EXHIBIT 99.3
================================================================================
ASI SOLUTIONS INCORPORATED
McLAGAN PARTNERS, INC.
____________________________________________
$20,000,000
CREDIT AGREEMENT
November 13, 1997
____________________________________________
THE CHASE MANHATTAN BANK
as Administrative Agent
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. DEFINITIONS.................................................. 1
1.1 Defined Terms.................................................. 1
1.2 Other Definitional Provisions.................................. 21
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.............................. 21
2.1 Revolving Credit Commitments................................... 21
2.2 Procedure for Revolving Credit Borrowing....................... 22
2.3 Commitment Fee................................................. 22
2.4 Termination or Reduction of Commitments........................ 22
2.5 Term Loans..................................................... 23
2.6 Procedure for Term Loan Borrowing.............................. 23
2.7 Repayment of Loans; Evidence of Debt........................... 23
2.8 Optional Prepayments and Mandatory Prepayments................. 24
2.9 Conversion and Continuation Options............................ 27
2.10 Minimum Amounts of Tranches................................... 27
2.11 Interest Rates and Payment Dates.............................. 27
2.12 Computation of Interest and Fees.............................. 28
2.13 Inability to Determine Interest Rate.......................... 28
2.14 Pro Rata Treatment and Payments............................... 29
2.15 Illegality.................................................... 30
2.16 Requirements of Law........................................... 30
2.17 Taxes......................................................... 31
2.18 Indemnity..................................................... 32
2.19 Change of Lending Office...................................... 33
SECTION 3. LETTERS OF CREDIT............................................ 33
3.1 L/C Commitment................................................. 33
3.2 Procedure for Issuance of Letters of Credit.................... 34
3.3 Fees, Commissions and Other Charges............................ 34
3.4 L/C Participations............................................. 34
3.5 Reimbursement Obligation of ASI................................ 35
3.6 Obligations Absolute........................................... 36
3.7 Letter of Credit Payments...................................... 36
3.8 Application.................................................... 36
SECTION 4. REPRESENTATIONS AND WARRANTIES............................... 36
4.1 Financial Condition............................................ 37
4.2 No Change; Solvency............................................ 38
4.3 Corporate Existence; Compliance with Law....................... 38
4.4 Corporate Power; Authorization; Enforceable Obligations........ 38
Page
----
4.5 No Legal Bar................................................... 39
4.6 No Material Litigation......................................... 39
4.7 No Default..................................................... 39
4.8 Ownership of Property; Liens................................... 39
4.9 Intellectual Property.......................................... 39
4.10 No Burdensome Restrictions.................................... 39
4.11 Taxes......................................................... 39
4.12 Federal Regulations........................................... 40
4.13 ERISA......................................................... 40
4.14 Investment Company Act; Other Regulations..................... 40
4.15 Subsidiaries.................................................. 40
4.16 Purpose of Loans.............................................. 40
4.17 Representations and Warranties Contained in the McLagan
Documentation............................................... 41
4.18 Environmental Matters......................................... 41
SECTION 5. CONDITIONS PRECEDENT......................................... 42
5.1 Conditions to Initial Extensions of Credit..................... 42
5.2 Conditions to Each Extension of Credit......................... 45
SECTION 6. AFFIRMATIVE COVENANTS........................................ 46
6.1 Financial Statements........................................... 46
6.2 Certificates; Other Information................................ 46
6.3 Payment of Obligations......................................... 47
6.4 Conduct of Business and Maintenance of Existence............... 48
6.5 Maintenance of Property; Insurance............................. 48
6.6 Inspection of Property; Books and Records; Discussions; Audits
and Field Examinations....................................... 48
6.7 Notices........................................................ 48
6.8 Environmental Laws............................................. 49
6.9 Interest Rate Protection....................................... 49
6.10 Further Assurances............................................ 50
6.11 Additional Collateral......................................... 50
SECTION 7. NEGATIVE COVENANTS........................................... 51
7.1 Financial Condition Covenants.................................. 51
7.2 Limitation on Indebtedness..................................... 53
7.3 Limitation on Liens............................................ 53
7.4 Limitation on Guarantee Obligations............................ 54
7.5 Limitation on Fundamental Changes.............................. 55
7.6 Limitation on Sale of Assets................................... 55
7.7 Limitation on Dividends........................................ 56
Page
----
7.8 Limitation on Capital Expenditures............................. 56
7.9 Limitation on Investments, Loans and Advances.................. 56
7.10 Limitation on Optional Payments and Modifications of Debt
Instruments................................................. 56
7.11 Limitation on Transactions with Affiliates.................... 57
7.12 Limitation on Sales and Leasebacks............................ 57
7.13 Limitation on Changes in Fiscal Year.......................... 57
7.14 Limitation on Negative Pledge Clauses......................... 57
7.15 Limitation on Lines of Business............................... 57
7.16 Accounting Practices.......................................... 58
7.17 Employment Agreements......................................... 58
SECTION 8. EVENTS OF DEFAULT............................................ 58
SECTION 9. THE ADMINISTRATIVE AGENT..................................... 61
9.1 Appointment.................................................... 61
9.2 Delegation of Duties........................................... 61
9.3 Exculpatory Provisions......................................... 61
9.4 Reliance by Administrative Agent............................... 62
9.5 Notice of Default.............................................. 62
9.6 Non-Reliance on Administrative Agent and Other Lenders......... 62
9.7 Indemnification................................................ 63
9.8 Administrative Agent in Its Individual Capacity................ 63
9.9 Successor Administrative Agent................................. 63
SECTION 10. MISCELLANEOUS............................................... 64
10.1 Amendments and Waivers........................................ 64
10.2 Notices....................................................... 65
10.3 No Waiver; Cumulative Remedies................................ 65
10.4 Survival of Representations and Warranties.................... 65
10.5 Payment of Expenses and Taxes................................. 66
10.6 Successors and Assigns; Participations and Assignments........ 66
10.7 Adjustments; Set-off.......................................... 68
10.8 Counterparts.................................................. 69
10.9 Severability.................................................. 69
10.10 Integration.................................................. 69
10.11 GOVERNING LAW................................................ 69
10.12 Submission To Jurisdiction; Waivers.......................... 70
10.13 Acknowledgements............................................. 70
10.15 WAIVERS OF JURY TRIAL........................................ 71
SCHEDULES
Schedule 1.1(a) Commitments
Schedule 4.2 Certain Payments
Schedule 7.2(d) Indebtedness
Schedule 7.3(f) Liens
Schedule 7.4(a) Guarantee Obligations
Schedule 10.2 Addresses
EXHIBITS
Exhibit A Form of Borrowing Base Certificate
Exhibit B Form of Compliance Certificate
Exhibit C Form Guarantee and Collateral Agreement
Exhibit D Form of Revolving Credit Note
Exhibit E Form of Term Note
Exhibit F Form of Borrowing Certificate
Exhibit G Form of Assignment and Acceptance
CREDIT AGREEMENT, dated as of November 13, 1997 among ASI SOLUTIONS
INCORPORATED, a Delaware corporation ("ASI"), ▇▇▇▇▇▇▇ PARTNERS, INC., a Delaware
corporation ("McLagan Partners"; together with ASI, the "Borrowers"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Administrative Agent (as hereinafter defined) for the Lenders
hereunder.
W I T N E S S E T H :
-------------------
WHEREAS, McLagan Partners, McLagan Partners International, Inc., a
Delaware corporation ("▇▇▇▇▇▇▇ International"), and ▇▇▇▇▇▇▇ Partners Asia, Inc.,
a Delaware corporation ("McLagan Asia", and together with McLagan Partners and
▇▇▇▇▇▇▇ International, the "McLagan Buyers"), have entered into Asset Purchase
Agreements, each dated as of November 13, 1997 (collectively, the "Purchase
Agreement"), among ASI, McLagan Partners Incorporated ("Existing McLagan
Partners"), McLagan Partners International ("Existing ▇▇▇▇▇▇▇ International")
and McLagan Partners Asia Incorporated ("McLagan Asia"; together with Existing
McLagan Partners and Existing ▇▇▇▇▇▇▇ International, the "McLagan Sellers")
pursuant to which ASI McLagan Buyers will purchase substantially all of the
assets of the McLagan Sellers (such transaction being referred to herein as the
"McLagan Acquisition");
WHEREAS, in connection with the McLagan Acquisition, each of the
Borrowers has requested that the Lenders extend credit for the purposes of
partially financing the McLagan Acquisition and providing for the working
capital needs of ASI and its Subsidiaries following the McLagan Acquisition; and
WHEREAS, the Lenders are willing to extend credit to each of the
Borrowers, but only on the terms and subject to the conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the rate
of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the lowest
rate of interest charged by Chase in connection with extensions of credit
to debtors); and "Federal Funds Effective Rate" shall mean, for any day,
the weighted average of the rates on overnight federal funds transactions
with members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the ABR due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change
in the Prime Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Account Debtor": as to any Account of any Person, any other Person
who is or may become obligated to such Person under, with respect to, or on
account of, such Account.
"Accounts": as to any Person, any right to payment for goods sold or
leased or for services rendered by such Person.
"Acquisition": as to any Person, the acquisition (in a single
transaction or a series of related transactions) by such Person of (a) 100%
of the outstanding Capital Stock of any other Person, (b) all or
substantially all of the assets of any other Person or (c) assets
constituting one or more business units or divisions of any other Person.
"Adjustment Date": the fifth Business Day following receipt by the
Administrative Agent of both (a) the financial statements required to be
delivered pursuant to subsection 6.1(a) or 6.1(b), as the case may be, for
the most recently completed fiscal period and (b) the certificate required
to be delivered pursuant to subsection 6.2(b) with respect to such fiscal
period.
"Administrative Agent": Chase, together with its affiliates, as the
arranger of the Commitments and as the administrative agent for the Lenders
under this Agreement and the other Loan Documents, and any successor agent
appointed pursuant to subsection 9.9.
"Advance Rate": 75%, provided that, the Administrative Agent and the
--------
Required Lenders shall have the right, in their sole discretion, to
periodically modify the Advance Rate based upon the results of examinations
by the Administrative Agent or its designated agent of the Accounts and
related books of ASI and its Subsidiaries.
2
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Aggregate Outstanding Revolving Extensions of Credit": as to any
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such ▇▇▇▇▇▇ then
outstanding and (b) such ▇▇▇▇▇▇'s Commitment Percentage of the L/C
Obligations then outstanding.
"Agreement": this Credit Agreement, as amended, modified,
supplemented, extended, renewed or refinanced from time to time.
"Application": an application, in such form as the Issuing Bank may
specify from time to time, requesting the Issuing Bank to open a Letter of
Credit.
"Assessment": Assessment Solutions, Inc., a New York corporation and
wholly owned subsidiary of ASI.
"Assignee": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at any
time, an amount equal to the excess, if any, of (a) such ▇▇▇▇▇▇'s Revolving
Credit Commitment over (b) such ▇▇▇▇▇▇'s Aggregate Outstanding Revolving
Extensions of Credit.
"Borrowers": as defined in the recitals to this Agreement.
"Borrowing Base": on any date of determination thereof, the product
of the Advance Rate and the aggregate amount of Eligible Accounts of ASI
and its Domestic Subsidiaries on such date of determination. The Borrowing
Base shall be determined by the Administrative Agent in its sole discretion
exercising reasonable judgment from time to time by reference to the most
recent monthly Borrowing Base Certificate delivered initially to the
Administrative Agent pursuant to subsection 5.1(k) and thereafter pursuant
to subsection 5.2(c) or 6.2(d).
"Borrowing Base Certificate": a certificate, substantially in the
form of Exhibit A, or in such other form as the Administrative Agent shall
------- -
from time to time request.
"Borrowing Date": any Business Day specified in a notice pursuant to
subsection 2.2 or 2.6 as a date on which either of the Borrowers requests
the Lenders to
3
make Loans hereunder.
"Business": as defined in subsection 4.18.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"C3": C3 Solutions, Inc., a New York corporation and wholly owned
subsidiary of ASI.
"Capital Expenditure": as defined in subsection 7.8.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Collateral Account": an account established by ASI with the
Administrative Agent and over which the Administrative Agent shall have
exclusive dominion and control.
"Cash Equivalents": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank (whether domestic or foreign) having capital and
surplus in excess of $100,000,000, (c) repurchase obligations of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-1 or
its equivalent by S&P or P-1 or its equivalent by ▇▇▇▇▇'▇ (e) securities
with maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of
which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A
by S&P or A by ▇▇▇▇▇'▇, (f) securities with maturities of one year or less
from the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause (b)
of this definition or (g) shares of money market mutual or similar funds
with assets of at least $2,500,000,000 which invest exclusively in assets
satisfying the requirements of clauses (a) through (f) of this definition.
4
"Cash Interest Expense": of any Person for any period, Consolidated
Interest Expense of such Person for such period minus, in each case to the
extent included in determining such Consolidated Interest Expense for such
period, the sum of the following: (a) non-cash expenses for interest
payable in kind and (b) amortization of debt discount and fees.
