1.75.
6.4 EBIDAT. The Borrower shall not permit EBIDAT (a) for the three months
ending March 31, 1997 to be less than $500,000, (b) for the six months ending
June 30, 1997 to be less than $1,500,000, (c) for the nine months ending
September 30, 1997 to be less than $2,250,000, (d) for the twelve months ending
December 31, 1997 to be less than $3,500,000 and (e) for the twelve months
ending on the last day of each quarter thereafter to be less than the prior
quarter's EBIDAT covenant level plus $50,000.
ARTICLE VII - EVENTS OF DEFAULT
7.1 EVENT OF DEFAULT. Any of the following shall constitute an "Event of
Default":
(a) NON-PAYMENT. The Borrower fails to pay, (i) when and as required to be
paid herein, any amount of principal of or interest on any Loan, including after
maturity of the Loans, whether by acceleration or otherwise, or (ii) within five
(5) days after the same shall become due, any fee or any other amount payable
hereunder or pursuant to any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty by the
Borrower or any of its Subsidiaries made or deemed made herein, in any Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Borrower, any of its Subsidiaries, or their respective
Responsible Officers, furnished at any time under this Agreement, or in or under
any Loan Document, shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Borrower fails to perform or observe any term,
covenant or agreement contained in Sections 4.1, 4.2(b), 4.2(d), 4.9 or Article
V or Article VI hereof; or
(d) OTHER DEFAULTS. The Borrower or, except as provided in subsection
7.1(m), any of its Subsidiaries fails to perform or observe any other term or
covenant contained in this Agreement or any Loan Document, and such default
shall continue unremedied for a period of thirty (30) days after the date upon
which written notice thereof is given to the Borrower by the Agent or any
Lender; or
(e) CROSS-DEFAULT. The Borrower or any of its Subsidiaries (i) fails to
make any payment in respect of any Indebtedness or Contingent Obligation having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than $1,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the document relating thereto on the date of such failure; or (ii) fails to
perform or observe any other condition or covenant, or any other event shall
occur or condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, if the effect of such failure, event or
condition is to cause the holder or holders of such Indebtedness or beneficiary
or beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Borrower or any of its
Subsidiaries (i) ceases or fails to be Solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Borrower or any Subsidiary of the Borrower, or
any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of the Borrower's or any of its
Subsidiaries' Properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within sixty (60) days
after commencement, filing or levy; (ii) the Borrower or any of its Subsidiaries
admits the material allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-U.S. law) is
ordered in any Insolvency Proceeding; or (iii) the Borrower or any of its
Subsidiaries acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or business;
(h) ERISA. (i) A member of the Controlled Group shall fail to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under a Multiemployer Plan; (ii) the
Borrower or an ERISA Affiliate shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (iii) in the case of an ERISA Event
involving the withdrawal from a Plan of a "substantial employer" (as defined in
Section 4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than
$250,000; (iv) in the case of an ERISA Event involving the complete or partial
withdrawal from a Multiemployer Plan, the withdrawing employer has incurred a
withdrawal liability in an aggregate amount exceeding $250,000; (v) in the case
of an ERISA Event not described in clause (iii) or (iv), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed $250,000; (vi) a Plan that is
intended to be qualified under Section 401(a) of the Code shall lose its
qualification, and the loss can reasonably be expected to impose on members of
the Controlled Group liability (for additional taxes, to Plan participants, or
otherwise) in the aggregate amount of $250,000 or more; (vii) the commencement
or increase of contributions to, or the adoption of or the amendment of a Plan
by, a member of the Controlled Group shall result in a net increase in unfunded
liabilities to the Controlled Group in excess of $250,000; (viii) any member of
the Controlled Group engages in or otherwise becomes liable for a non-exempt
prohibited transaction and the initial tax or additional tax under section 4975
of the Code relating thereto might reasonably be expected to exceed $250,000;
(ix) a violation of section 404 or 405 of ERISA or the exclusive benefit rule
under section 401(a) of the Code if such violation might reasonably be expected
to expose a member or members of the Controlled Group to monetary liability in
excess of $250,000; (x) any member of the Controlled Group is assessed a tax
under section 4980B of the Code in excess of $250,000; or (xi) the occurrence of
any combination of events listed in clauses (iii) through (x) that involves a
potential liability, net increase in aggregate Unfunded Pension Liabilities,
unfunded liabilities, or any combination thereof, in excess of $250,000.
(i) MONETARY JUDGMENTS. One or more judgments, non-interlocutory orders,
decrees or arbitration awards shall be entered against the Borrower or any of
its Subsidiaries involving in the aggregate a liability (not fully covered by
independent third-party insurance) as to any single or related series of
transactions, incidents or conditions, of $250,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of thirty
(30) days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or decree
shall be rendered against the Borrower or any of its Subsidiaries which does or
would reasonably be expected to have a Material Adverse Effect, and there shall
be any period of ten (10) consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; or
(k) COLLATERAL. Any material provision of any Collateral Document shall for
any reason cease to be valid and binding on or enforceable against the Borrower
or any Subsidiary of the Borrower party thereto or the Borrower or any
Subsidiary of the Borrower shall so state in writing or bring an action to limit
its obligations or liabilities thereunder; or any Collateral Document shall for
any reason (other than pursuant to the terms thereof and other than the failure
of Agent to take any action within its control) cease to create a valid security
interest in the Collateral purported to be covered thereby or such security
interest shall for any reason cease to be a perfected and first priority
security interest subject only to Permitted Liens other than due to the failure
of Agent to take any action within its control; or
(l) OWNERSHIP. Subject to the provisions of Section 5.2(c) and 5.3,
Borrower ceases to own 100% of the outstanding capital stock of each of ▇▇▇▇▇
▇▇▇▇▇▇▇ & Associates (U.S.A.), Ltd., Esquire Reporting Company, Inc., Pepper
Services, Limited, ▇▇▇▇▇▇▇ Deposition Service, Inc., Esq. Com CSD, Inc., Esq.
Com D.C., Inc. and any other wholly-owned Subsidiary acquired in an Acquisition
permitted hereunder; or
(l) SUBSIDIARY GUARANTY. A Subsidiary shall fail in any material respect to
perform or observe any term, covenant or agreement in the guaranty executed by
such Subsidiary, or any guaranty shall for any reason be partially (including
with respect to future advances) or wholly revoked or invalidated, or otherwise
cease to be in full force and effect, or Borrower or any of its Subsidiaries
shall contest in any manner the validity or enforceability thereof or deny that
it has any further liability or obligation thereunder; or
(n) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination provisions of
the subordination agreements delivered to Agent pursuant to Section 2.1(q) or
any agreement or instrument governing any Subordinated Debt shall for any reason
be revoked or invalidated, or otherwise cease to be in full force and effect, or
any Obligor a party thereto shall contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation
thereunder, or the Obligations for any reason shall not have the priority
contemplated by this Agreement or such subordination provisions.
7.2 REMEDIES. If any Event of Default occurs, the Agent may, and shall at
the request of the Majority Lenders:
(a) declare the Commitment of each Lender to make Loans or issue Letters of
Credit to be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable;
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in
subsections 7.1(f) and (g) above (in the case of clause (i) of paragraph (g)
upon the expiration of the 60-day period mentioned therein), the obligation of
each Lender to make Loans shall automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the Agent or
any Lender.
