EXHIBIT 10.57
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AMENDED AND RESTATED
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REVOLVING CREDIT AND TERM LOAN AGREEMENT
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Dated as of June 11, 1998
among
SALESLINK CORPORATION,
INSOLUTIONS INCORPORATED,
PACIFIC DIRECT MARKETING CORP.
BANKBOSTON, N.A.
AND THE OTHER LENDING
INSTITUTIONS SET FORTH ON SCHEDULE 1 HERETO
and
BANKBOSTON, N.A. as Agent
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1
TABLE OF CONTENTS
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1. DEFINITIONS:......................................................... 1
2. REVOLVING CREDIT FACILITY............................................ 11
2.1. Commitment to Lend........................................... 11
2.2. Requests for Loans........................................... 12
2.3. Conversion Options........................................... 13
2.3.1. Conversion to Different Loan Type.................. 13
2.3.2. Continuation of Loan Type.......................... 14
2.3.3. LIBOR Rate Loans................................... 14
2.4. Interest..................................................... 14
2.5. Repayments and Prepayments................................... 15
2.6. Funds for Revolving Credit Loan.............................. 15
2.6.1. Funding Procedures................................. 15
2.6.2. Advances by Agent.................................. 16
3. THE TERM LOAN........................................................ 16
3.1. Commitment to Lend........................................... 16
3.2. The Term Notes............................................... 16
3.3. Schedule of Installment Payments of Principal of Term Loan... 17
3.4. Optional Prepayment of Term Loan............................. 17
3.5. Interest on Term Loan........................................ 17
3.5.1. Interest Rates..................................... 18
3.5.2. Notification by Borrower........................... 18
3.5.3. Amounts, Etc....................................... 18
4. LETTER OF CREDIT FACILITY............................................ 18
4.1. Letter of Credit Commitment.................................. 18
4.2. Reimbursement Obligation of the Borrower..................... 20
4.3. Letter of Credit Payments.................................... 20
4.4. Obligations Absolute......................................... 21
4.5. Reliance by Issuer........................................... 22
4.6. Letter of Credit Fees........................................ 22
5. CHANGES IN CIRCUMSTANCES, ETC........................................ 22
5.1. Inability to Determine LIBOR Rate............................ 22
5.2. Illegality................................................... 22
5.3. Changes in Circumstances..................................... 23
5.4. Certificate.................................................. 24
5.5. Indemnity.................................................... 24
6. FEES AND PAYMENTS.................................................... 24
7. REPRESENTATIONS AND WARRANTIES....................................... 25
8. CONDITIONS PRECEDENT................................................. 27
9. COVENANTS............................................................ 29
9.1. Affirmative Covenants........................................ 29
9.2. Negative Covenants........................................... 31
9.3. Financial Covenants.......................................... 32
10. EVENTS OF DEFAULT; ACCELERATION...................................... 33
11. SETOFF............................................................... 35
12. THE AGENT............................................................ 36
12.1. Authorization................................................ 36
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12.2. Employees and Agents............................................. 37
12.3. No Liability..................................................... 37
12.4. No Representations............................................... 37
12.5. Payments......................................................... 38
12.5.1. Payments to Agent...................................... 38
12.5.2. Distribution by Agent.................................. 38
12.5.3. Delinquent Banks....................................... 38
12.6. Holders of Notes................................................. 39
12.7. Indemnity........................................................ 39
12.8. Agent as Bank.................................................... 39
12.9. Resignation...................................................... 39
12.10. Notification of Defaults and Events of Default................... 40
12.11. Duties in the Case of Enforcement................................ 40
13. ASSIGNMENT AND PARTICIPATION................................................ 40
13.1. Conditions to Assignment by Banks................................ 40
13.2. Certain Representations and Warranties; Limitations; Covenants... 41
13.3. Register......................................................... 42
13.4. New Notes........................................................ 42
13.5. Participations................................................... 43
13.6. Disclosure....................................................... 43
13.7. Assignee or Participant Affiliated with the Borrower............. 43
13.8. Miscellaneous Assignment Provisions.............................. 44
13.9. Assignment by Borrower........................................... 44
14. MISCELLANEOUS............................................................... 44
AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT
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This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT (this
"Agreement") is made as of June 11, 1998, by and among (a) SALESLINK CORPORATION
("SalesLink"), a Delaware corporation having its principal place of business at
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (b) INSOLUTIONS INCORPORATED
("InSolutions" and, collectively with SalesLink, the "Borrowers" and each
individually, a "Borrower"), a Delaware corporation having its principal place
of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, (c) PACIFIC DIRECT
MARKETING CORP. ("Pacific Direct"), a California corporation having its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
(d) BANKBOSTON, N.A. (FORMERLY KNOWN AS THE FIRST NATIONAL BANK OF BOSTON), a
national banking association, and the other lending institutions listed on
Schedule 1 hereto and (e) BANKBOSTON, N.A. as agent for itself and such other
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lending institutions.
WHEREAS, pursuant to a Revolving Credit and Term Loan Agreement dated as of
October 24, 1996 (as amended from time to time, the "Original Credit Agreement")
by and among SalesLink, the Parent (as hereinafter defined), certain of the
Banks (as hereinafter defined) and the Agent, the lenders party thereto made
loans available to SalesLink for, among other things, financing a portion of the
acquisition of Pacific Direct and for general corporate and working capital
purposes; and
WHEREAS, SalesLink has requested, among other things, to amend and restate
the Original Credit Agreement and to provide additional financing, to refinance
certain Indebtedness (as hereinafter defined) and to provide funds for working
capital and general corporate purposes, and the Banks are willing to amend and
restate the Original Credit Agreement and to provide such additional financing
on the terms and conditions set forth herein;
NOW, THEREFORE, the Borrowers, the Banks and the Agent agree that on and as
of the Closing Date (as hereinafter defined) the Original Credit Agreement is
hereby amended and restated in its entirety and shall remain in full force and
effect only as expressly set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION:
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1.1 DEFINITIONS: Certain capitalized terms are defined below:
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Accounts: All rights of the Borrowers or any of their Subsidiaries to any
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payment of money for goods sold, leased or otherwise marketed in the ordinary
course of business, whether evidenced by or under or in respect of a contract or
instrument, and to all proceeds in respect thereof.
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Acquisition: The acquisition by the Parent on the Acquisition Closing Date
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of all of the outstanding shares of capital stock of InSolutions pursuant to the
Acquisition Documents.
Acquisition Closing Date: The first date on which the conditions set forth
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in the Merger Agreement have been satisfied and the Acquisition has occurred.
Acquisition Documents: Collectively, the Merger Agreement and all
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agreements and documents required to be entered into or delivered pursuant
thereto or in connection with the Acquisition, each in the form delivered to the
Agent on the Acquisition Closing Date.
Adjustment Date: The first day of the month immediately following the
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month in which a Compliance Certificate is to be delivered by the Borrowers to
the Agent pursuant to (S)9.1(a)(iv).
Affiliate: Any Person that would be considered an affiliate of any
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Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if such Borrower were
issuing securities.
Agent: BankBoston, N.A., acting as agent for the Banks.
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Agent's Head Office: The Agent's head office located at 100 Federal
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▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Agreement: See the preamble, which term shall include this Agreement and
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the Schedules and Exhibits hereto, all as amended and in effect from time to
time.
Applicable Margin: For each period commencing on an Adjustment Date
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through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrowers' Leverage Ratio, as determined for the
fiscal period of the Borrowers and their Subsidiaries ending immediately prior
to the applicable Rate Adjustment Period:
BASE RATE LIBOR RATE
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LEVERAGE RATIO LOANS LOANS
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Greater than or equal to 2.00:1.00 .50% 2.00%
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Less than 2.00:1.00 but greater
than or equal to 1.50:1.00 .25% 1.75%
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Less than 1.50:1.00 0% 1.50%
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Notwithstanding the foregoing, (a) for Loans outstanding during the period
commencing on the Closing Date through the date immediately preceding the first
Adjustment Date to occur after the fiscal quarter ending July 31, 1998, the
Applicable Margin shall be at the highest level set forth above and (b) if the
Borrowers fail to deliver any Compliance Certificate pursuant to (S)9.1(a)(iv)
hereof, then, for the period commencing on the next Adjustment Date to occur
subsequent to such failure through the date immediately following the date on
which such Compliance Certificate is delivered, the Applicable Margin shall be
the highest Applicable Margin set forth above.
Assignment and Acceptance: See (S)13.
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Banks: BKB and the other lending institutions listed on Schedule 1 hereto
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and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to (S)13.
Base Rate: The higher of (a) the annual rate of interest announced from
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time to time by BKB at its head office as it's "base rate" and (b) one-half of
one percent (1/2%) above the Federal Funds Effective Rate.
Base Rate Loans: Revolving Credit Loans and all or any portion of the Term
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Loan bearing interest calculated by reference to the Base Rate.
BKB: BankBoston, N.A., in its individual capacity.
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Borrowers: See the preamble.
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Borrowing Base: At the relevant time of reference thereto, an amount
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determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to (S)9.1(a)(v), which is equal to
80% of Eligible Accounts Receivable for which invoices have been issued and are
payable. The Agent may, in its discretion, from time to time, upon five (5)
days' prior notice to the Borrowers, (a) reduce the lending formula with respect
to Eligible Accounts Receivable to the extent that the Agent determines that:
(i) the dilution with respect to the Accounts for any period has increased in
any material respect or may be reasonably anticipated to increase in any
material respect above historical levels, or (ii) the general creditworthiness
of account debtors or other obligors of the Borrowers have declined. In
determining whether to reduce the lending formula, the Agent may consider
events, conditions, contingencies or risks which are also considered in
determining Eligible Accounts Receivable.
Borrowing Base Report: A Borrowing Base Report signed by the chief
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financial officer of each Borrower and in form and substance acceptable to the
Agent.
Business Day: Any day on which banking institutions in Boston,
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Massachusetts, are open for the conduct of a substantial part of its commercial
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banking business generally and, in the case of LIBOR Rate Loans, also a day
which is a LIBOR Business Day.
Capitalized Leases: Leases under which the Borrowers or any of their
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Subsidiaries are the Lessee or obligor, the discounted, future rental payment
obligations under which are required to be capitalized on the combined balance
sheet of the Borrowers and their Subsidiaries in accordance with GAAP.
Charter Documents: In respect of any entity, the certificate or articles
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of incorporation or organization and the by-laws of such entity, or other
constitutive documents of such entity.
Closing Date: The first date on which the conditions set forth in (S)8
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have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.
Collateral: All of the property, rights and interests of the Borrowers and
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their Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Combined or combined: With reference to any term defined herein, shall
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mean that term as applied to the accounts of the Borrowers and their
Subsidiaries, combined in accordance with GAAP.
Combined Current Assets: All assets of the Borrowers and their
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Subsidiaries on a combined basis that in accordance with GAAP are properly
classified as current assets, excluding bad debts and inventory not yet
saleable.
Combined Current Liabilities: All liabilities of the Borrowers and their
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Subsidiaries on a combined basis payable on demand or maturing within one (1)
year from the date as of which current liabilities are to be determined, and
such other liabilities that in accordance with GAAP are properly classified as
current liabilities; provided, however, for purposes of calculating compliance
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with (S)9.3(d) hereof, so long as (a) the Parent and the Borrowers file all
required income tax returns pursuant to a consolidated federal income tax
return and (b) the Parent is not obligated, on a consolidated basis, to make any
cash federal income tax payments in the period of determination, Combined
Current Liabilities shall exclude all accrued federal income tax liabilities for
such period of determination.
Combined Net Income (or Deficit): The combined net income (or deficit) of
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the Borrowers and their Subsidiaries, after deduction of all expenses, taxes and
other proper charges, determined in accordance with GAAP.
Combined Operating Cash Flow: For any Reference Period, the amount equal
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to (a) the EBITDA for such period, minus (b) cash payments for all taxes paid
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during such period, minus (c) capital expenditures made during such period to
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the extent permitted hereunder.
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Combined Total Debt Service: For any Reference Period, all scheduled
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mandatory payment of principal on Indebtedness of the Borrowers and their
Subsidiaries made or required to be made in that period, plus the Combined Total
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Interest Expense of the Borrowers and their Subsidiaries for that period.
Combined Total Interest Expense. For any period, the aggregate amount of
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interest required to be paid or accrued by the Borrowers and their Subsidiaries
during such period on all Indebtedness of the Borrowers and their Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of Capitalized Leases and including
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees or expenses in connection with the borrowing of money.
Commitment: Collectively, the Revolving Credit Loan Commitment and the
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Term Loan Commitment.
Commitment Percentage: With respect to each Bank, the percentage set forth
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on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
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all the Banks.
Compliance Certificate: See (S)9.1(a)(iv) hereof.