"Change of Control": shall occur upon the occurrence of any of the
following (i) ASI shall cease to own 100% of the Capital Stock of McLagan
Partners or (ii) any Person or "group" (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act of 1934, as amended) shall acquire
beneficial ownership of 20% or more of any outstanding class of Capital
Stock of ASI having ordinary voting rights in the election of directors of
ASI or (iii) any two or more of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇ shall cease to be officers of ASI or any of its Subsidiaries.
"Chase": The Chase Manhattan Bank, a New York banking corporation,
and its successors.
"Closing Date": the date on which the conditions precedent set forth
in subsection 5.1 shall be satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment": with respect to any Lender, such ▇▇▇▇▇▇'s Term Loan
Commitment and/or Revolving Credit Commitment, as the case may be;
collectively, as to all the Lenders, the "Commitments".
"Commitment Percentage": as to any Lender at any time, (a) at any
time prior to the termination of the Revolving Credit Commitments, the
percentage which (i) the sum of (A) such Lender's Revolving Credit
Commitment plus (B) the aggregate principal amount of such Lender's Term
----
Loans constitutes of (ii) the sum of (A) the aggregate Revolving Credit
Commitments of all the Lenders and (B) the aggregate principal amount of
Term Loans of all the Lenders then outstanding or (b) at any time after the
termination of the Revolving Credit Commitments, the percentage which (i)
the sum of (A) the aggregate principal amount of such Lender's Loans then
outstanding and (B) such Lender's Commitment Percentage (immediately prior
to the termination of the Revolving Credit Commitments, but after giving
effect to any assignments) of the aggregate amount of L/C Obligations then
outstanding constitutes of (ii) the sum of (A) the aggregate principal
amount of the Loans of all the Lenders then outstanding and (B) the
aggregate amount of L/C Obligations then outstanding.
5
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with either of the Borrowers within the
meaning of Section 4001 of ERISA or is part of a group which includes
either of the Borrowers and which is treated as a single employer under
Section 414 of the Code.
"Compliance Certificate": a certificate delivered pursuant to
subsection 6.2(b), substantially in the form of Exhibit B hereto.
---------
"Consolidated": when used in connection with any defined term, and
not otherwise defined, means such term as it applies to ASI and its
Subsidiaries on a consolidated basis, after eliminating all intercompany
items.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Current Assets": of any Person, at any date of determination thereof,
all assets of such Person and its Consolidated Subsidiaries which would, in
accordance with GAAP, be classified on a consolidated balance sheet of such
Person and its Consolidated Subsidiaries as current assets at such date of
determination.
"Current Liabilities": of any Person, at any date of determination
thereof, all liabilities of such Person and its Consolidated Subsidiaries
which, in accordance with GAAP, would be classified on a consolidated
balance sheet of such Person and its Consolidated Subsidiaries as current
liabilities at such date of determination.
"Default": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary": any Subsidiary of ASI organized under the laws
of any jurisdiction within the United States.
"EBIT": of any Person for any period, EBITDA of such Person for such
period minus depreciation and amortization expense.
-----
"EBITDA": of any Person for any period, Consolidated Net Income of
such Person for such period plus, without duplication and to the extent
----
deducted in determining such Consolidated Net Income, the sum of (a)
provision for income and franchise tax expense, (b) Consolidated Interest
Expense and (c) depreciation and amortization expense minus, without
-----
duplication and to the extent added in determining
6
such Consolidated Net Income, (a) any extraordinary gains (including,
whether or not otherwise includable as a separate item in the statement of
such Consolidated Net Income, gains on the sales of assets outside of the
ordinary course of business).
"Eligible Accounts": as to any Person, at a particular date, the
total outstanding balance of Accounts of such Person:
(1) which are bona fide, valid and legally enforceable obligations of
the Account Debtor in respect thereof and arise from the actual sale
and delivery of goods or rendition and acceptance of services in the
ordinary course of business to such Account Debtor;
(2) which are owing from a single Account Debtor (other than Account
Debtors approved by the Administrative Agent and the Required Lenders,
in their sole and absolute discretion) to the extent the Accounts of
such Account Debtor do not constitute greater than 15% of the
aggregate Eligible Accounts at any one time (or 20%, in the case of
Accounts owing by Bell Atlantic);
(3) which do not contravene, or arise from sales which contravene, any
Requirement of Law applicable thereto;
(4) which are payable in full not later than 90 days after the date of
the creation of original invoices related thereto;
(5) which are not subject to any offset, net-out, set-off, deduction,
dispute, counterclaim or defense, and with respect to which no return,
rejection or repossession has occurred (subject to clause (8) below);
(6) which do not represent a consignment sale, guaranteed sale, sale
or return or other similar arrangement;
(7) which are not Accounts relating to sales to employees or
representatives;
(8) which are reduced by any amounts then owing by such Person to the
Account Debtor or obligor in respect of such Accounts, including,
without limitation, any amounts credited or charged back to such
Accounts;
(9) which have been invoiced by such Person and which have not been
past due for more than 90 days after the date of the invoice related
to such Accounts;
(10) with respect to which, the Administrative Agent is, and continues
to be, reasonably satisfied with the credit standing of the Account
Debtor or obligor;
7
(11) which are not owed by an Account Debtor or obligor which is an
Affiliate or Subsidiary of such Person;
(12) which are not owed by an Account Debtor or obligor which has
taken any of the actions or suffered any of the events of the kind
described in paragraph (f) of Section 8, except to the extent any such
Accounts are entitled to an administrative expense priority under the
Bankruptcy Code;
(13) with respect to which more than 50% of the aggregate amount of
Accounts owed by any Account Debtor or obligor, together with its
Affiliates, to such Person are not more than 90 days past due after
the date of the invoice related to such Accounts;
(14) which are (i) with respect to Accounts owed by any Account Debtor
located in the United States of America, denominated in Dollars and
payable only in Dollars and only in the United States of America and
(ii) with respect to Accounts owed to by any Account Debtor located
outside the United States of America, are (x) denominated in Dollars
and payable only in Dollars and only in the United States of America
and (y) covered by credit insurance assigned to the Administrative
Agent and naming the Administrative Agent as loss payee and otherwise
reasonably satisfactory to the Administrative Agent and the Required
Lenders;
(15) which are owned solely by such Person free and clear of all Liens
or other rights or claims of any other Person (except in favor of the
Administrative Agent for the benefit of the Lenders) and arise from
sales in respect of which all sales, excise or similar taxes have been
paid in full;
(16) which are subject to a perfected first priority security interest
in favor of the Administrative Agent for the benefit of the Lenders
pursuant to the Guarantee and Collateral Agreement;
(17) with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority, required to be obtained, effected or given in
connection with the execution, delivery and performance of such
Accounts have been duly obtained, effected or given, and are in full
force and effect;
(18) which are not Accounts owed by any Governmental Authority other
than such Accounts as to which all required filings to perfect the
security interest in such Accounts in favor of the Administrative
Agent pursuant to the Guarantee and Collateral Agreement, have been
made, including, without limitation, any filings and/or assignments
required under the Assignment of Claims Act of
8
1940, as amended;
(19) which, with respect to Accounts owed by any Account Debtor
located outside the United States of America, may be reduced, to the
extent not covered by credit insurance, by an amount, as determined by
the Administrative Agent in its reasonable discretion, equal to any
costs, taxes or other amounts that might be payable in the event the
security interest in such Accounts in favor of the Administrative
Agent was to be enforced;
(20) with respect to which the creditworthiness of the Account Debtor
is satisfactory to the Administrative Agent and the Required Lenders;
(21) which constitute "accounts" within the meaning of the Uniform
Commercial Code of the state in which the chief executive office of
such Person is located; and
(22) which conform in all other respects to the representations and
warranties contained in the Guarantee and Collateral Agreement.
Standards of eligibility may be fixed and revised from time to time by the
Administrative Agent in the Administrative Agent's reasonable judgment with
the consent of or five days' prior notice to ASI, provided that the
--------
Administrative Agent shall not revise the standards of eligibility in a
manner which would increase the outstanding balance of Eligible Accounts at
the time of such revision without the prior written consent of the Required
Lenders. Unless a Default or Event of Default has occurred and is
continuing, the Administrative Agent shall give five days prior written
notice to ASI of any change in the standards of eligibility set forth
above, except for changes relating to the credit standing of the Account
Debtor or obligor on any Account.
"Employment Agreements": collectively, the Employment Agreements
dated as of November 13, 1997 by and between McLagan Partners and each of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇.
▇▇▇▇▇▇ ▇▇▇▇▇.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
9
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": Eurodollar Loans the then current Interest
Periods with respect to all of which begin on the same date and end on the
same later date (whether or not such Eurodollar Loans shall originally have
been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of ASI, the excess of (a)
EBITDA of ASI for such fiscal year over (b) the sum of (i) to the extent
deducted in determining Consolidated Net Income of ASI for such fiscal
year, the aggregate amount of Cash Interest Expense of ASI for such fiscal
year plus (ii) principal payments actually made in respect of Term Loans or
----
the Subordinated Note during such fiscal year after giving effect to any
reduction in such scheduled principal amortization as a result of voluntary
prepayments), plus (iii) any voluntary prepayments of Term Loans made
----
during such
10
fiscal year, plus (iv) the aggregate amount of all prepayments of Revolving
----
Credit Loans pursuant to subsection 2.4 as a result of a concurrent
reduction of the Revolving Credit Commitments at the option of ASI by a
like amount during such fiscal year, plus (v) the aggregate amount of
----
income taxes paid in cash during such fiscal year plus (vi) the aggregate
----
amount of all Unfunded Capital Expenditures made in cash during such fiscal
year plus (vii) any decreases in Working Capital during such fiscal year,
----
minus (viii) to the extent subtracted in determining Consolidated Net
-----
Income of ASI for such fiscal year, all items which did not result from a
cash payment by ASI or any of its Subsidiaries during such fiscal year,
minus (ix) any increases in Working Capital during such fiscal year.
-----
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Fixed Charges": of any Person for any period, an amount equal to the
sum of (a) Consolidated Interest Expense of such Person for such period,
(b) cash dividends and distributions in respect of the Capital Stock of
such Person for such period and (c) the aggregate amount of long-term
Indebtedness of such Person and its Subsidiaries classified as the current
portion thereof on the consolidated balance sheet of such Person as at the
last day of such period, in each case as determined on a Consolidated basis
in accordance with GAAP.
"Fleet Credit Agreement": as defined in subsection 5.1(p).
"Fleet Letter of Credit": as defined in subsection 5.1(p).
"Foreign Currency Protection Agreements": as to any Person, all
foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements designed to protect such Person against
fluctuations in currency values.
"Foreign Subsidiary": any Subsidiary of ASI organized under the laws
of any jurisdiction outside the United States of America.
"Funded Debt": of any Person, as of the date of determination, all
Indebtedness of such Person which by its terms matures more than one year
after the date of incurrence thereof, and any such Indebtedness maturing
within one year from such date which is renewable or extendable at the
option of the obligor to a date more than one year from such date and
including, in any event, the Revolving Credit Loans.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
11
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee": any guarantee made by any Loan Party in connection with
this Agreement, including, without limitation, the Guarantee and Collateral
Agreement.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by ASI and each of its Domestic
Subsidiaries, substantially in the form of Exhibit C, as the same may be
---------
amended, restated, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to
induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) 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 (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
--------
however, that the term Guarantee Obligation shall not include endorsements
-------
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing
person shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the applicable
Borrower in good faith.
"Guarantor": any Person delivering a Guarantee pursuant to this
Agreement.
"Indebtedness": of any Person at any date, without duplication, (a)
all
12
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Financing Leases, (d) all obligations of
such Person in respect of acceptances issued or created for the account of
such Person, (e) all obligations of such Person in respect of Foreign
Currency Protection Agreements, Interest Rate Protection Agreements and any
other commodity or other hedging arrangement and (f) all liabilities
secured by any Lien on any property owned by such Person even though such
Person has not assumed or otherwise become liable for the payment thereof.
For purposes of this Agreement, the amount of any Indebtedness referred to
in clause (e) of the preceding sentence shall be the net amounts (including
by offset of amounts payable thereunder), including any net termination
payments, required to be paid to a counterparty rather than any notional
amount with regard to which payments may be calculated.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor and Subordination
Agreement, dated the date hereof among ASI, McLagan Partners, the
Administrative Agent, Existing McLagan Partners, and certain other Persons
named therein.
"Interest Expense": of any Person for any period the amount of
interest expense, both expensed and capitalized, of such Person and its
Subsidiaries, determined on a Consolidated basis in accordance with GAAP,
for such period on the aggregate principal amount of its Indebtedness.
"Interest Payment Date": (a) as to any ABR Loan, the last Business
Day of each calendar month during which such ABR Loan is outstanding and
(b) as to any Eurodollar Loan, the last day of each calendar month during
which such Eurodollar Loan is outstanding and the last day of such Interest
Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six or, subject to availability to
each Lender, nine or twelve months thereafter, as selected by ASI or
McLagan Partners, as the case may be, in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and
13
(ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six or, subject to availability to each
Lender, nine or twelve months thereafter, as selected by ASI or
McLagan Partners, as the case may be, by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods
--------
are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such 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;
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date or beyond the date final payment is
due on the Term Loans shall end on the Revolving Credit Termination
Date or such date of final payment, as the case may be;
(3) any Interest Period pertaining to a Eurodollar 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 a calendar month; and
(4) ASI shall select Interest Periods so as not to require a
payment or prepayment of any Eurodollar Loan during an Interest Period
for such Loan including, in connection with the payment of any
scheduled principal payment in respect of such Loan.