7.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
7.4 CASH COLLATERAL FOR LETTERS OF CREDIT. If an Event of Default has
occurred and is continuing or this Agreement shall be terminated for any reason,
then the Agent may demand (which demand shall be deemed to have been delivered
automatically upon any acceleration of the Loans and other obligations hereunder
pursuant to Section 7.2 hereof), and Borrower shall thereupon deliver to the
Agent, to be held for the benefit of the Agent and the Lenders entitled thereto,
an amount of cash equal to the amount of all outstanding Letters of Credit
(determined in accordance with subsection 1.1(c) hereof) as additional
collateral security for Borrower's Obligations in respect of any outstanding
Letters of Credit. The Agent may at any time apply any or all of such cash and
cash collateral to the payment of any or all of Borrower's Obligations in
respect of any Lender Letters of Credit or Letter of Credit Participation
Agreements. Pending such application, the Agent may (but shall not be obligated
to) invest the same in an interest bearing account in the Agent's name, for the
benefit of the Agent and the Lenders entitled thereto, under which deposits are
available for immediate withdrawal, at such bank or financial institution as the
Agent may, in its discretion, select.
ARTICLE VIII - THE AGENT
8.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby irrevocably appoints,
designates and authorizes the Agent to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by the Borrower or any Subsidiary or Affiliate of the Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or for the value of any Collateral or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the Properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Lenders (or, where an action or waiver need only be approved by the Majority
Lenders, by the Majority Lenders) as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Lenders
(or, where an action or waiver need only be approved by the Majority Lenders, by
the Majority Lenders) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing 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, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
requested by the Majority Lenders in accordance with Article VII; provided,
however, that unless and until the Agent shall have received any such request,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable or in the best interest of the Lenders.
8.6 CREDIT DECISION. Each Lender expressly acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and its Subsidiaries shall be deemed to constitute any representation
or warranty by the Agent to any Lender. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated thereby, and made its own decision to enter into this
Agreement and extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon the Agent and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Agent.
8.7 INDEMNIFICATION. Whether or not the transactions contemplated hereby
shall be consummated, upon demand therefor the Lenders shall indemnify the Agent
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), ratably from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever which
may at any time (including at any time following the repayment of the Loans and
the termination or resignation of the Agent) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Agent under or in connection with any of the foregoing; provided, however,
that no Lender shall be liable for the payment to the Agent of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the Agent's gross
negligence or willful misconduct. In addition, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. Without limiting the generality of the foregoing, if the
Internal Revenue Service or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section 8.7, together with all related costs and
expenses (including Attorney Costs). The obligation of the Lenders in this
Section 8.7 shall survive the payment of all Obligations hereunder.
8.8 AGENT IN INDIVIDUAL CAPACITY. Antares and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower and its Subsidiaries and
Affiliates as though Antares were not the Agent hereunder and without notice to
or consent of the Lenders. With respect to its Loans, Antares shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
shall include Antares in its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon thirty (30) days'
prior notice to the Lenders. If the Agent shall resign as Agent under this
Agreement, the Majority Lenders shall appoint from among the Lenders a successor
agent for the Lenders. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may thereupon appoint a
successor agent from among the Lenders. Upon the acceptance of its appointment
as successor agent hereunder, such successor agent shall succeed to all the
rights, powers and duties of the retiring Agent and the term "Agent" shall mean
such successor agent and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article VIII and Sections 9.4 and 9.5 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is thirty (30) days following a retiring Agent's notice
of resignation (or, if later, ten (10) days after the date upon which the Agent
designates a successor agent), the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent hereunder until such time, if any, as the Majority Lenders
appoint a successor agent as provided for above.
8.10 COLLATERAL MATTERS.
(a) The Agent is authorized (but not required) on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral:
(i) upon termination of the Commitments and payment in full of all
Loans and all other Obligations then payable under this Agreement and under
any other Loan Document;
(ii) constituting Property sold or to be sold or disposed of as part
of or in connection with any disposition permitted hereunder;
(iii) consisting of an instrument evidencing Indebtedness or of any
other debt instrument, if the indebtedness evidenced thereby has been paid
in full; or
(iv) if approved, authorized or ratified in writing by the Majority
Lenders or all the Lenders, as the case may be, as provided in subsection
9.1(f).
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this subsection 8.10(b).
(c) Each Lender agrees with and in favor of each other Lender (which
agreement shall not be for the benefit of the Borrower or any of its
Subsidiaries) that the Borrower's obligation to such Lender under this Agreement
and the other Loan Documents shall be equally and ratably secured by any real
property and/or other collateral now or hereafter securing any obligations of
the Borrower or any of its Subsidiaries to such Lender, whether or not the same
constitutes Collateral hereunder.
ARTICLE IX - MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders, the Borrower and acknowledged by
the Agent, and then such waiver shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders, the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to subsection 7.2(a)) or subject any Lender to
any additional obligations;
(b) postpone or delay any date fixed for any payment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any Loan Document;
(c) reduce the principal of, or the rate of interest specified herein or
the amount of interest payable in cash specified herein on any Loan, or of any
fees or other amounts payable hereunder or under any Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which shall be required for the Lenders or any of
them to take any action hereunder;
(e) amend this Section 9.1 or the definition of Majority Lenders or any
provision providing for consent or other action by all Lenders; or
(f) release all or substantially all of the Collateral except as otherwise
may be provided in this Agreement or the other Loan Documents;
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Majority Lenders or all the
Lenders, as the case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document.
9.2 NOTICES. (a) All notices, requests and other communications provided
for hereunder shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission) and mailed by certified or
registered mail, faxed or delivered, to the address or facsimile number
specified for notices on the applicable signature page hereof; or, if directed
to the Borrower or the Agent, to such other address as shall be designated by
such party in a written notice to each of the other parties hereto given in
compliance herewith, or, if directed to any other party hereto, to such other
address as shall be designated by such party in a written notice given in
compliance herewith to the Borrower and the Agent.
(b) All such communications shall be deemed to have been given or made (i)
if delivered in person, when delivered, (ii) if delivered by telecopy, on the
date of transmission if transmitted on a Business Day before 4:00 p.m. Chicago
time, otherwise on the next Business Day, (iii) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed
and (iv) if mailed, three (3) Business Days after deposited in the United States
mail, certified or registered; except that notices pursuant to Article I or VII
shall not be effective until actually received by the Agent.
(c) The Borrower acknowledges and agrees that any agreement of the Agent
and the Lenders in Article I hereof to receive certain notices by telephone and
facsimile is solely for the convenience and at the request of the Borrower. The
Agent and the Lenders shall be entitled to rely on the authority of any Person
purporting to be a Person authorized by the Borrower to give such notice and the
Agent and the Lenders shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Agent or the Lenders
in reliance upon such telephonic or facsimile notice. The obligation of the
Borrower to repay the Loans shall not be affected in any way or to any extent by
any failure by the Agent and the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Agent and the Lenders of a
confirmation which is at variance with the terms understood by the Agent and the
Lenders to be contained in the telephonic or facsimile notice.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
9.4 COSTS AND EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, the Borrower shall pay or reimburse:
(a) Antares (including in its capacity as Agent) within five (5) Business
Days after demand (except as otherwise provided in subsection 2.1(f)) for all
costs and expenses incurred by Antares (including in its capacity as Agent) in
connection with the development, preparation, syndication, delivery,
administration and execution of, and any amendment, supplement, waiver or
modification to (in each case, whether or not consummated), this Agreement, any
Loan Document and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including the reasonable Attorney Costs incurred by Antares (including
in its capacity as Agent) with respect thereto; provided, however, that Attorney
Costs for each Acquisition after the Closing Date shall not exceed $20,000 plus
out-of-pocket expenses unless otherwise agreed to by Agent and Borrower;
(b) pay or reimburse each Lender and the Agent within five (5) Business
Days after demand for all costs and expenses incurred by them in connection with
the enforcement, attempted enforcement, or preservation of any rights or
remedies during the existence of an Event of Default (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding) under this Agreement, any other
Loan Document, and any such other documents, including Attorney Costs, incurred
by the Agent and/or any Lender; and
(c) pay or reimburse Agent within five (5) Business Days after demand for
all appraisal, audit, environmental inspection and review (including the
allocated cost of such internal services), search and filing costs, fees and
expenses, incurred or sustained by Agent in connection with the matters referred
to under subsections (a) and (b) of this Section 9.4.