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Consent: In respect of any person or entity, any permit, license or
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exemption from, approval, consent of, registration or filing with any local,
state or federal governmental or regulatory agency or authority, required under
applicable law.
Conversion Request: A notice by any Borrower to the Agent of such
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Borrower's election to convert or continue a Loan in accordance with (S)2.3
hereof.
Default: An event or act which with the giving of notice and/or the lapse
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of time, would become an Event of Default.
Domestic Lending Office: Initially, the office of each Bank designated as
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such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
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located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date: The date on which any Revolving Credit Loan or the Term
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Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with (S)2.3 or all or any portion of the
Term Loan is converted or continued in accordance with (S)3.5.
EBITDA: With respect to any fiscal period, an amount equal to the sum of
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(a) Combined Net Income for such period, plus (b) to the extent deducted in the
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calculation of such Person's Combined Net Income and without duplication, (i)
depreciation and amortization for such period, plus (ii) other noncash charges,
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including, without limitation, in process research and development expenses or
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charges, made in calculating Combined Net Income for such period, plus (iii) tax
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expense for such period, plus (iv) Combined Total Interest Expense paid or
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accrued during such period, all as determined in accordance with GAAP.
Eligible Accounts Receivable: The aggregate of the unpaid portions of
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Accounts (net of any credits, rebates, offsets, holdbacks or other adjustments
or commissions payable to third parties that are adjustments to such Accounts)
(a) that the Borrowers reasonably and in good faith determine to be collectible;
(b) that are with account debtors or other obligors that (i) are not Affiliates
of the Borrowers, (ii) purchased the goods or services giving rise to the
relevant Account in an arm's length transaction, (iii) are not insolvent or
involved in any case or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the
Agent's reasonable judgment, creditworthy; (c) that are in payment of
obligations that have been fully performed, do not consist of progress ▇▇▇▇▇▇▇▇
or ▇▇▇▇ and hold invoices and are not subject to dispute or any other similar
claims that would reduce the cash amount payable therefor; (d) that are not
subject to any pledge, restriction, security interest or other lien or
encumbrance other than those created by the Loan Documents; (e) in which the
Agent has a valid and perfected first priority security interest; (f) that are
not outstanding for more than ninety (90) days past the earlier to occur of (i)
the date of the respective invoices therefor and (ii) the date of shipment
thereof in the case of goods or the end of the calendar month following the
provision thereof in the case of services; (g) that are not due from an account
debtor or other obligor located in Minnesota unless the applicable Borrower (i)
has received a certificate of authority to do business and is in good standing
in such state or (ii) has filed a notice of business activities report with the
appropriate office or agency of such state for the current year; (h) that are
not due from any single account debtor or other obligor if more than thirty
percent (30%) of the aggregate amount of all Accounts owing from such account
debtor or other obligor would otherwise not be Eligible Accounts Receivable; (i)
that are payable in Dollars; (j) that are not payable from an office outside of
the United States; (k) that are not secured by a letter of credito unless the
Agent has a prior, perfected security interest in such letter of credit; and (i)
to the extent the account debtor on such Account is Cisco, are not more than 25%
of the aggregate amount of all Accounts..
Eligible Assignee: Any of (a) a commercial bank or finance company
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organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
Untied States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with GAAP; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development ( the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided, that such bank is acting through a branch or agency
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located in the country in which it is organized or another country
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which is also a member of the OECD; (d) the central bank of any country which is
a member of the OECD; and (e) if, but only if, any Event of Default has occurred
and is continuing, any other bank, insurance company, commercial finance company
or other financial institution or other Person approved by the Agent, such
approval not to be unreasonably withheld.
Environmental Laws: All laws pertaining to environmental matters,
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including without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
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and all rules, regulations, judgments, decrees, and orders arising thereunder.
Eurocurrency Reserve Rate: For any day with respect to a LIBOR Rate Loan,
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the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Event of Default: Any of the events listed in (S)10 hereof.
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Federal Funds Effective Rate: For any day, the rate per annum equal to the
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weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
Financials: In respect of any period, the combined balance sheet of the
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Borrower and their Subsidiaries as at the end of such period, and the related
statement of income and combined statement of cash flow for such period, each
setting forth in comparative form the figures for the previous comparable fiscal
period, all in reasonable detail and prepared in accordance with GAAP.
GAAP: Generally accepted accounting principles consistent with those
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adopted by the Financial Accounting Standards Board and its predecessor, (a)
generally, as in effect from time to time, and (b) for purposes of determining
compliance by the Borrowers with their financial covenants set forth herein, as
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in effect for the fiscal year therein reported in the most recent Financials
submitted to the Agent prior to execution of this Agreement.
Guarantors: Each Subsidiary of any Borrower existing on the Closing Date
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and each other Person which is required to be or become guarantors from time to
time pursuant to (S)9.1(h) hereof.
Guaranty: Collectively, (a) the Amended and Restated Guaranty, dated or to
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be dated on or prior to the Closing Date, made by Pacific Direct in favor of the
Banks and the Agent pursuant to which Pacific Direct guaranties to the Banks and
the Agent the payment and performance of the Obligations in form and substance
satisfactory to the Banks and the Agent and (b) any other guaranty dated
subsequent to the Closing Date made by any other Guarantor in favor of the Banks
and the Agent pursuant to which each Guarantor guaranties to the Banks and the
Agent the payment and performance of the Obligations in form and substance
satisfactory to the Banks and the Agent.
Indebtedness: In respect of any entity, all obligations, contingent and
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otherwise, that in accordance with GAAP should be classified upon the obligor's
balance sheet as liabilities, or to which reference should be made by footnotes
thereto, including in any event and whether or not so classified, but without
duplication with respect liabilities under swap arrangements where the
underlying obligation appears on the balance sheet of such entity: (a) all debt
and similar monetary obligations, whether direct or indirect, (b) all
liabilities secured by Liens, whether or not the liability secured thereby shall
have been assumed, (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise and (d) all liabilities in
respect of bankers' acceptances or letters of credit.
Interest Payment Date: (a) As to any Base Rate Loan, the last day of the
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calendar month which includes the Drawdown Date thereof; and (b) as to any LIBOR
Rate Loan in respect of which the Interest Period is (i) ninety (90) days or
less, the last day of such Interest Period and (ii) more than ninety (90) days,
the date that is ninety (90) days from the first day of such Interest Period
and, in addition, the last day of such Interest Period.
Interest Period: With respect to each Revolving Credit Loan or all or any
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relevant portion of the Term Loan, (a) initially, the period commencing on the
Drawdown Date of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrowers in a Loan Request (i) for any Base
Rate Loans, the last day of the calendar month; and (ii) for any LIBOR Rate
Loan, 1, 2, 3, or 6 months; and (b) thereafter each period commencing on the
last day of the immediately preceding Interest Period applicable to such Loan
and ending
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on the last day of one of the periods set forth above, as selected by the
Borrowers in a Conversion Request; provided that all of the foregoing provisions
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relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR 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 LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) If the Borrowers shall fail to give notice as provided in (S)2.3,
the Borrowers shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Base Rate Loan and the continuance of all
Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that begins
on the last LIBOR 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 LIBOR Business Day of a
calendar month; and
(e) any Interest period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Revolving Credit Loan Maturity Date (if
comprising a Revolving Credit Loan) or the Term Loan Maturity Date (if
comprising the Term Loan or a portion thereof) shall end on the Revolving
Credit Loan Maturity Date or, as the case may be, the Term Loan Maturity
Date.
Letter of Credit: See (S)4.1(a).
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Letter of Credit Application: See (S)4.1(a).
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Letter of Credit Fee: See (S)4.7.
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Letter of Credit Participation: See (S)4.1(d).
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Leverage Ratio: As at any date of determination, the ratio of (a) Total
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Funded Indebtedness of the Borrowers and their Subsidiaries outstanding on such
date to (b) the EBITDA of the Borrowers and their Subsidiaries for the Reference
Period ending on such date.
LIBOR Business Day: Any day on which commercial banks are open for
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international business (including dealings in U.S. dollar deposits) in London or
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such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
LIBOR Lending Office: Initially, the office of each Bank designated as
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such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
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that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate: For any Interest Period with respect to a LIBOR Rate Loan, the
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rate of interest equal to (a) the rate determined by the Agent at which U.S.
dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 (or any successor publication or source selected
by the Bank in its reasonable discretion) at 11:00 a.m. (London time) on the
second LIBOR Business Day, prior to the first day of such Interest Period,
divided by (b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if
-----
applicable.
LIBOR Rate Loans: Revolving Credit Loans and all or any portion of the
----------------
Term Loan bearing interest calculated by reference to the LIBOR Rate.
Liens: Any encumbrance, mortgage, pledge, hypothecation, charge,
-----
restriction or other security interest of any kind securing any obligation of
any entity or person.
Loan Documents: This Agreement, the Notes, the Letter of Credit
--------------
Applications, the Letters of Credit and the Security Documents, in each case as
from time to time amended or supplemented.
Loan Request: See (S)2.1.
------------
Loans: The Revolving Credit Loans and the Term Loan.
-----
Majority Banks: As of any date, (a) if there are only two (2) Banks,
--------------
Majority Banks shall mean all the Banks, and (b) if there are three (3) or more
Banks the Banks whose aggregate Commitments constitute at least sixty six and
two thirds percent (66 2/3%) of the Total Commitment.
Materially Adverse Effect: Any materially adverse effect on the financial
-------------------------
condition or business operations of the Borrowers and their Subsidiaries
taken together or material impairment of the ability of the Borrowers or any of
their Subsidiaries to perform its obligations hereunder or under any of the
other Loan Documents.
Maximum Drawing Amount: The maximum aggregate amount from time to time
----------------------
that the beneficiary may draw under the outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Merger Agreement: The Agreement and Plan of Merger dated as of June 15,
----------------
1998 among the Parent, CMG-InSolutions Merger Corporation, InSolutions
-11-
Incorporated and the shareholders of InSolutions Corporation identified therein,
together with all schedules, exhibits and annexes thereto.
Notes: The Term Notes and the Revolving Credit Notes.
-----
Obligations: All indebtedness, obligations and liabilities of the
-----------
Borrowers and their Subsidiaries to any of the Banks and the Agent, existing on
the date of this Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any other Loan Document
or in respect of any of the Loans made or Reimbursement Obligations incurred or
any of the Notes, Letter of Credit Applications, Letters of Credit, or arising
or incurred in connection with any interest rate protection arrangements
contemplated by (S)9.1(g) or any documents, agreements or instruments executed
in connection therewith, or other instruments at any time evidencing any
thereof.
Parent: CMG Informations Services Inc, a Delaware corporation, and the
------
parent corporation of each of the Borrowers.
Perfection Certificates: Each of the Perfection Certificates of the
-----------------------
Borrowers and the Guarantors as defined in the Security Agreements.
Person: Any individual, corporation, partnership, trust, unincorporated
------
association, business or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Adjustment Period: See the definition of Applicable Margin.
----------------------
Record: See (S)3.2 hereof.
------
Reference Period: The period of (a) four (4) consecutive fiscal quarters
----------------
of SalesLink ending on the relevant date or (b) until four (4) full fiscal
quarters of SalesLink have elapsed after April 30, 1998, such shorter period of
one (1), two (2) or three (3) full fiscal quarters elapsed since April 30, 1998,
with the relevant amount applicable to such shorter period annualized for the
period of four (4) consecutive fiscal quarters for which the applicable covenant
or test calculation is being performed by multiplying such relevant amount by a
fraction whose numerator is four (4) and whose denominator is such actual number
of elapsed full fiscal quarters.
Reimbursement Obligation: The Borrowers' joint and several obligation to
------------------------
reimburse the Agent and the Banks on account of any drawing under any Letter of
Credit as provided in (S)4.2.
Requirement of Law: In respect of any person or entity, any law, treaty,
------------------
rule, regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such person or entity or
affecting any of its property.
-12-
Restricted Payment: In relation to any Borrower and its Subsidiaries, any
------------------
(a) Distribution; and (b) payment by such Borrower or any of its Subsidiaries to
the Parent or any Affiliate of the Parent or such Borrower or its Subsidiaries
other than payments to any such Affiliates for goods and services in the
ordinary course of business on terms equivalent to those obtainable in arms
length transactions.
Revolving Credit Loan Commitment: With respect to each Bank, the amount
--------------------------------
set forth on Schedule 1 hereto as the amount of such Bank's commitment to make
-------- -
Revolving Credit Loans to, and to participate in the issuance, extention and
renewal of Letters of Credit for the account of the Borrowers, as the same may
be reduced from time to time or terminated hereunder.
Revolving Credit Loan Maturity Date: November 11, 2002.
-----------------------------------
Revolving Credit Loans: Revolving credit loans made or to be made by the
----------------------
Banks to the Borrowers pursuant to (S)2 hereof.
Revolving Credit Note: See (S)2.2(d) hereof.