"Interest Rate Protection Agreement": any interest rate protection
agreement, interest rate future, interest rate option, interest rate cap or
collar or other interest rate hedge arrangement, to or under which ASI or
any of its Subsidiaries is a party or a beneficiary.
"Investments": as defined in subsection 7.9.
"Issuing Bank": Chase, in its capacity as issuer of any Letter of
Credit.
"L/C Commitment": $1,000,000.
14
"L/C Fee Payment Date": the last Business Day of each calendar
quarter.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed pursuant to subsection 35.
"L/C Participants": the collective reference to all the Lenders
other than the Issuing Bank.
"Letters of Credit": as defined in subsection 31.
"Leverage Ratio": at any time, the ratio of (a) Consolidated Funded
Debt of ASI at such time to (b) Consolidated EBITDA of ASI for the most
recent period of four consecutive fiscal quarters.
"Leverage Ratio Level": as to ASI, the existence of Leverage Ratio
Level I, Leverage Ratio Level II or Leverage Ratio Level III.
"Leverage Ratio Level I": as to ASI, shall exist on an Adjustment
Date if the Leverage Ratio for the period of four consecutive fiscal
quarters ending on the last day of the period covered by the financial
statements relating to such Adjustment Date is greater than 2.50 to 1.00.
"Leverage Ratio Level II": as to ASI, shall exist on an Adjustment
Date if the Leverage Ratio for the period of four consecutive fiscal
quarters ending on the last day of the period covered by the financial
statements relating to such Adjustment Date is less than or equal to 2.50
to 1.00 but greater than or equal to 2.00 to 1.00.
"Leverage Ratio Level III": as to ASI, shall exist on an Adjustment
Date if the Leverage Ratio for the period of four consecutive fiscal
quarters ending on the last day of the period covered by the financial
statements relating to such Adjustment Date is less than 2.00 to 1.00.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Loan": any Term Loan or Revolving Credit Loan, as the case may be.
15
"Loan Documents": this Agreement, any Notes, the Applications, the
Guarantees and the Security Documents.
"Loan Parties": ASI, McLagan Partners and each of their direct and
indirect Subsidiaries which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of (i) ASI and its Subsidiaries taken as a whole or (ii) McLagan
Partners and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this or any of the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"McLagan Acquisition": as defined in the recitals to this Agreement.
"McLagan Buyers": as defined in the recitals to this Agreement.
"McLagan Sellers": as defined in the recitals to this Agreement.
"Moody's": means ▇▇▇▇▇'▇ Investors Service, Inc., a Delaware
corporation having a principal office at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, together with any Person succeeding thereto by merger,
consolidation or acquisition of all or substantially all of its assets,
including substantially all of its business of rating securities.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Income": of any Person for any period, the net income of such
Person and its Subsidiaries for such period, determined on a Consolidated
basis in accordance with GAAP.
"Net Proceeds": with respect to any Person, with respect to any
issuance of Capital Stock by such Person, or capital contribution made to
such Person subsequent to the Closing Date the cash proceeds received from
such issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and
expenses and other reasonable and customary costs and
16
expenses actually incurred in connection therewith.
"Net Worth": of any Person, as of the date of determination, all
items which in conformity with GAAP would be included under shareholders'
equity on a consolidated balance sheet of such Person at such date of
determination.
"Non-Excluded Taxes": as defined in subsection 2.17.
"Notes": the collective reference to the Revolving Credit Notes and
the Term Notes.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": any Acquisition, provided that (a) such
--------
Acquisition has been approved by the Board of Directors (or a majority of
holders of the Capital Stock of such Person) of the Person whose Capital
Stock or assets are to be acquired in such Acquisition, (b) no Default or
Event of Default has then occurred and is continuing or would result
therefrom, (c) the purchase price (including assumed indebtedness and the
fair market value of any non-cash consideration) of all such Acquisitions
in the aggregate since the Closing Date does not exceed $2,500,000, and (d)
such Acquisition has been approved by the Required Lenders.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which either of the Borrowers or a
Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Properties": as defined in subsection 4.18.
"Proudfoot": Proudfoot Reports, Inc., a New York corporation and
wholly owned subsidiary of ASI.
"Purchase Agreement": as defined in the recitals to this Agreement.
"Register": as defined in subsection 10.6(d).
17
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of ASI to reimburse the
Issuing Bank pursuant to subsection 35 for amounts drawn under Letters of
Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. (S)
2615.
"Required Lenders": at any time, Lenders (including, in any event,
Chase) the Commitment Percentages of which then aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer and the president
of ASI or the chief operating officer of ASI or any other officer of ASI
having supervisory responsibility for a principal business function, or,
with respect to financial matters, the chief financial officer of ASI.
"Revolving Credit Applicable Margin": for each Type of Revolving
Credit Loan, the rate per annum set forth under the relevant column heading
below:
ABR Loans Eurodollar Loans
--------- ----------------
0% 3.00%
provided that, from and after the fifth Business Day following receipt by
--------
the Administrative Agent of the audited financial statements of ASI and its
Subsidiaries for the fiscal year ended March 31, 1999 required to be
delivered pursuant to subsection 6.1(a), the Revolving Credit Applicable
Margin for Revolving Credit Loans which are Eurodollar Loans will be
adjusted, on each Adjustment Date, to the Revolving Credit Applicable
Margin set forth on Annex I opposite the Leverage Ratio Level of ASI in
-------
effect on such Adjustment Date, and provided, further, that in the event
-------- -------
that the financial statements required to be delivered pursuant to
subsections 6.1 (a) and (b), as the case may be, hereof, and the related
certificate required to be delivered pursuant to
18
subsection 6.2 (b), are not delivered when due, then, during the period
from the date upon which such financial statements were required to be
delivered until five Business Days following the date upon which they
actually are delivered, the Revolving Credit Applicable Margin for
Revolving Credit Loans which are Eurodollar Loans shall be 3.00%, and,
provided further, that if any Event of Default shall have occurred and be
-------- -------
continuing on any Adjustment Date, no reduction in the Revolving Credit
Applicable Margin on any Loan which would otherwise become effective on
such Adjustment Date shall become effective unless such Event of Default is
cured or waived prior to the next succeeding Adjustment Date.
"Revolving Credit Commitment": as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to, and to issue or participate
in Letters of Credit issued for the account of, ASI hereunder in an
aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such ▇▇▇▇▇▇'s name on Schedule 1.1(a),
---------------
as such amount may be reduced or adjusted from time to time in accordance
with the provisions of this Agreement.
"Revolving Credit Commitment Period": the period from and including
the date hereof to but not including the Revolving Credit Termination Date
or such earlier date on which the Revolving Credit Commitments shall
terminate as provided herein.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Note": as defined in subsection 2.7(f).
"Revolving Credit Termination Date": the third anniversary of the
Closing Date.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any asset or assets of any
Person to secure the obligations and liabilities of ASI and its
Subsidiaries hereunder and under any of the other Loan Documents or to
secure any guarantee of any such obligations and liabilities.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person on a particular date, the
condition that on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets 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 does not intend to,
and does not
19
believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (d) 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 an unreasonably small amount of capital.
"S&P": means Standard & Poor's Ratings Group, a New York corporation
having a principal office at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
together with any Person succeeding thereto by merger, consolidation or
acquisition of all or substantially all of its business of rating
securities.
"Subordinated Debt": any unsecured Indebtedness of ASI: no part of
the principal of which is required to be paid (whether by way of mandatory
sinking fund, mandatory redemption, mandatory prepayment or otherwise)
prior to the date that is one year after the Term Loan Maturity Date; the
payment of the principal of and interest on which and other obligations of
ASI in respect thereof are subordinated to the prior payment in full of the
principal of and interest (including post-petition interest) on the Loans
and all other obligations and liabilities of ASI to the Administrative
Agent and the Lenders hereunder on terms and conditions approved in writing
by the Required Lenders; and all other terms and conditions of which are
satisfactory in form and substance to the Required Lenders (as evidenced by
their prior written approval thereof).
"Subordinated Employee Payments": as defined in the Intercreditor
Agreement.
"Subordinated Note": as defined in the Intercreditor Agreement.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of ASI.
"T3 Solutions Incorporated": a Delaware corporation and wholly owned
Subsidiary of ASI.
"Term Loan": as defined in subsection 2.5.
"Term Loan Applicable Margin": for each Type of Term Loan, the rate
per annum set forth under the relevant column heading below:
20
ABR Loans Eurodollar Loans
--------- ----------------
0.25% 3.25%
provided that, from and after the fifth Business Day following receipt by
--------
the Administrative Agent of the audited financial statements of ASI and its
Subsidiaries for the fiscal year ended March 31, 1999 required to be
delivered pursuant to subsection 6.1(a), the Term Loan Applicable Margin
for Term Loans which are ABR Loans and Eurodollar Loans will be adjusted,
on each Adjustment Date, to the Term Loan Applicable Margin set forth on
Annex I opposite the Leverage Ratio Level of ASI in effect on such
-------
Adjustment Date, and provided, further, that in the event that the
-------- -------
financial statements required to be delivered pursuant to subsection 6.1
(a) and (b), as the case may be, hereof, and the related certificate
required to be delivered pursuant to subsection 6.2(b), are not delivered
when due, then, during the period from the date upon which such financial
statements were required to be delivered until five Business Days following
the date upon which they actually are delivered, the Term Loan Applicable
Margin (a) for Term Loans which are for Eurodollar Loans shall be 3.25% and
(b) for Term Loans which are ABR Loans shall be 0.25%, and, provided
--------
further, that if any Event of Default shall have occurred and be continuing
-------
on any Adjustment Date, no reduction in the Term Loan Applicable Margin on
any Loan which would otherwise become effective on such Adjustment Date
shall become effective unless such Event of Default is cured or waived
prior to the next succeeding Adjustment Date.
"Term Loan Commitment": as to any Lender, the obligation of such
Lender to make Term Loans hereunder in an aggregate principal amount not to
exceed the amount set forth opposite such ▇▇▇▇▇▇'s name on Schedule 1.1(a),
---------------
as such amount may be reduced or adjusted from time to time in accordance
with the provisions of this Agreement.
"Term Loan Maturity Date": the fifth anniversary of the Closing Date.
"Term Note": as defined in subsection 2.7(f).
"Total Liabilities": of any Person, as of the date of determination,
all liabilities of such Person and its subsidiaries determined on a
Consolidated basis in accordance with GAAP, including all Current
Liabilities and Funded Debt of such Person at such date of determination.
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Unfunded Capital Expenditures": for any period, (i) the aggregate
amount of
21
Capital Expenditures of ASI and its Subsidiaries for such period minus (ii)
-----
the amount thereof funded with the proceeds of Indebtedness incurred to
finance such Capital Expenditures or financed pursuant to a Financing
Lease, in each case determined on a Consolidated basis in accordance with
GAAP.
" Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended from time to time.
"Working Capital": at any date of determination, the sum of (a) all
amounts which would, in conformity with GAAP, be included under current
assets (other than cash and Cash Equivalents) on a balance sheet of ASI and
its Subsidiaries on a Consolidated basis on such date of determination
minus (b) all amounts which would, in conformity with GAAP, be included
-----
under current liabilities on a balance sheet (other than the current
portion of Indebtedness) of ASI and its Subsidiaries on a Consolidated
basis on such date of determination.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrowers and their Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "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 Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to ASI from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such ▇▇▇▇▇▇'s Commitment Percentage of then outstanding L/C
Obligations, does not exceed the lesser of (i) the amount of such ▇▇▇▇▇▇'s
Revolving Credit Commitment and (ii) such ▇▇▇▇▇▇'s
22
Commitment Percentage of the Borrowing Base then in effect. During the Revolving
Credit Commitment Period, ASI may use the Revolving Credit Commitments by
borrowing, prepaying and reborrowing the Revolving Credit Loans in whole or in
part all in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans, or (iii) a combination thereof, as determined
by ASI and notified to the Administrative Agent in accordance with subsections
2.2 and 2.9, provided that no Revolving Credit Loan shall be made as a
--------
Eurodollar Loan after the day that is one month prior to the Revolving Credit
Termination Date.
2.2 Procedure for Revolving Credit Borrowing. ASI may borrow under
----------------------------------------
the Revolving Credit Commitments during the Revolving Credit Commitment Period
on any Business Day, provided that ASI shall give the Administrative Agent
--------
irrevocable notice (which notice must be received by the Administrative Agent
prior to 10:00 A.M., New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans are to be initially Eurodollar Loans, and one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods
therefor. Each borrowing under the Revolving Credit Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $500,000 or a whole multiple of
$100,000 in excess thereof (or, if the then Available Revolving Credit
Commitments are less than $500,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $1,500,000 or a whole multiple of $100,000 in excess thereof.