9.5 INDEMNITY. Whether or not the transactions contemplated hereby shall be
consummated, the Borrower shall indemnify, defend and hold harmless each Lender,
the Agent and each of their respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including Attorney
Costs):
(a) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to this Agreement or the
Loans or the use of the proceeds thereof, whether or not any Indemnified Person
is a party thereto; and
(b) which may be incurred by or asserted against such Indemnified Person in
connection with or arising out of any pending or threatened investigation,
litigation or proceeding, or any action taken by any Person, with respect to any
Environmental Claim arising out of or related to any Property subject to a
Mortgage in favor of the Agent or any Lender;
(all the foregoing, collectively, the "Indemnified Liabilities"); provided, that
the Borrower shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnified Person.
No action taken by legal counsel chosen by the Agent or any Lender in
defending against any investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless the
Agent and each Lender. In no event shall any site visit, observation, or testing
by the Agent or any Lender (or any contractee of the Agent or any Lender) be
deemed a representation or warranty that Hazardous Materials are or are not
present in, on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Borrower nor any other Person
is entitled to rely on any site visit, observation, or testing by the Agent or
any Lender. Neither the Agent nor any Lender owes any duty of care to protect
the Borrower or any other Person against, or to inform the Borrower or any other
party of, any Hazardous Materials or any other adverse condition affecting any
site or Property. Neither the Agent nor any Lender shall be obligated to
disclose to the Borrower or any other Person any report or findings made as a
result of, or in connection with, any site visit, observation, or testing by the
Agent or any Lender.
The obligations in this Section 9.5 shall survive payment of all other
Obligations. At the election of any Indemnified Person, the Borrower shall
defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section 9.5 shall be paid
within thirty (30) days after demand.
9.6 MARSHALLING; PAYMENTS SET ASIDE. Neither the Agent nor any Lender shall
be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the Borrower or any
other Person or against or in payment of any or all of the Obligations. To the
extent that the Borrower makes a payment or payments to the Agent or any Lender,
or the Agent or any Lender enforces its Liens or exercise its rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent in its discretion) to be repaid to a trustee, receiver
or any other party in connection with any Insolvency Proceeding, or otherwise,
then:
(a) to the extent of such recovery the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred; and
(b) each Lender severally agrees to pay to the Agent upon demand its
ratable share of the total amount so recovered from or repaid by the Agent.
9.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided that any assignment by any Lender shall be
subject to the provisions of Section 9.8 hereof, and provided further that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Lender.
9.8 ASSIGNMENTS, PARTICIPATIONS, ETC. (a) Any Lender may, with the written
consent of the Agent and Borrower, which consent shall not be unreasonably
withheld, at any time assign and delegate to one or more Eligible Assignees
(provided that no written consent of the Agent or Borrower shall be required in
connection with any assignment and delegation by a Lender to an Eligible
Assignee that is an Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Lender hereunder, in a minimum amount of $5,000,000 or, if
less, the entire Commitment of such Lender; provided, however, that the Borrower
and the Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until:
(i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such
Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the Borrower
and the Agent an Assignment and Acceptance in form and substance reasonably
satisfactory to Agent, such Lender and its Assignee (an "Assignment and
Acceptance"); and
(iii) the assignor Lender or the Assignee has paid to the Agent a
processing fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the assignor Lender
that the Agent has received and provided its consent with respect to an executed
Assignment and Acceptance and payment of the above-referenced processing fee:
(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, shall have the rights and obligations of a
Lender under this Agreement and the other Loan Documents; and
(ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Loan Documents.
(c) Immediately upon the making of the processing fee payment to the Agent
in respect of the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender to the same extent.
(d) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant") participating
interests in any Loans, the Commitment of that Lender and the other interests of
that Lender (the "Originating Lender") hereunder and under the other Loan
Documents; provided, however, that:
(i) the Originating Lender's obligations under this Agreement shall
remain unchanged;
(ii) the Originating Lender shall remain solely responsible for the
performance of such obligations;
(iii) the Borrower and the Agent shall continue to deal solely and
directly with the Originating Lender in connection with the Originating
Lender's rights and obligations under this Agreement and the other Loan
Documents;
(iv) no Lender shall transfer or grant any participating interest
under which the Participant shall have rights to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Lenders as described in the first proviso
to Section 9.1; and
(v) the participation shall be in a minimum amount of $5,000,000 or,
if less, the entire commitment of such Originating Lender.
In the case of any such participation, the Participant shall not have any rights
under this Agreement, or any of the other Loan Documents, and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had not
sold such participation.
(e) Notwithstanding any other provision contained in this Agreement or any
other Loan Document to the contrary, any Lender may assign all or any portion of
the Loans held by it to any Federal Reserve Lender or the United States Treasury
as collateral security pursuant to Regulation A of the Federal Reserve Board and
any Operating Circular issued by such Federal Reserve Lender, provided that any
payment in respect of such assigned Loans made by the Borrower to or for the
account of the assigning or pledging Lender in accordance with the terms of this
Agreement shall satisfy the Borrower's obligations hereunder in respect to such
assigned Loans to the extent of such payment. No such assignment shall release
the assigning Lender from its obligations hereunder.
9.9 CONFIDENTIALITY. Each of the Agent and the Lenders shall maintain in
confidence in accordance with its customary procedures for handling confidential
information, all written information that Borrower or any of its Subsidiaries,
or any of their authorized representatives, furnishes to the Agent or any Lender
on a confidential basis clearly marked as such ("Confidential Information"),
other than any such Confidential Information that becomes generally available to
the public other than as a result of a breach by the Agent or any Lender of its
obligations hereunder or that is or becomes available to the Agent or such
Lender from a source other than Borrower or any of its Subsidiaries, or any of
their authorized representatives, and that is not, to the actual knowledge of
the recipient thereof, subject to obligations of confidentiality with respect
thereto; provided, however, that the Agent and each Lender shall in any event
have the right to deliver copies of any such documents, and to disclose any such
information, to:
(a) its directors, officers, trustees, partners, employees, agents,
attorneys and professional consultants;
(b) any other Lender and any successor Agent;
(c) any Person to which such Lender offers to sell any Loan or any part
thereof or interest or participation therein (provided such Person agrees to
keep such information confidential on the terms set forth in this Section 9.9);
(d) any Person from which such Lender offers to purchase any security of
the Borrower or any of its Subsidiaries;
(e) any federal or state regulatory authority or examiner, or any insurance
industry association, including, without limitation, the National Association of
Insurance Commissioners, regulating or having jurisdiction over the Agent or
such Lender; and
(f) any other Person to which such delivery or disclosure may be necessary
or appropriate (i) in compliance with any applicable law, rule, regulation or
order, (ii) in response to any subpoena or other legal process or informal
investigative demand, (iii) in connection with any litigation to which the Agent
or such Lender is a party, or (iv) in connection with the enforcement of the
rights and remedies of the Agent or the Lenders under this Agreement and the
other Loan Documents at any time when an Event of Default shall have occurred
and be continuing.