---------------------
Security Agreements: Collectively, (a) the Amended and Restated Security
-------------------
Agreement, dated or to be dated on or prior to the Closing Date, among the
Borrowers and the Agent and in form and substance satisfactory to the Agent; and
(b) the Amended and Restated Security Agreement, dated or to be dated on or
prior to the Closing Date, between Pacific Direct and the Agent, and in form and
substance satisfactory to the Agent, and as each Security Agreement may be
amended, restated, modified and/or supplemented from time to time.
Security Documents: Collectively, the Security Agreements, each Guaranty,
------------------
the Trademark Agreements and the Stock Pledge Agreement.
Seller: Each of the Shareholders (as such term is defined in the Merger
------
Agreement) set forth on the signature page to the Merger Agreement.
Seller Note: The unsecured promissory note from the Parent to ▇▇▇▇▇▇ ▇▇▇
-----------
in the original principal amount of $4,249,845 issued pursuant to the
Acquisition, which promissory note shall be in form and substance satisfactory
to the Banks and the Agent.
Stock Pledge Agreement. The Amended and Restated Stock Pledge Agreement
----------------------
dated or to be dated on or prior to the Closing Date between SalesLink and the
Agent and in form and substance satisfactory to the Banks and the Agent.
Subsidiary: In respect of any Person, any business entity of which such
-----------
Person at any time owns or controls directly or indirectly more than fifty
percent (50%) of the outstanding shares of stock having voting power, regardless
of whether such right to vote depends upon the occurrence of a contingency.
-13-
Term Loan: The term loan made or to be made by the Banks to the Borrowers
---------
on the Closing Date in the aggregate principal amount of $15,500,000 pursuant to
(S)3 hereof.
Term Loan Commitment: With respect to each Bank, the amount set forth on
--------------------
Schedule 1 hereto as the amount of such Bank's commitment to make the Term Loan
----------
to the Borrowers on the Closing Date.
Term Loan Maturity Date: November 11, 2002.
-----------------------
Term Note: See (S)3.2 hereof.
---------
Total Commitment: The sum of the Commitments of the Banks, as in effect
----------------
from time to time.
Total Revolving Credit Commitment: The sum of the Revolving Credit
---------------------------------
Commitments of the Banks, as in effect from time to time. As of the Closing
Date the Total Revolving Credit Commitment is $8,000,000.
Total Funded Indebtedness: All Indebtedness of the Borrowers and their
-------------------------
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases, determined on a combined basis in accordance with GAAP.
Trademark Agreement. Collectively, (a) the Amended and Restated Trademark
-------------------
Collateral Security and Pledge Agreement, dated or to be dated on or prior to
the Closing Date, between SalesLink and the Agent and in form and substance
satisfactory to the agent, and as such Trademark Agreement may be amended,
restated, modified and/or supplemented from time to time and (b) the Trademark
Collateral Security and Pledge Agreement, dated or to be dated on or prior to
the Closing Date, between InSolutions and the Agent and in form and substance
satisfactory to the agent, and as such Trademark Agreement may be amended,
restated, modified and/or supplemented from time to time.
Uniform Customs: With respect to any Letter of Credit, the Uniform Customs
---------------
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation: Any Reimbursement Obligation for which
-------------------------------
any Borrower or the Parent, as the case may be, does not reimburse the Agent and
the Banks on the date specified in, and in accordance with, (S)3.2(a).
1.2. RULES OF INTERPRETATION. For purposes of this Agreement, the parties
hereto hereby acknowledge and agree that when a reference is made to any fiscal
year, fiscal quarter, fiscal month or any other such period, until such time as
InSolutions changes its fiscal year to be identical to that of SalesLink, such
term shall mean the fiscal year, fiscal quarter and fiscal month of
-14-
SalesLink, and shall include the relevant information of InSolutions for those
identical months, quarter or twelve month period, regardless of the actual
fiscal year of InSolutions. For example, a reference to the Combined Current
Assets of the Borrowers for the fiscal quarter ended July 31, 1998 shall mean
the current assets of SalesLink and it Subsidiaries for its period of April 1,
1998 through July 31, 1998, and the current assets of InSolutions and its
Subsidiaries for the three month period of April 1, 1998 through July 31, 1998.
2. REVOLVING CREDIT FACILITY.
-------------------------
2.1. COMMITMENT TO LEND. Upon the terms and subject to the conditions of
------------------
this Agreement, each of the Banks severally agrees to lend to the Borrowers such
sums that the Borrowers may request, from the Closing Date until but not
including the Revolving Credit Loan Maturity Date, up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested) at any one
time equal to such Bank's Revolving Credit Loan Commitment minus such Bank's
-----
Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations pertaining to Letters of Credit, provided that the sum
--------
of the outstanding amount of the Revolving Credit Loans (after giving effect to
all amounts requested) plus the Maximum Drawing Amount and all Unpaid
----
Reimbursement Obligations pertaining to all Letters of Credit shall not at any
time exceed the lesser of (a) Total Revolving Credit Commitment and (b) the
Borrowing Base. Revolving Credit Loans shall be in the minimum aggregate amount
of $100,000 or an integral multiple thereof.
2.2. REQUESTS FOR LOANS.
------------------
(a) SalesLink shall give to the Agent written notice in form and
substance satisfactory to the Agent (or telephonic notice confirmed in
writing in form and substance satisfactory to the Agent) of each Revolving
Credit Loan being requested hereunder (a "Loan Request") (i) no later than
10:00 a.m. (Boston time) on the proposed Drawdown Date of any Base Rate
Loan and (ii) no less than three (3) LIBOR Business Days prior to the
proposed Drawdown Date of any LIBOR Rate Loan. Each such notice shall
specify (A) the principal amount of the Revolving Credit Loan being
requested, (B) the proposed Drawdown Date of such Revolving Credit Loan,
(C) in the event the Revolving Credit Loan being requested is a LIBOR Rate
Loan, the Interest Period for such Revolving Credit Loan and (D) whether
such Revolving Credit Loan shall be a Base Rate Loan or a LIBOR Rate Loan.
Promptly upon receipt of any such notice, the Agent shall notify each of
the Banks thereof. Each Loan Request shall be irrevocable and binding upon
the Borrowers and shall obligate the Borrowers to accept the Revolving
Credit Loan requested from the Banks on the proposed Drawdown Date. Each
Loan Request shall be in a minimum aggregate amount of $100,000 or an
integral multiple thereof.
-15-
(b) Notwithstanding the notice requirements set forth in (S)2.2(a)
and the minimum Revolving Credit Loan amount provisions contained in (S)2.1
and 2.2(a), Revolving Credit Loans may be made from time to time in the
following manner: the Banks may make Revolving Credit Loans to the
Borrowers by entry of credits by the Agent to the Borrowers' controlled
disbursement account (the "Disbursement Account") with the Agent to cover
checks and other charges which the Borrowers have drawn or made against
such Disbursement Account. The Borrowers hereby request and authorize the
Banks to make from time to time such Revolving Credit Loans by means of
appropriate entries of such credits sufficient to cover checks and other
charges then presented. The Borrowers and the Banks may also agree to
effect such other controlled disbursement arrangements as may be mutually
satisfactory. The Borrowers acknowledge and agree that the making of such
Revolving Credit Loans in accordance with this (S)2.2(b) shall, in each
case, be subject in all respects to the provisions of this Agreement as if
they were Revolving Credit Loans covered by a Loan Request, including
without limitation, the limitations set forth in (S)2.1 and the requirement
that the applicable provisions of (S)8 be satisfied. All actions taken by
the Agent and the Banks pursuant to the provisions of this (S)2.2(b) shall
be conclusive and binding upon the Borrowers.
(c) Notwithstanding the notice requirement set forth in (S)2.2(a) and
the minimum Revolving Credit Loan provisions contained in (S)2.1 and
(S)2.2(a), each of the Banks agrees to make Revolving Credit Loans to the
Borrowers sufficient to pay to the Banks any Unpaid Reimbursement
Obligations on the date on which such Reimbursement Obligations become
Unpaid Reimbursement Obligations. The Borrowers hereby request and
authorize the Banks to make from time to time such Revolving Credit Loans
by means of paying Unpaid Reimbursement Obligations. The Borrowers
acknowledge and agree that the making of such Revolving Credit Loans shall,
in each case, be subject in all respects to the provisions of this
Agreement, including, without limitation, the limitations set forth in
(S)2.1(a) and the requirements of the applicable conditions in (S)8. All
actions taken by the Agent and the Banks pursuant to the provisions of this
(S)2.2(c) shall be conclusive and binding on the Borrowers.
(d) The joint and several obligations of the Borrowers to repay to
the Banks the principal of the Revolving Credit Loans and interest accrued
thereon shall be evidenced by separate joint and several promissory notes
(each a "Revolving Credit Note") dated as of the Closing Date and completed
with appropriate insertions. One Revolving Credit Note shall be payable to
the order of each Bank in a principal amount equal to such Bank's Revolving
Credit Loan Commitment or, if less, the outstanding amount of all Revolving
Credit Loans made by such Bank, plus interest accrued thereon, as set forth
in (S)2.4 below.
-16-
2.3. CONVERSION OPTIONS.
------------------
2.3.1. CONVERSION TO DIFFERENT LOAN TYPE. The Borrowers may elect
---------- -- --------- ---- ----
from time to time to convert any outstanding Revolving Credit Loan from a
Base Rate Loan to a LIBOR Rate Loan or from a LIBOR Rate Loan to a Base
Rate Loan, provided that (a) with respect to any such conversion of a LIBOR
--------
Rate Loan to a Base Rate Loan, the Borrowers shall give the Agent at least
three (3) Business Day's prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate Loan,
the Borrowers shall give the Agent at least three (3) LIBOR Business Days
prior written notice of such election; (c) with respect to any such
conversion of a LIBOR Rate Loan into a Base Rate Loan, such conversion
shall only be made on the last day of the Interest Period with respect
thereto; and (d) no Revolving Credit Loan may be converted into a LIBOR
Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office or
its LIBOR Lending Office, as the case may be. All or any part of Revolving
Credit Loans may be converted as provided herein, provided that any partial
--------
conversion shall be in an aggregate principal amount of $100,000 or a whole
multiple thereof. Each Conversion Request relating to the conversion of a
Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrowers.
2.3.2. CONTINUATION OF LOAN TYPE. Any Base Rate Loan or LIBOR Rate
------------ -- ---- ----
Loan may be continued as such upon the expiration of an Interest Period
with respect thereto by compliance by the Borrowers with the notice
provisions contained in (S)2.3.1; provided that no LIBOR Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Agent active upon the Borrowers' account have actual knowledge. In the
event that the Borrowers fail to provide any such notice with respect to
the continuation of any LIBOR Rate Loan as such, then such LIBOR Rate Loan
shall be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto.
2.3.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate Loans
----- ---- -----
shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all LIBOR
Rate Loans having the same Interest Period shall not be less than $100,000
or a whole multiple thereof, and there shall not be more than three (3)
outstanding Revolving Credit Loans which are LIBOR Rate Loans at any time.
-17-
2.4. INTEREST. So long as no Event of Default is continuing, and except as
--------
otherwise provided herein, (a) each Base Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending of the last day of
the Interest Period with respect thereto at the rate per annum equal to the Base
Rate plus the Applicable Margin; (b) each LIBOR Rate Loan shall bear interest
----
for the period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum equal to
the LIBOR Rate for such Interest Period plus the Applicable Margin; and (c) the
----
Borrowers jointly and severally promise to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto. While an
Event of Default is continuing, amounts payable under any of the Loan Documents
shall bear interest (compounded monthly and payable on demand in respect of
overdue amounts) at a rate per annum which is equal to the sum of (a) the Base
Rate, and (b) four percent (4%) above the Margin until such amount is paid in
full or (as the case may be) such Event of Default has been cured or waived in
writing by the Majority Banks (after as well as before judgment).
2.5. REPAYMENTS AND PREPAYMENTS. The Borrowers hereby jointly and
--------------------------
severally agree to pay to the Agent for the benefit of the Banks on the
Revolving Credit Loan Maturity Date the entire unpaid principal of and interest
on all Revolving Credit Loans. If at any time the outstanding amount of the
Revolving Credit Loans plus the Maximum Drawing Amount and all Unpaid
----
Reimbursement Obligations exceeds the lesser of (a) the Total Revolving Credit
Commitment and (b) the Borrowing Base, then the Borrowers shall immediately pay
the amount of such excess to the Agent for the respective accounts of the Banks
for application, first to any Unpaid Reimbursement Obligation; second, to the
Revolving Credit Loans; and third, to provide to the Agent cash collateral for
Reimbursement Obligations as contemplated by (S)4. Each payment of any Unpaid
Reimbursement Obligation or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Revolving Credit Note, with adjustments to be extent
practicable to equalize any prior payments or repayments not exactly in
proportion. The Borrowers may elect to prepay the outstanding principal of all
or any part of any Revolving Credit Loan, without premium or penalty, in a
minimum amount of $100,000 or an integral multiple thereof, upon written notice
to the Agent given by 10:00 a.m. Boston time on the date of such prepayment, of
the amount to be prepaid. Each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.