Upon receipt of any such notice from ASI, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of ASI at the office of the Administrative Agent specified in subsection
10.2 prior to 11:00 A.M., New York City time, on the Borrowing Date requested by
ASI in funds immediately available to the Administrative Agent. Such borrowing
will then be made available to ASI by the Administrative Agent crediting the
account of ASI on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
2.3 Commitment Fee. ASI agrees to pay to the Administrative Agent
--------------
for the account of each Lender a commitment fee for the period from and
including the first day of the Revolving Credit Commitment Period to the
Revolving Credit Termination Date, computed at the rate of 0.25% per annum on
the average daily amount of the Available Revolving Credit Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the last Business Day of each March, June, September and December and on the
Revolving Credit Termination Date or such earlier date as the Revolving Credit
Commitments
23
shall terminate as provided herein, commencing on the first of such dates to
occur after the date hereof.
2.4 Termination or Reduction of Commitments. ASI shall have the
---------------------------------------
right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the Revolving Credit Commitments or, from time to time, to
reduce the amount of the Revolving Credit Commitments, provided that, after
--------
giving effect thereto and any prepayments of Revolving Credit Loans on such
date, the aggregate principal amount of Revolving Credit Loans then outstanding,
when added to the outstanding L/C Obligations, does not exceed the Revolving
Credit Commitments of the Lenders then in effect. Any such reduction shall be
in an amount equal to $100,000 or a whole multiple thereof and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.5 Term Loans. Subject to the terms and conditions hereof, each
----------
Lender severally agrees to make term loans (each a "Term Loan") to ASI and
McLagan Partners on the Closing Date in an aggregate amount not to exceed the
amount of the Term Loan Commitment of such Lender, provided that, the aggregate
--------
amount of Term Loans made to ASI shall be $3,000,000 and the aggregate amount of
Term Loans made to McLagan Partners shall be $12,000,000. The Term Loans may
from time to time be (a) Eurodollar Loans, (b) ABR Loans or (c) a combination
thereof, as determined by ASI or McLagan Partners, as the case may be, and
notified to the Administrative Agent in accordance with subsections 2.6 and 2.9.
2.6 Procedure for Term Loan Borrowing. ASI and McLagan Partners
---------------------------------
hereby request a Term Loan borrowing on the Closing Date in an amount equal to
the aggregate amount of the Term Loan Commitments of the Lenders. Each Lender
will make the amount of its pro rata share of the Term Loans available to the
Administrative Agent for the account of ASI and McLagan Partners at the office
of the Administrative Agent specified in subsection 10.2 prior to 11:00 A.M.,
New York City time, on the Closing Date in Dollars and in funds immediately
available to the Administrative Agent. The Administrative Agent shall credit
the accounts of ASI and McLagan Partners, as applicable, on the books of such
office of the Administrative Agent by 2:00 P.M., New York City time, on the
Closing Date, with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.
2.7 Repayment of Loans; Evidence of Debt. (a) ASI hereby
------------------------------------
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Credit Loan of
such Lender on the Revolving Credit Termination Date (or such earlier date on
which the Revolving Credit Loans become due and payable pursuant to Section 8).
ASI hereby further agrees to pay interest on the unpaid principal amount of the
Revolving Credit Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates set forth in
subsections 2.11 and 2.14.
24
(b) Each of ASI and McLagan Partners hereby, jointly and severally,
unconditionally promise to pay to the Administrative Agent for the account of
each Lender the principal amount of the Term Loans of such Lender in quarterly
installments during each year set forth below payable on the last day of March,
June, September and December of each such year (with the aggregate amount due in
each such year being equal to the amount set forth below opposite such year and
the installments in each year being equal in amount):
Year Amount
---- ------
1998 $1,500,000
1999 2,000,000
2000 3,000,000
2001 4,000,000
2002 4,500,000
Each of ASI and McLagan Partners, jointly and severally, hereby further agree to
pay interest on the unpaid principal amount of the Term Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsections 2.11 and 2.14.
(c) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
subsection 10.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan and Term Loan made
hereunder, the Type thereof and each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become due and
payable from each of the Borrowers to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from each of
the Borrowers and each ▇▇▇▇▇▇'s share thereof.
(e) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.7(c) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of each of the Borrowers therein recorded; provided, however, that
-------- -------
the failure of any Lender or the Administrative Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of either of the Borrowers to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(f) Each of the Borrowers agrees that such ▇▇▇▇▇▇▇▇ will execute and
deliver to
25
such Lender (i) a promissory note of such Borrower evidencing the Revolving
Credit Loans of such Lender, made to such Borrower, substantially in the form of
Exhibit D with appropriate insertions as to date and principal amount (a
---------
"Revolving Credit Note"), and/or (ii) a promissory note of such Borrower
evidencing the Term Loans of such Lender made to such Borrower, substantially in
the form of Exhibit E with appropriate insertions as to date and principal
---------
amount (a "Term Note").
2.8 Optional Prepayments and Mandatory Prepayments. (a) Each of the
----------------------------------------------
Borrowers may on the last day of any Interest Period with respect thereto, in
the case of Eurodollar Loans, or at any time and from time to time, in the case
of ABR Loans, prepay the Loans, in whole or in part, without premium or penalty,
by giving irrevocable notice (which may be by telephone, promptly confirmed in
writing) to the Administrative Agent by 10:00 A.M. on the date of the
prepayment, specifying the date and amount of prepayment and whether the
prepayment is of Term Loans and/or Revolving Credit Loans and of Eurodollar
Loans, ABR Loans or a combination thereof, and, if of a combination thereof, the
amount allocable to each. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to subsection 2.18
and, in the case of prepayments of the Term Loans only, accrued interest to such
date on the amount prepaid. Partial prepayments of the Term Loans shall be
applied to the remaining installments of principal thereof in the inverse order
of their scheduled maturities. Amounts prepaid on account of the Term Loans may
not be reborrowed. Partial prepayments shall be in an aggregate principal
amount of $100,000 or a whole multiple of $50,000 in excess thereof, in the case
of any prepayment of Revolving Credit Loans, and $100,000 or a whole multiple of
$50,000 in excess thereof, in the case of prepayment of any Term Loans.
(b) If, at any time during the Commitment Period, the Aggregate
Outstanding Revolving Extensions of Credit of the Lenders exceed the Borrowing
Base then in effect, ASI shall, without notice or demand, immediately prepay the
Revolving Credit Loans in an aggregate principal amount equal to such excess,
together with interest and commitment fees accrued to the date of such payment
or prepayment to the Administrative Agent. To the extent that after giving
effect to any prepayment of any Revolving Credit Loans required by the preceding
sentence, the Aggregate Outstanding Revolving Extensions of Credit at such time
exceed the Borrowing Base at such time, ASI shall, without notice or demand,
immediately deposit in a Cash Collateral Account upon terms reasonably
satisfactory to the Administrative Agent an amount equal to the aggregate then
outstanding L/C Obligations. The Administrative Agent shall apply any cash
deposited in the Cash Collateral Account (to the extent thereof) to pay any
Reimbursement Obligations which become due thereafter, provided that the
--------
Administrative Agent shall release to ASI from time to time such portion of the
amount on deposit in the Cash Collateral Account which is equal to the amount by
which the Borrowing Base at such time plus the amount on deposit in the Cash
Collateral Account exceeds the Aggregate Outstanding Revolving Extensions of
Credit at such time. Unless a Default or
26
Event of Default shall have occurred and be continuing, the Administrative Agent
shall invest all amounts on deposit in such Cash Collateral Account in Cash
Equivalents designated by ASI and all earnings on such investments shall be for
the benefit of ASI. After the occurrence and during the continuation of an Event
of Default, the Administrative Agent may invest amounts on deposit in such Cash
Collateral Account in such Cash Equivalents as it may determine and all earnings
on such investments shall be held as additional collateral security for the
Obligations (as defined in the Guarantee and Collateral Agreement). The
Administrative Agent shall not be responsible for losses as a result of any
investment of amounts on deposit in such Cash Collateral Account and ASI shall
deposit additional amounts in the Cash Collateral Account equal to the amount of
any such losses upon the realization thereof.
(c) If, with respect to any fiscal year of ASI, commencing with its
fiscal year ending March 31, 1999, ASI and its Consolidated Subsidiaries shall
have Excess Cash Flow for such fiscal year, ASI and McLagan Partners shall
prepay the Term Loans in an aggregate amount equal to 50% of such Excess Cash
Flow, with such prepayment being due and payable on or prior to July 15 of the
fiscal year following the fiscal year in respect of which such payment is made.
(d) Upon any issuance of any Capital Stock by ASI or any capital
contribution made to ASI, ASI and McLagan Partners shall prepay the Term Loans
in an amount equal to the lesser of (i) 50% of the Net Proceeds of such issuance
or capital contribution and (ii) 50% of the then aggregate outstanding principal
amount of Term Loans. Each prepayment made pursuant to this subsection 2.8(d)
shall be made on or before the date which is two Business Days after the date of
receipt of the relevant Net Proceeds.
(e) Prepayments of any of the Term Loans pursuant to subsection
2.8(c) or 2.8(d) shall be applied (i) to first prepay any outstanding Term Loans
which are ABR Loans until all such loans have been prepaid in full and second,
to prepay any Term Loans which are Eurodollar Loans and (ii) in the inverse
order of maturity thereof. All such prepayments shall be accompanied by the
interest accrued on any such prepayment amount through the date of such
prepayment. Notwithstanding the forgoing provisions of this subsection 2.8, if
at any time the mandatory prepayment of Loans pursuant to subsection 2.8(b), (c)
or (d) would result in ASI's incurring breakage costs under subsection 2.18 as a
result of Eurodollar Loans being prepaid other than on the last day of an
Interest Period applicable thereto (the "Affected Eurodollar Loans"), then ASI
may in its sole discretion, so long as no Default or Event of Default shall have
then occurred and be continuing, initially deposit a portion (up to 100%) of the
amounts that otherwise would have been paid in respect of the Affected
Eurodollar Loans with the Administrative Agent (which deposit must be equal in
amount to the amount of the Affected Eurodollar Loans not immediately prepaid)
in a Cash Collateral Account to be held as security for all amounts owing to the
Administrative Agent and the Lenders in connection with this Agreement or any
other Loan Document, with such cash collateral to be directly applied by the
Administrative Agent to prepay the relevant Affected Eurodollar Loans on the
last day of the Interest Periods applicable thereto (or such earlier date or
dates as shall be requested by
27
ASI or as shall be determined by the Administrative Agent at any time after the
occurrence and during the continuation of a Default or Event of Default).
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, all amounts deposited in such Cash Collateral Account pursuant to the
immediately preceding sentence shall be held for the sole benefit of the Lenders
whose Loans would otherwise have been immediately prepaid with the amounts
deposited, and, upon the taking of any action by the Administrative Agent or the
Lenders pursuant to the remedial provisions of Section 8, any amounts held as
cash collateral pursuant to this subsection 2.8(e) shall, subject to the
requirements of applicable law, be immediately applied to prepay such Loans.
Unless a Default or Event of Default shall have occurred and be continuing, the
Administrative Agent shall invest all amounts on deposit in such Cash Collateral
Account in Cash Equivalents designated by ASI and all earnings on such
investments shall be for the benefit of ASI. After the occurrence and during the
continuation of an Event of Default, the Administrative Agent may invest amounts
on deposit in such Cash Collateral Account in such cash Equivalents as it may
determine and all the earnings on such investments shall be held as additional
collateral security for the Obligations (as defined in the Guarantee and
Collateral Agreement). The Administrative Agent shall not be responsible for
losses as a result of any investment of amounts on deposit in such Cash
Collateral Account and ASI shall deposit additional amounts in the Cash
Collateral Account equal to the amount of any such losses upon the realization
thereof.
2.9 Conversion and Continuation Options. (a) Each of the Borrowers
-----------------------------------
may elect from time to time to convert its Eurodollar Loans to ABR Loans, by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that any such conversion of Eurodollar Loans
--------
may only be made on the last day of an Interest Period with respect thereto.
Each of the Borrowers may elect from time to time to convert its ABR Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election. Any such notice of conversion
to Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, provided
--------
that (i) no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Administrative Agent has or the
Required Lenders have determined that such a conversion is not appropriate and
(ii) no Loan may be converted into a Eurodollar Loan after the date that is one
month prior to the Revolving Credit Termination Date (in the case of conversions
of Revolving Credit Loans) or the date of the final installment of principal of
the Term Loans (in the case of conversions of Term Loans).
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the applicable
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such (i) when any Event of
--------
Default has occurred and is continuing and the Administrative Agent has or the
Required
28
Lenders have determined that such a continuation is not appropriate or (ii)
after the date that is one month prior to the Revolving Credit Termination Date
(in the case of continuations of Revolving Credit Loans) or the date of the
final installment of principal of the Term Loans (in the case of continuations
of Term Loans) and provided, further, that if the applicable Borrower shall fail
-------- -------
to give such notice or if such continuation is not permitted such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period.
2.10 Minimum Amounts of Tranches. All borrowings, conversions and
---------------------------
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, no more than five Eurodollar Tranches in
respect of Term Loans still be outstanding at any one time.