9.10 SET-OFF; SHARING OF PAYMENTS. In addition to any rights and remedies
now or hereafter granted under applicable law, and not by way of limitation of
any such rights or remedies, upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized by the Borrower at any
time and from time to time, with reasonably prompt subsequent notice to the
Borrower or to any other Person (any prior or contemporaneous notice being
hereby expressly waived by the Borrower) to set off and to appropriate and to
apply any and all
(a) balances held by such Lender at any of its offices for the account of
the Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to the Borrower or any of its Subsidiaries); and
(b) other Property at any time held or owing by such Lender to or for the
credit or for the account of the Borrower or any of its Subsidiaries;
against and on account of any and all Obligations which are not paid when due;
except that no Lender shall exercise such right without the prior written
consent of the Agent. Any Lender having a right to set off shall purchase for
cash (and the other Lenders shall sell) participations in each such other
Lender's pro rata share of the Obligations as would be necessary to cause such
Lender to share the benefit of such right of set-off with each other Lender in
accordance with their respective pro rata shares of the Obligations. The
Borrower agrees, to the fullest extent permitted by law, that (i) any Lender may
exercise its right to set off with respect to amounts in excess of its pro rata
share of the Obligations and may sell participations to other Lenders, and (ii)
any Lender so purchasing a participation in the Obligations held by other
Lenders may exercise all rights of setoff, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. The
Borrower hereby grants to each Lender a security interest in all such deposits
and other Property, whether now existing or hereafter arising, held by each
Lender for the purposes set forth herein.
9.11 AUTOMATIC DEBITS OF FEES. The Borrower hereby irrevocably authorizes
the Agent to debit any deposit account of the Borrower with the Agent in such
amounts as may be necessary with respect to any interest, Commitment Fee, Letter
of Credit Participation Fee, facility fee, wire transfer fee or other fee, or
any other cost or expense (including Attorney Costs) due and payable to the
Agent, for itself or for the benefit of the Lenders, under the Loan Documents.
Agent shall give Borrower prior notice of such debits with respect to Attorneys
Costs. No such debit under this Section 9.11 shall be deemed a setoff.
9.12 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
the Lender should be directed, of addresses of its Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
9.13 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts, each of which,
when so executed, shall be deemed an original, and all of said counterparts
taken together shall be deemed to constitute but one and the same instrument. A
set of the copies of this Agreement signed by all the parties shall be lodged
with each of the Borrower and the Agent.
9.14 SEVERABILITY. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.15 CAPTIONS. The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
9.16 INDEPENDENCE OF PROVISIONS. The parties acknowledge that this
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters, and that such
limitations, tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
9.17 INTERPRETATION. This Agreement is the result of negotiations among and
has been reviewed by counsel to the Agent, the Borrower and other parties, and
is the product of all parties hereto. Accordingly, this Agreement and the other
Loan Documents shall not be construed against the Lenders or the Agent merely
because of the Agent's or Lenders' involvement in the preparation of such
documents and agreements.
9.18 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrower, the Lenders and the
Agent, and their permitted successors and assigns, and no other Person shall be
a direct or indirect legal beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this Agreement or any of the other Loan
Documents. Neither the Agent nor any Lender shall have any obligation to any
Person not a party to this Agreement or other Loan Documents.
9.19 GOVERNING LAW AND JURISDICTION.
(A) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT
AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(B) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY BORROWER AGAINST AGENT OR ANY LENDER OR
ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.
(C) BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY BORROWER WHICH IRREVOCABLY AGREE
IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY
ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A
COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO
BORROWER AT ITS ADDRESS PROVIDED IN SUBSECTION 9.3 EXCEPT THAT UNLESS OTHERWISE
PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE
VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY BORROWER REFUSES TO
ACCEPT SERVICE, BORROWER HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.20 WAIVER OF JURY TRIAL. THE BORROWER, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE AGENT EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A
JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO
ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART,
TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
9.21 ENTIRE AGREEMENT; RELEASE. This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Borrower, the Lenders and the Agent, and supersedes all prior or contemporaneous
Agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof, except for the fee letter referenced in
subsection 1.9(a), and any prior arrangements made with respect to the payment
by the Borrower of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of the Agent or the
Lenders. Execution of this Agreement by the Borrower constitutes a full,
complete and irrevocable release of any and all claims which the Borrower may
have at law or in equity in respect of all prior discussions and understandings,
verbal or written, relating to the subject matter of this Agreement and the
other Loan Documents.
ARTICLE X - TAXES, YIELD PROTECTION AND ILLEGALITY
10.1 TAXES. (a) Subject to subsection 10.1(g), any and all payments by the
Borrower to each Lender or the Agent under this Agreement shall be made free and
clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's net income by the jurisdiction under the laws of
which such Lender or the Agent, as the case may be, is organized or maintains a
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes").
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) Subject to subsection 10.1(g), the Borrower shall indemnify and hold
harmless each Lender and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 10.1) paid by the Lender or the Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days from the date the Lender or the Agent makes written
demand therefor.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Agent, then, subject to subsection 10.1(g):
(i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable
to additional sums payable under this Section 10.1) such Lender or the
Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made;
(ii) the Borrower shall make such deductions; and
(iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(e) Within thirty (30) days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower shall furnish to the Agent the original or
a certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(f) Each Lender which is a foreign person (i.e., a person other than a
United States person for United States Federal income tax purposes) agrees that:
(i) it shall, no later than the Closing Date (or, in the case
of a Lender which becomes a party hereto pursuant to Section 9.8 after
the Closing Date, the date upon which the Lender becomes a party
hereto) deliver to the Borrower through the Agent two accurate and
complete signed originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor
thereto ("Form 1001"), as appropriate, in each case indicating that the
Lender is on the date of delivery thereof entitled to receive payments
of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(ii) if at any time the Lender makes any changes necessitating
a new Form 4224 or Form 1001, it shall with reasonable promptness
deliver to the Borrower through the Agent in replacement for, or in
addition to, the forms previously delivered by it hereunder, two
accurate and complete signed originals of Form 4224, or two accurate
and complete signed originals of Form 1001, as appropriate, in each
case indicating that the Lender is on the date of delivery thereof
entitled to receive payments of principal, interest and fees under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any
event (including the passing of time but excluding any event mentioned
in (ii) above) requiring a change in or renewal of the most recent Form
4224 or Form 1001 previously delivered by such Lender and deliver to
the Borrower through the Agent two accurate and complete original
signed copies of Form 4224 or Form 1001 in replacement for the forms
previously delivered by the Lender; and
(iv) it shall, promptly upon the Borrower's or the Agent's
reasonable request to that effect, deliver to the Borrower or the Agent
(as the case may be) such other forms or similar documentation as may
be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for
withholding purposes.
(g) The Borrower will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 10.1(d) to
any Lender for the account of any Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not
have arisen but for a failure by such Lender to comply with its
obligations under subsection 10.1(f) in respect of such Lending Office;
(ii) if such Lender shall have delivered to the Borrower a
Form 4224 in respect of such Lending Office pursuant to subsection
10.1(f), and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Borrower hereunder for the account of such
Lending Office for any reason other than a change in United States law
or regulations or in the official interpretation of such law or
regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 4224; or
(iii) if the Lender shall have delivered to the Borrower a
Form 1001 in respect of such Lending Office pursuant to subsection
10.1(f), and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Borrower hereunder for the account of such
Lending Office for any reason other than a change in United States law
or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001.
(h) If, at any time, the Borrower requests any Lender to deliver any forms
or other documentation pursuant to subsection 10.1(f)(iv), then the Borrower
shall, on demand of such Lender through the Agent, reimburse such Lender for any
costs and expenses (including Attorney Costs) reasonably incurred by such Lender
in the preparation or delivery of such forms or other documentation.
(i) If the Borrower is required to pay additional amounts to any Lender or
the Agent pursuant to subsection 10.1(d), then such Lender shall use its
reasonable best efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by the Borrower which may thereafter accrue if such change in
the judgment of such Lender is not otherwise disadvantageous to such Lender.
10.2 ILLEGALITY. (a) If any Lender shall determine that the introduction of
any Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by the Lender to the Borrower through the Agent, the obligation of that
Lender to make LIBOR Rate Loans shall be suspended until the Lender shall have
notified the Agent and the Borrower that the circumstances giving rise to such
determination no longer exists.