The Borrowers shall be entitled to reborrow before the Revolving Credit Loan
Maturity Date such amounts, upon the terms and subject to the conditions of this
Agreement. Each repayment or prepayment of principal of any Revolving Credit
Loan shall be accompanied by payment of the unpaid interest accrued to such date
on the principal being repaid or prepaid.. The Borrowers may elect to reduce or
terminate the Revolving Credit Loan
-18-
Commitment by a minimum principal amount of $100,000 or an integral multiple
thereof, upon written notice to the Agent given by 10:00 a.m. Boston time at
least two (2) Business Days prior to the date of such reduction or termination.
The Borrowers shall not be entitled to reinstate the Revolving Credit Loan
Commitment following such reduction or termination.
2.6. FUNDS FOR REVOLVING CREDIT LOAN.
-------------------------------
2.6.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston time)
------------------
on the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by (S)8 and the satisfaction of the other conditions set forth
therein, to the extent applicable, the Agent will make available to the
Borrowers the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
2.6.2 ADVANCES BY AGENT. The Agent may, unless notified to the
-----------------
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (b) the amount of such Bank's Commitment
-----
Percentage of such Revolving Credit Loans, times (c) a fraction, the
-----
numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
----- -----
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the
-19-
Agent shall be entitled to recover such amount from the Borrowers on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
3. THE TERM LOAN.
-------------
3.1. COMMITMENT TO LEND. Upon the terms and subject to the conditions of
------------------
this Agreement, each Bank agrees to lend to the Borrowers on the Closing Date
the amount of its Commitment Percentage of the principal amount of $15,500,000.
3.2. THE TERM NOTES. The Term Loan shall be evidenced by separate joint
--------------
and several promissory notes of the Borrowers in form and substance satisfactory
to the Agent (each a "Term Note"), dated the Closing Date and completed with
appropriate insertions. One Term Note shall be payable to the order of each Bank
in a principal amount equal to such Bank's Commitment Percentage of the Term
Loan and representing the joint and several obligation of the Borrowers to pay
to such Bank such principal amount or, if less, the outstanding amount of such
Bank's Commitment Percentage of the Term Loan, plus interest accrued thereon, as
set forth below. The Borrowers irrevocably authorize each Bank to make or cause
to be made a notation on each grid attached to such Bank's Term Note (the
"Record") reflecting the original principal amount of the Term Loan and, at or
about the time of such Bank's receipt of any principal payment on such Term
Note, an appropriate notation on such Record reflecting such payment. The
aggregate unpaid amount set forth on the Record shall be prima facie evidence of
the principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on the Record shall not
affect the joint and several obligations of the Borrowers hereunder or under the
Term Note to make payments of principal of and interest on the Term Note when
due.
3.3. SCHEDULE OF INSTALLMENT PAYMENTS OF PRINCIPAL OF TERM LOAN. The
----------------------------------------------------------
Borrowers jointly and severally promise to pay to the Agent for the account of
the Banks the principal amount of the Term Loan in sixteen (16) consecutive
quarterly payments, payable on the last Business Day of each fiscal quarter
ending within any period set forth below in the amount set forth opposite such
period, commencing on January 31, 1999 with a final payment on the Term Loan
Maturity Date in an amount equal to the unpaid balance of the Term Loan.
QUARTER ENDING: AMOUNT OF EACH PAYMENT
-------------- ----------------------
January 31, 1999 - October 31, 1999 $ 387,500
January 31, 2000 - October 31, 2000 $ 775,000
January 31, 2001 - October 31, 2001 $1,162,500
January 31, 2002 - October 31, 2002 $1,550,000
-20-
Term Loan Maturity Date Remaining unpaid balance of Term
Loan
3.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrowers shall have the right
--------------------------------
at any time to prepay the Term Notes on or before the Term Loan Maturity Date,
as a whole, or in part, upon not less than five (5) Business Days prior written
notice to the Agent, without premium or penalty, provided, that (a) each partial
--------
prepayment shall be in the principal amount of $100,000 or an integral multiple
thereof; (b) no portion of the Term Loan bearing interest at the LIBOR Rate may
be prepaid pursuant to this (S)3.4 except on the last day of the Interest Period
relating thereto; and (c) each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective outstanding
amount of each Bank's Term Note, with adjustments to the extent practicable to
equalize any prior prepayments not exactly in proportion. Any prepayment of
principal of the Term Loan shall include all interest accrued to the date of
prepayment and shall be applied against the scheduled installments of principal
due on the Term Loan in the inverse order of maturity No amount repaid with
respect to the Term Loan may be reborrowed.
3.5. INTEREST ON TERM LOAN.
---------------------
3.5.1. INTEREST RATES. So long as no Event of Default is continuing,
-------- -----
and except as otherwise provided herein, the Term Loan shall bear interest
during each Interest Period relating to all or any portion of the Term Loan
at the following rates: (a) to the extent that all or any portion of the
Term Loan bears interest during such Interest Period at the Base Rate, the
Term Loan or such portion shall bear interest during such Interest Period
at the rate per annum equal to the Base Rate plus the Applicable Margin;
----
(b) to the extent that all or any portion of the Term Loan bears interest
during such Interest Period at the LIBOR Rate, the Term Loan or such
portion shall bear interest during such Interest Period at the rate per
annum equal to the LIBOR Rate for such Interest Period plus the Applicable
----
Margin. The Borrowers jointly and severally promise to pay interest on the
Term Loan or any portion thereof outstanding during each Interest Period in
arrears on each Interest Payment Date applicable to such Interest Period.
While an Event of Default is continuing, amounts payable under any of the
Loan Documents shall bear interest (compounded monthly and payable on
demand in respect of overdue amounts) at a rate per annum which is equal to
the sum of (a) the Base Rate, and (b) three percent (3%) above the Margin
until such amount is paid in full or (as the case may be) such Event of
Default has been cured or waived in writing by the Majority Banks (after as
well as before judgment).
3.5.2. NOTIFICATION BY BORROWERS. The Borrowers shall notify the
------------ -- ---------
Agent, such notice to be irrevocable, at least three (3) LIBOR Business
Days prior to the Drawdown Date of the Term Loan if all or any portion of
the Term Loan is to bear interest at the LIBOR Rate. After the
-21-
Term Loan has been made, the provisions of (S)2.3 shall apply mutatis
-------
mutandis with respect to all or any portion of the Term Loan so that the
--------
Borrower may have the same interest rate options with respect to all or any
portion of the Term Loan as it would be entitled to with respect to the
Revolving Credit Loans.
3.5.3. AMOUNTS, ETC. Any portion of the Term Loan bearing interest
------- ---
at the LIBOR Rate relating to any Interest Period shall be in the amount of
$100,000 or an integral multiple thereof. No Interest Period relating to
the Term Loan or any portion thereof bearing interest at the LIBOR Rate
shall extend beyond the date on which a regularly scheduled installment
payment of the principal of the Term Loan is to be made unless a portion of
the Term Loan at least equal to such installment payment has an Interest
Period ending on such date or is then bearing interest at the Base Rate.
4. LETTER OF CREDIT FACILITY.
-------------------------
4.1. LETTER OF CREDIT COMMITMENT.
---------------------------
(a) Subject to the terms and conditions hereof and the execution
and delivery by the Borrowers of a letter of credit application on the
Agent's customary form (a "Letter of Credit Application"), the Agent on
behalf of the Banks, in reliance upon the agreement of the Banks set forth
in (S)4.1(d) and upon the representations and warranties of the Borrowers
contained herein, agrees, in its individual capacity, to issue, extend and
renew, for the account of the Borrowers, or, at the Borrowers' request, for
the account of the Parent, one or more standby letters of credit
(individually, a "Letter of Credit"), in such form as may be requested from
time to time by the Borrowers or, as the case may be, the Parent and agreed
to by the Agent; provided, however, that, after giving effect to such
-------- -------
request, (i) the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations for all Letters of Credit shall not exceed
$2,000,000 at any one time; and (ii) the sum of (1) the Maximum Drawing
Amount on all Letters of Credit; plus (2) all Unpaid Reimbursement
----
Obligations, plus (3) the amount of all Revolving Credit Loans outstanding
----
shall not exceed the lesser of (a) the Total Commitment and (b) the
Borrowing Base;
(b) Each Letter of Credit Application shall be completed to the
satisfaction of the Agent. In the event that any provision of any Letter
of Credit Application shall be inconsistent with any provision of this
Agreement, then the provisions of this Agreement shall, to the extent of
any such inconsistency, govern;
(c) Each Letter of Credit issued, extended or renewed hereunder
shall, among other things, (i) provide for the payment of sight drafts for
honor thereunder when presented in accordance with the terms thereof
-22-
and when accompanied by the documents described therein and (ii) shall have
an expiry date no later than the date which is fourteen (14) days (or, if
the Letter of Credit is confirmed by a confirmer or otherwise provides for
one or more nominated persons, forty-five (45) days) prior to the Revolving
Credit Loan Maturity Date. The Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs;
(d) Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any
other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse the Agent on demand for the amount of
each draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrowers pursuant to (S)4.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank); and
(e) Each such payment made by a Bank shall be treated as the purchase
by such Bank of a participating interest in the Borrowers' Reimbursement
Obligation under (S)4.2 in an amount equal to such payment. Each Bank
shall share in accordance with its participating interest in any interest
which accrues pursuant to (S)4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
----------------------------------------
Agent to issue, extend and renew any Letter of Credit and the Banks to
participate therein, each of the Borrowers hereby jointly and severally
agrees to reimburse or pay to the Agent, for the account of the Agent or,
as the case may be, the Banks, with respect to any Letter of Credit issued,
extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in (S)4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to the Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with
any payment made by the Agent or any Bank under, or with respect to, such
Letter of Credit;
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations;
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with (S)10 an amount equal to the Maximum Drawing Amount on all
Letters of Credit, which amount shall be held by
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the Agent for the benefit of the Agent and the Banks as cash collateral for
all Reimbursement Obligations.
Unless funded by a Revolving Credit Loan pursuant to (S)2.2(c)(i), each
such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this (S)4.2 and not required to be funded by a Revolving
Credit Loan pursuant to (S)2.2(c)(i) at any time from the date such amounts
become due and payable (whether as stated in this (S)4.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Bank on demand at the rate specified in (S)2.2 following an Event
of Default.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
-------------------------
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrowers of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrowers fail to reimburse the Agent as provided in
(S)4.2 on or before the date that such draft is paid or other payment is made by
the Agent, the Agent may at any time thereafter notify the Banks of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, times (b) the amount equal to such Bank's
-----
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
-----
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Bank to the
Borrowers, the Parent and the Banks, as the case may be, shall be only to
determine that the documents (including each draft) delivered under such Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. Each of the Borrowers' joint and several
--------------------
obligations under this (S)4 shall be absolute and unconditional under any and
all circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Borrowers may have or have had against the Agent,
any Bank or the beneficiary of any Letter of Credit. Each of the Borrowers
further agrees with the Agent and the Banks that the Agent and the Banks shall
not be responsible for, and the Reimbursement Obligations shall not
-24-
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even if such documents should in fact prove to be
in any or all respects invalid, fraudulent or forged, or any dispute between or
among the Borrowers, the beneficiary of any Letter of Credit or any financing
institution or other party to which such Letter of Credit may be transferred or
any claims or defenses whatsoever of either the Parent or the Borrowers against
the beneficiary of any Letter of Credit or any such transferee. The Agent and
the Banks shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. Each of the Parent and the
Borrowers agrees that any action taken or omitted by the Agent or any Bank under
or in connection with any Letter of Credit and the related drafts and documents,
if done in good faith, shall be binding upon the Borrowers and the Parent and
shall not result in any liability on the part of the Agent or any Bank to the
Borrowers or the Parent.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with (S)4.4, the
------------------
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper person or entity and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement unless it shall first have received such
advice or concurrence of the Majority Banks as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all case be
fully protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEES. The Borrowers shall, on the date of issuance
---------------------
or of any extension or renewal of any Letter of Credit and at such other time or
times as such charges are customarily made by the Agent, pay a fee (in each case
a "Letter of Credit Fee") to the Agent in a per annum amount equal to the
Applicable Margin otherwise applicable to LIBOR Rate Loans times the face amount
of such Letter of Credit (of which 1/8% of such 1% shall be retained for the
account of the Agent as issuer of such Letter of Credit (the "Issuing Bank
Fee")), plus the Agent's customary issuance, amendment and other administrative
----
processing fees, such Letter of Credit Fee (other than the Issuing Bank Fee and
not such issuance, amendment or administrative fee) to be for the accounts of
the Banks in accordance with their respective Commitment Percentages.