2.11 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
--------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus (i) in the case of Eurodollar Loans which are Revolving Credit Loans, the
Revolving Credit Applicable Margin or (ii) in the case of Eurodollar Loans which
are Term Loans, the Term Loan Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus (i) in the case of ABR Loans which are Revolving Credit Loans, the
Revolving Credit Applicable Margin or (ii) in the case of ABR Loans which are
Term Loans, the Term Loan Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (x) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
3% or (y) in the case of any such overdue interest, commitment fee or other
amount, the rate described in paragraph (b) of this subsection plus 3%, in each
case from the date of such non-payment until such overdue principal, interest,
commitment fee or other amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
--------
subsection shall be payable from time to time on demand.
(e) Upon the occurrence and during the continuance of an Event of
Default, the Required Lenders shall have the right to require that the principal
of any Loan then outstanding shall bear interest ar a rate per annum which is
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this subsection plus 3%.
29
2.12 Computation of Interest and Fees. (a) Commitment fees and
--------------------------------
interest shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Borrowers and the Lenders of each determination of a Eurodollar Rate. Any
change in the interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrowers and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of either of the Borrowers, deliver
to the Borrowers a statement showing the quotations used by the Administrative
Agent in determining any interest rate pursuant to subsection 2.11(a).
2.13 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon each of the Borrowers)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from any
Lender that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lender (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans, requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans, shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans that were to
have been continued as such on such first day shall be converted on such day to
ABR Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans, as the case may be, shall be made or continued as
such, nor shall either of the Borrowers have the right to convert Loans to
Eurodollar Loans, as the case may be.
2.14 Pro Rata Treatment and Payments. (a) Each borrowing by each of
-------------------------------
the Borrowers from the Lenders hereunder, each payment by each of the Borrowers
on account of any commitment fee hereunder and any reduction of the Revolving
Credit Commitments or the Term Loan Commitments shall be made pro rata according
--------
to the Lenders' Commitment Percentages. Each payment (including each
prepayment) by each of the Borrowers on account
30
of principal of and interest on the Loans shall be made pro rata according to
--------
the respective outstanding principal amounts of the Revolving Credit Loans or
Term Loans, as the case may be, then held by the Lenders. All payments
(including prepayments) to be made by each of the Borrowers hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without set
off or counterclaim and shall be made prior to 12:00 Noon, New York City time,
on the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in subsection 10.2
hereof, in Dollars and in immediately available funds. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such ▇▇▇▇▇▇'s share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans hereunder, on demand, from the applicable
Borrower. The failure of any Lender to make any extension of credit required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
--------
responsible for any other Lender's failure to make any extension of credit as
required.
2.15 Illegality. Notwithstanding any other provision herein, if the
----------
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
▇▇▇▇▇▇'s Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the relevant Borrower shall pay to such Lender
31
such amounts, if any, as may be required pursuant to subsection 2.18.
2.16 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Non-
Excluded Taxes covered by subsection 2.17 and changes in the rate of tax on
the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the relevant Borrower shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letters of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the relevant
Borrower shall promptly pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the relevant Borrower
(with a copy to the
32
Administrative Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender to the relevant Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.17 Taxes. (a) All payments made by each of the Borrowers under
-----
this Agreement and any Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or any
Lender as a result of a present or former connection between the Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any Note). If any such non-
excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrowers shall not be required to
-------- -------
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded Taxes are payable by either of the Borrowers, as promptly as
possible thereafter such Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by such Borrower showing payment
thereof. If either of the Borrowers fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify the Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to each of the Borrowers and the Administrative
Agent (A) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224,
33
or successor applicable form, as the case may be, and (B) an Internal
Revenue Service Form W-8 or W-9, or successor applicable form, as the case
may be;
(ii) deliver to each of the Borrowers and the Administrative
Agent two further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to such Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by such
Borrowers or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrowers and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 10.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
2.18 Indemnity. Each of the Borrowers agrees to indemnify each Lender
---------
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after such
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by such Borrower in making any
prepayment of a Eurodollar Loan after such Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender
34
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.19 Change of Lending Office. Each Lender agrees that if it makes
------------------------
any demand for payment under subsection 2.16 or 2.17(a), or if any adoption or
change of the type described in subsection 2.15 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrowers to make payments under subsection 2.16 or
2.17(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.15.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
the Issuing Bank, in reliance on the agreements of the other Lenders set forth
in subsection 34, agrees to issue letters of credit ("Letters of Credit") for
-----------------
the account of ASI on any Business Day during the Revolving Credit Commitment
Period in such form as may be approved from time to time by the Issuing Bank;
provided that the Issuing Bank shall have no obligation to issue any Letter of
--------
Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii the Available Revolving Credit Commitments of
the Lenders would be less than zero or (ii the sum of the outstanding L/C
Obligations and the aggregate outstanding principal amount of Revolving Credit
Loans at such time would exceed the Borrowing Base then in effect.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars and shall be a standby letter of
credit issued to support obligations of ASI, contingent or otherwise, in
respect of leases of real property.
(ii) expire no later than five Business Days prior to the Revolving
Credit Termination Date.
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The Issuing Bank shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
35
3.2 Procedure for Issuance of Letters of Credit. ASI may from time
-------------------------------------------
to time request that the Issuing Bank issue a Letter of Credit by delivering to
the Issuing Bank at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Bank, and such other
certificates, documents and other papers and information as the Issuing Bank may
request. Upon receipt of any Application, the Issuing Bank will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Bank be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing Bank and ASI.
The Issuing Bank shall furnish a copy of such Letter of Credit to ASI promptly
following the issuance thereof.
3.3 Fees, Commissions and Other Charges. (a) ASI shall pay to the
-----------------------------------
Administrative Agent, for the account of the Issuing Bank and the L/C
Participants, a letter of credit commission with respect to each Letter of
Credit, computed for the period from the date of such payment to the date upon
which the next such payment is due hereunder at the rate of 1.50% per annum,
calculated on the basis of a 360 day year, of the aggregate amount available to
be drawn under such Letter of Credit on the date on which such fee is
calculated. Such commissions shall be payable in advance on the date of
issuance of each Letter of Credit and on each L/C Fee Payment Date to occur
thereafter and shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, ASI shall pay
or reimburse the Issuing Bank for such normal and customary costs and expenses
as are incurred or charged by the Issuing Bank in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this subsection.
3.4 L/C Participations. (a) The Issuing Bank irrevocably agrees to
------------------
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Commitment Percentage in the Issuing Bank's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Bank thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Bank that, if a draft is paid under any Letter of Credit
for which the Issuing Bank is not reimbursed in full by ASI in accordance with
the terms of this Agreement, such L/C Participant shall pay to the Issuing Bank
upon demand at the Issuing Bank's address for notices
36
specified herein an amount equal to such L/C Participant's Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Bank pursuant to subsection 34 in respect of any unreimbursed portion of
any payment made by the Issuing Bank under any Letter of Credit is paid to the
Issuing Bank within three Business Days after the date such payment is due, such
L/C Participant shall pay to the Issuing Bank on demand an amount equal to the
product of (i) such amount, times (ii the daily average Federal Funds Effective
Rate, as quoted by the Issuing Bank, during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuing Bank, times (ii a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 360. If any such amount required to be paid by any L/C Participant pursuant
to subsection 34 is not in fact made available to the Issuing Bank by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Bank shall be entitled to recover from such L/C Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per
annum applicable to ABR Loans hereunder. A certificate of the Issuing Bank
submitted to any L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
rata share of such payment in accordance with subsection 34, the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from ASI
or otherwise, including proceeds of collateral applied thereto by the Issuing
Bank), or any payment of interest on account thereof, the Issuing Bank will
distribute to such L/C Participant its pro rata share thereof; provided,
--------
however, that in the event that any such payment received by the Issuing Bank
-------
shall be required to be returned by the Issuing Bank, such L/C Participant shall
return to the Issuing Bank the portion thereof previously distributed by the
Issuing Bank to it.
3.5 Reimbursement Obligation of ASI. (a) ASI agrees to reimburse the
-------------------------------
Issuing Bank on each date on which the Issuing Bank notifies ASI of the date and
amount of a draft presented under any Letter of Credit and paid by the Issuing
Bank for the amount of (i) such draft so paid and (ii any taxes, fees, charges
or other costs or expenses incurred by the Issuing Bank in connection with such
payment. Each such payment shall be made to the Issuing Bank at its address for
notices specified herein in lawful money of the United States of America and in
immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by ASI under this subsection from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate which would be payable on any outstanding ABR Loans which were then
overdue.
37
3.6 Obligations Absolute. (a) ASI's obligations under this Section
--------------------
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which ASI may
have or have had against the Issuing Bank or any beneficiary of a Letter of
Credit.
(b) ASI also agrees with the Issuing Bank that the Issuing Bank shall
not be responsible for, and ASI's Reimbursement Obligations under subsection 35
shall not be affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or (ii any dispute between or
among ASI and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or (ii any claims whatsoever of
ASI against any beneficiary of such Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) ASI agrees that any action taken or omitted by the Issuing Bank
under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on ASI and shall not result in
any liability of the Issuing Bank to ASI.
3.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Bank shall promptly notify ASI
of the date and amount thereof. The responsibility of the Issuing Bank to ASI in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any Application
-----------
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, each of the Borrowers hereby, jointly and severally, represents and
warrants to the Administrative Agent and each Lender (except that the
representations and warranties in subsections 4.1 and 4.15 are
38
made solely by ASI) that:
4.1 Financial Condition. (a) The audited consolidated and
-------------------
consolidating balance sheet of ASI and its consolidated Subsidiaries as at March
31, 1997 and the related consolidated and consolidating statements of income and
of cash flows for the fiscal year ended on such date, reported on by Coopers &
▇▇▇▇▇▇▇, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the consolidated and consolidating
financial condition of ASI and its Consolidated Subsidiaries as at such date,
and the consolidated results of their operations and their consolidated and
consolidating cash flows for the fiscal year then ended. The unaudited
consolidated and consolidating balance sheet of ASI and its consolidated
Subsidiaries as at June 30, 1997 and the related unaudited consolidated and
consolidating statements of income and of cash flows for the three-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, are complete and correct and present
fairly the consolidated and consolidating financial condition of ASI and its
Consolidated Subsidiaries as at such date, and the consolidated and
consolidating results of their operations and their consolidated and
consolidating cash flows for the three-month period then ended (subject to
normal year-end audit adjustments and the absence of certain notes). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants or Responsible Officer,
as the case may be, and as disclosed therein). Neither ASI nor any of its
Consolidated Subsidiaries had, at the date of the most recent balance sheet
referred to above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency
swap or exchange transaction, which is not reflected in the foregoing statements
or in the notes thereto. During the period from March 31, 1997 to and including
the date hereof there has been no sale, transfer or other disposition by ASI or
any of its consolidated Subsidiaries of any material part of its business or
property and no purchase or other acquisition of any business or property
(including any capital stock of any other Person) material in relation to the
consolidated and consolidating financial condition of ASI and its consolidated
Subsidiaries at March 31, 1997.
(b) The pro forma consolidated and consolidating balance sheet of ASI
and its Consolidated Subsidiaries as of a date satisfactory to the Lenders are
complete and correct and present fairly the consolidated and consolidating pro
forma financial condition of ASI and its Consolidated Subsidiaries as at such
date after giving effect, on a pro forma basis, to (i) the McLagan Acquisition,
(ii) the financing thereof and (iii) the payment of related fees and expenses,
as if such events had occurred on such date. Such balance sheet was prepared
based on good faith assumptions and on the best information available to ASI as
of the date of delivery thereof and fairly presents on a pro forma basis the
--- -----
Consolidated financial position of ASI and its Consolidated Subsidiaries as at
such date, as adjusted, as described above, assuming such events had occurred at
such date. The balance sheets, income statements and cash flow projections of
ASI and its Consolidated Subsidiaries for the fiscal years ending
39
March 31, 1998 through March 31, 2003 have been prepared on the basis of sound
financial planning practice and are complete and not misleading in any material
respect.
4.2 No Change; Solvency. (a) Since March 31, 1997 there has been no
-------------------
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) except as set forth on Schedule 4.2, during the
period from March 31, 1997 to and including the date hereof no dividends or
other distributions have been declared, paid or made upon the Capital Stock of
ASI nor has any of the Capital Stock of ASI been redeemed, retired, purchased or
otherwise acquired for value by ASI or any of its Subsidiaries. As of the
Closing Date, after giving effect to the transactions contemplated by this
Agreement and the other Loan Documents, and as of each Borrowing Date, each of
the Borrowers and its Subsidiaries will be Solvent on a Consolidated basis.
4.3 Corporate Existence; Compliance with Law. Such Borrower and each
----------------------------------------
of its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified as a foreign corporation 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
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Such
-------------------------------------------------------
Borrower and each of its Subsidiaries has the corporate power and authority, and
the legal right, to make, deliver and perform the Loan Documents to which it is
a party and to borrow hereunder and has taken all necessary corporate action to
authorize the borrowings on the terms and conditions of this Agreement and any
Notes and to authorize the execution, delivery and performance of the Loan
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents to which such Borrower is a party. This Agreement has been, and each
other Loan Document to which it is a party will be, duly executed and delivered
on behalf of such ▇▇▇▇▇▇▇▇. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of such Borrower enforceable against such
Borrower in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
4.5 No Legal Bar. The execution, delivery and performance of the
------------
Loan Documents to which such Borrower is a party, the borrowings hereunder and
the use of the
40
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of such Borrower or of any of its Subsidiaries and will not result
in, or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.