(b) If a Lender shall determine that it is unlawful to maintain any LIBOR
Rate Loan, the Borrower shall prepay in full all LIBOR Rate Loans of that Lender
then outstanding, together with interest accrued thereon, either on the last day
of the Interest Period thereof if the Lender may lawfully continue to maintain
such LIBOR Rate Loans to such day, or immediately, if the Lender may not
lawfully continue to maintain such LIBOR Rate Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 10.4.
(c) If the obligation of any Lender to make or maintain LIBOR Rate Loans
has been terminated, the Borrower may elect, by giving notice to the Lender
through the Agent that all Loans which would otherwise be made by the Lender as
LIBOR Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent pursuant to this Section 10.2,
the affected Lender shall designate a different Lending Office with respect to
its LIBOR Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Lender, be
illegal or otherwise disadvantageous to the Lender.
10.3 INCREASED COSTS AND REDUCTION OF RETURN. (a) If any Lender shall
determine that, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time to
time, upon demand therefor by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender, additional amounts as
are sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that:
(i) the introduction of any Capital Adequacy Regulation;
(ii) any change in any Capital Adequacy Regulation;
(iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or
administration thereof; or
(iv) compliance by the Lender (or its Lending Office) or any
corporation controlling the Lender, with any Capital Adequacy
Regulation;
affects or would affect the amount of capital required or expected to be
maintained by the Lender or any corporation controlling the Lender and (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital) determines that
the amount of such capital is increased as a consequence of its Commitment(s),
loans, credits or obligations under this Agreement, then, upon demand of such
Lender (with a copy to the Agent), the Borrower shall upon demand pay to the
Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
10.4 FUNDING LOSSES. The Borrower agrees to reimburse each Lender and to
hold each Lender harmless from any loss or expense which the Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrower to make any payment or mandatory prepayment
of principal of any LIBOR Rate Loan (including payments made after any
acceleration thereof);
(b) the failure of the Borrower to borrow, continue or convert a Loan after
the Borrower has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/ Continuation;
(c) the failure of the Borrower to make any prepayment after the Borrower
has given a notice in accordance with Section 1.7;
(d) the prepayment of a LIBOR Rate Loan on a day which is not the last day
of the Interest Period with respect thereto; or
(e) the conversion pursuant to Section 1.6 of any LIBOR Rate Loan to a Base
Rate Loan on a day that is not the last day of the applicable Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained. Solely
for purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 10.4 and under subsection 10.3(a): each LIBOR Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBOR used in determining the
interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing
in the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such LIBOR Rate Loan is in fact so funded.
10.5 INABILITY TO DETERMINE RATES. If the Agent shall have determined that
for any reason adequate and reasonable means do not exist for ascertaining the
LIBOR for any requested Interest Period with respect to a proposed LIBOR Rate
Loan or that the LIBOR applicable pursuant to subsection 1.3(a) for any
requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Agent will forthwith give notice of such determination to the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans.
10.6 RESERVES ON LIBOR RATE LOANS. The Borrower shall pay to each Lender,
as long as such Lender shall be required under regulations of the Federal
Reserve Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency funds or deposits (currently known as
"Eurocurrency liabilities"), additional costs on the unpaid principal amount of
each LIBOR Rate Loan equal to actual costs of such reserves allocated to such
Loan by the Lender (as determined by the Lender in good faith, which
determination shall be conclusive), payable on each date on which interest is
payable on such Loan provided the Borrower shall have received at least fifteen
(15) days' prior written notice (with a copy to the Agent) of such additional
interest from the Lender. If a Lender fails to give notice fifteen (15) days
prior to the relevant Interest Payment Date, such additional interest shall be
payable fifteen (15) days from receipt of such notice. This covenant shall
survive payment of all other Obligations.
10.7 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation pursuant to this Article X shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
10.8 SURVIVAL. The agreements and obligations of the Borrower in this
Article X shall survive the payment of all other Obligations.
10.9 REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS. Within forty-five
(45) days after receipt by the Borrower of written notice and demand from any
Lender (an "Affected Lender") for payment of additional costs as provided in
subsections 10.1, 10.3 and 10.6, the Borrower may, at its option, notify the
Agent and such Affected Lender of the Borrower's intention to obtain, at the
Borrower's expense, a replacement Lender ("Replacement Lender") for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
the Administrative Agent and the Agent. In the event the Borrower obtains a
Replacement Lender within ninety (90) days following notice of its intention to
do so, the Affected Lender shall sell and assign its Loans and Commitments to
such Replacement Lender, provided that the Borrower has reimbursed such Affected
Lender for its increased costs for which it is entitled to reimbursement under
this Agreement through the date of such sale and assignment.
ARTICLE XI - DEFINITIONS
11.1 DEFINED TERMS. The following terms are defined in the Sections or
subsections referenced opposite such terms:
"Acquisition Documents" 2.3(d)
"Adjusted EBIDAT" 1.1(b)
"Affected Lender" 10.9
"Agent" Preamble
"Agreement" Preamble
"Assignee" 9.8(a)
"Assignment and Acceptance" 9.8(a)(ii)
"Borrower" Preamble
"Capital Expenditure Limitation" 6.1
"Commitment Fee" 1.9(b)
"Commitment Fee Ratio" 1.12(d)
"Confidential Information" 9.9
"Daily Interest Amount" 1.12(d)
"Daily Interest Rate" 1.12(d)
"Daily Loan Balance" 1.12(d)
"Event of Default" 7.1
"Excess Owner's Compensation" 1.1(b)
"Form 1001" 10.1(f)
"Form 4224" 10.1(f)
"Indemnified Person" 9.5
"Indemnified Liabilities" 9.5
"Interest Ratio" 1.12(d)
"Interest Settlement Date" 1.12(d)
"Lender" Preamble
"Lender Letter of Credit" 1.1(c)
"Letter of Credit Participation Agreement" 1.1(c)
"Letter of Credit Participation Fee" 1.9(b)
"Letter of Credit Participation Fee Ratio" 1.12(d)
"Maximum Revolving Loan Balance" 1.1(b)
"Originating Lender" 9.8(d)
"Other Taxes" 10.1(b)
"Participant" 9.8(d)
"Permitted Liens" 5.1
"Replacement Lender" 10.9
"Restricted Payments" 5.12
"Revolving Loan Commitment" 1.1(b)
"Revolving Loan" 1.1(b)
"Settlement Date" 1.12(b)
"Taxes" 10.1(a)
In addition to the terms defined elsewhere in this Agreement, the following
terms have the following meanings:
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, including a court reporting business, (b) the acquisition
of in excess of fifty percent (50%) of the capital stock, partnership interests
or equity of any Person or otherwise causing any Person to become a Subsidiary
of the Borrower, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary of the Borrower)
provided that the Borrower or the Borrower's Subsidiary is the surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of five percent
(5%) or more of the equity of a Person shall for the purposes of this Agreement,
be deemed to control the other Person. Notwithstanding the foregoing, no Lender
nor the Agent shall be deemed an "Affiliate" of the Borrower or of any
Subsidiary of the Borrower.
"Agent" means Antares in its capacity as agent for the Lenders hereunder,
and any successor agent.
"Agent-Related Persons" means Antares and any successor agent arising under
Section 8.9, together with their respective Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Agent's Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Agent or such other address as the
Agent may from time to time specify in accordance with Section 9.2.
"Aggregate Revolving Loan Commitment" or "Aggregate Commitment" means the
combined Revolving Loan Commitments of the Lenders, which shall initially be in
the amount of $20,000,000, as such amount may be reduced from time to time
pursuant to this Agreement.
"Antares" means Antares Leveraged Capital Corp., a Delaware corporation.