-25-
5. CHANGES IN CIRCUMSTANCES, ETC.
-----------------------------
5.1. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
--------- -- --------- ----- ----
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrowers and the
Banks) to the Borrowers and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for a Base Rate Loan, (b) each LIBOR
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make LIBOR Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks shall so notify the Borrowers and the Banks.
5.2. ILLEGALITY. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrowers and the other Banks and thereupon (a) the commitment of such Bank
to make LIBOR Rate Loans or convert Base Rate Loans to LIBOR Rate Loans shall
forthwith be suspended and (b) such Bank's Loans then outstanding as LIBOR Rate
Loans, if any, shall be converted automatically to Base Rate Loans on the last
day of each Interest Period applicable to such LIBOR Rate Loans or within such
earlier period as may be required by law. Each of the Borrowers hereby jointly
and severally agrees promptly to pay the Agent for the account of such Bank,
upon demand by such Bank, any additional amounts necessary to compensate such
Bank for any costs incurred by such Bank in making any conversion in accordance
with this (S)5.2, including the discounted present value of any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Loans hereunder.
5.3. CHANGES IN CIRCUMSTANCES. If, on or after the date hereof any Bank or
------- -- -------------
the Agent determines that (a) the adoption of, or any change in, any applicable
law, rule, regulation or guideline or the interpretation or administration
thereof (whether or not having the force of law), or (b) compliance by such Bank
or the Agent or its parent holding company with any guideline, request or
directive (whether or not having the force of law), (i) has the effect of
reducing the return on the Bank's, the Agent's or such holding company's capital
as a consequence of the Commitment, the Loans or the Letters of Credit to a
level below that which such Bank, the Agent or such holding company could have
achieved but for such adoption, change or compliance by any amount deemed by
such Bank or the Agent to be material, or (ii) shall subject such Bank to any
tax, duty or other charge with respect to any LIBOR
-26-
Rate Loan or any Note, or shall change the basis of taxation of payments to such
Bank of the principal of or interest on, LIBOR Rate Loans or in respect of any
other amount due under this Agreement in respect of LIBOR Rate Loans (other than
with respect to taxes based upon such Bank's net income); or (iii) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System, but excluding with respect to the LIBOR Rate Loan any
such requirement included in the applicable Eurocurrency Reserve Rate) against
assets of, deposits with or for the account of, or credit extended by, any Bank
or the Agent, or shall impose on any Bank, the Agent or the London interbank
market any other condition affecting LIBOR Rate Loans or the Notes, and the
result of any of the foregoing is to increase the cost to any Bank of making or
maintaining any LIBOR Rate Loan, or to reduce the amount of any sum received or
receivable by such Bank under this Agreement or under any Note with respect to
any Loan or the Letter of Credit, by an amount reasonably deemed by such Bank or
the Agent to be material, then such Bank or the Agent may notify the Borrowers
thereof. Each of the Borrowers jointly and severally agrees to pay to the Agent
for the account of such Bank or the Agent, as the case may be, (A) the amount of
the Borrowers' allocable share of the amount of such reduction in the return on
capital as and when such reduction is determined, upon presentation by such Bank
of a statement in the amount and setting forth such Bank's calculation thereof,
which statement shall be deemed true and correct absent manifest error and (B)
such additional amount or amounts as will compensate such Bank for such other
increased costs or reduction. Each Bank agrees to allocate shares of such
reduction among the Borrowers and such Bank's other customers similarly situated
on a fair and non-discriminatory basis.
5.4. CERTIFICATE. A certificate setting forth any additional amounts
-----------
payable pursuant to (S)5.3 and a brief explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrowers, shall be conclusive,
absent manifest error, that such amounts are due and owing.
5.5. INDEMNITY. The Borrowers jointly and severally agree to indemnify
---------
each Bank and to hold each Bank harmless from and against any loss, cost or
expense that such Bank may sustain or incur as a consequence of (a) default by
the Borrowers in payment of the principal amount of or any interest on any LIBOR
Rate Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by such Bank to lenders of funds obtained
by it in order to maintain its LIBOR Rate Loans, (b) default by the Borrowers in
making a borrowing or conversion after the Borrowers have given (or are deemed
to have given) a Loan Request or a Conversion Request relating thereto in
accordance with (S)2.2, (S)2.3 or (S)3.5 or (c) the making of any payment of a
LIBOR Rate Loan or the making of any conversion of any such Loan to a Base Rate
Loan on a day that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by any Bank to lenders of
funds obtained by it in order to maintain any such LIBOR Rate Loans.
-27-
6. FEES AND PAYMENTS.
-----------------
Contemporaneously with execution and delivery of this Agreement, the
Borrowers shall jointly and severally pay to the Agent a closing fee in the
amount of $50,000. The Borrowers shall jointly and severally pay to the Agent
for the Agent's own account an agent's fee at the times and in the amounts
determined by the Agent and the Borrowers. The Borrowers shall jointly and
severally pay to the Agent for the pro rata accounts of the Banks, on the first
--------
day of each calendar quarter hereafter, and upon the Revolving Credit Loan
Maturity Date or the date upon which the Revolving Credit Loan Commitment is no
longer in effect, a commitment fee calculated at a rate per annum which is equal
to one half of one percent (1/2%) of the average daily difference by which the
Total Revolving Credit Commitment amount exceeds the aggregate sum of the
outstanding Revolving Credit Loans during the preceding calendar quarter or
portion thereof. All payments to be made by the Borrowers hereunder or under
any of the other Loan Documents shall be made in U.S. dollars in immediately
available funds at the Agent's Head Office, without set-off or counterclaim and
without any withholding or deduction whatsoever. Each Bank and the Agent shall
be entitled to charge any account of the Borrowers with such Bank for any sum
due and payable by the Borrowers to such Bank hereunder or under any of the
other Loan Documents. If any payment hereunder is required to be made on a day
which is not a Business Day, it shall be paid on the immediately succeeding
Business Day, with interest and any applicable fees adjusted accordingly. All
computations of interest or of the commitment fee or any Letter of Credit Fees
payable hereunder shall be made by the Bank on the basis of actual days elapsed
and on a 360-day year.
7. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each of the Borrowers and the Guarantors represents and warrants to the
Banks and the Agent on the date hereof, on the date of any Loan Request, on the
date of the request for a Letter of Credit, on each Drawdown Date and on the
date on which the Letter of Credit is issued, extended or renewed that:
(a) each of the Borrowers and each of their Subsidiaries is duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified and in good standing in
every other jurisdiction where it is doing business, and the execution,
delivery and performance by the Borrowers and the Guarantors of the Loan
Documents to which it is a party (i) are within its corporate authority,
(ii) have been duly authorized, (iii) do not conflict with or contravene
its Charter Documents;
(b) upon execution and delivery thereof, each Loan Document shall
constitute the legal, valid and binding obligation of the Borrowers and
their Subsidiaries party thereto, enforceable in accordance with its terms;
-28-
(c) each of the Borrowers and their Subsidiaries has good and
marketable title to all its material properties, subject only to Liens
permitted hereunder, and possesses all assets, including intellectual
properties, franchises and Consents, adequate for the conduct of its
business as now conducted, without known conflict with any rights of
others. Each of the Borrowers and their Subsidiaries maintains insurance
with financially responsible insurers, copies of the policies for which
have been previously delivered to the Agent, covering such risks and in
such amounts and with such deductibles as are customary in the each of the
Borrowers' and their Subsidiaries' business and are adequate;
(d) SalesLink has provided to the Agent its audited Financials as at
July 31, 1997, and for the fiscal period then ended, and such Financials
are complete and correct and fairly present the position of SalesLink and
its Subsidiaries on a consolidated basis as at such date and for such
period in accordance with GAAP consistently applied. InSolutions has
provided to the Agent the audited Financials of InSolutions Incorporated,
and such Financials are complete and correct and fairly present the
position of InSolutions and its Subsidiaries on a consolidated basis as at
such date and for such period in accordance with GAAP consistently applied.
Each of the Borrowers has also provided to the Agent its projections of the
consolidated and combined operations of the Borrowers and their
Subsidiaries for the period from 1998 through 2003, and such forecast has
been prepared in good faith based upon reasonable assumptions;
(e) since July 31, 1997, there has been no materially adverse change
of any kind in SalesLink or any of its other Subsidiaries which would have
a Materially Adverse Effect, and since March 31, 1998 there has been no
materially adverse change of any kind in the business or assets to be
acquired in the Acquisition which would have, either individually or in the
aggregate, a Materially Adverse Effect;
(f) there are no legal or other proceedings or investigations pending
or threatened against the Borrowers or any of their Subsidiaries before any
court, tribunal or regulatory authority which would, if adversely
determined, alone or together, have a Materially Adverse Effect;
(g) the execution, delivery, performance of its obligations, and
exercise of its rights under the Loan Documents by each of the Guarantors
and the Borrowers, including borrowing under this Agreement and the
obtaining of Letters of Credit (i) do not require any Consents; and (ii)
are not and will not be in conflict with or prohibited or prevented by (A)
any Requirement of Law, or (B) any Charter Document, corporate minute or
resolution, instrument, agreement or provision thereof, in each case
binding on it or affecting its property;
-29-
(h) neither of the Guarantors nor either Borrower is in violation of
(i) any Charter Document, corporate minute or resolution, (ii) any
instrument or agreement, in each case binding on it or affecting its
property, or (iii) any Requirement of Law, in a manner which could have a
Materially Adverse Effect, including, without limitation, all applicable
federal and state tax laws, ERISA and Environmental Laws;
(i) each Borrower is a wholly-owned Subsidiary of the Parent,
SalesLink has no Subsidiaries other than Pacific Direct, InSolutions has no
Subsidiaries and neither of the Guarantors nor the Borrowers are a party to
any partnership or joint venture;
(j) the Acquisition Documents have not been amended in any material
respect. Each of the representations and warranties made by the Borrowers
in any of the Loan Documents or by the Parent and InSolutions Incorporated
in any of the Acquisition Documents was true and correct in all material
respects when made and continues to be true and correct in all material
respects on the Closing Date, except to the extent that any of such
representations and warranties relate, by the express terms thereof, solely
to a date falling prior to the Closing Date, and except to the extent that
any of such representations and warranties may have been affected by the
consummation of the transactions contemplated and permitted or required by
the Loan Documents or the Acquisition;
(k) no representation or warranty made by either of the Guarantors or
the Borrowers in this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Agent or any Bank by or
on behalf of such Guarantor and such Borrower in connection with any of the
transactions contemplated by any of the Loan Documents and the Acquisition
Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are
made;
(l) to the best of the Borrowers' knowledge, each of the
representations and warranties of the Sellers and InSolutions Incorporated
contained in the ▇▇▇▇▇ Agreement are true and correct in all material
respects as of the Closing Date and the Acquisition Closing Date;
(m) the proceeds of (i) the Term Loan shall be used to refinance
existing Indebtedness of SalesLink and InSolutions and to make a loan to
the Parent to finance a portion of the purchase price of the Acquisition;
and (ii) the Revolving Credit Loans shall be used for working capital and
general corporate purposes of the Borrowers and their Subsidiaries. The
Borrowers will obtain other Letters of Credit solely for working capital
and general corporate purpposes. No portion of any Loan is to be used,
-30-
and no portion of the Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such
terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224; and
(n) all filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken that are
necessary or advisable, under applicable law, to establish and perfect the
Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any
setoff, claims, withholdings or other defenses. The Borrowers and the
Guarantors (with respect to the Collateral under the Guarantor's Security
Agreement) is the owner of the Collateral free from any lien, security
interest, encumbrance and any other claim or demand, except Liens permitted
under (S)9.2(b) (the "Permitted Liens").