4.6 No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of either of the Borrowers, threatened by or against such
Borrower or any of its Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect.
4.7 No Default. Neither such Borrower nor any of its Subsidiaries is
----------
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Such Borrower and each of its
----------------------------
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 7.3.
4.9 Intellectual Property. Such Borrower and each of its
---------------------
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does either
of the Borrowers know of any valid basis for any such claim. The use of such
Intellectual Property by ASI and each of its Subsidiaries does not infringe on
the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.10 No Burdensome Restrictions. To the best of the Borrowers'
--------------------------
knowledge, no Requirement of Law or Contractual Obligation of such Borrower or
any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
4.11 Taxes. Such Borrower and each of its Subsidiaries has filed or
-----
caused to be filed all tax returns which, to the knowledge of such Borrower, are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which
41
are currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of such Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of such Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.12 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. If requested by any Lender or the Administrative Agent,
each of the Borrowers will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-1 or FR Form U-1 referred to in said Regulation G or Regulation U, as the case
may be.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither of the Borrowers nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan, and neither of the
Borrowers nor any Commonly Controlled Entity would become subject to any
liability under ERISA if either Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. Neither of the
-----------------------------------------
Borrowers is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. Neither of the Borrowers is subject to regulation under any Federal
or State statute or regulation (other than Regulation X of the Board of
Governors of the Federal Reserve System) which limits its ability to incur
Indebtedness.
4.15 Subsidiaries. The following constitute all the Subsidiaries of
------------
ASI at the date hereof (after giving effect to the Acquisition): Assessments,
Proudfoot, ▇▇▇▇▇▇▇ Partners, T3 and C3.
4.16 Purpose of Loans. The proceeds of the Revolving Credit Loans
----------------
shall be
42
used by ASI to finance the working capital needs of ASI and its Subsidiaries in
the ordinary course of business and to finance up to $2,500,000 in Permitted
Acquisitions and to pay related fees and expenses. The proceeds of the Term
Loans made to ▇▇▇▇▇▇▇ Partners shall be used by ▇▇▇▇▇▇▇ Partners to finance the
McLagan Acquisition and the proceeds of the Term Loans made to ASI shall be used
to make a capital contribution to ▇▇▇▇▇▇▇ Partners to finance the McLagan
Acquisition.
4.17 Representations and Warranties Contained in the McLagan
-------------------------------------------------------
Documentation. All of the McLagan Documentation has been duly executed and
-------------
delivered by each of the parties thereto. As of the Closing Date, the
representations and warranties contained in the McLagan Documentation (after
giving effect to any amendments, supplements, waivers or other modifications of
such McLagan Documentation prior to such Closing Date in accordance with this
Agreement) will be true and correct in all material respects except as otherwise
disclosed to the Lenders in writing prior to the date hereof.
4.18 Environmental Matters. (a) To the best knowledge of the
---------------------
Borrowers, the facilities and properties owned, leased or operated by such
Borrower or any of its Subsidiaries (the "Properties") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts or
concentrations which (i) constitute or constituted a violation of, or (ii) could
reasonably be expected to give rise to liability under, any Environmental Law.
(b) To the best knowledge of the Borrowers, the Properties and all
operations at the Properties are in compliance, and have in the last five years
been in compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business operated by ASI
or any of its Subsidiaries (the "Business") which could materially interfere
with the continued operation of the Properties or materially impair the fair
saleable value thereof.
(c) To the best knowledge of the Borrowers, neither such Borrower nor
any of its Subsidiaries has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or
the Business, nor does such Borrower have knowledge or reason to believe that
any such notice will be received or is being threatened.
(d) To the best knowledge of the Borrowers, materials of
Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable
43
Environmental Law.
(e) To the best knowledge of the Borrowers, no judicial proceeding or
governmental or administrative action is pending or, to the knowledge of such
Borrower, threatened, under any Environmental Law to which such Borrower or any
of its Subsidiaries is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business.
(f) To the best knowledge of the Borrowers, there has been no release
or threat of release of Materials of Environmental Concern at or from the
Properties, or arising from or related to the operations of such Borrower or any
of its Subsidiaries in connection with the Properties or otherwise in connection
with the Business, in violation of or in amounts or in a manner that could
reasonably give rise to liability under Environmental Laws.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extensions of Credit. The agreement of
------------------------------------------
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, immediately prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
--------------
this Agreement, executed and delivered by a duly authorized officer of each
of the Borrowers, with a counterpart for each Lender, (ii) the Guarantee
and Collateral Agreement executed and delivered by a duly authorized
officer of each party thereto, with a counterpart or a conformed copy for
each Lender and (iii) for the account of each requesting Lender, a Term
Note or Revolving Credit Note, as the case may be, executed and delivered
by a Responsible Officer of the relevant Borrower.
(b) Related Agreements. The Administrative Agent shall have
------------------
received, with a copy for each Lender, true and correct copies, certified
as to authenticity by a Responsible Officer of ASI, of the Purchase
Agreement, the Intercreditor Agreement and such other documents or
instruments as may be reasonably requested by the Administrative Agent,
including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which ASI and any of its
Subsidiaries may be a party.
(c) Borrowing Certificate. The Administrative Agent shall have
---------------------
received, with a counterpart for each Lender, a certificate from each of
ASI and ▇▇▇▇▇▇▇ Partners, dated the Closing Date, substantially in the form
of Exhibit F, with appropriate
---------
44
insertions and attachments, satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of ASI.
(d) Corporate Proceedings of the Loan Parties. The Administrative
-----------------------------------------
Agent shall have received, with a counterpart for each Lender, a copy of
the resolutions, in form and substance satisfactory to the Administrative
Agent, of the Boards of Directors of each Loan Party authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Security Documents, certified by the Secretary or an Assistant Secretary of
such Loan Party as of the Closing Date, which certificate shall be in form
and substance satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(e) Loan Party Incumbency Certificates. The Administrative Agent
----------------------------------
shall have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Closing Date, as to the incumbency and signature
of the officers of each Loan Party executing any Loan Document satisfactory
in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of such Loan Party.
(f) Corporate Documents. The Administrative Agent shall have
-------------------
received, with a counterpart for each Lender, true and complete copies of
the certificate of incorporation and by-laws of each Loan Party, certified
as of the Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the such Loan Party and a
certificate of good standing for each Loan Party issued by its jurisdiction
of incorporation.
(g) Fees. The Administrative Agent shall have received all fees and
----
expenses (including the fees and expenses of counsel to the Administrative
Agent) due on the Closing Date, including, without limitation, the fees to
be received on the Closing Date referred to (i) in the Fee Letter addressed
to ASI dated October 30, 1997 and (ii) in the Commitment Letter and Term
Sheet executed by the Administrative Agent and ASI on October 30, 1997.
The fees and expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ shall have been paid.
(h) Legal Opinions. The Administrative Agent shall have received,
--------------
with a counterpart for each Lender, the executed legal opinion of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel to ASI and the other Loan Parties, which
shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(i) Pledged Stock; Stock Powers. The Administrative Agent shall have
---------------------------
45
received the certificates representing the shares pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of
the pledgor thereof.
(j) Actions to Perfect Liens. The Administrative Agent shall have
------------------------
received evidence in form and substance satisfactory to it that all
filings, recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on form UCC-1,
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Liens created by the Security Documents shall have been
completed.
(k) [intentionally omitted].
(l) Lien Searches. The Administrative Agent shall have received the
-------------
results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgement and tax lien filings which
may have been filed with respect to personal property of ASI and its
Subsidiaries and the results of such search shall be satisfactory to the
Administrative Agent.
(m) Audit. The Banks shall have received copies of an audit, in form
-----
and substance satisfactory, of the Accounts of ASI, Proudfoot, Assessments
and C3 prepared by an auditing firm or organization satisfactory to the
Administrative Agent.
(n) Insurance. The Administrative Agent shall have received evidence
---------
in form and substance satisfactory to it that all of the requirements of
subsection 6.5 hereof shall have been satisfied.
(o) McLagan Acquisition; McLagan Documentation. The Administrative
------------------------------------------
Agent shall have received evidence satisfactory to it that (i) the McLagan
Acquisition shall have been approved by ASI, McLagan Buyers, and the
McLagan Sellers, (ii) the aggregate purchase price of the McLagan
Acquisition shall not exceed $22,500,000 and (iii) the cash portion of the
McLagan Acquisition shall not exceed $15,500,000. All aspects of the
McLagan Acquisition and the terms and conditions of all documentation
related thereto (the "McLagan Documentation") shall be satisfactory to the
Administrative Agent. The Administrative Agent shall be satisfied that the
assets acquired pursuant to the McLagan Acquisition shall have been
purchased free and clear of any and all Liens (other than Liens permitted
under the terms of this Agreement).
(p) Fleet Credit Agreement. The Administrative Agent shall have
----------------------
received evidence satisfactory to it that (i) all Indebtedness owed to
Fleet Bank by ASI and any of its Subsidiaries shall have been fully paid
off and all commitments pursuant to the Credit Agreement, dated as of July
22, 1997, between Fleet Bank and ASI (the "Fleet Credit Agreement"), shall
have been permanently terminated, (ii) all guarantees related
46
to the Fleet Credit Agreement shall have been permanently released and
(iii) all security interests created pursuant to the Fleet Credit Agreement
and any security documents related thereto shall have been terminated,
including, without limitation, by the filing of UCC-3 termination
statements in the relevant jurisdictions (it being understood and agreed
that the letter of credit (the "Fleet Letter of Credit") issued by Fleet
Bank under the Fleet Credit Agreement shall remain outstanding and shall be
fully cash collateralized).
(q) Subordinated Note. The Administrative Agent shall have received
-----------------
copies of, and approved the terms and conditions contained in, the
Subordinated Note.
(r) Certificate of Deposit. ASI shall have purchased a certificate
----------------------
of deposit from the Administrative Agent in an amount equal to the first
scheduled payment of principal and interest under the Subordinated Note.
(s) Employment Agreements; Employee Benefit Plans. The
---------------------------------------------
Administrative Agent shall have received copies of the Employment
Agreements and copies of all employee benefit plans of ASI and its
Subsidiaries in existence on the Closing Date and the terms and conditions
of such plans shall be reasonably satisfactory to the Administrative Agent.
(t) Lease Agreements. The Administrative Agent shall have received a
----------------
schedule of all material lease agreements of ASI and its Subsidiaries,
describing, in reasonable detail, the term of the applicable lease, the
lessor, the lessee, the annual lease expenditure, the expiration date
thereof and type of lease.
(u) Financial Statements. The Administrative Agent have received the
--------------------
financial statements referred to in subsection 3.1(a) and (b) hereof. The
Lenders shall have received a satisfactory balance sheet of each McLagan
Buyer, on a stand alone basis, as of the Closing Date, after giving effect
to the McLagan Acquisition, the financing thereof and the payment of
related fees and expenses.
5.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any Loan requested to be made by it on any date (including,
without limitation, its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by each of the Borrowers and each of the other Loan Parties
in or pursuant to the Loan Documents shall be true and correct in all
material respects on and as of such date as if made on and as of such date,
except that representations and warranties made with respect to a specified
earlier date shall be true and correct in all material respects on and as
of such earlier date.
47
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Borrowing Base. After giving effect to the extensions of credit
--------------
requested to be made on such date, the Aggregate Outstanding Revolving
Extensions of Credit of the Lenders shall not exceed the Borrowing Base
then in effect. In addition, in the case of a borrowing at Revolving
Credit Loans and an issuance of a Letter of Credit, ASI shall have
delivered a Borrowing Base Certificate as of the relevant Borrowing Date.
(d) Additional Matters. All corporate and other proceedings, and all
------------------
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement, the other Loan Documents and
the Purchase Agreement shall be satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received such
other documents and legal opinions in respect of any aspect or consequence
of the transactions contemplated hereby or thereby as it shall reasonably
request.