"Applicable Margin" means with respect to LIBOR Rate Loans and Base Rate
Loans, respectively, the applicable LIBOR margin or Base Rate margin (which
margins shall be increased by .25% after the occurrence of the GTCR Event) in
effect from time to time determined based upon the applicable Leverage Ratio,
Senior Leverage Ratio and Adjusted EBIDAT level then in effect pursuant to the
appropriate column under the table below:
Senior Leverage Leverage LIBOR Base Rate
Ratio Ratio Margin Margin
*2.25 *4.0 2.25% .75%
*2.25 **4.0 2.75% 1.25%
**2.25, but
less than 2.5 *4.0 2.50% 1.00%
**2.25, but
less than 2.5 **4.0 3.00% 1.50%
**2.5, but
less than 3.0 *4.5 2.75% 1.25%
**2.5, but
less than 3.0 **4.5 3.00% 1.50%
**3.0, but
less than 3.5 *5.0 3.00% 1.50%
**3.0, but
less than 3.5 **5.0 3.25% 1.75%
**3.5 ***5.5 3.25% 1.75%
------
* Less than.
** Greater than or equal to.
*** Less than or equal to.
The Applicable Margin shall be adjusted from time to time upon delivery to the
Agent of the monthly financial statements required to be delivered pursuant to
Section 4.1 hereof accompanied by a written calculation of the Leverage Ratio,
Senior Leverage Ratio and Adjusted EBIDAT certified by a Responsible Officer as
of the end of the fiscal month for which such financial statements are
delivered. If such calculation indicates that the Applicable Margin shall
increase or decrease, then on the first day of the fiscal month following the
date of delivery of such financial statements and written calculation the
Applicable Margin shall be adjusted in accordance therewith; provided, however,
that if Borrower shall fail to deliver any such financial statements for any
such fiscal month by the date required pursuant to Section 4.1, then, effective
as of the first day following the end of the fiscal month for which such
financial statements were to have been delivered, and continuing through the
first day of the month following the date (if ever) when such financial
statements and such written calculation are finally delivered, the Applicable
Margin shall be conclusively presumed to equal the highest Applicable Margin
specified in the pricing table set forth above.
"Attorney Costs" means and includes all fees and disbursements of any law
firm or other external counsel, the allocated cost of internal legal services
and all disbursements of internal counsel.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. ss.101, et seq.), as amended and in effect from time to time and the
regulations issued from time to time thereunder.
"Base Rate" means, for any day, a rate of interest equal to rate of
interest which is identified as the "Prime Rate" and normally published in the
Money Rates section of The Wall Street Journal (or, if such rate ceases to be so
published, as quoted from such other generally available and recognizable source
as the Agent may select).
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day by the Lenders pursuant to Article I.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in Chicago, Illinois or New York, New York are authorized
or required by law to close and, if the applicable Business Day relates to any
LIBOR Rate Loan, a day on which dealings are carried on in the London interbank
market.
"Capital Adequacy Regulation" means any guideline, request or directive of
any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Lender or of any corporation controlling a Lender.
"Capital Expenditures" means, for any period and with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing of fixed or capital assets or additions to fixed
or capital assets (including replacements, capitalized repairs and improvements
during such period) which should be capitalized under GAAP on a consolidated
balance sheet of such Person and its Subsidiaries. Capital Expenditures does not
include the purchase price of an Acquisition permitted hereunder. For the
purposes of the capital expenditures covenant in Section 6.1, the entire payment
stream for such Capital Expenditure shall be deemed to have been made on the
date the Property which is the subject thereof is put into service.
"Capital Lease" means any leasing or similar arrangement which, in
accordance with GAAP, is classified as a capital lease.
"Capital Lease Obligations" means all monetary obligations of the Borrower
or any of its Subsidiaries under any Capital Leases.
"Cash Equivalents" means: (a) securities issued or fully guaranteed or
insured by the United States Government or any agency thereof having maturities
of not more than six (6) months from the date of acquisition; (b) certificates
of deposit, time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor of not more than six (6)
months, issued by any Lender, or by any U.S. commercial bank or any branch or
agency of a non-U.S. bank licensed to conduct business in the U.S. having
combined capital and surplus of not less than $250,000,000; (c) commercial paper
of an issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by
▇▇▇▇▇'▇ Investors Service Inc. and in either case having a tenor of not more
than three (3) months.
"Cash Flow" means, for any period, EBIDAT for such period minus Capital
Expenditures actually paid in cash for such period and otherwise permitted by
this Agreement, all as determined for Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"CERCLA" has the meaning specified in the definition of "Environmental
Laws."
"Closing Date" means the date on which all conditions precedent set forth
in Section 2.1 are satisfied or waived by the Agent and all Lenders.
"Code" means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower and its Subsidiaries in
or upon which a Lien now or hereafter exists in favor of any Lender or the Agent
for the benefit of the Lenders, whether under this Agreement or under any other
documents executed by any such persons and delivered to the Agent.
"Collateral Documents" means, collectively, the Security Agreement, the
Mortgages, the Pledge Agreement, the guaranties executed by Borrower's
Subsidiaries and all other security agreements, mortgages, deeds of trust,
patent and trademark assignments, lease assignments, guarantees and other
similar agreements, and all amendments, restatements, modifications or
supplements thereof or thereto, between the Borrower or its Subsidiaries and any
Lender or the Agent for the benefit of the Lenders now or hereafter delivered to
the Lenders or the Agent pursuant to or in connection with the transactions
contemplated hereby, and all financing statements (or comparable documents now
or hereafter filed in accordance with the UCC or comparable law) against the
Borrower or any Subsidiaries as debtor in favor of any Lender or the Agent for
the benefit of the Lenders, as secured party.
"Commitment" means, for each Lender, its Revolving Loan Commitment.
"Commitment Percentage" means, as to any Lender, the percentage equivalent
of such Lender's Revolving Loan Commitment divided by the Aggregate Revolving
Loan Commitment.
"Consolidated Net Income (Loss)" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period,
determined in accordance with GAAP; provided that in determining Consolidated
Net Income (Loss) there shall be excluded:
(a) the income (or loss) of any Person which is not a
Subsidiary of Borrower, except to the extent of the amount of dividends
or other distributions actually paid to Borrower or any of its
Subsidiaries in cash by such Person during such period and the payment
of dividends or similar distributions by that Subsidiary is not at the
time prohibited;
(b) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Borrower or is merged into or
consolidated with Borrower or any of its Subsidiaries or that Person's
assets are acquired by Borrower or any of its Subsidiaries;
(c) the proceeds of any life insurance policy;
(d) gains (but not losses) from the sale, exchange, transfer
or other disposition of Property or assets not in the ordinary course
of business of Borrower and its Subsidiaries, and related tax effects
in accordance with GAAP; and
(e) any other extraordinary or non-recurring gains (but not
losses) of Borrower or its Subsidiaries, and related tax effects in
accordance with GAAP.
"Consolidated Net Interest Expense" means, for any period, gross interest
expense for the period required to be paid in cash (including all commissions,
discounts, fees and other charges in connection with standby letters of credit
and similar instruments) for the Borrower and its Subsidiaries on a consolidated
basis, less interest income for that period; all as determined in accordance
with GAAP.
"Contingent Obligation" means, as to any Person: (a) any Guaranty
Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person:
(i) in respect of any Surety Instrument issued for the account
of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments;
(ii) to purchase any materials, supplies or other Property
from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment
for such materials, supplies or other Property, or for such services,
shall be made regardless of whether delivery of such materials,
supplies or other Property is ever made or tendered, or such services
are ever performed or tendered; or
(iii) in respect of any Rate Contract that is not entered into
in connection with a bona fide hedging operation that provides
offsetting benefits to such Person.