8. CONDITIONS PRECEDENT.
--------------------
In addition to the making of the foregoing representations and warranties
and the delivery of the Loan Documents, the Acquisition Documents and such other
documents and the taking of such actions as the Agent and each Bank may require
at or prior to the time of executing this Agreement, the obligation of any Bank
to make any Loan or of the Agent to issue, renew or extend any Letter of Credit
to the Borrowers, is subject to the satisfaction of the following further
conditions precedent:
(a) each of the representations and warranties of each of the
Guarantors and the Borrowers to the Agent and the Banks herein, in any of
the other Loan Documents or any documents, certificate or other paper or
notice in connection herewith shall be true and correct in all material
respects as of the time made or claimed to have been made;
(b) no Default or Event of Default shall have occurred and be
continuing;
(c) all proceedings in connection with the transactions contemplated
hereby shall be in form and substance satisfactory to the Agent and the
Banks, and the Agent and the Banks shall have received all information and
documents as it may have reasonably requested;
(d) no change shall have occurred in any law or regulation or in the
interpretation thereof that in the reasonable opinion of the Agent or any
Bank would make it unlawful for such Bank to make such Loan or for the
Agent to issue, extend or renew any Letter of Credit;
(e) each of the Guarantors and the Borrowers shall have delivered to
the Agent and the Banks (i) certified copies of its Charter Documents; (ii)
evidence that all corporate action necessary for the valid execution,
-31-
delivery and performance by each of the Guarantors and the Borrowers of the
Loan Documents to which it is a party has been duly and effectively taken;
(iii) an incumbency certificate signed by a duly authorized officer of each
of the Guarantors and the Borrowers, and giving the name and bearing a
specimen signature of each individual who shall be authorized to sign, in
the name and on behalf of each of the Guarantors and the Borrowers, each of
the Loan Documents to which each is a party and to give notices and to take
action on each of the Guarantor's and the Borrowers' behalf under the Loan
Documents; (iv) a solvency certificate of each of the Guarantors and the
Borrowers in form and substance satisfactory to the Agent; and (v) a
favorable legal opinion addressed to the Agent and the Banks in form and
substance satisfactory to the Agent and the Banks from counsel to each of
the Guarantors and the Borrowers;
(f) the Borrowers shall have paid to the Agent the closing fee and
the agent's fee as set forth in (S)6 hereof;
(g) the Agent and the Banks shall have received an opinion of counsel
to the Borrowers and the Guarantors satisfactory to the Agent and the
Banks;
(h) the Borrowers shall have caused the Agent to receive evidence
that all of the closing conditions in the Merger Agreement have been
satisfied without recourse to any provision permitting the waiver by any
party thereto of any condition, obligation, covenant or other requirement
and that the Acquisition shall have been completed pursuant to Merger
Agreement and otherwise on terms and conditions that are satisfactory to
the Agent in all respects. In addition the purchase price of the capital
stock acquired pursuant to the Acquisition and all expenditures and
transaction costs associated therewith shall not exceed $15,000,000 in the
aggregate, and the Acquisition shall have been completed on terms and
conditions that are satisfactory to the Agent in all respects;
(i) the Agent shall have received evidence satisfactory to the Agent
that the Indebtedness under the Original Credit Agreement has been
refinanced hereunder, the promissory note issued to ▇▇▇▇▇▇▇ ▇▇▇▇▇ has been
repaid in full, and the Letter of Credit issued in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇
has been cancelled and returned to the Agent (or, in the alternative,
appropriate arrangements satisfactory to the Agent have been made for its
return and cancellation); and
(j) the Agent and the Banks shall be satisfied that all information
provided to the Agent and the Banks prior to the Closing Date accurately
sets forth the cash flow for such period attributable to the assets and
business to be acquired in the Acquisition and the Agent and the Banks
shall be satisfied with the results of its due diligence.
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9. COVENANTS.
---------
9.1. AFFIRMATIVE COVENANTS. Each of the Guarantors and the Borrowers
---------------------
agrees that so long as there are any Loans or Letters of Credit outstanding and
until the termination of the Commitment and the payment and satisfaction in full
of all the Obligations, each of the Guarantors and the Borrowers will, and where
applicable the Borrowers will cause each of their Subsidiaries to comply with,
its obligations as set forth throughout this Agreement and to:
(a) furnish the Agent and the Banks: (i) as soon as available but in
any event within ninety (90) days after the close of each fiscal year, each
of the Borrowers' audited consolidated and consolidating Financials for
such year, certified by its accountants, as well as the Borrowers' combined
Financials for such year, certified by its accountants; (ii) as soon as
available but in any event within forty-five (45) days after the end of
each fiscal quarter, the Borrowers' unaudited combined and combining
Financials for such quarter, certified by their respective chief financial
officers; (iii) as soon as available but in any event within thirty (30)
days after the end of each month in each fiscal year of the Borrowers,
unaudited monthly combined Financials for such month, certified by their
respective chief financial officers; (iv) together with the quarterly and
annual audited Financials, a certificate of the Borrowers (the "Compliance
Certificate") setting forth computations demonstrating compliance with the
Borrowers' financial covenants set forth herein, and certifying that no
Default or Event of Default has occurred, or if it has, the actions taken
by the Borrowers with respect thereto; (v) within twenty (20) days after
the end of each calendar month or at such earlier time as the Agent may
reasonably request, a Borrowing Base Report setting forth the Borrowing
Base as at the end of such calendar month or other date so requested by the
Agent; (vi) within twenty (20) days after the end of each calendar month,
an Accounts Receivable aging report; (vii) contemporaneously with the
delivery thereof, copies of all accountants' management letters delivered
to the Borrowers or any of their Subsidiaries; and (viii) from time to time
such other financial data and information as the Agent or any Bank may
request;
(b) keep true and accurate books of account in accordance with GAAP,
maintain its current fiscal year and permit the Agent or any Bank or its
designated representatives to inspect the Guarantors' and the Borrowers'
premises during normal business hours, to examine and be advised as to such
or other business records upon the request of the Agent or any Bank, and to
permit the Agent's or any Bank's commercial finance examiners to conduct
periodic commercial finance examinations which prior to an Event of Default
shall be no more often than one (1) per year;
(c) (i) maintain its corporate existence, business and assets, (ii)
keep its business and assets adequately insured, (iii) maintain
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SalesLink's chief executive office in Boston, Massachusetts or at such
other place in the United States of America as SalesLink shall designate
upon written notice to the Agent and maintain InSolution's chief executive
office in Santa Clara, California or at such other place in the United
States of America as InSolutions shall designate upon written notice to the
Agent, (iv) continue to engage in substantially similar lines of business,
and (v) comply with all Requirements of Law, including ERISA and
Environmental Laws;
(d) notify the Agent and the Banks promptly in writing of (i) the
occurrence of any Default or Event of Default, (ii) any noncompliance with
ERISA or any Environmental Law or proceeding in respect thereof which could
have a Materially Adverse Effect, (iii) any change of address, (iv) any
threatened or pending litigation or similar proceeding affecting the
Guarantors or the Borrowers or their other Subsidiaries or any material
change in any such litigation or proceeding previously reported and (v)
claims against any assets or properties of the Guarantors, the Borrower or
any such Subsidiaries encumbered in favor of the Agent or any Bank;
(e) use the proceeds of the Loans and Letters of Credit solely for
the purposes set forth in (S)7(m), and not for the carrying of "margin
security" or "margin stock" within the meaning of Regulations U and X of
the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221
and 224;
(f) cooperate with the Agent and the Banks, take such action, execute
such documents, and provide such information as the Agent and the Banks may
from time to time reasonably request in order further to effect the
transactions contemplated by and the purposes of the Loan Documents;
(g) by not later than ninety (90) days of the Closing Date, purchase
an interest rate cap or swap or effect other interest rate protection
arrangements for a minimum period of five (5) years applicable to not less
than fifty percent (50%) of the Term Loan, on terms and conditions
satisfactory to the Agent; and
(h) simultaneously with the formation or acquisition of any new
Subsidiary, cause such Subsidiary to execute and deliver to the Agent a
Guaranty, Security Agreement and such other documents, instruments or
agreements which the Agent may reasonably request in order to perfect its
security interest in all assets of such Subsidiary.
9.2. NEGATIVE COVENANTS. Each of the Guarantor and the Borrowers agrees
------------------
that so long as there are any Loans or any Letter of Credit is outstanding and
until the termination of the Commitment and the payment and satisfaction in full
of all the Obligations, neither of the Guarantors nor the Borrowers will and
where applicable the Borrowers will not permit their Subsidiaries to:
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(a) create, incur or assume any Indebtedness other than (i)
Indebtedness to the Agent and the Banks, (ii) current liabilities of the
Borrowers or any Subsidiaries of the Borrowers not incurred through the
borrowing of money or the obtaining of credit except credit on an open
account customarily extended, (iii) Indebtedness in respect of taxes or
other governmental charges contested in good faith and by appropriate
proceedings and for which adequate reserves have been taken; (iv)
Indebtedness of the Borrowers in respect of interest rate protection
arrangements required to be maintained by (S)9.1(g) or in respect of
currency swap arrangements so long as such arrangements are in the ordinary
course of business and not for speculative purposes; (v) unsecured
Indebtedness of the Borrowers and their Subsidiaries not otherwise provided
for in this (S)9.2(a) which, when taken together with all such Indebtedness
of the Borrower and its Subsidiaries set forth on Schedule 9.2(a) does not
---------------
exceed, in the aggregate, $500,000; (vi) Indebtedness not included above
and listed on Schedule 9.2(a) hereto; and (vii) Indebtedness in respect of
-------- ------
capitalized leases in the aggregate amount outstanding at any time not to
exceed the amount permitted pursuant to (S)9.3(a) hereof;
(b) create or incur any Liens on any of the property or assets of the
Borrowers or any of their Subsidiaries except (i) Liens securing the
Obligations; (ii) Liens securing taxes or other governmental charges not
yet due; (iii) deposits or pledges made in connection with social security
obligations; (iv) Liens of carriers, warehousemen, mechanics and
materialmen, less than 120 days old as to obligations not yet due; (v)
easements, rights-of-way, zoning restrictions and similar minor Liens which
individually and in the aggregate do not have a Materially Adverse Effect;
(vi) purchase money security interests in or purchase money mortgages on
real or personal property securing purchase money Indebtedness permitted by
(S)9.2(a)(ii), covering only the property so acquired; and (vii) other
Liens existing on the date hereof and listed on Schedule 9.2(b) hereto;
-------- ------
(c) make any investments other than investments in (i) marketable
obligations of the United States maturing within one (1) year, (ii)
certificates of deposit, bankers' acceptances and time and demand deposits
of United States banks having total assets in excess of $1,000,000,000,
(iii) Subsidiaries which are parties to the Loan Documents, (iv) Twin
Solutions LLC for the construction of the CD-ROM processing facility
provided the aggregate amount of such investment does not exceed
$2,500,000; (v) the loan in the principal amount not to exceed $4,249,845
in the aggregate to the Parent or (vi) such other investments as the Agent
and the Majority Banks may from time to time approve in writing;
(d) make any Restricted Payment, provided, however, any Subsidiary
shall be permitted to make a Distribution to any Borrower;
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(e) become party to a merger or sale-leaseback transaction, or to
effect any disposition of assets other than in the ordinary course, or to
purchase, lease or otherwise acquire assets other than in the ordinary
course; provided, however, SalesLink shall be permitted to acquire 100 % of
-------- -------
the capital stock of InSolutions from the Parent so long as the criteria
set forth in (i) through (vii) are satisfied and the Borrowers shall be
permitted to acquire the assets and/or stock of another entity so long as
(i) such entity is in the same or a similar line of business as the
Borrowers; (ii) the applicable Borrower has provided the Agent with five
(5) Business Days prior written notice of such acquisition, which notice
shall include a reasonably detailed description of the acquisition; (iii)
the business and/or entity to be acquired would not subject the Agent or
any Bank to regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or the other Loan
Documents; (iv) the Borrowers have demonstrated to the satisfaction of the
Agent and the Banks, based on a pro forma Compliance Certificate,
--- -----
compliance with (S)9.3 on a pro forma basis immediately prior to and after
--- -----
giving effect to any such acquisition; (v) the business and assets so
acquired in each such acquisition shall be acquired by the applicable
Borrower free and clear of all liens and Indebtedness; (vi) the aggregate
purchase price for each acquisition, or a series of related acquisitions,
does not exceed $5,000,000 and the aggregate purchase price of all
acquisitions permitted hereunder does not exceed $10,000,000 during the
term of this Agreement; and (vii) the applicable Borrower shall at all
times maintain a majority voting interest in such entity to be acquired;
and
(f) make any change in or amendment to either of the Borrowers' or
the Guarantors' Charter Documents unless such change or amendment that
would not have any adverse effect on the Agent's or any Bank's interest
under the Loan Documents or the Guarantors' or Borrowers' obligations under
the Loan Documents.
9.3. FINANCIAL COVENANTS. Each of the Borrowers agrees that so long as
-------------------
there are any Loans or Letters of Credit outstanding and until the termination
of the Commitment and the payment and satisfaction in full of all the
Obligations, the Borrowers will not and will not permit their Subsidiaries to:
(a) make capital expenditures or incur Indebtedness in respect of
capitalized leases which in the aggregate and on a combined basis exceed
(a) $5,000,000 from the Closing Date through July 31, 1999; (b) $4,000,000
for the fiscal year ending July 31, 2000 and (c) $2,000,000 in any fiscal
year thereafter; provided, however, that, if during any fiscal year the
-------- -------
amount of capital expenditures permitted for that fiscal year is not so
utilized, such unutilized amount may be utilized in the next succeeding
fiscal year but not in any subsequent fiscal year;
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(b) permit the Leverage Ratio for any fiscal quarter ending during
any period described in the table below to be greater than the ratio set
forth opposite such period in such table:
PERIOD RATIO
------ -----
July 31, 1998 2.50:1.00
October 31, 1998 2.40:1.00
January 31, 1999 2.25:1.00
April 30, 1999 and thereafter 2.00:1.00
(c) permit the ratio of the Borrowers' Combined Operating Cash Flow
to Combined Total Debt Service for any Reference Period to be less than
1.25:1.00.