Each borrowing by each of the Borrowers hereunder and each Letter of Credit
issued on behalf of ASI shall constitute a representation and warranty by such
Borrower as of the date thereof that the conditions contained in this subsection
have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
ASI hereby agrees that, so long as the Commitments remain in effect ,
or any Letter of Credit remains outstanding, or any amount is owing to any
Lender or the Administrative Agent hereunder or under any other Loan Document,
ASI shall and (except in the case of delivery of financial information, reports
and notices) shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
--------------------
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of ASI, a copy of the consolidated and
consolidating balance sheet of ASI and its Consolidated Subsidiaries as at
the end of such year and the related consolidated and consolidating
statements of income and retained earnings and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
independent certified public accountants of nationally recognized standing
reasonably satisfactory to the Agent and the Required Lenders; and
48
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of ASI, the unaudited consolidated and consolidating balance sheet of
ASI and its Consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated and consolidating statements of income and
retained earnings and of cash flows of ASI and its consolidated
Subsidiaries for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments and the absence of certain notes thereto);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), 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 in respect of subsection 7.1, except as
specified in such certificate and including a schedule demonstrating
compliance with the financial covenants contained herein;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b) a certificate of a Responsible
Officer substantially in the form attached hereto as Exhibit B (i) stating
---------
that, to the best of such Responsible Officer's knowledge, during such
period (A) no Subsidiary has been formed or acquired (or, if any such
Subsidiary has been formed or acquired, ASI has complied with the
requirements of subsection 6.10 with respect thereto), (B) neither ASI nor
any of its Subsidiaries has changed its name, its principal place of
business, its chief executive office or the location of any material item
of tangible Collateral without complying with the requirements of this
Agreement and the Security Documents with respect thereto and (C) ASI has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) setting forth the
calculations required to determine compliance with subsection 7.1 at such
time, the Revolving Credit Applicable Margin and Term Loan Applicable
Margin then in effect and, in the case of the financial statements
delivered pursuant to subsection 6.1(a), the Excess Cash Flow for the
relevant fiscal year, provided that ASI shall also deliver a Compliance
--------
Certificate satisfying the
49
requirements of this paragraph on the fifth Business Day preceding the date
any payment is due on the Subordinated Note or the making of any
Subordinated Employee Payment (with calculation of compliance with the
subsection 7.1 to be made as of such Business Day);
(c) within five days after the same are sent, copies of all financial
statements and reports which ASI sends to its stockholders, and within five
days after the same are filed, copies of all financial statements and
reports which ASI may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(d) within 15 days after the last day of each calendar month, a
Borrowing Base Certificate setting forth the Borrowing Base as of such last
day together with a detailed schedule setting forth the aging of Accounts
(by Subsidiary and by account);
(e) promptly, a copy of any management letter received from the
accountants which audited the financial statements of ASI for any period;
and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
ASI or its Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 7.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property useful and
----------------------------------
necessary in its business in good working order and condition, ordinary wear and
tear excepted; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business or as shall be reasonably
required by the Administrative Agent and such insurance shall name the
Administrative Agent as an insured party or an additional loss payee; and
furnish to each
50
▇▇▇▇▇▇, upon written request, full information as to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions; Audits
--------------------------------------------------------------
and Field Examinations. Keep proper books of records and account in which full,
----------------------
true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities; and, upon two Business Day's advance notice (unless a Default of
Event of Default shall have occurred and be continuing), permit representatives
of any Lender to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time during normal
business hours and as often as may reasonably be desired, provided that, unless
--------
a Default or Event of Default shall have occurred and be continuing, no more
than two inspections per year shall be permitted, and to discuss the business,
operations, properties and financial and other condition of ASI and its
Subsidiaries with officers and employees of ASI and its Subsidiaries and with
its independent certified public accountants and to perform periodic audits or
field examinations (it being understood and agreed that at least one such field
examination or periodic audit shall be made each year) of the assets of ASI and
its Subsidiaries (the reasonable costs and expenses of one such audit or field
examination per year to be borne by ASI).
6.7 Notices. Promptly give notice to the Administrative Agent and
-------
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of either of ASI or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between ASI or any
of its Subsidiaries and any Governmental Authority, which in either case,
if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting ASI or any of its
Subsidiaries in which the amount involved is $50,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after ASI knows or has reason to know thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or ASI or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
51
(e) any event which could reasonably be expected to have a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action ASI proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and use best commercial
------------------
efforts to ensure compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants obtain and comply with and maintain, any
and all licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that the same are being
contested in good faith and to the extent that failure to do so could not be
reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
6.9 Interest Rate Protection. Within thirty days of the Closing
------------------------
Date, enter into an Interest Rate Protection Agreement, with any Lender or an
Affiliate thereof, with respect to the Term Loans covering a national principal
amount of at least $5,000,000 for a period of at least five years and on such
terms and conditions as the Administrative Agent may reasonably require.
6.10 Further Assurances. Upon the request of the Administrative
------------------
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents (including, without limitation,
financing statements and continuation statements) for filing under the
provisions of the Uniform Commercial Code or any other Requirement of Law which
are necessary or advisable to maintain in favor of the Administrative Agent, for
the benefit of the Lenders, Liens on the Collateral that are duly perfected in
accordance with all applicable Requirements of Law.
6.11 Additional Collateral. (a) With respect to any assets acquired
---------------------
after the Closing Date by ASI or any of its Domestic Subsidiaries that are
intended to be subject to the Lien created by any of the Security Documents but
which are not so subject (other than any assets described in paragraph (b) or
(c) of this subsection, promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Administrative Agent such
amendments to the relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit
52
of the Lenders, a Lien on such assets, (ii) take all actions necessary or
advisable to cause such Lien to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be requested by the
Administrative Agent, and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary (other than a Foreign Subsidiary), promptly upon the
request of the Administrative Agent: (i) execute and deliver to the
Administrative Agent, for the benefit of the Lenders, a new pledge agreement or
such amendments to the Guarantee and Collateral Agreement as the Administrative
Agent shall deem necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a Lien on the Capital Stock of such Subsidiary
which is owned by ASI or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a duly authorized
officer of ASI or such Subsidiary, as the case may be, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement
pursuant to documentation which is in form and substance satisfactory to the
Administrative Agent, and (B) to take all actions necessary or advisable to
cause the Lien created by the Guarantee and Collateral Agreement to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be requested by the Administrative Agent and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described in clauses (i), (ii) and (iii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any Person that, subsequent to the Closing Date,
becomes a Foreign Subsidiary, promptly upon the request of the Administrative
Agent: (i) execute and deliver to the Administrative Agent a foreign stock
pledge agreement relating to the pledge of the shares of such Foreign Subsidiary
(provided that in no event shall more than 65% of the Capital Stock of any such
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent any certificates representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized officer of ASI
or such Subsidiary, as the case may be, and take or cause to be taken all such
other actions under the law of the jurisdiction of organization of such Foreign
Subsidiary as may be necessary or advisable to perfect such Lien on such Capital
Stock and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 7. NEGATIVE COVENANTS
53
ASI hereby agrees that, so long as the Commitments remain in effect,
or any Letter of Credit remains outstanding, or any amount is owing to any
Lender or the Administrative Agent hereunder or under any other Loan Document,
ASI shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
-----------------------------
(a) Maintenance of Current Ratio. Permit the ratio of Consolidated
----------------------------
Current Assets of ASI to Consolidated Current Liabilities of ASI at any
time to be less than 1.25 to 1.00.
(b) Maintenance of Net Worth. Permit Consolidated Net Worth of ASI
------------------------
at any time during any period set forth below to be less than the amount
set forth opposite such period below:
Period Amount
------ ------
Closing Date to 3/30/99 $ 13,000,000
3/31/99 to 3/30/00 Consolidated Net Worth of ASI
as of 3/31/98 plus $2,000,000
3/31/00 to 3/30/01 Consolidated Net Worth of ASI
as of 3/31/99 plus $4,000,000
3/31/01 to 3/30/02 Consolidated Net Worth of ASI
as of 3/31/00 plus $5,000,000
3/31/02 and thereafter Consolidated Net Worth of ASI
as of 3/31/01 plus $5,000,000
(c) Total Liabilities to Net Worth Ratio. Permit the ratio of
------------------------------------
Consolidated Total Liabilities of ASI to Consolidated Net Worth of ASI at
any time during any period set forth below to be greater than the amount
set forth opposite such period below:
Period Ratio
------ -----
Closing Date to 3/30/99 2.00 to 1.00
3/31/99 to 3/30/00 1.40 to 1.00
3/31/00 and thereafter 1.00 to 1.00
54
(d) Consolidated Funded Debt to Consolidated EBITDA. Permit at any
-----------------------------------------------
time during any "Test Period" set forth below the Leverage Ratio to be
greater than the ratio set forth opposite such Test Period below:
Test Period Ratio
----------- -----
Closing Date to 3/30/99 5.20 to 1.00
3/31/99 to 3/30/00 2.20 to 1.00
3/31/00 to 3/30/01 1.40 to 1.00
3/31/01 and thereafter 1.00 to 1.00
(e) Fixed Charge Coverage. Permit, for any period of four
---------------------
consecutive fiscal quarters ending during any "Test Period" set forth
below, the ratio of (i) Consolidated EBITDA for such period minus Unfunded
-----
Capital Expenditures for such period to (ii) Consolidated Fixed Charges of
ASI for such period to be less than the ratio set forth opposite such Test
Period below:
Test Period Fixed Charge Coverage
----------- ---------------------
Closing Date to 3/30/00 1.50 to 1.00
3/31/00 to 3/30/01 1.60 to 1.00
3/31/01 to 3/30/02 1.40 to 1.00
3/31/02 to 3/30/03 2.00 to 1.00
3/31/03 and thereafter 3.00 to 1.00
(f) Interest Coverage. Permit, for any period of four consecutive
-----------------
fiscal quarters ending during any "Test Period" set forth below, the ratio
of Consolidated EBIT of ASI for such period to Consolidated Interest
Expense of ASI for such period to be less than the ratio set forth opposite
such test period below:
55
Period Ratio
------ -----
Closing Date to 3/30/99 4.50 to 1.00
3/31/99 to 3/30/00 4.00 to 1.00
3/31/00 and thereafter 5.00 to 1.00
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist any Indebtedness, except:
(a) Indebtedness of each of the Borrowers under this Agreement;
(b) Indebtedness of ASI to any Subsidiary and of any Subsidiary to
ASI or any other Subsidiary;
(c) Indebtedness of ASI or any of its Subsidiaries to finance the
acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to ASI and its Subsidiaries $250,000 at any time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d);
---------------
(e) Indebtedness in respect of the Subordinated Note;
(f) Indebtedness under the Interest Rate Protection Agreement
required pursuant to subsection 5.1(o); and
(g) Subordinated Debt of ASI.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of the applicable Borrower or
its Subsidiaries, as the case may be, in conformity with GAAP (or, in the
case of Foreign Subsidiaries, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of
incorporation);
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a
56
period of more than 60 days or which are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) 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
materially interfere with the ordinary conduct of the business either of
the Borrowers or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
---------------
securing Indebtedness permitted by subsection 7.2(d), provided that no such
--------
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrowers and their
Subsidiaries permitted by subsection 7.2(c) incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall
--------
be created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal amount
of Indebtedness secured by any such Lien shall at no time exceed 80% of the
original purchase price of such property at the time it was acquired;
(h) Liens created pursuant to the Security Documents; and
(i) Liens to secure the Fleet Letter of Credit, provided that such
--------
Liens only cover cash and related investments and the aggregate amount of
such cash and investments shall not exceed at any time exceed the face
amount of such Letter of Credit.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or
-----------------------------------
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed
on Schedule 7.4(a);
---------------
57
(b) Guarantee Obligations incurred in connection with the endorsement
of negotiable instruments for deposit or collection and made in the
ordinary course of its business;
(c) Guarantee Obligations created pursuant to the Guarantee and
Collateral Agreement or any other Security Document.
7.5 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrowers may be merged or consolidated
with or into either of the Borrowers (provided that the relevant Borrower
--------
shall be the continuing or surviving corporation) or with or into any one
or more wholly owned Subsidiaries of the either of Borrowers (provided that
--------
a Subsidiary which is a wholly owned Subsidiary shall be the continuing or
surviving corporation and if any Subsidiary so merged or consolidated is a
Guarantor, the surviving corporation shall be a Guarantor); and
(b) any Subsidiary may sell, lease, transfer or otherwise dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to
either ASI or a wholly owned Subsidiary of ASI, provided that if the
--------
Subsidiary whose assets are so sold, leased, transferred or otherwise
disposed of is a Guarantor, any Subsidiary to which such assets are so
sold, leased, transferred or otherwise disposed of must also be a
Guarantor.
7.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables, notes and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person other
than applicable Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property in the ordinary
course of business, provided that (other than inventory) the aggregate book
--------
value of all assets so sold or disposed of in any period of twelve
consecutive months shall not exceed $25,000.
(c) the sale of inventory in the ordinary course of business;
58
(d) the sale or discount with or without recourse of accounts
receivable arising in the ordinary course of business in connection with
the compromise or collection thereof; and
(e) as permitted by subsection 7.5(b).
7.7 Limitation on Dividends. Declare or pay any dividend (other than
-----------------------
dividends payable solely in common stock of the relevant Borrower) on, or make
any payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other acquisition
of, any shares of any class of Capital Stock of such Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of such Borrower or
any Subsidiary.
7.8 Limitation on Capital Expenditures. Make or commit to make (by
----------------------------------
way of the acquisition of securities of a Person or otherwise) any expenditure
(a "Capital Expenditure") in respect of the purchase or other acquisition of
fixed or capital assets (excluding any such asset acquired in connection with
normal replacement and maintenance programs properly charged to current
operations) except for expenditures in the ordinary course of business not
exceeding, in the aggregate for ASI and its Subsidiaries, (i) $3,000,000 during
the fiscal year ending March 31, 1998, (ii) $1,000,000 for the fiscal year
ending March 31, 1999, (iii) $1,250,000 for the fiscal year ending March 31,
2000 and (iv) $1,500,000 during any fiscal year thereafter.