The amount of any Contingent Obligation shall (subject, in the case of Guaranty
Obligations, to the last sentence of the definition of "Guaranty Obligation") be
deemed equal to the maximum reasonably anticipated liability in respect thereof,
and shall, with respect to item (b)(iii) of this definition, be marked to market
on a current basis.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound, and
includes the Related Agreements.
"Controlled Group" means the Borrower and all Persons (whether or not
incorporated) under common control or treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which the Borrower converts a Base Rate
Loan to a LIBOR Rate Loan or a LIBOR Rate Loan to a Base Rate Loan.
"Default" means any event or circumstance which, with the giving of notice,
the lapse of time, or both, would (if not cured or otherwise remedied during
such time) constitute an Event of Default.
"Dollars", "dollars" and "$" each mean lawful money of the United States of
America.
"EBIDAT" means, for any period, for the Borrower and its Subsidiaries on a
consolidated basis, determined in accordance with GAAP, the sum of (a)
Consolidated Net Income (Loss) for such period plus (b) all amounts deducted
from net income (or net loss) for such period for depreciation or amortization,
plus (c) interest expense deducted from net income (or net loss) for such
period, plus (d) all accrued taxes on or measured by income to the extent
included in the determination of such net income (or loss); plus (e) to the
extent included in net income (or net loss) for such period, any extraordinary
losses or losses from discontinued operations; plus (f) all other non-cash
charges which reduced Consolidated Net Income (Loss) for such period.
"Eligible Assignee" means any of: (a) a commercial bank organized under the
laws of the United States, or any State thereof; (b) a commercial bank organized
under the laws of any other country; or (c) a finance company, insurance company
or other financial institution or fund which is engaged in making, purchasing or
otherwise investing in commercial loans for its own account in the ordinary
course of its business.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by the Borrower.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), the Clean Air Act, the Federal Water Pollution
Control Act of 1972, the Solid Waste Disposal Act, the Federal Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the Emergency
Planning and Community Right-to-Know Act.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b),
414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan
or a Multiemployer Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate
from a Qualified Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from
a Multiemployer Plan; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of
ERISA or the commencement of proceedings by the PBGC to terminate a Qualified
Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure by the
Borrower or any member of the Controlled Group to make required contributions to
a Qualified Plan or Multiemployer Plan; (f) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Qualified
Plan or Multiemployer Plan; (g) the imposition of any liability under Title IV
of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate; (h) an application for a
funding waiver or an extension of any amortization period pursuant to Section
412 of the Code with respect to any Plan; (i) a non-exempt prohibited
transaction occurs with respect to any Plan for which the Borrower or any
Subsidiary of the Borrower may be directly or indirectly liable; or (j) a
violation of the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Code by any fiduciary or
disqualified person with respect to any Plan for which the Borrower or any
member of the Controlled Group may be directly or indirectly liable.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System, or any entity succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent:
(a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security
therefor; or
(b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition
of the primary obligor; or
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation; or
(d) otherwise to assure or hold harmless the holder of any such
primary obligation against loss in respect thereof;
in each case, including arrangements wherein the rights and remedies of the
holder of the primary obligation are limited to repossession or sale of certain
property of such Person. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
"GTCR" means Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV, L.P., an Illinois
limited partnership.
"GTCR Event" means if GTCR ceases to directly own and control at least 60%
of the number of shares of capital stock of Borrower (i) owned by GTCR on the
Closing Date plus (ii) acquired by GTCR after the Closing Date (without double
counting any shares of capital stock which have been converted from preferred
stock to common stock), in each case free and clear of all liens, claims and
encumbrances.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law.
"Indebtedness" of any Person means, without duplication: (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business pursuant to ordinary
terms); (c) all non-contingent reimbursement or payment obligations with respect
to Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to
Property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property); (f) the capitalized portion of all
Capital Lease Obligations; (g) all net obligations with respect to Rate
Contracts; (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in Property
(including accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness;
and (i) all Guaranty Obligations in respect of indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above.
"Insolvency Proceeding" means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors; in each case undertaken under U.S. Federal, State or foreign law,
including the Bankruptcy Code.
"Interest Payment Date" means, with respect to any LIBOR Rate Loan, the
last day of each Interest Period applicable to such Loan and, with respect to
Base Rate Loans, the first day of each calendar month and each date a Base Rate
Loan is converted into a LIBOR Rate Loan.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Business Day the Loan is disbursed or continued or on the
Conversion Date on which the Loan is converted to the LIBOR Rate Loan and ending
on the date one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(a) if any Interest Period pertaining to a LIBOR Rate Loan
would otherwise end on a day which is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Revolving
Termination Date;
"Investor Stockholders" means Allied Investment Corporation, Allied
Investment Corporation II, Allied Capital Corporation II and CMNY Capital, L.P.
"Joint Venture" means a partnership, joint venture or other similar legal
arrangement (whether created pursuant to contract or conducted through a
separate legal entity) now or hereafter formed by the Borrower or any of its
Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"Lending Office" means, with respect to any Lender, the office or offices
of the Lender specified as its "Lending Office" opposite its name on the
applicable signature page hereto, or such other office or offices of the Lender
as it may from time to time notify the Borrower and the Agent.
"Letter of Credit Participation Liability" means, as to each Lender Letter
of Credit and each Letter of Credit Participation Agreement, all reimbursement
obligations of Borrower or any of its Subsidiaries to Agent and the Lenders in
connection with the Lender Letter of Credit or to the obligee with respect to
the transaction for which the Letter of Credit Participation Agreement was
issued, whether contingent or otherwise, including with respect to any letter of
credit: (a) the amount available to be drawn or which may become available to be
drawn; (b) all amounts which have been paid or made available by the issuing
bank to the extent not reimbursed; and (c) all unpaid interest, fees and
expenses.
"Letter of Credit Reserve" means, at any time, an amount equal to all
liabilities of the Borrower to the Agent in respect of any Lender Letter of
Credits and Letter of Credit Participation Agreements outstanding at such time,
whether contingent or otherwise, including: (a) the amount available to be drawn
or which may become available to be drawn; (b) all-amounts which have been paid
or made available by the Agent under such Lender Letters of Credit or Letter of
Credit Participation Agreement to the extent not reimbursed; and (c) all unpaid
interest, fees and expenses in respect of such Lender Letter of Credits and
Letter of Credit Participation Agreements.
"Leverage Ratio" means, as of any date of determination thereof, the ratio
of consolidated total Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis as of such date to Adjusted EBIDAT for the twelve fiscal
months then ended.
"LIBOR" means, for each Interest Period, the offered rate per annum for
deposits of Dollars for the applicable Interest Period that appears on Telerate
Page 3750 as of 11:00 A.M. (London, England time) two (2) Business Days prior to
the first day in such Interest Period. If no such offered rate exists, such rate
will be the rate of interest per annum, as determined by the Agent (rounded
upwards, if necessary, to the nearest 1/16 of 1%) at which deposits of Dollars
in immediately available funds are offered at 11:00 A.M. (London, England time)
two (2) Business Days prior to the first day in such Interest Period by major
financial institutions reasonably satisfactory to the Agent in the London
interbank market for such Interest Period for the applicable principal amount on
such date of determination.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease Obligation, any
financing lease having substantially the same economic effect as any of the
foregoing, or the filing of any financing statement naming the owner of the
asset to which such lien relates as debtor, under the UCC or any comparable law)
and any contingent or other agreement to provide any of the foregoing, but not
including the interest of a lessor under an Operating Lease.
"Loan" means an extension of credit by a Lender to the Borrower pursuant to
Article I hereof, and may be a Base Rate Loan or a LIBOR Rate Loan.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
all documents delivered to the Agent in connection therewith and all Rate
Contracts between the Borrower and any of the Lenders.
"Majority Lenders" means at any time Lenders then having at least sixty six
and two-thirds percent (66-2/3%) of the Commitments.
"Management Stockholders" means ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇ and The
▇▇▇▇▇▇▇ Trust.
"Margin Stock" means "margin stock" as such term is defined in Regulation
G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of the
Borrower to perform under any Loan Document and avoid any Event of Default; or
(c) a material adverse effect upon (i) the legality, validity, binding effect or
enforceability of any Loan Document, or (ii) the perfection or priority of any
Lien granted to the Lenders or to the Agent for the benefit of the Lenders under
any of the Collateral Documents.
"Mortgage" means any deed of trust, mortgage or other document creating a
Lien on real property or any interest in real property.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) and to which any member of the Controlled Group
makes, is making, or is obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make, contributions.
"Note" means any Revolving Note and "Notes" means all such Notes.
"Notice of Borrowing" means a notice given by the Borrower to the Agent
pursuant to Section 1.5, in substantially the form of Exhibit B hereto.
"Notice of Conversion/Continuation" means a notice given by the Borrower to
the Agent pursuant to Section 1.6, in substantially the form of Exhibit C
hereto.
"Notice of Lien" means any "notice of lien" or similar document intended to
be filed or recorded with any court, registry, recorder's office, central filing
office or other Governmental Authority for the purpose of evidencing, creating,
perfecting or preserving the priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to any
Lender, the Agent, or any other Person required to be indemnified, that arises
under any Loan Document, whether or not for the payment of money, whether
arising by reason of an extension of credit, loan, guaranty, indemnification or
in any other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired.
"Operating Lease" means, as applied to any Person, any lease of Property
which is not a Capital Lease.
"Ordinary Course of Business" means, in respect of any transaction
involving the Borrower or any Subsidiary of the Borrower, the ordinary course of
such Person's business, as conducted by any such Person in accordance with past
practice and undertaken by such Person in good faith and not for purposes of
evading any covenant or restriction in any Loan Document.
"Organization Documents" means, for any corporation, the certificate or
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any of its principal functions under ERISA.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which the Borrower or any member of the Controlled Group sponsors or maintains
or to which the Borrower or any member of the Controlled Group makes, is making
or is obligated to make contributions.
"Pledge Agreement" means the Pledge Agreement, in form and substance
reasonably satisfactory to Agent, made by the Borrower in favor of the Agent for
the benefit of the Lenders.
"Pledged Collateral" has the meaning specified in the Pledge Agreement.
"Prior Indebtedness" means the indebtedness and obligations specified on
Schedule 11.1 hereto.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes, is
making or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least five (5)
plan years, but excluding any Multiemployer Plan.
"Rate Contracts" means swap agreements (as such term is defined in Section
101 of the Bankruptcy Code) and any other agreements or arrangements designed to
provide protection against fluctuations in interest or currency exchange rates.
"Related Agreements" means the Purchase Agreement dated October 23, 1996
among Borrower, Antares and GTCR, Registration Agreement dated October 23, 1996
among Borrower, GTCR and Antares, Stockholders Agreement dated October 23, 1996
among Borrower, GTCR, Antares, Investor Stockholders and Management
Stockholders, the Acquisition Documents from time to time in effect.
"Related Transactions" means the transactions contemplated by the Related
Agreements.
"Reportable Event" means, as to any Plan, (a) any of the events set forth
in Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC, (b) a withdrawal from a Plan described in
Section 4063 of ERISA, or (c) a cessation of operations described in Section
4062(e) of ERISA.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the president of
the Borrower, or any other officer having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the Borrower, or any other officer
having substantially the same authority and responsibility.
"Revolving Note" means a promissory note of the Borrower payable to the
order of a Lender and otherwise substantially the form of Exhibit D hereto,
evidencing indebtedness of the Borrower under the Revolving Loan Commitment of
such Lender.
"Revolving Termination Date" means the earlier to occur of: (a) December
24, 1999; and (b) the date on which the Aggregate Revolving Loan Commitment
shall terminate in accordance with the provisions of this Agreement.
"SEC" means the Securities and Exchange Commission, or any entity
succeeding to any of its principal functions.
"Security Agreement" means each Security Agreement, in form and substance
reasonably satisfactory to Agent, made or to be made, by the Borrower and each
of its Subsidiaries, in favor of the Agent for the benefit of the Lenders.
"Senior Leverage Ratio" means, as of any date of determination thereof, the
ratio of the outstanding principal balance of all Loans as of such date to
Adjusted EBIDAT for the twelve (12) fiscal months then ended.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code and, in the alternative, for purposes of the
Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the
Property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay its debts
and other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"Subordinated Indebtedness" means the Indebtedness described on Schedule
5.5 and all other Indebtedness of Borrower or any of its Subsidiaries which is
subordinated in right of payment to the Obligations, including, without
limitation, Indebtedness incurred in connection with Acquisitions permitted
hereunder.
"Subsidiary" of a Person means any corporation, association, partnership,
joint venture or other business entity of which more than fifty percent (50%) of
the voting stock or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the Person, or
one or more of the Subsidiaries of the Person, or a combination thereof.
"Surety Instruments" means all letters of credit (including standby and
commercial), banker's acceptances, bank guaranties, shipside bonds, surety bonds
and similar instruments.
"Target" means any other Person, or business unit or asset group of any
other Person, including court reporting business, acquired or proposed to be
acquired in an Acquisition.
"UCC" means the Uniform Commercial Code as in effect in the State of
Illinois.
"Unfunded Pension Liabilities" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used by the Plan's
actuaries for funding the Plan pursuant to section 412 for the applicable plan
year.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any corporation in which (other than
directors' qualifying shares required by law) 100% of the capital stock of each
class having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being made, is
owned, beneficially and of record, by the Borrower, or by one or more of the
other Wholly-Owned Subsidiaries, or both.
"Withdrawal Liabilities" means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the
Controlled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.
11.2 OTHER INTERPRETIVE PROVISIONS.
(a) DEFINED TERMS. Unless otherwise specified herein or therein, all terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto. The meaning of
defined terms shall be equally applicable to the singular and plural forms of
the defined terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) THE AGREEMENT. The words "hereof", "herein", "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
section, schedule and exhibit references are to this Agreement unless otherwise
specified.
(c) CERTAIN COMMON TERMS. The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced. The term "including" is not limiting and means
"including without limitation."
(d) PERFORMANCE; TIME. Whenever any performance obligation hereunder (other
than a payment obligation) shall be stated to be due or required to be satisfied
on a day other than a Business Day, such performance shall be made or satisfied
on the next succeeding Business Day. In the computation of periods of time from
a specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including." If any provision of this Agreement
refers to any action taken or to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be interpreted to encompass any and
all means, direct or indirect, of taking, or not taking, such action.
(e) CONTRACTS. Unless otherwise expressly provided herein, references to
agreements and other contractual instruments, including this Agreement and the
other Loan Documents, shall be deemed to include all subsequent amendments,
thereto, restatements thereof and other modifications and supplements thereto
which are in effect from time to time, but only to the extent such amendments
and other modifications are not prohibited by the terms of any Loan Document.
(f) LAWS. References to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
11.3 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year", "fiscal quarter" and "fiscal month"
refer to such fiscal periods of the Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
ESQUIRE COMMUNICATIONS LTD.
By:
Title:
Address for notices:
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ANTARES LEVERAGED CAPITAL CORP.,
as Agent and as a Lender
By:
Title:
Address for notices:
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Address for payments:
Antares Leveraged Capital Corp.
Account # 4070-6016
Citibank N.A., NY
ABA # ▇▇▇▇▇▇▇▇▇
Reference: Esquire Communications Ltd.
Please advise ▇▇▇ ▇▇▇▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ upon receipt