(d) permit the ratio of the Borrowers' Combined Current Assets to
Combined Current Liabilities at any time to be less than 1.25:1.00; or
(e) permit the Borrower's Combined Net Income for any fiscal quarter
to be less than $1.00.
10. EVENTS OF DEFAULT; ACCELERATION.
-------------------------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrowers shall fail to pay when due and payable any
principal of the Loans when the same becomes due;
(b) the Borrowers shall fail to pay interest on the Loans, or the
Borrowers shall fail to pay any Reimbursement Obligations not funded by a
Revolving Credit Loan pursuant to (S)2.2(c), or any other sum due under any
of the Loan Documents within two (2) Business Days after the date on which
the same shall have first become due and payable;
(c) either of the Guarantors or the Borrowers shall fail to perform
any term, covenant or agreement contained in (S)(S)9.1(a), 9.1(d) through
(g), 9.2 and 9.3;
(d) the Borrowers or any of their Subsidiaries shall fail to perform
any other term, covenant or agreement contained in the Loan Documents
within fifteen (15) days after the Agent has given written notice of such
failure to the Borrowers;
(e) any representation or warranty of the Borrowers or any of their
other Subsidiaries in the Loan Documents or in any certificate or notice
given in connection therewith shall have been false or misleading in any
material respect at the time made or deemed to have been made;
-37-
(f) the Borrowers or any of their Subsidiaries shall be in default
(after any applicable period of grace or cure period) under any agreement
or agreements evidencing Indebtedness owing to any Bank or any affiliates
of any Bank, to the Seller, or to any other Person in excess of $500,000 in
aggregate principal amount, or shall fail to pay such Indebtedness when
due, or within any applicable period of grace;
(g) any of the Loan Documents shall cease to be in full force and
effect or if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of
the Borrowers or any of their Subsidiaries party thereto or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(h) the Parent, the Borrowers or any of their Subsidiaries (i) shall
make an assignment for the benefit of creditors, (ii) shall be adjudicated
bankrupt or insolvent, (iii) shall seek the appointment of, or be the
subject of an order appointing, a trustee, liquidator or receiver as to all
or part of its assets, (iv) shall commence, approve or consent to, any case
or proceeding under any bankruptcy, reorganization or similar law and, in
the case of an involuntary case or proceeding, such case or proceeding is
not dismissed within forty-five (45) days following the commencement
thereof, or (v) shall be the subject of an order for relief in an
involuntary case under federal bankruptcy law;
(i) the Borrowers or any of their Subsidiaries shall be unable to pay
its debts as they mature;
(j) there shall remain undischarged for more than thirty (30) days
any final judgment or execution action against the Borrowers or any of
their Subsidiaries that, together with other outstanding claims and
execution actions against the Borrowers and their Subsidiaries exceeds
$500,000 in the aggregate;
(k) the Parent ceases to own legally or beneficially 80% or more of
the voting stock of the Borrowers (or, in the event the Parent contributes
100% of the capital stock of InSolutions to SalesLink, 80% or more of the
voting stock of SalesLink) or more than 51% of the voting stock of any
Subsidiary of the Borrowers, and either of the Borrowers ceases to own
legally or beneficially
-38-
100% or more of the voting stock of any Guarantor (or, in the event the
Parent contributes 100% of the capital stock of InSolution to SalesLink,
SalesLink ceases to own 100% of the capital stock of InSolution);
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrowers declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
--------
Event of Default specified in (S)(S)10.1(h) or 10.1(i), all such amounts shall
become immediately due and payable automatically and without any requirement of
notice from the Agent or any Bank.
If any one or more of the Events of Default specified in (S)10.1(h) or
(S)10.1(i) shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Banks shall be relieved of all further
obligations to make Loans to the Borrowers and the Agent shall be relieved of
all further obligations to issue, extend or renew any Letter of Credit. If any
other Event of Default shall have occurred and be continuing, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrowers,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make Loans
and the Agent shall be relieved of all further obligations to issue, extend or
renew any Letter of Credit. No termination of the credit hereunder shall
relieve the Borrowers, the Guarantors or any other Subsidiaries of the Borrowers
of any of the Obligations.
In case any one or more of the Events of Default shall have occurred and be
continuing, and whether or not the Banks shall have accelerated the maturity of
the Loans pursuant to (S)10.1, each Bank, if owed any amount with respect to the
Loans or the Reimbursement Obligations, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations to such
Bank are evidenced, including as permitted by applicable law the obtaining of
the ex parte appointment of a receiver, and, if such amount shall have become
-- -----
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon
any Bank or the Agent or the holder of any Note or purchaser of a Letter of
Credit Participation is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
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In the event that, following the occurrence or during the continuance of
any Default or Event of Default, the Agent or any Bank, as the case may be,
receives any monies in connection with the enforcement of any of the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows: (a)
first, the payment of, or, as the case may be, the reimbursement of the Agent
for or in respect of all reasonable costs, expenses, disbursements and losses
which shall have been incurred or sustained by the Agent in connection with the
collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral and supports the provision of adequate
indemnity to the Agent against all taxes or liens which by law shall have, or
may have, priority over the rights of the Agent to such monies; (b) second, to
all other Obligations in such order or preference as the Majority Banks may
determine; provided, however that distributions in respect of such Obligations
-------- -------
shall be made (i) pari passu among Obligations with respect to the Agent's fee
payable under (S)6 and all other Obligations and (ii) Obligations owing to the
Banks with respect to each type of Obligations such as interest, principal, fees
and expenses, shall be made among the Banks pro rata; and provided, further,
that the Agent may in its discretion make proper allowance to take into account
any Obligations not then due and payable; (c) third, upon payment and
satisfaction in full or other provisions for payment in full satisfactory to the
Banks and the Agent of all of the Obligations, to the payment of any obligations
required to be paid pursuant to (S)9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and (d) fourth, the excess, if any, shall be
returned to the Borrowers or to such other Persons as are entitled thereto.
11. SETOFF.
------
Regardless of the adequacy of any collateral for the Obligations, any
deposits or other sums credited by or due from any of the Banks to the Borrowers
or the Guarantors may be applied to or set off following an Event of Default
against any principal, interest and any other amounts due from the Borrowers or
any Guarantor to the Banks at any time without notice to the Borrowers or the
Guarantors, or compliance with any other procedure imposed by statute or
otherwise, all of which are hereby expressly waived by the Borrowers and the
Guarantors. Each of the Banks agrees with each other Bank that (a) if an amount
to be set off is to be applied to Indebtedness of the Borrowers to such Bank,
other than Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, and (b) if such Bank shall receive from any Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the
Borrowers at law or in equity or by proof thereof in
-40-
bankruptcy, reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Note or Notes held
by, or Reimbursement Obligations owed to, such Bank any amount in excess of its
ratable portion of the payments received by all of the Banks with respect to the
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
--- -----
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Notes held by it or Reimbursement obligations owed it, its
proportionate payment as contemplated by this Agreement; provided that if all or
--------
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
12. THE AGENT.
---------
12.1. AUTHORIZATION.
-------------
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that
--------
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Agreement nor the other Loan Documents
shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
-41-
12.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
--------------------
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrowers and the Guarantors.
12.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
------------
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
12.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
------------------
execution or validity or enforceability of this Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Notes, or
for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Guarantors, the Borrowers or
any of their Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended to
constitute, collateral security for the Notes or to inspect any of the
properties, books or records of the Guarantors, the Borrowers or any of their
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Guarantors, the Borrowers or
any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrowers or any of their Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or any other
Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.
12.5. PAYMENTS.
--------
12.5.1. PAYMENTS TO AGENT. A payment by the Borrowers or any of the
-----------------
Guarantors to the Agent hereunder or any of the other Loan Documents for
the account of any Bank shall constitute a payment to
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such Bank. The Agent agrees promptly to distribute to each Bank such Bank's
pro rata share of payments received by the Agent for the account of the
--- ----
Banks except as otherwise expressly provided herein or in any of the other
Loan Documents.
12.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
---------------------
distribution of any amount received by it in such capacity hereunder, under
the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.
12.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
----------------
contained in this Agreement or any of the other Loan Documents, any Bank
that fails (a) to make available to the Agent its pro rata share of any
--- ----
Loan or to purchase any Letter of Credit Participation or (ii) to comply
with the provisions of (S)11 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata
--- ----
share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any and all payments due
to it from the Borrowers and the Guarantors, whether on account of
outstanding Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Loans and
--- ----
Unpaid Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion
to their respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of
the assigned payments to all outstanding Loans and Unpaid Reimbursement
Obligations of the nondelinquent Banks, the Banks' respective pro rata
--- ----
shares of all outstanding Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
12.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
----------------
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
-43-
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
12.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
---------
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrowers as
required by (S)14), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross negligence.
12.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
-------------
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
12.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
-----------
days prior written notice thereof to the Banks and the Borrowers. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a rating of not less than A or its equivalent by Standard &
Poor's Corporation. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
12.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
----------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this (S)12.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
13. ASSIGNMENT AND PARTICIPATION.
----------------------------
13.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
---------------------------------
Bank may assign to one or more Eligible Assignees all or a portion
-44-
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it, the Notes held by it and its
participating interest in the risk relating to any Letters of Credit); provided
--------
that (a) each of the Agent and, unless a Default or Event of Default shall have
occurred and be continuing, the Borrowers shall have given its prior written
consent to such assignment, which consent, in the case of the Borrowers, will
not be unreasonably withheld, (b) each such assignment shall be of a constant,
and not a varying, percentage of all the assigning Bank's rights and obligations
under this Agreement, (c) each assignment shall be in an amount that is a whole
multiple of $1,000,000 and (d) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, in form and substance satisfactory to the Agent (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in (S)13.3, be released from its obligations under this Agreement.
13.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
--------------------------------------------------------------
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers and their Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance
or observance by the Guarantors, the Borrowers and their Subsidiaries or
any other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Agreement or any of the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto;
-45-
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in (S)9.1 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro
---
rata share of the Letter of Credit Fees in respect of any outstanding
----
Letter of Credit.
13.3. REGISTER. The Agent shall maintain a copy of each Assignment and
--------
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrowers and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,500.
13.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
---------
executed by the parties to such assignment, together with each Note subject to
-46-
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrowers, at their own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this (S)13.4, the Borrowers shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrowers.
13.5. PARTICIPATIONS. Each Bank may sell participations to one or more
--------------
banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
--------
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrowers, and (b) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Loans, extend the term or increase the amount of the
Commitment of such Bank as it relates to such participant, reduce the amount of
any commitment fees or Letter of Credit Fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest.
13.6. DISCLOSURE. Each of the Borrowers and the Guarantors agrees that
----------
in addition to disclosures made in accordance with standard and customary
banking practices any Bank may disclose information obtained by such Bank
pursuant to this Agreement to assignees or participants and potential assignees
or participants hereunder; provided that such assignees or participants or
--------
potential assignees or participants shall agree (a) to treat in confidence such
information unless such information otherwise becomes public knowledge, (b) not
to disclose such information to a third party, except as required by law or
legal process and (c) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
13.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
-----------------------------------------------------
assignee Bank is an Affiliate of either the Guarantors or the Borrowers, then
-47-
any such assignee Bank shall have no right to vote as a Bank hereunder or under
any of the other Loan Documents for purposes of granting consents or waivers or
for purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to (S)10.1 or
(S)10.2, and the determination of the Majority Banks shall for all purposes of
this Agreement and the other Loan Documents be made without regard to such
assignee Bank's interest in any of the Loans. If any Bank sells a participating
interest in any of the Loans or Reimbursement Obligations to a participant, and
such participant is either a Guarantor or a Borrower or an Affiliate of either
the Guarantors or the Borrowers, then such transferor Bank shall promptly notify
the Agent of the sale of such participation. A transferor Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Agent pursuant to (S)13.1 or (S)13.2 to the extent that
such participation is beneficially owned by either the Guarantors or the
Borrowers or any Affiliate of either the Guarantors or the Borrowers, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Loans to the extent of such participation.
13.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
-----------------------------------
retain its rights to be indemnified pursuant to (S)14 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this (S)13 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Agreement (including all or
any portion of its Notes) to any of the twelve Federal Reserve Banks organized
under (S)4 of the Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
13.9. ASSIGNMENT BY BORROWERS. Neither of the Guarantors nor Borrowers
-----------------------
shall assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks.