7.9 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person (an "Investment"),
except :
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Permitted Acquisitions;
(d) loans and advances to employees of either of the Borrowers or
their Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrowers and
their Subsidiaries not to exceed $100,000 at any one time outstanding; and
(e) Investments by ASI in any Guarantor and investments by
Subsidiaries in ASI and in any Guarantor.
59
7.10 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments. (a) Make any optional payment or prepayment on or redemption or
-----------
purchase of any Indebtedness (other than the Loans), (b) amend, modify or
change, or consent or agree to any amendment, modification or change to any of
the terms of any such Indebtedness (other than any such amendment, modification
or change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon), or (c) amend any provisions of the Purchase Agreement, the
Subordinated Note or any other Subordinated Debt without the prior written
consent of the Administrative Agent.
7.11 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrowers' or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the relevant Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
7.12 Limitation on Sales and Leasebacks. Enter into any arrangement
----------------------------------
with any Person providing for the leasing by either of the Borrowers or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by such Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of such Borrower or such
Subsidiary.
7.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
------------------------------------
either of the Borrowers or any of their Subsidiaries to end on a day other than
March 31.
7.14 Limitation on Negative Pledge Clauses. Enter into with any
-------------------------------------
Person any agreement, other than (a) this Agreement, (b) the Security Documents
and (c) any industrial revenue bonds, purchase money mortgages or Financing
Leases permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed thereby), which
prohibits or limits the ability of either of the Borrowers or any of their
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired.
7.15 Limitation on Lines of Business. Enter into any business,
-------------------------------
either directly or through any Subsidiary, except for those businesses in which
the Borrowers and their Subsidiaries are engaged on the date of this Agreement.
60
7.16 Accounting Practices. Change, alter or modify the accounting and
--------------------
reporting methods and practices utilized by ASI or any of its Subsidiaries on
the date hereof unless such changes, alterations or modifications are permitted
or required by GAAP.
7.17 Employment Agreements. Amend, modify or change, or consent to
---------------------
any amendment, modification or change to any of the non-competition provisions
of the Employment Agreements, without the prior written consent of the
Administrative Agent.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either of the Borrowers shall fail to pay any principal of any
Loan or any Reimbursement Obligation when due in accordance with the terms
thereof or hereof; or either of the Borrowers shall fail to pay any
interest on any Loan, or any other amount payable hereunder within three
days after any such interest or other amount becomes due; or
(b) Any representation or warranty made or deemed made by ASI or any
other Loan Party herein or in any other Loan Document or which is contained
in any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such other
Loan Document shall prove to have been incorrect in any material respect on
or as of the date made or deemed made; or
(c) ASI or any other Loan Party shall default in the observance or
performance of any agreement contained in Section 7 or Section 5 of the
Guarantee and Collateral Agreement; or
(d) ASI or any other Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section); or
(e) ASI or any of its Subsidiaries shall (i) default in any payment
of principal of or interest of any Indebtedness (other than the Loans) or
in the payment of any Guarantee Obligation, beyond the period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or
61
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to then cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or such Guarantee Obligation to
become payable; provided, however, that no Default or Event of Default
-------- -------
shall exist under this paragraph unless the aggregate amount of
Indebtedness and/or Guarantee Obligations in respect of which any default
or other event or condition referred to in this paragraph shall have
occurred shall be equal to at least $50,000; or
(f) (i) ASI or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or ASI or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against ASI or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against ASI or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) ASI or any of its Subsidiaries shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of
the acts set forth in clause (i), (ii), or (iii) above; or (v) ASI or any
of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of either
of the Borrowers or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement
of proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) either of
62
the Borrowers or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, involve an aggregate amount which could reasonably be
expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against ASI or
any of its Subsidiaries involving in the aggregate a liability (not paid or
fully covered by insurance) of $50,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or ASI or any other Loan Party which is a
party to any of the Security Documents shall so assert or (ii) the Lien
created by any of the Security Documents shall cease to be enforceable and
of the same effect and priority purported to be created thereby; or
(j) Any Guarantee shall cease, for any reason, to be in full force
and effect or any Guarantor shall so assert; or
(k) A Change of Control shall have occurred;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to either of
the Borrowers, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement (including, without limitation, all amounts of L/C
--------------------------------------------------
Obligations, whether or not the beneficiaries of the then outstanding Letters of
--------------------------------------------------------------------------------
Credit shall have presented the documents required thereunder) shall immediately
--------------------------------------------------------------
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrowers
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrowers, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand,
63
protest and all other notices of any kind are hereby expressly waived.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, ASI shall at such time deposit in a Cash
Collateral Account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. ASI
hereby grants to the Administrative Agent, for the benefit of the Issuing Bank
and the L/C Participants, a security interest in such cash collateral to secure
all obligations of ASI under this Agreement and the other Loan Documents.
Amounts held in such Cash Collateral Account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of ASI hereunder and under the Notes. After all such Letters of
Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrowers
hereunder and under the Notes shall have been paid in full, the balance, if any,
in such Cash Collateral Account shall be returned to the Borrowers. ASI shall
execute and deliver to the Administrative Agent, for the account of the Issuing
Bank and the L/C Participants, such further documents and instruments as the
Administrative Agent may request to evidence the creation and perfection of the
within security interest in such Cash Collateral Account.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or 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 Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
64
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
----------------------
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by either of the
Borrowers or any officer thereof contained in this Agreement or any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of either of the
Borrowers to perform its obligations hereunder or thereunder. The
Administrative Agent shall not 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 either of the
Borrowers.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
--------------------------------
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative 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 Required Lenders as it deems
appropriate or 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 Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
9.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
one of the Borrowers 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 Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
--------
Administrative Agent shall
65
have received such directions, the Administrative 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 in the best
interests of the Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders. Each
------------------------------------------------------
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
either of the Borrowers, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of either of the
Borrowers which may come into the possession of the Administrative Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such (to the extent not reimbursed by
either of the Borrowers and without limiting the obligation of such Borrower to
do so), ratably according to their respective Commitment Percentages in effect
on the date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements
in this subsection shall survive the payment
66
of the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with either of the Borrowers as
though the Administrative Agent were not the Administrative Agent hereunder and
under the other Loan Documents. With respect to the Loans made by it and with
respect to any Letters of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 10 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required ▇▇▇▇▇▇▇ shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by each of the Borrowers), shall succeed to the
rights, powers and duties of the Administrative Agent hereunder. Effective upon
such appointment and approval, the term "Administrative Agent" shall mean such
successor agent, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement nor any other
----------------------
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with each of the
Borrowers written amendments, supplements or modifications hereto and to the
other Loan Documents for the purpose of adding any provisions to this Agreement
or the other Loan Documents or changing in any manner the rights of the Lenders
or of each of the Borrowers hereunder or thereunder or (b) waive, on such terms
and conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
-------- -------
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or
67
reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case without the consent of
each Lender affected thereby, (ii) amend, modify or waive any provision of this
subsection or the definition of Advance Rate or reduce the percentage specified
in the definition of Required Lenders or consent to the assignment or transfer
by either of the Borrowers of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or substantially all of
the Collateral, in each case without the written consent of all the Lenders,
(iii) amend, modify or waive any provision of Section 9 without the written
consent of the then Administrative Agent or (iv) increase the Advance Rate or
the amount set forth in clause (c) of the definition of Permitted Acquisition or
amend, modify or waive any provision of the Intercreditor Agreement or consent
to or permit any Acquisition other than a Permitted Acquisition, in each case
without the consent of Lenders (including, in any event, Chase), the Commitment
Percentages of which then aggregate at least 75%. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon each of the Borrowers, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, each of
the Borrowers, the Lenders and the Administrative Agent shall be restored to
their former positions and rights hereunder and under the other Loan Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon or (iv) increase the
percentage specified in the definition of Advance Rate, without the written
consent of all the Lenders.
10.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Administrative Agent, and as set
forth in Schedule 10.2 in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
The Borrowers: ASI Solutions Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
68
The Administrative
Agent: The Chase Manhattan Bank
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.8, 2.9 or 2.14 shall not
be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
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.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrowers, jointly and
-----------------------------
severally agree (a) to pay or reimburse the Administrative Agent for all its
out-of-pocket costs and expenses incurred in connection with the preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to each Lender and of counsel to the Administrative Agent, (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from and against any
69
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents, the Purchase
Agreement, the Acquisition or the use of the proceeds of the Loans in connection
with the McLagan Acquisition and any such other documents, including, without
limitation, any of the foregoing relating to the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
each of the Borrowers, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided that the Borrowers shall have no obligation hereunder to the
--------
Administrative Agent or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent or any such Lender. The agreements in this subsection shall survive
repayment of the Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of each of the
Borrowers, the Lenders, the Administrative Agent and their respective successors
and assigns, except that neither of the Borrowers may assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such ▇▇▇▇▇▇'s rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 10.1. Each of the
Borrowers agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
--------
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 10.7(a) as
70
fully as if it were a ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇. Each of the Borrowers also agrees that
each Participant shall be entitled to the benefits of subsections 2.16, 2.17 and
2.18 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case
--------
of subsection 2.17, such Participant shall have complied with the requirements
of said subsection and provided, further, that no Participant shall be entitled
-------- -------
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Administrative Agent (which shall not be unreasonably withheld), to an
additional bank or financial institution (an "Assignee") all or any part of its
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
-------
G, executed by such Assignee, such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register, provided that, (i) any assignment by a
--------
Lender of a portion of its Term Loan Commitment or Term Loans must include an
assignment of an equal percentage of its Revolving Credit Commitment or, in the
case of assignments after the Revolving Credit Termination Date, Revolving
Credit Loans and (ii) any assignment by a Lender of its Revolving Credit
Commitment or in the case of assignments after the Revolving Credit Termination
Date, Revolving Credit Loans must include an assignment of an equal percentage
of its Term Loan Commitment or Term Loans,. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Administrative Agent, on behalf of each of the Borrowers,
shall maintain at the address of the Administrative Agent referred to in
subsection 10.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Commitments of, and principal amounts of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and each of the Borrowers, the Administrative
Agent and the Lenders may (and, in the case of any Loan or other obligation
hereunder not evidenced by a Note, shall) treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation hereunder as
the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding any notice to the
71
contrary. Any assignment of any Loan or other obligation hereunder not evidenced
by a Note shall be effective only upon appropriate entries with respect thereto
being made in the Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Administrative Agent) together
with payment to the Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrowers.
(f) Each of the Borrowers authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such ▇▇▇▇▇▇'s possession concerning either
of the Borrowers and any of their Affiliates which has been delivered to such
Lender by or on behalf of such Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of such Borrower in connection
with such Lender's credit evaluation of such Borrower and its Affiliates prior
to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
--------------------
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender's Loans or
the Reimbursement Obligations owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan or the Reimbursement
Obligations owing to it, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
-------- -------
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to either of the
Borrowers, any such notice
72
being expressly waived by such Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by such Borrower hereunder
(whether at the stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of such Borrower. Each Lender agrees promptly to notify the relevant
Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
--------
affect the validity of such set-off and application.
10.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with ASI and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrowers, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of the Borrowers
-----------------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
73
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrowers at the address set forth in subsection 10.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages.
10.13 Acknowledgements. Each of the Borrowers hereby acknowledges
----------------
that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to either of the Borrowers arising out
of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one hand,
and each of the Borrowers, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among either of the Borrowers and the Lenders.
10.14 Covenant by McLagan Partners. McLagan Partners hereby agrees
----------------------------
that, so long as the Commitments remain in effect or any amount is owing to any
Lender or the Administrative Agent hereunder or under any other Loan Document,
McLagan Partners shall, and shall cause each of its Subsidiaries to, comply with
all covenants contained in Sections 6 and 7 hereof, to the extent such covenants
may be applicable to McLagan Partners and such Subsidiaries.
10.15 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS,
---------------------
74
THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ASI SOLUTIONS INCORPORATED
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Title: Vice President
▇▇▇▇▇▇▇ PARTNERS, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Title: Vice President
THE CHASE MANHATTAN BANK,
as Administrative Agent and as a Lender
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Title: Vice President
STATE STREET BANK AND TRUST
COMPANY, as a Lender
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
EUROPEAN AMERICAN BANK, as a Lender
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Vice President
76
▇▇▇▇▇ ▇
-------
Pricing Grid
=============================================================================
Leverage Ratio Level Revolving Credit Applicable Term Loan Applicable
Margin Margin
-----------------------------------------------------------------------------
Level I 3.00% 3.25%
-----------------------------------------------------------------------------
Level II 2.75% 3.00%
-----------------------------------------------------------------------------
Level III 2.50% 2.75%
=============================================================================
Schedule 1.1(a)
Commitments
-----------
Revolving Credit Term Loan
Lender Commitment Commitment
------ ---------------- -----------
The Chase Manhattan Bank $1,750,000 $ 5,250,000
State Street Bank and Trust $1,750,000 $ 5,250,000
Company
European American Bank $1,500,000 $ 4,500,000
---------- -----------
Total $5,000,000 $15,000,000
Schedule 10.2
Addresses
---------
European American Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