14. MISCELLANEOUS.
-------------
Each of the Guarantors and the Borrowers jointly and severally agrees to
indemnify and hold harmless the Agent and the Banks and their officers,
employees, affiliates, agents, and controlling persons from and against all
claims, damages, liabilities and losses of every kind arising out of the Loan
Documents, including without limitation, against those in respect of the
application of Environmental Laws to the Guarantors, the Borrowers and their
-48-
other Subsidiaries absent the gross negligence or willful misconduct of the
Agent and the Banks. The Borrowers shall pay to the Agent and the Banks
promptly on demand all costs and expenses (including any taxes and reasonable
legal and other professional fees and fees of its commercial finance examiner)
incurred by the Agent and the Banks in connection with the preparation,
negotiation, execution, amendment, administration or enforcement of any of the
Loan Documents. Any communication to be made hereunder shall (a) be made in
writing, but unless otherwise stated, may be made by telex, facsimile
transmission, overnight delivery or letter, and (b) be made or delivered to the
address of the party receiving notice which is identified with its signature
below (unless such party has by five (5) days written notice specified another
address), and shall be deemed made or delivered, when dispatched, left at that
address, one (1) day after given to an overnight delivery service, or five (5)
days after being mailed, postage prepaid, to such address. This Agreement shall
be binding upon and inure to the benefit of each party hereto and its successors
and assigns, but neither of the Guarantors nor the Borrowers may assign their
rights or obligations hereunder. This Agreement may not be amended or waived
except by a written instrument signed by the Borrowers, the Agent and the
Majority Banks, and any such amendment or waiver shall be effective only for the
specific purpose given; provided, however, notwithstanding the foregoing, the
-------- -------
rate of interest on the Notes, the term of the Notes, the Commitment amounts and
the amount of the fees hereunder, the definition of Majority Banks and this
sentence of (S)14 shall not be changed without the written consent of all the
Banks, and the amount of the agent's fee and (S)12 may not be amended without
the consent of the Agent. No failure or delay by the Bank to exercise any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other right, power or
privilege. The provisions of this Agreement are severable and if any one
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, such invalidity or unenforceability shall affect only such
provision in such jurisdiction. This Agreement, together with all Schedules
hereto, expresses the entire understanding of the parties with respect to the
transactions contemplated hereby. This Agreement and any amendment hereby may
be executed in several counterparts, each of which shall be an original, and all
of which shall constitute one agreement. In proving this Agreement, it shall
not be necessary to produce more than one such counterpart executed by the party
to be charged. THIS AGREEMENT AND THE NOTES ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND
GOVERNED THEREBY. EACH OF THE GUARANTORS AND THE BORROWERS AGREES THAT ANY SUIT
FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN. Each of
the Guarantors and the Borrowers, as an inducement to the Bank to enter into
this Agreement, hereby waives its right to a jury trial with respect to any
action arising in connection with any Loan Document.
-49-
15. SECURITY; GUARANTIES.
--------------------
15.1. GUARANTIES AND SECURITY OF BORROWERS. The Obligations shall also be
------------------------------------
guaranteed pursuant to the terms of the Guaranty. The obligations of the
Guarantors under the Guaranty shall in turn be secured by a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the assets of each such Guarantor, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which each such Guarantor is a party.
15.2. GUARANTIES AND SECURITY OF GUARANTORS. The Obligations shall also
-------------------------------------
be guaranteed pursuant to the terms of the Guaranty. The obligations of the
Guarantors under the Guaranty shall in turn be secured by a perfected first
priority security interest (subject only to Permitted Liens entitled to priority
under applicable law) in all of the assets of the Guarantors, whether now owned
or hereafter acquired, pursuant to the terms of the Security Documents to which
each such Guarantor is a party.
15.3. JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
--------------------------------------------
15.3.1. JOINT and Several Liability. Each of the Borrowers is and
----- --- ------- ---------
shall be jointly and severally liable for each and every Obligation of any
of the Borrowers arising or incurred under or in respect of this Agreement
or any of the other Loan Documents or in respect of any of the Loans made
or Reimbursement Obligations incurred on any of the Notes, any Letter of
Credit Application, any Letter of Credit or other instruments at any time
evidencing any thereof. Each of the Borrowers agrees that it shall be
jointly and severally liable for all fees, as well as each of the other
Obligations of any of the Borrowers arising or incurred under or in respect
of this Credit Agreement or any of the other Loan Documents.
15.3.2. CONSIDERATION. Each of the Borrowers is accepting joint and
-------------
several liability hereunder in consideration of the financial
accommodations to be provided by the Agents and the Banks under this
Agreement, for the mutual benefit, directly or indirectly, of each of the
Borrowers and in consideration of the undertakings of each of the Borrowers
to accept joint and several liability for the obligations of each of them.
15.3.3. CO-DEBTORS. Each of the Borrowers jointly and severally
----------
hereby irrevocably and unconditionally accepts, not merely as a surety but
as a co-debtor, joint and several liability with the other Borrowers with
respect to the payment and performance of all of the Obligations arising
under this Agreement and the other Loan Documents, it being the intention
of the parties hereto that all the Obligations shall be the joint
-50-
and several obligations of each of the Borrowers without preferences or
distinction among them.
15.3.4. PAYMENT. If and to the extent that any of the Borrowers
-------
shall fail to make any payment with respect to any of the Obligations
hereunder as and when due or to perform any of such Obligations in
accordance with the terms thereof, then in each such event, the other
Borrowers will make such payment with respect to, or perform, such
Obligation.
15.3.5. RECOURSE. The obligations of each Borrower under the
--------
provisions of this (S)15.3.5 constitute full recourse obligations of such
Borrower, enforceable against it to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or the other Loan Documents against any Obligor or any other
circumstances whatsoever.
15.3.6. WAIVERS. Except as otherwise expressly provided herein,
-------
each Borrower hereby waives promptness, diligences, presentment, demand,
protest, notice of acceptance of its joint and several liability, notice of
any and all advances of the Loans made under this Agreement and the Notes,
notice of occurrence of any Default or Event of Default (except to the
extent notice is expressly required to be given pursuant to the terms of
this Agreement or any of the other Loan Documents), or of any demand for
any payment under this Agreement, notice of any action at any time taken or
omitted by the Agents or the Lenders under or in respect of any of the
Obligations hereunder, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in connection with
this Credit Agreement and the other Loan Documents. Each Borrower hereby
waives all defenses which may be available by virtue of any valuation,
stay, moratorium law or other similar law now or hereafter in effect, any
right to require the marshaling of assets of the Borrowers and any other
entity or Person primarily or secondarily liable with respect to any of the
Obligations, and all suretyship defenses generally. Each Borrower hereby
assents to, and waives notice of, any extension or postponement of the time
for the payment, or place or manner for payment, compromise, refinancing,
consolidation or renewals of any of the Obligations hereunder, the
acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Agent and the Banks at any time or times in
respect of any default by any Borrower in the performance or satisfaction
of any term, covenant, condition or provision of this Agreement and the
other Loan Documents, any and all other indulgences whatsoever by the Agent
and the Banks in respect of any of the Obligations hereunder, and the
taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of such Obligations or the addition,
substitution or release, in whole or in part, of any Borrower or any other
entity or Person primarily or secondarily liable for any Obligation. Such
Borrower further
-51-
agrees that its Obligations shall not be released or discharged, in whole
or in part, or otherwise affected by the adequacy of any rights which the
Agent or any Bank may have against any collateral security or other means
of obtaining repayment of any of the Obligations, the impairment of any
collateral security securing the Obligations, including, without
limitation, the failure to protect or preserve any rights which the Agent
or any Bank may have in such collateral security or the substitution,
exchange, surrender, release, loss or destruction of any such collateral
security, any other act or omission which might in any manner or to the
extent vary the risk of the Borrower, or otherwise operate as a release or
discharge of such Borrower, all of which may be done without notice to such
Borrower; provided, however, that the foregoing shall in no way be deemed
-------- -------
to create commercially unreasonable standards as to the Agent's duties as
secured party under the Loan Documents (as such rights and duties are set
forth therein). If for any reason any of the other Borrowers has no legal
existence or is under no legal obligation to discharge any of the
Obligations, or if any of the Obligations have become irrecoverable from
any of the other Borrowers by reason of such other Borrower's insolvency,
bankruptcy or reorganization or by other operation of law or for any
reason, this Agreement and the other Loan Documents to which it is a party
shall nevertheless be binding on such Borrower to the same extent as if
such Borrower at all times had been the sole obligor on such Obligations.
Without limiting the generality of the foregoing, each Borrower assents to
any other action or delay in acting or failure to act on the part of the
Agent and the Banks, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder which might, but for the
provisions of this (S)15.3.6, afford grounds for terminating, discharging
or relieving such Borrower, in whole or in part, from any of its
obligations under this (S)15.3.6 shall not be discharged except by
performance and then only to the extent of such performance. The
Obligations of each Borrower under this (S)15.3.6 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Borrower, or any
of the Banks. The joint and several liability of the Borrowers hereunder
shall continue in full force and effect notwithstanding any absorption,
merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any Borrower or the
Banks.
15.3.7. ENFORCEMENT. The provisions of this (S)15.3.7 are made for
-----------
the benefit of each of the Agent and the Banks and its successors and
assigns, and may be enforced by it from time to time against any of the
Borrowers as often as occasion therefor may arise and without requirement
on the part of the Agent and the Banks first to ▇▇▇▇▇▇▇▇ any of their
claims or to exercise any of their rights against the other Borrowers or to
exhaust any remedies available to it against the other
-52-
Borrowers or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The
provisions of this (S)15.3.7 shall remain in effect until all the
Obligations hereunder shall have been paid in full or otherwise fully
satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Agent or the Banks upon the insolvency,
bankruptcy or reorganization of the Borrowers, or otherwise, the provisions
of this (S)15.3.7 will forthwith be reinstated in effect as though such
payment had not been made.
15.3.8. CONTRIBUTION. To the extent any Borrower makes a payment
------------
hereunder in excess of the aggregate amount of the benefit received by such
Borrower in respect of the extensions of credit under the Agreement (the
"Benefit Amount"), then such Borrower, after the payment in full in cash of
all of the Obligations, shall be entitled to recover from each other
Borrower such excess payment, pro rata in accordance with the ratio of the
--- ----
Benefit Amount received by each such other Borrower to the total Benefit
Amounts received by all Borrowers, and the right to such recovery shall be
deemed to be in asset and property of such Borrower so funding; provided
--------
that all such rights to recovery shall be subordinate and junior in right
of payment to the final and indefeasible repayment in full in cash of all
of the Obligations.
16. TRANSITIONAL ARRANGEMENTS.
16.1. ORIGINAL CREDIT AGREEMENT SUPERSEDED. This Agreement shall on the
------------------------------------
Closing Date supersede the Original Credit Agreement in its entirety, except as
provided in this (S)16. On the Closing Date, the rights and obligations of the
parties evidenced by the Original Credit Agreement shall be evidenced by this
Agreement and the other Loan Documents, the "Revolving Credit Loans" and "Term
Loans" as defined in the Original Credit Agreement shall be converted into
Revolving Credit Loans and Term Loans as defined herein and all outstanding
letters of credit issued by the Agent for the account of SalesLink or the Parent
prior to the Closing Date shall, for purposes of this Credit Agreement, be
Letters of Credit hereunder.
16.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably practicable
---------------------------------
after its receipt of its Notes hereunder on the Closing Date, the Banks will
promptly return to SalesLink, marked "Substituted" or "Cancelled", as the case
may be, any promissory notes of SalesLink held by the Banks pursuant to the
Original Credit Agreement.
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16.3. INTEREST AND FEES UNDER SUPERSEDED AGREEMENT. All interest and fees
--------------------------------------------
and expenses, if any, owing or accruing under or in respect of the Original
Credit Agreement though the Closing Date shall be calculated as of the Closing
Date (prorated in the case of any fractional periods) and shall be paid on the
Closing Date. Commencing on the Closing Date, the commitment fees shall be
payable by the Borrowers to the Agent for the accounts of the Banks in
accordance with (S)2 hereof.
-54-
IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Revolving Credit and Term Loan Agreement as a sealed instrument as of
the date first above written.
SALESLINK CORPORATION
By:__________________________________
Name:
Title:
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (617)
Fax: (617)
INSOLUTIONS INCORPORATED
By:__________________________________
Name:
Title:
Address:
Tel:
Fax:
PACIFIC DIRECT MARKETING CORP.
By:__________________________________
Name:
Title:
Address:
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Tel:
Fax:
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BANKBOSTON, N.A., individually and as Agent
By:__________________________________
Name:
Title:
Address:
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High Technology Division
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Tel:
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IMPERIAL BANK
By:__________________________________
Name:
Title:
Address:
Tel:
Fax: