Exhibit 10.13
CREDIT AGREEMENT
Dated as of December 22, 2000
among
FTI CONSULTING, INC.,
THE LENDERS NAMED HEREIN
AND
BANK OF AMERICA, N.A., as Administrative Agent
AND
BANC OF AMERICA SECURITIES LLC,
As Sole Lead Arranger and Sole Book Manager
AND
SUNTRUST BANK,
As Documentation Agent
AND
ALLFIRST BANK,
As Co-Agent
CREDIT AGREEMENT
----------------
THIS CREDIT AGREEMENT is made as of December 22, 2000, by and among FTI
CONSULTING, INC. (the "Borrower"), a Delaware corporation with its principal
office at 2021 Research Drive, Annapolis, Maryland 21401, each of the lenders
named herein on the signature pages hereof (such lenders and any other lender or
lenders which may hereafter become a party to this Agreement pursuant to the
provisions of Section 11.3 hereof, together, the "Lenders" and each individually
a "Lender") BANK OF AMERICA, N.A., a national banking association, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), SUNTRUST BANK, as Documentation Agent, ALLFIRST BANK, as Co-Agent and
BANC OF AMERICA SECURITIES LLC ("BAS"), as the sole lead arranger and sole book
manager.
RECITALS
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A. The Borrower has applied to the Lenders for credit facilities
consisting of (i) a revolving credit facility in the maximum principal amount of
Forty Seven Million Five Hundred Thousand Dollars ($47,500,000), (ii) a letter
of credit facility in the maximum principal amount of Five Million ($5,000,000),
as part of that revolving credit facility, and (iii) a term loan facility in the
principal amount of Thirty Two Million Five Hundred Thousand Dollars
($32,500,000) to be used by the Borrower for the permitted uses described in
this Agreement.
B. The Lenders severally are willing to make those credit facilities
available to the Borrower upon the terms and subject to the conditions set forth
in this Agreement.
AGREEMENTS
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NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Borrower, the Lenders, the Administrative Agent and BAS agree as follows:
ARTICLE 1
DEFINITIONS; ACCOUNTING TERMS
-----------------------------
Section 1.1 Definitions. As used in this Agreement the following terms
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shall have the meanings herein specified and shall include in the singular
number the plural and in the plural number the singular:
"Acquisition" means any transaction, or any series of related transactions,
consummated (after the date of this Agreement), by which the Borrower or any of
its Subsidiaries (a) acquires a division or similar business unit, any ongoing
business or all or substantially all of the assets of any Person incorporated or
organized within the United States of America, whether through the purchase of
assets, merger or otherwise, (b) directly or indirectly acquires control of at
least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors, or (c) directly or
indirectly acquires control of a majority ownership interest in any Person that
is not a corporation. The terms "Acquire", "Acquired" and "Acquiring" used as
verbs shall have correlative meanings.
"Acquisition Agreement" means (i) the agreement between an Acquisition
Company and a Target or the seller or sellers of a Target, pursuant to which
such Acquisition Company agrees to Acquire a division or similar business unit
from a Target, all or substantially all of the assets, stock or other ownership
interests of a Target, or merge with a Target; (ii) the documents described in
any such agreement and related in any manner to the Acquisition of any Acquired
assets, including, but not limited to, the buy/sell agreement, historical
financial statements of the Target and a detailed description of the Acquired
assets, and every other document, instrument or certificate executed in
connection with such agreement; together with (iii) all amendments to any of the
foregoing.
"Acquisition Analysis" means, with respect to any proposed Acquisition, an
analysis, prepared by the chief financial officer of the Borrower, of the
structure and financial impact of the Acquisition in question, including,
financial statements acceptable to the Administrative Agent in its sole
discretion for the last fiscal year and a summary of the material tax and
accounting consequences related to the Acquisition, which analysis shall be in
form and substance reasonably satisfactory to the Administrative Agent.
"Acquisition Company" means the Borrower or any Consolidated Subsidiary of
the Borrower Acquiring a Target.
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the
quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar Loan
for such Interest Period by (b) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"Administrative Agent" has the meaning set forth on the first page hereof.
"Administrative Agent's Account" means the account maintained by the
Administrative Agent at 6610 Rockledge Drive, Bethesda, Maryland 20817 for the
purposes of this Agreement or such other account as may be specified by the
Administrative Agent to the Borrower and to the Lenders.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, the account as set forth on the signature page, or such
other address or account as the Administrative Agent may from time to time
notify to the Borrower and the Lenders.
"Administrative Agent's Fee" means the fees payable to the Administrative
Agent under the provisions of Section 2.9(b).
"Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.
"Aggregate Commitments" means the sum of the Aggregate Revolving
Commitments,
2
and the Aggregate Term Commitments.
"Aggregate Revolving Commitments" means the sum of the Revolving
Commitments which, as of the Closing Date, is the principal amount of Forty
Seven Million Five Hundred Thousand Dollars ($47,500,000), as such amount may be
reduced from time to time pursuant to Sections 2.7 and 2.13.
"Aggregate Term Commitments" means the sum of the Term Commitments, which
is, Thirty Two Million Five Hundred Thousand Dollars ($32,500,000).
"Agreement" means this Credit Agreement, as it may be extended from time to
time and as it may be amended from time to time by written agreement, in each
case as herein provided.
"Applicable Lending Office" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to the Administrative Agent and the Borrower by written
notice in accordance with the terms hereof as the office by which its Loans of
such Type are to be made and maintained.
"Applicable Margin" means, for any day, with respect to any Loan, the
applicable rate per annum set forth below under the caption "Base Rate Margin"
or "Eurodollar Rate Margin," based upon the applicable Leverage Ratio:
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Leverage Ratio Base Rate Margin Eurodollar Rate Margin
(basis points per annum) (basis points per annum)
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Less than or
Equal to 1.0:1.0 25.0 175.0
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Greater than
1.0:1.0
but less than or
equal to 1.5:1.0 50.0 200.0
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Greater than
1.5:1.0 but less
than or equal to
2.25:1.0 75.0 225.0
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Greater than
2.25:1.0 100.0 250.0
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Subject to the provisions of this paragraph, the Base Rate Margin and the
Eurodollar Rate Margin as of the Closing Date until the next date of
determination pursuant to this paragraph shall be determined as if the Leverage
Ratio is greater than 1.5 to 1.0, but less than or equal to 2.25 to 1.0.
Thereafter, the Applicable Margin for any date shall be determined by reference
to the Leverage Ratio as of the last day of the fiscal quarter of the Borrower
most recently ended as of such determination date (such calculation of the
Leverage Ratio to be for the four fiscal
3
quarters ending on such date), and any change in the Applicable Margin shall
become effective five (5) Business Days after the date on which each Lender
receives the financial statements required to be delivered pursuant to Sections
6.1(a) or (b) as the case may be, and shall apply to Loans outstanding on such
delivery date or made on and after such delivery date. Notwithstanding the
foregoing, at any time during which the Borrower has failed to deliver to the
Administrative Agent any financial statement required by Section 6.1 within the
time provided therein, the Leverage Ratio shall be deemed, solely for the
purposes of calculating the Applicable Margin, to be greater than 2.25:1.0 until
such time as the Borrower shall have delivered all financials required by
Section 6.1 and such certificate to the Administrative Agent.
"Assets" means, at any time, all assets that should, in accordance with
GAAP consistently applied, be classified as assets on a consolidated balance
sheet of a Person.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee, and accepted by the Administrative Agent, in the
form of EXHIBIT H.
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"Authorized Officer" means, with respect to any act to be performed or duty
to be discharged by any Person which is not an individual, any officer or other
representative thereof then authorized to perform such act or discharge such
duty.
"BAS" has the meaning set forth on the first page hereof.
"Bank of America" means Bank of America, N.A., a national banking
association and its successors and assigns.
"Base Rate" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (1/2 of 1%)
and (b) the Prime Rate for such day. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" means a Revolving Loan which bears interest at rates based
upon the Base Rate, or the Term Loan at such time as it bears interest at a rate
based upon the Base Rate; and "Base Rate Loans" means all of said Loans.
"Borrower" has the meaning set forth on the first page hereof.
"Business Day" means any day, other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the laws of, or are in fact
closed in, the state where the Administrative Agent's office is located and, if
such date relates to any Eurodollar Loans, means any such date on which dealings
in Dollar deposits are conducted by and between banks in the applicable offshore
Dollar interbank market.
"Capital Expenditure" means an expenditure for Fixed or Capital Assets. The
term also includes, whether or not required by GAAP, all Capitalized Lease
Obligations.
"Capitalized Lease Obligations" means the amount determined in accordance
with GAAP
4
which represents the capitalized value of leases of the Borrower and its
Consolidated Subsidiaries which appears on the liabilities side of the
consolidated balance sheet of the Borrower and its Subsidiaries.
"Change in Control" means (a) the acquisition of ownership, directly, or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than thirty percent (30%) of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower;
(b) the occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by individuals who were neither (i) nominated
by the board of directors of the Borrower nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of the Borrower
by any Person.
"Closing Date" means the date on which this Agreement has been executed by
all the parties hereto and all of the conditions set forth in Section 5.1 have
been satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder, in each case as in
effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Collateral" means all of the property which is subject or is to be subject
to the Liens granted by the Collateral Documents.
"Collateral Documents" means the Security Agreements, the Pledge
Agreements, the Intellectual Property Assignments, and all supplemental
assignments, mortgages, deeds of trust and other documents now or hereafter
delivered or to be delivered pursuant thereto.
"Commitment" means each Lender's individual obligation to make Revolving
Loans and the Term Loan in a principal amount not to exceed the dollar amounts
shown on the signature pages opposite its name, as such amount may be reduced
from time to time pursuant to Sections 2.7, 2.13 and 11.3(a).
"Commitment Fee on the Unused Portion of the Loan" means the fee payable
under Section 2.9(a).
"Commitment Fee on Unused Portion of Loan Rate" means, for any day, the
applicable rate per annum set forth below based upon the applicable Leverage
Ratio:
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Leverage Ratio Commitment Fee on
Unused Portion of
Loan Rate
(basis points per
annum)
------------------------------------------------
5
------------------------------------------------
Less than or 37.5
equal to 1.0:1.0
------------------------------------------------
Greater than 1.0:1.0
but less than or
equal to 1.5:1.0 50.0
------------------------------------------------
Greater than 1.5:1.0
but less than or equal to
2.25:1.0 50.0
------------------------------------------------
Greater than 2.25:1.0 50.0
------------------------------------------------
Subject to the provisions of this paragraph, the Commitment Fee on the Unused
Portion of Loan Rate as of the Closing Date until the next date of determination
pursuant to this paragraph shall be determined as if the Leverage Ratio is
greater than 1.5 to 1.0, but less than or equal to 2.25 to 1.0. Thereafter, the
Commitment Fee on the Unused Portion of Loan Rate for any date shall be
determined by reference to the Leverage Ratio as of the last day of the fiscal
quarter of the Borrower most recently ended as of such determination date (such
calculation of the Leverage Ratio to be for the four fiscal quarters ending on
such date), and any change in the Commitment Fee on the Unused Portion of Loan
shall become effective five (5) Business Days after the date on which the
Administrative Agent receives the financial statements required to be delivered
pursuant to Sections 6.1(a) and (b), as the case may be. Notwithstanding the
foregoing, at any time during which the Borrower has failed to deliver to the
Administrative Agent any financial statement required by Section 6.1 within the
time provided therein, the Leverage Ratio shall be deemed, for the purposes of
calculating the Commitment Fee on the Unused Portion of the Loan Rate, to be
greater than 2.25:1.0 until such time as the Borrower shall have delivered all
financial statements required by Section 6.1 and such certificate to the
Administrative Agent.
"Consolidated Subsidiary" means a Subsidiary of the Borrower whose
financial condition and results of operations are included on a consolidated
basis in a consolidated balance sheet and consolidated statements of income,
changes in shareholders' equity and cash flows of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Continue", "Continuing", "Continuation", and "Continued" shall refer to
the continuation pursuant to Section 2.4 hereof of a Eurodollar Loan of a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting powers, by contract or otherwise.
"Controlling" and Controlled" have meanings correlative thereto.
"Convert", "Converting, "Conversion", and "Converted" shall refer to a
conversion
6
pursuant to Section 2.4 or Article 3 of one Type of Loan into another Type of
Loan.
"Current Maturities of Long Term Debt" means, as of any date, the aggregate
amount of principal payments made for the trailing twelve (12) month period
(including, without limitation, the portion of any obligation under Capitalized
Lease Obligations allocable to amortization in accordance with GAAP) in respect
of Long-Term Debt which are, in accordance with GAAP, properly classified as of
such date as current liabilities, and the aggregate unpaid principal amount of
Synthetic Lease obligations calculated in accordance with applicable Federal
income tax laws and regulations.
"Current Taxes" means, for any period, Taxes paid in such period in cash
(rather than merely accrued or deferred.)
"Debt" of any Person means all obligations, contingent or otherwise which,
in accordance with GAAP, should be classified upon such Person's balance sheet
as liabilities or disclosed in footnotes thereto, but in any event including
liabilities secured by any lien existing on property owned or acquired by such
Person or a Subsidiary thereof (whether or not the liability secured thereby
shall have been assumed) and obligations which have been or under GAAP should be
capitalized for financial accounting purposes, including all senior debt,
letters of credit, all cash payments due under any Earn Out Provisions, and
excluding operating leases, and the aggregate unpaid principal amount of
Synthetic Lease obligations calculated in accordance with applicable Federal
income tax laws and regulations.
"Default" means any event or condition which with the giving of notice or
passage of time, or both, would constitute an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender Default
is in effect.
"Disposition" shall mean any sale, assignment, transfer or other
disposition of substantially all of the Assets (whether now owned or hereafter
acquired) or substantially all of the stock of any Subsidiary, by the Borrower
or any of its Subsidiaries to any other Person, excluding any sale, assignment,
transfer or other disposition of any assets sold or disposed of in the ordinary
course of business and on ordinary business terms. The terms "Dispose" and
"Disposed" shall have correlative meanings.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"Domestic Subsidiary" means a Subsidiary incorporated or organized within
the United States of America.
"Earn Out Provisions" means those payment obligations incurred in
connection with Permitted Acquisitions which are calculated based upon the
future performance of the Target.
"Eastern Time" means Eastern Standard Time or Eastern Daylight Savings
Time, whichever shall be in effect in Charlotte, North Carolina on the date of
determination.
7
"EBITDA" means for any period, the sum for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) of (a) Net Income for such period, plus (b) Taxes,
----
Interest Expense, depreciation and amortization for such period; provided that
--------
(1) if the Borrower or any of its Subsidiaries shall have Disposed of a business
(or any part thereof) during such period, EBITDA shall be computed as if such
business (or part thereof) had been Disposed of prior to the first day of such
period, and (2) if the Borrower or any of its Subsidiaries shall have made a
Permitted Acquisition (or any part thereof) during such period, and if the
Borrower has provided the Administrative Agent with financial statements
acceptable to the Administrative Agent or audited financial statements (prepared
in accordance with GAAP by an accounting firm acceptable to the Administrative
Agent) of the Target, or (if such statements are unavailable) other due
diligence as to the financial position of such business acceptable to the
Administrative Agent, for that portion of such period preceding the Permitted
Acquisition, EBITDA shall be computed as if such Target (or part thereof) had
been owned by the Borrower or such Subsidiary for the whole of such period.
EBITDA may be increased by the amount of projected reductions in compensation of
executive officers of a Target which are substantiated by employment contracts
or other documentation acceptable to the Administrative Agent. If a Target has
been generating a negative EBITDA for the prior twelve (12) month period, the
adjusted amount shall be deducted for purposes of calculating compliance with
Section 6.10.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by the Administrative Agent and, unless a
Default or an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 11.3, the Borrower, such
approval not to be unreasonably withheld or delayed by the Borrower and such
approval to be deemed given by the Borrower if no objection is received by the
assigning Lender and the Administrative Agent from the Borrower within two (2)
Business Days after notice of such proposed assignment has been provided by the
assigning Lender to the Borrower; provided, however, that neither the Borrower
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nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Employee Plan" means an employee benefit plan or other plan covered by
Title IV of ERISA and maintained in whole or in part for employees of the
Borrower or any of its Subsidiaries, including any such plan of an ERISA
Affiliate.
"Environmental Laws" means any and all Federal, state, local and foreign
laws which provide remedies, including injunctive relief, for injuries to
persons or damage to or contamination of property resulting from the release or
threatened release of Hazardous Material or which regulate the generation,
storage, transportation or disposal of Hazardous Material in any manner
applicable to the Borrower or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S)9601 et seq.), the
-- ---
Hazardous Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Solid
-- ---
Waste Disposal Act (42 U.S.C. (S)6901 et seq.), the Federal Water Pollution
-- ---
Control Act (33 U.S.C. (S)1251 et seq.), the Clean Air Act (42 U.S.C. (S)7401 et
-- --- --
seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et seq.), the
- --- -- ---
Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.) and the Emergency
-- ---
Planning and Community Right-to-Know Act (42
8
U.S.C. (S)11001 et seq.), each as amended or supplemented, together with any
-- ---
rules and regulations promulgated thereunder, each as in effect on the date of
determination.
"Equity Issuance" means any issuance or sale by a Person of its capital
stock or other similar equity security, or any warrants, options or similar
rights to acquire, or securities convertible into or exchangeable for, such
capital stock or other similar equity security.
"ERISA" means the Employee Retirement Income Security Act of 1974, together
with the rules and regulations promulgated thereunder, as in effect from time to
time.
"ERISA Affiliate" means any Person which is a member of the same
"controlled group of corporations" as the Borrower or any Person under "common
control" with the Borrower within the meaning of Section 414 of the Code.
"Eurodollar Loan" means a Revolving Loan which bears interest at rates
based upon the Adjusted Eurodollar Rate, or the Term Loan at such time as it
bears interest at a rate based upon the Adjusted Eurodollar Rate; and
"Eurodollar Loans" means all of said Loans.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded upward, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
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than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Event of Default" has the meaning set forth in Article 8.
"Federal Funds Rate" means, for any day, the simple interest rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
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the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to the Administrative Agent (in its individual capacity) on
such day on such transactions as determined by the Administrative Agent.
"Fixed Charge Coverage Ratio" means, at any time, the ratio of (a) EBITDA,
minus Current Taxes and Capital Expenditures, of the Borrower and its
Consolidated Subsidiaries, to
9
(b) the aggregate amount of principal Current Maturities of Long-Term Debt, plus
the cash amount of Interest Expense paid to any Lender, plus the amount of any
Earn Out Provisions, plus the amount of any Restricted Payments of the Borrower
and its Consolidated Subsidiaries, provided that if the Borrower or any of its
--------
Subsidiaries shall have made a Permitted Acquisition (or any part thereof)
during such period, Interest Expense shall be computed as if such Target (or
part thereof) had been owned by the Borrower or such Subsidiary for the whole of
such period and shall be calculated based on the amount borrowed from the
Lenders in connection with such Permitted Acquisition multiplied by the
applicable rate of interest on the Obligations.
"Fixed or Capital Assets" of a Person at any date means all assets which
would, in accordance with GAAP consistently applied, be classified on the
balance sheet of such Person as property, plant or equipment at such date.
"Foreign Subsidiary" means a Subsidiary which was incorporated or organized
in jurisdictions other than a state within the United States of America.
"Funded Debt" means at any date, with respect to any Person, all senior
debt, letters of credit, all cash payments due under any Earn Out Provisions,
stockholder debt, subordinated debt, seller notes, guaranties and contingent
Debt and Capitalized Lease Obligations at such date.
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any court, agency, department,
commission, board, bureau or instrumentality of any of the foregoing.
"Guarantor" means Teklicon, Inc., a California corporation, L.W.G., Inc.,
an Illinois corporation, KCI Management, Inc., a New York corporation, Klick,
Kent & Allen, Inc., a Virginia corporation, S.E.A., Inc., an Ohio corporation,
Kahn Consulting, Inc., a New York corporation, Policano & Manzo, L.L.C., a New
Jersey limited liability company, RestorTek, Inc., an Illinois corporation, FTI
Applied Science (Annapolis), LLC, a Maryland limited liability company, FTI
Litigation Consulting, LLC, a Maryland limited liability company and each
current and future Subsidiary and the successors and assigns of each of them, in
its capacity as guarantor of the payment of the Loans, and "Guarantors" means
all of said Persons
"Guaranty" means each guaranty of the Loans executed by a Guarantor, and
"Guaranties" means all of said guaranties.
"Hazardous Material" means (a) any oil, petroleum or petroleum derived
substance, any drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, any flammable
substances or explosives, any radioactive materials, any hazardous wastes or
substances, any toxic wastes or substances, or any other materials or pollutants
which (i) pose a hazard to any property of the Borrower or any of its
Subsidiaries or to Persons on or about such property or (ii) cause such property
to be in violation of any Environmental Laws; (b) asbestos in any form which is
or could become friable, urea
10
formaldehyde foam insulation, electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (c) any chemical, material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or words of similar import under any applicable
law; and (d) any other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any Governmental Authority having
jurisdiction over the Borrower or any of its Subsidiaries or any of their
respective properties.
"Indemnified Party" has the meaning set forth in Section 10.6 hereof.
"Intellectual Property Assignment" means any security agreement between the
Borrower or a Guarantor and the Administrative Agent, substantially in the form
of EXHIBIT I hereto, as such agreement may be amended, supplemented or modified
---------
from time to time, and "Intellectual Property Assignments" means all of said
agreements.
"Interest Expense" means, for any period, the sum for the Borrower and its
Consolidated Subsidiaries (in accordance with GAAP) of the following: (a) all
interest in respect of Debt (including the interest component of any payments in
respect of Capitalized Lease Obligations) accrued or capitalized during such
period plus (a) the net amount payable (or minus the net amount receivable)
----
under interest rate protection agreements during such period.
"Interest Payment Date" means (a) as to any Base Rate Loan, the last day of
each calendar quarter, and (b) as to any Eurodollar Loan, the last day of the
applicable Interest Period for such Loan and, if such Interest Period is longer
than three (3) months, each day prior to the last day of such Interest Period
that occurs at intervals of three months duration after the first day of such
Interest Period.
"Interest Period" means, as to any Eurodollar Loan, the period commencing
on the date of such Eurodollar Loan and ending on the numerically corresponding
day (or, if there is no numerically corresponding day, the last day) in the
calendar month that is one, two, three or six months thereafter, as the Borrower
may elect; provided, however, that no Interest Period shall end after the
-------- -------
Revolving Commitment Termination Date, in the case of the Revolving Loans, or
the Maturity Date, in the case of the Term Loan; provided, further, that
-------- -------
whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, unless such extension
would cause the last day of such Interest Period to occur in the next following
calendar month, in which case the last day of such Interest Period shall occur
on the next preceding Business Day.
"Issuing Bank" means Bank of America, in its capacity as issuer of Letters
of Credit hereunder, and its successors in such capacity as provided in Section
2.12(n).
"LC Fee Rate" means, for any day, the applicable rate per annum set forth
below, based upon the Applicable Leverage Ratio of the Borrower and its
Consolidated Subsidiaries:
11
-------------------------------------------------------
LC Fee
Leverage Ratio (basis points
per annum)
-------------------------------------------------------
Less than or 175.0
equal to 1.0:1.0
-------------------------------------------------------
Greater than 1.0:1.0
but less than or 200.0
equal to 1.5:1.0
-------------------------------------------------------
Greater than 1.5:1.0 but less
than or equal to 2.25:1.0 225.0
-------------------------------------------------------
Greater than 2.25:1.0 250.0
-------------------------------------------------------
Subject to the provisions of this paragraph, the LC Fee Rate as of the Closing
Date until the next date of determination pursuant to this paragraph shall be
determined as if the Leverage Ratio is greater than 1.5 to 1.0, but less than or
equal to 2.25 to 1.0. Thereafter, the LC Fee Rate for any date shall be
determined by reference to the Leverage Ratio as of the last day of the fiscal
quarter of the Borrower most recently ended as of such determination date (such
calculation of the Leverage Ratio to be for the four fiscal quarters ending on
such date), and any change in the LC Fee Rate shall become effective upon the
delivery to each Lender of the certificate with respect to the financial
statements to be delivered pursuant to Section 6.1 for the fiscal quarter or
fiscal year most recently ended, as the case may be, and shall apply to Letters
of Credit outstanding on such delivery date or issued on and after such delivery
date. Notwithstanding the foregoing, at any time during which the Borrower has
failed to deliver to the Administrative Agent any financial statement required
by Section 6.1 within the time provided therein, the Leverage Ratio shall be
deemed, for the purposes of calculating the LC Fee Rate, to be greater than
2.25:1.0 until such time as the Borrower shall have delivered all financial
statements required by Section 6.1 and such certificate to the Administrative
Agent.
"LC Subfacility" has the meaning set forth in Section 2.12(b).
"Lender" and "Lenders" have the meanings set forth on the first page
hereof, provided that any lender which becomes a party hereto pursuant to the
--------
provisions of Section 11.3(a) or Section 3.7 shall thereafter be included in the
definition of "Lenders".
"Lender Default" means (i) the failure (which has not been rectified) of a
Lender to make available its portion of any borrowing or Letter of Credit
participation or (ii) a Lender having notified the Administrative Agent and/or
the Borrower that it does not intend to comply with its obligations hereunder as
a result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
12
"Letter of Credit" means any letter of credit issued pursuant to Section
2.12 of this Agreement.
"Letter of Credit Fees" means the fees payable under Section 2.9(c).
"Letter of Credit Participant" has the meaning set forth in Section
2.12(h).
"Letter of Credit Request" has the meaning set forth in Section 2.12(c).
"Leverage Ratio" means, at any time, the ratio of (a) Funded Debt of the
Borrower and its Consolidated Subsidiaries, to (b) EBITDA of the Borrower and
its Consolidated Subsidiaries.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, lien or charge of
any kind, whether perfected or unperfected, avoidable or unavoidable, including,
without limitation, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction,
excluding the precautionary filing of any financing statement by any lessor in a
true lease transaction, by any bailor in a true bailment transaction or by any
consignor in a true consignment transaction under the Uniform Commercial Code of
any jurisdiction or the agreement to give any financing statement by any lessee
in a true lease transaction, by any bailee in a true bailment transaction or by
any consignee in a true consignment transaction.
"Loan" means the Term Loan, a Revolving Loan, or a Swing Line Loan, as the
case may be, and "Loans" means the Term Loan, all Revolving Loans and Swing Line
Loans, collectively.
"Loan Documents" means this Agreement, the Notes, the Collateral Documents,
the Guaranties and any and all other documents, instruments, certificates and
agreements executed and/or delivered by the Borrower, any of its Subsidiaries or
any other Person in connection herewith or therewith or relating to the Loans or
any of the Obligations, or any one, more or all of the foregoing, as the context
shall require, as amended, modified, supplemented, renewed or extended from time
to time and any replacement thereof or substitution therefor.
"Loan Parties" means the Borrower and the Guarantors.
"Long-Term Debt" means as of any date, that portion of Funded Debt
scheduled to mature more than one (1) year from such date and which is
classified properly as long-term debt in accordance with GAAP.
"Mandatory Prepayment" has the meaning set forth in Section 2.11 hereof.
"Margin Stock" has the meaning assigned to such term in Regulation U.
"Material Contract" means any contract to which the Borrower or any of its
Subsidiaries is a party involving aggregate consideration payable to or by such
Person of Five Hundred
13
Thousand Dollars ($500,000) or more in any year or otherwise material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole;
and "Material Contracts" means all of said contracts.
"Materially Adverse Effect" means (a) a material adverse effect on the
business, prospects, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries on a consolidated basis, (b) a material adverse
effect on the ability of the Borrower or any other Person to perform or comply
with any of the terms or conditions of any Loan Document to which it is a party,
(c) a material adverse effect on the Collateral, taken as a whole, or (d) a
material adverse effect on the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document or the
ability of any Lender to enforce any rights or remedies under or in connection
with any Loan Document.
"Maturity Date" means the earlier to occur of (i) five (5) years from the
Closing Date and (ii) the date the Term Loan is paid in full (whether by
prepayment, accelerated payment, or otherwise).
"Minimum Net Worth Level" means Sixty One Million Dollars ($61,000,000),
adjusted upward, effective as of December 31, 2000 and as of the end of each
fiscal quarter thereafter, by an amount equal to the sum of (i) fifty percent
(50%) of the consolidated Net Income of the Borrower and its Subsidiaries for
such fiscal quarter, with each of the foregoing increases being fully
cumulative, and with no reduction being made on account of any negative
consolidated Net Income of the Borrower and its Subsidiaries for any fiscal
quarter, plus (ii) one hundred percent (100%) of the aggregate amount of all
----
cash and other consideration received by the Borrower or any Subsidiary in
respect of any Equity Issuance during such fiscal quarter.
"Net Income" means, for any Person for any period, the consolidated net
income (or deficit) of such Person and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from the calculation thereof any extraordinary, unusual or
non-recurring gains or losses during such period in accordance with GAAP.
"Net Worth" means, at any time, the excess of (a) Assets over (b) Debt, all
determined on a consolidated basis in accordance with GAAP.
"Non-Default Certificate" means a certificate of the Principal Financial
Officer of the Borrower, certifying that (a) such individual has no knowledge
that an Event of Default or a Default has occurred and is continuing and, if an
Event of Default or a Default has occurred and is continuing, a statement as to
the nature thereof and the action which the Borrower proposes to take with
respect thereto, (b) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.10, and (c) stating whether any change
in GAAP or in the application thereof has occurred since the date of the latest
audited financial statements referred to in Section 4.7 or Section 6.1, as the
case may be, and, if any change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate.
14
"Non-Defaulting Lender" means each Lender other than a Defaulting Lender.
"Non-Excluded Taxes" has the meaning set forth in Section 3.6(a).
"Note" and "Notes" means one or more of the Revolving Credit Notes, Term
Notes or Swing Line Note described in Section 2.6 and any other promissory notes
issued pursuant to this Agreement, and any extensions, renewals or amendments
to, and any replacements of or substitutions for any of the foregoing.
"Notice of Borrowing" means the notice provided for in Section 2.2(a) in
the form of EXHIBIT B.
---------
"Notice of Continuation/Conversion" means the notice provided for in
Section 2.4 in the form of EXHIBIT C.
---------
"Obligations" has the meaning set forth in the Security Agreement.
"Other Taxes" has the meaning set forth in Section 3.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisitions" has the meaning set forth in Section 2.5.
"Permitted Acquisition Price" means the purchase price of any Permitted
Acquisition, including without limitation, the value of any cash consideration,
notes, assumed Debt (less cash acquired), amounts allocated to non-compete
agreements.
"Permitted Cash Acquisition Price" means the value of any cash
consideration in connection with any Permitted Acquisition.
"Person" means an individual, corporation, partnership, association,
limited liability company, limited liability partnership, joint-stock company,
trust, unincorporated organization or joint venture, or a court or government or
any agency or political subdivision thereof.
"Pledge Agreement" means any pledge agreement executed and delivered by the
Borrower or a Guarantor in accordance with the requirements of Section
2.5(b)(ix) and substantially in the form of EXHIBIT J hereto, as such agreement
---------
may be amended, modified or supplemented from time to time, and "Pledge
Agreements" means all of said documents.
"Prime Rate" means the per annum rate of interest established from time to
time by Bank of America as its prime rate, which rate may not be the lowest rate
of interest charged by Bank of America to its customers.
"Principal Financial Officer" means Theodore I. Pincus or any other officer
of the Borrower designated in writing to the Lenders as such by the Board of
Directors of the Borrower and reasonably acceptable to the Administrative Agent.
15
"Principal Office" means the principal office of Bank of America, presently
located at 6610 Rockledge Drive, Bethesda, Maryland 20817.
"Pro Forma Financials" means, with respect to any Acquisition, consolidated
and consolidating balance sheets and income statements of the Borrower, the
Acquisition Company and Target, as of the closing of the applicable Acquisition,
setting forth projections for the three-year period following the Acquisition
after giving effect to the closing of the related Acquisition Agreement, and
which projections for the Borrower shall be broken down by line of business, and
setting forth in reasonable detail the assumptions underlying such projections,
which assumptions are acceptable to the Administrative Agent in its sole
discretion.
"Prohibited Transaction" means any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
"Register" has the meaning set forth in Section 11.3 (c).
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as it may be amended from time to time.
"Reportable Event" has the meaning specified therefor in Title IV of ERISA.
"Required Lenders" means (a) with respect to (i) the granting of any
increase in any Lender's Commitment, (ii) the granting of any reduction in the
amount, or change in the calculation which would result in a reduction in the
amount of any scheduled payment, of principal, interest, or fees or other
amounts payable hereunder on any Loan, (iii) the granting of extensions of time
for any scheduled payment of principal, interest or fees, the Maturity Date, or
the Revolving Commitment Termination Date, (iv) the granting of any material
release of Collateral subject to any of the Collateral Documents, (v) the
granting of any release of any of the Guarantors, or (vi) changing the
definition of Required Lenders, Non-Defaulting Lenders having one hundred
percent (100%) of the aggregate Commitments of the Non-Defaulting Lenders; and
(b) with respect to all other matters, Non-Defaulting Lenders holding at least
sixty-six and two-thirds percent (66 2/3%) of the then aggregate Commitments and
unpaid principal amount of the Loans made by the Non-Defaulting Lenders.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate is to be determined,
16
or (ii) any category of extensions of credit or other assets which include
Eurodollar Loans. The Adjusted Eurodollar Rate shall be adjusted automatically
on and as of the effective date of any change in the Reserve Requirement.
"Restricted Margin Stock" means Margin Stock owned by the Borrower or any
Subsidiary which represents not more than 33-1/3% of the aggregate value
(determined in accordance with Regulation U), on a consolidated basis, of the
property and assets of the Borrower and its Subsidiaries (other than any Margin
Stock) that is subject to the provisions of Article 7 (including Sections 7.2
and 7.3).
"Restricted Payments" by any Person means (a) the retirement, redemption,
purchase, or other acquisition for value of any capital stock or other equity
securities or partnership interests issued by such Person, (b) the declaration
or payment of any dividend or distribution on or with respect to any such
securities or partnership interests, (c) any loan or advance by such Person to,
or other investment by such Person in, the holder of any of such securities or
partnership interests, (d) any other payment (other than salaries of employees
or advances made in the ordinary course of business to employees for travel and
other expenses incurred in the ordinary course of business) by such Person with
respect to such securities or partnership interests, and (e) the prepayment of
any Debt other than as allowed under Sections 2.10 and 2.11.
"Revolving Commitment" means each Lender's commitment to make Revolving
Loans as such commitment may be reduced from time to time in accordance with
this Agreement.
"Revolving Commitment Percentage" means the percentage that the Revolving
Commitment of each Lender bears to the Aggregate Revolving Commitments, which
percentage is shown on the signature pages opposite the name of such Lender, as
such percentage may be adjusted from time to time as provided in Sections 2.13
and 11.3(a).
"Revolving Commitment Termination Date" means five (5) years from the
Closing Date.
"Revolving Loans" means Loans made pursuant to Section 2.1(a).
"Security Agreement" means any security agreement between the Borrower or a
Guarantor and the Administrative Agent, substantially in the form of EXHIBIT K
---------
hereto, as such Agreement may be amended, supplemented or modified from time to
time, and "Security Agreements" means all of said agreements.
"Stated Amount" means the face amount of each Letter of Credit issued under
this Agreement.
"Subsidiary" means any corporation of which more than fifty percent (50%)
(by number of votes) of the Voting Stock is owned and controlled by the Borrower
or by the Borrower and one or more Subsidiaries or by one or more Subsidiaries.
"Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where the
transaction is considered
17
Debt for borrowed money for federal income tax purposes but is classified as an
operating lease in accordance with GAAP for financial reporting purposes.
"Swing Line Loans" means Loans made pursuant to Section 2.3.
"Target" means any Person, a majority of the stock (or comparable ownership
interests) of which (directly or indirectly), a division or similar business
unit of which, or all or substantially all of the assets and business of any of
the foregoing of which, are to be Acquired by an Acquisition Company, pursuant
to the terms of an Acquisition Agreement.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all penalties or interest thereon), which at any time may be
assessed, levied, confirmed or imposed by any Governmental Authority on the
Borrower or any of its properties or assets or any part thereof or in respect of
any of its franchises, businesses, income or profits.
"Term Commitments" means each Lender's commitment to make the Term Loan.
"Term Commitment Percentage" means the percentage that the Term Commitment
of each Lender bears to the Aggregate Term Commitments, which percentage is
shown on the signature pages opposite the name of such Lender, as such
percentage may be adjusted from time to time as provided in Section 11.3(a).
"Term Loan" means the Loan made pursuant to Section 2.1(b).
"Type" shall mean either type of Revolving Loan (i.e., a Base Rate Loan or
Eurodollar Loan).
"Unpaid Drawing" has the meaning set forth in Section 2.12(f).
"Uniform Customs" has the meaning set forth in Section 2.12 (l).
"Unrestricted Margin Stock" means any Margin Stock owned by the Borrower or
any Subsidiary which is not Restricted Margin Stock.
"Voting Stock" means securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
Section 1.2 Accounting and Other Terms. Each definition of a document in
--------------------------
Section 1.1 shall include such document as modified, amended or supplemented
from time to time, and, except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Except where
restricted, reference to a party to a document includes that party and its
successors and assigns. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all accounting determinations hereunder shall
be made, and all financial statements required to be delivered hereunder shall
be prepared in accordance with
18
GAAP, applied on a basis consistent (except for changes concurred in by the
Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Subsidiaries delivered
to the Lenders.
ARTICLE 2
THE LOANS
---------
Section 2.1 Commitment to Make the Loans.
----------------------------
(a) Revolving Loans. Upon the terms and subject to the conditions
---------------
hereof, and in reliance upon the representations and warranties herein set
forth, each Lender severally and not jointly agrees to make Revolving Loans to
the Borrower, at any time and from time to time on or after the Closing Date and
prior to the Revolving Commitment Termination Date in a principal amount which
is equal to its Revolving Commitment Percentage of the amount by which the
Aggregate Revolving Commitments exceed the sum of (a) the aggregate principal
amount of the outstanding Revolving Loans and Swing Line Loans, (b) the undrawn
portion of the Stated Amount of all outstanding Letters of Credit and (c) to the
extent not included in clauses (a) or (b), all Unpaid Drawings under all Letters
of Credit. Within such limits, the Borrower may borrow, repay and reborrow under
the Revolving Commitment on or after the date hereof and prior to the Revolving
Commitment Termination Date, subject to the terms, provisions and limitations
set forth herein. Revolving Loans shall be made ratably by the Lenders in
accordance with their respective Revolving Commitment Percentages; provided,
--------
however, that the failure of any Lender to make any Revolving Loan shall not in
- -------
itself relieve any other Lender of its obligation to lend hereunder. Each
Revolving Loan shall bear interest either at a rate based on the Eurodollar Rate
or the Base Rate, as the Borrower may request, subject to and in accordance with
the provisions of Section 2.2. Each Type of Revolving Loan shall be made and
maintained at such Lender's Applicable Lending Office for such Type of Loan.
Revolving Loans of more than one Type may be outstanding at the same time,
provided that at no time may the number of outstanding Eurodollar Loans of each
- --------
Lender exceed eight (8), it being understood that each Eurodollar Loan with a
different Interest Period shall be counted separately.
(b) Term Loan.
---------
(i) Upon the terms and subject to the conditions hereof, and
in reliance upon the representations and warranties herein set forth, each
Lender severally and not jointly agrees to make a Loan to the Borrower, on the
Closing Date, in a principal amount which is equal to its Term Commitment
Percentage of the Aggregate Term Commitments. The Term Loan shall bear interest
either at a rate based on the Eurodollar Rate or the Base Rate, as the Borrower
may request, initially within two (2) Business Days prior to the Closing Date
or, if no such election is so made, at the Base Rate. The Term Loan shall be
made and maintained at such Lender's Applicable Lending Office for such Loan.
19
(ii) The outstanding balance of the Term Loan shall be repaid
over a period of five (5) years in consecutive quarterly installments of
principal in the principal amounts set forth below on the first day of each
March, June, September, and December hereafter, plus accrued interest thereon on
each Interest Payment Date:
Quarterly Principal
Payment Number Payment Amount
-------------- --------------
1 - 8 $1,083,333;
9 - 12 $1,625,000; and
13- 20 $2,166,667.
Unless sooner paid, the unpaid principal balance of the Term Loan, together
with all interest accrued therein, shall be due and payable in full on the
Maturity Date.
Section 2.2 Notice and Manner of Borrowing of Revolving Loans.
-------------------------------------------------
(a) Any Revolving Loan shall, at the option of the Borrower as
provided in this Section (and, in the case of Eurodollar Loans, subject to the
provisions of Sections 3.2 and 3.3) be made either as a Base Rate Loan or a
Eurodollar Loan. The Borrower shall give the Administrative Agent at least three
(3) Business Days' prior notice of each Eurodollar Loan (which notice may be in
writing or by telecopy, telex or telegraph, or by telephone, if immediately
confirmed in writing, substantially in the form attached hereto as EXHIBIT B) (a
---------
"Notice of Borrowing") prior to the proposed borrowing date. Each Notice of
Borrowing for a Eurodollar Loan shall be given to the Administrative Agent prior
to 11:00 a.m., Eastern Time, and for purposes of this Section 2.2, any notice
given after such time on any day shall be deemed to have been given on the
following Business Day. The Borrower shall give the Administrative Agent notice
of each Base Rate Loan as early as reasonably possible and in any event prior to
12:00 noon, Eastern Time, on the borrowing date. For each borrowing of Revolving
Loans, such Notice of Borrowing shall specify the Type of Revolving Loan, the
requested borrowing date, which shall be a Business Day, the aggregate amount of
the proposed Revolving Loan and, if any portion of such borrowing shall consist
of different Types of Revolving Loans, or portions of a Revolving Loan with
different Interest Periods, the aggregate amount of such portion, each Type of
Revolving Loan to be borrowed, the Interest Periods selected by the Borrower and
the manner of disbursement. Each Base Rate Loan shall be in an aggregate
principal amount of One Million Dollars ($1,000,000) or an integral multiple of
Five Hundred Thousand Dollars ($500,000) in excess thereof, except a Base Rate
Loan may be in an amount equal to the unused amount of the Aggregate Revolving
Commitments, as determined in accordance with the first sentence of Section
2.1(a). Each Eurodollar Loan shall be in an aggregate principal amount of One
Million Dollars ($1,000,000) or an integral multiple of Five Hundred Thousand
Dollars ($500,000) in excess thereof. Notice of any Eurodollar Loan, once given,
shall be irrevocable. Notice of any Base Rate Loan may be revoked by the
Borrower upon delivery to the Administrative Agent, prior to the proposed
borrowing date, of notice of such revocation.
(b) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall
20
promptly notify each Lender by telephone, telex, or telecopy of the contents
thereof, the amount of such Lender's portion of such Revolving Loan and the
applicable interest rate. In the case of a Notice of Borrowing for a Base Rate
Loan which is received by the Administrative Agent prior to 10:00 a.m., Eastern
Time, the Administrative Agent shall provide such notice to each Lender not
later than 12:00 (noon), Eastern Time on the day on which such notice is
received. In the case of any other Notice of Borrowing which is received by the
Administrative Agent prior to 11:00 a.m., Eastern Time, the Administrative Agent
shall provide such notice not later than 2:00 p.m., Eastern Time, on the day on
which such notice is received. Subject to the satisfaction of all conditions
precedent thereto as set forth herein, each Lender shall, not later than 2:00
p.m., Eastern Time, on the date specified in the Notice of Borrowing, deposit to
the Administrative Agent's Account, in federal or other immediately available
funds, such Lender's Revolving Commitment Percentage of such Revolving Loan.
Unless the Administrative Agent shall have received prior notice from a Lender
(by telephone or otherwise, such notice to be promptly confirmed by telex,
telecopy or other writing) that such Lender will not make available such
Lender's Revolving Commitment Percentage of such Revolving Loan, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on the date of such Revolving Loan in accordance
with this Section 2.2(b), and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent such Lender shall not have made such amount
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand (but without
duplication) such amount together with interest thereon for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent (i) with respect to the Borrower, at the
interest rate applicable at the time the Type of Revolving Loan is chosen, or
(ii) with respect to the Lender, at the Federal Funds Rate. Such payment by the
Borrower, however, shall be without prejudice to its rights against such Lender.
If such Lender shall repay to the Administrative Agent such amount together with
interest, such amount so repaid shall constitute such Lender's Revolving Loan
for purposes of this Agreement, which Revolving Loan shall be deemed to have
been made by such Lender on the borrowing date applicable thereto, but without
prejudice to the Borrower's rights against such Lender.
Section 2.3 Swing Line Loans.
----------------
(a) Upon the terms and subject to the conditions hereof, and in
reliance upon the representations and warranties herein set forth, Bank of
America agrees to make a loan or loans to the Borrower (each a "Swing Line Loan"
and collectively, the "Swing Line Loans"), which Swing Line Loans (i) shall be
made as Base Rate Loans; (ii) may be repaid and reborrowed in accordance with
the provisions hereof; (iii) shall not exceed in aggregate principal amount at
any time outstanding the amount of the Aggregate Revolving Commitments minus the
aggregate principal amount of all Revolving Loans then outstanding, the Stated
Amount of all Letters of Credit, and, to the extent not included in the amount
of such Revolving Loans or Letters of Credit, the amount of all Unpaid Drawings;
(iv) shall not exceed Three Million Dollars ($3,000,000.00) in aggregate
principal amount at any time outstanding; (v) shall be made in accordance with
any autoborrow service agreement between the Borrower and Bank of America; and
(vi) shall not be made after Bank of America has received written notice from
the Required Lenders that a Default or Event of Default has occurred and is
continuing.
21
(b) On any Business Day, Bank of America may, in its sole
discretion, give notice to the Administrative Agent and the Lenders (other than
Bank of America) that its outstanding Swing Line Loans shall be funded with a
borrowing of Revolving Loans (provided that each such notice shall be deemed to
--------
have been automatically given upon the occurrence of an Event of Default), in
which case a borrowing of Revolving Credit Loans constituting Base Rate Loans
shall be made on the immediately succeeding Business Day by all of the Lenders
ratably based upon each Lender's Revolving Commitment Percentage, and the
proceeds thereof shall be applied directly to repay Bank of America for such
outstanding Swing Line Loans. Each Lender hereby irrevocably agrees to make Base
Rate Loans upon one (1) Business Day's notice in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Administrative Agent notwithstanding (i) that the amount of such borrowing may
not comply with the minimum borrowing amounts otherwise required hereunder, (ii)
whether any conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or Event of Default has occurred and is continuing, and (iv)
any reduction in the Aggregate Revolving Commitments after any such Swing Line
Loans were made. In the event that any borrowing pursuant to this Section 2.3
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code in respect of the Borrower), each Lender (other than Bank of
America) hereby agrees that it shall forthwith purchase from Bank of America
(without recourse or warranty) such assignment of the outstanding Swing Line
Loans as shall be necessary to cause the Lenders to share in such Swing Line
Loans ratably based upon their respective Revolving Commitment Percentages,
provided that all interest payable on the Swing Line Loans shall be for the
- --------
account of Bank of America until the date the respective Revolving Loan is
purchased and, to the extent attributable to the purchased Revolving Loan, shall
be payable to the Lender purchasing such Revolving Loan from and after such date
of purchase.
(c) Whenever the Borrower desires to borrow a Swing Line Loan
hereunder, it shall deliver to Bank of America irrevocable notice thereof (which
notice may be in writing or by telecopy, telex or telegraph, or by telephone, if
immediately confirmed in writing, substantially in the form of a Notice of
Borrowing) not later than 1:00 p.m., Eastern Time, on the proposed borrowing
date. Such notice shall specify (i) the date of such borrowing and (ii) the
amount of the Swing Line Loan.
Section 2.4 Continuation and Conversions.
----------------------------
(a) Subject to Sections 3.2 and 3.3 hereof, the Borrower shall
have the option, from time to time, to elect to convert or continue the Type of
Loan as follows:
(i) if such Loan is a Base Rate Loan, the Borrower may
elect, as of any Business Day, to convert such Loan or a portion thereof in the
amount of One Million Dollars ($1,000,000) or an integral multiple of Five
Hundred Thousand Dollars ($500,000) in excess thereof to a Eurodollar Loan; and
(ii) if such Loan is a Eurodollar Loan, the Borrower may
elect to convert such Loan or a portion thereof to a Base Rate Loan, or may
elect to continue such Loan
22
or a portion thereof as a Eurodollar Loan for an additional Interest Period, in
each case beginning on the last day of the then current Interest Period
applicable to such Loan; provided that (A) no election of a Eurodollar Loan may
--------
be made if a Default or Event of Default shall have occurred and be continuing,
(B) unless the outstanding principal amount outstanding is less than One Million
Dollars ($1,000,000), no conversion shall reduce the outstanding principal
amount of a Eurodollar Loan to an amount which is not One Million Dollars
($1,000,000) or an integral multiple of Five Hundred Thousand Dollars ($500,000)
in excess thereof, and (C) the amount of such Loan, when aggregated with all
other Loans outstanding hereunder, the Stated Amount of all Letters of Credit
issued hereunder, and, to the extent not included in the amount of such Loans or
Letters of Credit, the amount of all Unpaid Drawings, would not exceed the
Aggregate Commitments.
(b) Each Continuation or Conversion shall be effected by the
Borrower's delivering to the Administrative Agent notice thereof (which notice
may be in writing or by telecopy, telex or telegraph, or by telephone, if
immediately confirmed in writing, substantially in the form attached hereto as
EXHIBIT C) (a "Notice of Continuation/Conversion") at least (i) one (1) Business
- ---------
Day prior to a Conversion by the Borrower of a Eurodollar Loan to a Base Rate
Loan and (ii) in all other cases, three (3) Business Days prior to the date of
the proposed Continuation or Conversion, each such notice to be given prior to
11:00 a.m., Eastern Time, on the date specified. Each Notice of
Continuation/Conversion shall be irrevocable and shall specify the Type of Loan
to be Continued or Converted, the aggregate principal amount thereof and the
Interest Period to be applicable thereto. In the event no Notice of
Continuation/Conversion is delivered by the Borrower with respect to any
Eurodollar Loan in conformity with this Section 2.4 (b), then such Loan shall be
Continued as a Base Rate Loan. Notwithstanding the foregoing or the provisions
of Section 2.5 hereof, if a Default or Event of Default shall have occurred and
be continuing or would result from any proposed Continuation of a Eurodollar
Loan, such Loan may not be Continued as a Eurodollar Loan but instead shall be
automatically Converted on the last day of such Interest Period into a Base Rate
Loan
Section 2.5 Permitted Acquisitions.
----------------------
(a) The Revolving Loans may be used by the Borrower to finance a
portion of Acquisitions by any Acquisition Company which comply with the terms
and conditions set forth in this Section 2.5, as well as the other terms and
conditions set forth in this Agreement for such Acquisitions ("Permitted
Acquisitions"). Each Permitted Acquisition must comply with all of the following
conditions on or before the date of such Permitted Acquisition (unless otherwise
specifically provided below):
(i) An executed letter of intent with respect to such
Acquisition, a pro forma Non-Default Certificate and supporting Pro-Forma
---------
Financials, and an Acquisition Analysis shall be delivered to the Administrative
Agent and each Lender at least ten (10) Business Days before the closing of the
Acquisition. Said documentation shall reflect that, after giving effect to such
Acquisition, the Borrower and its Subsidiaries will be in compliance with all of
the financial covenants set forth in Section 6.10 of this Agreement. True and
substantially complete copies of the applicable Acquisition Agreement shall be
delivered to the Administrative Agent not more than five (5) days after the
closing of the Acquisition.
23
(ii) The Target shall be in substantially the same or a
related line of business as the Borrower or any of its Subsidiaries.
(iii) The Target must be incorporated within the United
States of America.
(iv) The Acquisition must not be a "hostile" acquisition.
(v) If the Permitted Acquisition is a stock purchase
transaction, a majority (in number of votes) of the Voting Stock of the Target
shall, as a result of said Acquisition, be directly or indirectly owned by the
Acquisition Company. In the case of a merger, the Acquisition Company must be
the surviving entity.
(vi) The Borrower shall have provided the Administrative
Agent evidence that the Acquisition is not prohibited by any applicable law or
governmental rule or regulation and shall not subject the Borrower or the
Acquisition Company to any penalty, liability or, in the Administrative Agent's
reasonable judgment, other onerous conditions, under or pursuant to any
applicable law or governmental rule or regulation, including, without
limitation, any bulk sales laws and the Hart- Scott-Rodino Antitrust
Improvements Act of 1976, as amended from time to time.
(vii) No Default shall have occurred and be continuing or
result from the Acquisition.
(viii) The Permitted Acquisition Price shall not cause the
aggregate Permitted Acquisition Price for all such Acquisitions to exceed Thirty
Million Dollars ($30,000,000) in any twelve (12) month period, or Fifty Million
Dollars ($50,000,000) in the aggregate from and after the Closing Date.
(ix) The Permitted Cash Acquisition Price shall not exceed
Fifteen Million Dollars ($15,000,000) for any Permitted Acquisition or Twenty
Million Dollars ($20,000,000) in any twelve (12) month period.
(b) Each Subsidiary that is in existence on, or formed or Acquired
on or after, the Closing Date, shall become a Guarantor, and the Borrower shall
cause each such Subsidiary to satisfy each of the following conditions forthwith
upon such Subsidiary's formation or Acquisition, except as otherwise set forth
below:
(i) Such Subsidiary shall execute and deliver to the
Administrative Agent a Guaranty, and, within thirty (30) days after the
Acquisition or formation, a Security Agreement, and if such Subsidiary has
intellectual property, an Intellectual Property Assignment.
(ii) All legal matters incident to such Subsidiary's
becoming a Guarantor shall be reasonably satisfactory to counsel for the Agent,
and the Subsidiary shall execute and deliver to the Agent, within thirty (30)
days after the Acquisition or formation, such additional documents and
certificates relating to the Loans as the Agent reasonably may request.
24
(iii) The Administrative Agent shall have received, within
thirty (30) days after the Acquisition or formation, an opinion of counsel to
such Subsidiary, addressed to the Administrative Agent, covering such matters as
the Administrative Agent may reasonably request, in form and substance
reasonably satisfactory to the Administrative Agent.
(iv) Financing statements in form and substance reasonably
satisfactory to the Administrative Agent shall have been properly filed in each
office where necessary to perfect the security interest of the Administrative
Agent in the Collateral of such Subsidiary, and, within thirty (30) days after
the Acquisition or formation, (A) termination statements shall have been filed
with respect to any other financing statements covering all or any portion of
such Collateral (except with respect to Liens permitted by this Agreement), (B)
all Taxes and fees with respect to such recording and filing shall have been
paid by such Subsidiary or the Borrower and (C) the Administrative Agent shall
have received such Lien searches or reports as it shall reasonably require
confirming that the foregoing filings and recordings have been completed.
(v) Such Subsidiary shall have delivered the following
documents to the Administrative Agent, each of which shall be certified as of
the date on which such Subsidiary is to become a Guarantor, by its secretary or
representative performing similar functions: (1) copies of evidence of all
actions taken by such Subsidiary to authorize the execution and delivery of the
applicable Loan Documents; (2) copies of the articles or certificate of
incorporation and bylaws (or the organizational documents for a Guarantor that
is not a corporation) of such Subsidiary; and (3) a certificate as to the
incumbency and signatures of the officers of such Subsidiary executing the Loan
Documents.
(vi) The Administrative Agent shall have received current
certificates of good standing and qualification issued by the appropriate state
official of the state of formation of such Subsidiary and in each jurisdiction
in which it is qualified to do business.
(vii) The Administrative Agent shall have received, within
thirty (30) days after the Acquisition or formation, such information and
documents the Administrative Agent may reasonably request with respect to the
Collateral of such Subsidiary.
(viii) All securities of each Domestic Subsidiary owned by the
Acquisition Company after the Acquisition or formation shall be subject to the
Lien of the Acquisition Company's Pledge Agreement, and the original
certificates representing such securities shall be delivered to the
Administrative Agent within thirty (30) days after such Acquisition or
formation, together with the appropriate stock powers or other instruments of
assignment, and such additional documents as may be required to perfect the
Administrative Agent's security interest under applicable law.
(ix) If required by the Administrative Agent, within thirty
(30) days after the Acquisition or formation, all intellectual property of such
Subsidiary that is subject to United States copyright, patent or trademark
protection shall have been duly registered with the Register of Copyrights or
the United States Patent and Trademark Office, as applicable, an
25
Intellectual Property Assignment shall have been recorded in such office, and
the Administrative Agent shall have received evidence that it has a first
priority perfected Lien with respect thereto.
(c) The Borrower shall provide the Administrative Agent and each
Lender with the foregoing information not less than ten (10) Business Days prior
to each Acquisition. The Administrative Agent may after notice to the Borrower
and the Lenders, reset the Applicable Margin and Commitment Fee on Unused
Portion of Loan Rate on the basis of the Pro Forma Financials received in
connection with any Acquisition.
Section 2.6 The Notes. (a) The Revolving Loans from each Lender to the
---------
Borrower shall be evidenced by a single note of the Borrower dated the Closing
Date payable to the order of such Lender in the form of EXHIBIT A-1 (the
-----------
"Revolving Credit Notes").
(b) The Term Loan from each Lender to the Borrower shall be
evidenced by a single note of the Borrower dated the Closing Date payable to the
order of such Lender in the form of EXHIBIT A-2 (the "Term Notes").
-----------
(c) The Swing Line Loans to the Borrower shall be evidenced by a
single note of the Borrower dated the Closing Date payable to the order of Bank
of America in the form of EXHIBIT A-3 (the "Swing Line Note").
-----------
Each Lender is hereby authorized to record on a Note or on its
internal records the amount and date of each Loan, and the date and amount of
each repayment of a Loan; provided that the failure to make any such notation or
--------
any error therein shall not affect the Borrower's obligation with respect to
such Loan. Absent manifest error, the information so recorded by a Lender shall
be controlling as to the intent of the parties.
Section 2.7 Termination and Optional Reduction of Revolving Loan
----------------------------------------------------
Commitments.
- -----------
(a) The Revolving Commitment of each Lender shall terminate on the
Revolving Commitment Termination Date and the aggregate unpaid principal amount
of all Revolving Loans and Swing Line Loans, together with all accrued and
unpaid interest thereon, and all amounts payable under this Agreement and any
other Loan Document in respect of such Loans shall be paid by the Borrower to
the Administrative Agent for the ratable account of the Lenders on such date.
(b) The Borrower may at any time upon at least three (3) Business
Days' prior notice to the Administrative Agent terminate, or and from time to
time ratably reduce the respective Revolving Commitments of the Lenders to an
amount not less than the sum of (x) the aggregate principal amount of the
Revolving Loans then outstanding (after giving effect to any contemporaneous
prepayment thereof), (y) the Stated Amount of Letters of Credit then
outstanding, and (z) to the extent not included in clauses (x) or (y), the
amount of all Unpaid Drawings, or terminate the respective Revolving Commitments
of the Lenders, without penalty or premium, provided that the aggregate amount
of any such reduction shall be in the amount of One Million Dollars ($1,000,000)
or an integral multiple of Five Hundred Thousand Dollars
26
($500,000) in excess thereof. Such notice of reduction may be in writing or by
telecopy, telex or telegraph, or by telephone, if promptly confirmed in writing.
From the effective date of any such reduction or termination, the obligations of
the Borrower to pay a Commitment Fee on the Unused Portion of the Loan under
Section 2.9(a) shall thereupon correspondingly be reduced.
Section 2.8 Interest.
--------
(a) The Borrower shall pay interest on the unpaid principal amount
of each Base Rate Loan at a rate per annum equal to the Base Rate, plus the
Applicable Margin. Such rate will be adjusted as of the date of each change in
the Base Rate or in the Applicable Margin. Interest on each Base Rate Loan shall
be computed on the basis of the actual number of days elapsed over a year of 360
days, and shall be due and payable in arrears on the applicable Interest Payment
Date.
(b) The Borrower shall pay interest on the unpaid principal amount
of each Eurodollar Loan at a rate per annum equal to the Adjusted Eurodollar
Rates, plus the Applicable Margin. The Administrative Agent, whose determination
shall be conclusive (absent manifest error), shall determine the Adjusted
Eurodollar Rate on the second Business Day prior to the first day of the
applicable Interest Period and shall notify the Borrower and each Lender of such
rate. Interest on each Eurodollar Loan shall be computed on the basis of the
actual number of days elapsed over a year of 360 days and shall be due and
payable in arrears on the applicable Interest Payment Date. Any principal amount
which is not paid when due and, to the extent permitted by applicable law, any
installment of interest which is not paid when due shall bear interest at a rate
two percent (2.0%) per annum above the otherwise applicable rate.
Section 2.9 Fees.
----
(a) The Borrower agrees to pay the Administrative Agent for the
ratable account of the Lenders quarterly in arrears on each March 31, June 30,
September 30 and December 31, to and including the Revolving Commitment
Termination Date, a fee (the "Commitment Fee on Unused Portion of the Loan
Rate") at the rate per annum equal to the Commitment Fee on the Unused Portion
of the Loan Rate on the aggregate amount of the unused portion of the Revolving
Commitments, plus the aggregate outstanding balance of Swingline Loans, during
the period from the Closing Date to the Revolving Commitment Termination Date.
(b) The Borrower will pay the Administrative Agent for its
services as agent for the Lenders hereunder a fee (the "Administrative Agent's
Fee") as provided in the letter dated October 27, 2000 from the Administrative
Agent and BAS to the Borrower.
(c) The Borrower shall pay the following fees (the "Letter of
Credit Fees") in U.S. Dollars:
(i) At the time of the issuance of any Letter of Credit, a
fee to the Issuing Bank in an amount equal to the product of (i) one-eighth of
one percent (.125%) per annum, (ii) the stated amount of such Letter of Credit
issued hereunder and (iii) the period
27
(expressed as a fraction of a year) during which such Letter of Credit will be
outstanding.
(ii) In arrears on December 31, 2000, and quarterly
thereafter on each March 31, June 30, September 30 and December 31, to and
including the Revolving Commitment Termination Date, a fee to the Administrative
Agent for the account of each Lender in an amount equal to the product of (i)
the LC Fee Rate, (ii) the Stated Amount of such Letter of Credit issued
hereunder and (iii) the period (expressed as a fraction of a year) during which
such Letter of Credit was outstanding.
(d) All computations of fees hereunder shall be made on the basis
of a year of 360 days for the actual number of days elapsed.
Section 2.10 Prepayments. The Borrower shall have the right without
-----------
premium or penalty to prepay the Term Loans in whole or to make partial
prepayments in an aggregate amount of One Million Dollars ($1,000,000) or an
integral multiple of Five Hundred Thousand Dollars ($500,000) in excess thereof
in the case of Base Rate Loans, and Two Million Five Hundred Thousand Dollars
($2,500,000) or an integral multiple of Five Hundred Thousand Dollars ($500,000)
in excess thereof in the case of Eurodollar Loans, at any time and from time to
time upon not less than one (1) Business Day's notice to the Administrative
Agent in the case of Base Rate Loans or not less than three (3) Business Days'
notice to the Administrative Agent in the case of Eurodollar Loans, provided
--------
that no Term Loan may be prepaid unless a pro rata payment, based upon the
respective amounts loaned by each Lender, is made on all Term Loans on the same
date, and provided further that any prepayment of any Eurodollar Loan shall be
-------- -------
subject to Section 3.5. Such notice of prepayment may be in writing or by
telecopy, telex or telegraph, or by telephone, if promptly confirmed in writing.
After giving effect to any partial prepayment of any Eurodollar Loan, the
aggregate outstanding principal amount thereof shall be Two Million Five Hundred
Thousand Dollars ($2,500,000) or an integral multiple of Five Hundred Thousand
Dollars ($500,000) in excess thereof. Any prepayment of principal shall not
affect the obligation of the Borrower to make subsequent scheduled principal
payments at the times and in the amounts required until the Notes are paid in
full.
Section 2.11 Mandatory Prepayments.
---------------------
In addition to the required installments of the Term Loans as set forth in
Section 2.1(b), the Borrower shall quarterly, on the first day of each March,
June, September and December hereafter, prepay to the Lenders, on a pro rata
basis (determined as of the date of notice of prepayment), based on the
outstanding principal amount of the Term Loans immediately prior to such
prepayment, in each case together with accrued interest thereon to the date of
prepayment an amount equal to (each a "Mandatory Prepayment") (i) one hundred
percent (100%) of the proceeds from the sale of any assets (including, without
limitation, the proceeds from sales of stock of the Borrower or any Subsidiary)
of the Borrower or any Subsidiary (after deducting customary costs of such sales
and after the payment of any Taxes directly arising from such sales), but
excluding (y) capital stock of the Borrower of an existing class issued as a
stock split or stock dividend, and (z) capital stock issued by the Borrower
pursuant to the Forensic Technologies International Corporation Employee Stock
Purchase Plan dated June 30, 1997 and Forensic Technologies International
Corporation 1997 Stock Option Plan dated as of March 27,
28
1997, as amended May 19, 1999), plus (ii) one hundred percent (100%) of the net
cash proceeds from any issuance of Funded Debt, other than Funded Debt permitted
under Section 7.1 of this Agreement; and plus (iii) seventy five percent (75%)
of the net cash proceeds of any Equity Issuance, other than Equity Issuances
included in the Permitted Acquisition Price in connection with any Permitted
Acquisition. The Borrower will give each Lender, written notice of each
prepayment under this Section not less than 10 (nor more than 30) days prior to
the date for such prepayment. Each such notice (i) shall specify the prepayment
date, the aggregate principal amount of the Term Loans, to be prepaid on such
date, the principal amount of each Term Loan held by such holder to be prepaid,
and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and (ii) shall include a detailed calculation of
the prepayment.
Section 2.12 Letters of Credit.
-----------------
(a) Upon the terms and subject to the conditions set forth
herein, the Borrower may request the issuance of one or more Letters of Credit
for the account of the Borrower or its Subsidiaries in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time on or after the Closing Date and prior to the Revolving
Commitment Termination Date and, upon the terms and subject to the conditions
of, and in reliance upon the representations and warranties herein set forth,
the Issuing Bank agrees to issue from time to time, Letters of Credit in such
form as may be approved by the Issuing Bank.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall
be issued in the Stated Amount of which, when added to the Stated Amount of
outstanding Letters of Credit (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time, either (A) would exceed Five Million Dollars ($5,000,000.00) (the "LC
Subfacility") or (B) when added to the aggregate principal amount of all
Revolving Loans, all Swing Line Loans and the Stated Amount of all Letters of
Credit outstanding hereunder, other than any to be replaced thereby, and the
amount of all Unpaid Drawings not included in the amount of such Revolving Loans
or such Letters of Credit, would exceed the Aggregate Revolving Commitments,
(ii) no Letter of Credit shall be issued if any Default or Event of Default
shall have occurred and be continuing, and (iii) no Letter of Credit shall have
an original expiry date more than one (1) year from the date of issuance or
extension (although Letters of Credit may provide for automatic renewals or
extensions prior to the expiry thereof), provided, further, that no Letter of
Credit shall have an expiry date, whether as originally issued or by extension,
beyond the Revolving Commitment Termination Date.
(c) Whenever it desires that a Letter of Credit be issued,
amended, renewed or extended, the Borrower shall give the Administrative Agent
and the Issuing Bank written notice thereof (each a "Letter of Credit Request")
prior to 12:00 (noon), Eastern Time, at least three (3) Business Days prior to
the proposed date of issuance, amendment, renewal or extension (which shall be a
Business Day) which Letter of Credit Request shall include the Issuing Bank's
customary application for a letter of credit in substantially the form of
EXHIBIT G attached hereto containing information necessary to issue the Letter
- ---------
of Credit and any other documents that the Issuing Bank customarily requires in
connection therewith. The Administrative Agent shall promptly notify each Lender
of each Letter of Credit Request. In the event of any
29
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower or entered into by the Borrower with the Issuing Bank
with respect to any Letter of Credit, the terms and conditions of this Agreement
shall control.
(d) The aggregate principal amount available under the Revolving
Loans and the LC Subfacility shall be reduced by the Dollar amount of each
Letter of Credit issued hereunder.
(e) The submission of each Letter of Credit Request shall be deemed
to be a representation and warranty by the Borrower that such Letter of Credit
may be issued in accordance with, and will not violate the requirements of,
Section 2.12(b). Unless the Issuing Bank has received written notice from the
Required Lenders before it issues a Letter of Credit that one or more of the
conditions specified in Section 5.2 were not then satisfied, or that the
issuance of such Letter of Credit would violate Section 2.12(b), the Issuing
Bank may issue the requested Letter of Credit for the account of the Borrower in
accordance with its usual and customary practices. The Issuing Bank shall,
promptly following the issuance of a Letter of Credit by it, give the
Administrative Agent, each Lender and the Borrower written notice of the
issuance of such Letter of Credit.
(f) The Borrower hereby agrees to reimburse the Issuing Bank, by
making payment to the Issuing Bank in immediately available funds, for any
payment or disbursement made by the Issuing Bank under any Letter of Credit
issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid
Drawing") no later than one (1) Business Day following the date of such payment
or disbursement, with interest on the amount so paid or disbursed by the Issuing
Bank, to the extent not reimbursed prior to 1:00 p.m., Eastern Time, on the date
of such payment or disbursement, from and including the date paid or disbursed
to but not including the date the Issuing Bank is reimbursed therefor at a rate
per annum equal to the Base Rate (plus an additional two percent (2%) per annum
if not reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand. The Issuing Bank
shall provide the Borrower prompt notice of any drawing made under any Letter of
Credit prior to any payment or disbursement made by it on account of such
drawing, although the failure of, or delay in, giving any such notice shall not
release or diminish the obligations of the Borrower under this Section 2.12(f)
or under any other Section of this Agreement.
(g) The Borrower's obligation to reimburse as provided in paragraph
(f) of this Section shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement under any
and all circumstances whatsoever and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or this Agreement;
30
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated with,
the Borrower, any Subsidiary or other Affiliate thereof or any other Person may
at any time have against the beneficiary under any Letter of Credit, the Issuing
Bank, the Administrative Agent or any Lender or any other Person, whether in
connection with this Agreement or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
(v) except as otherwise set forth below, payment by the Issuing
Bank under a Letter of Credit against presentation of a draft or other document
that does not comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuing Bank, any Lender, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, any Lender, nor the Issuing Bank shall have
any liability or responsibility by reason of or in connection with the issuance
or transfer of any Letter of Credit or any payment or failure to make any
payment thereunder, including any of the circumstances specified in clauses (i)
through (vi) above, as well as any error, omission, interruption, loss or delay
in transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
--------
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise the agreed standard of
care (as set forth below) in determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The parties
hereto expressly agree that the Issuing Bank shall have exercised the agreed
standard of care in the absence of gross negligence or willful misconduct on the
part of the Issuing Bank, except to the extent that applicable law requires a
different standard of care. Without limiting the generality of the foregoing,
it is understood that the Issuing Bank may accept documents that appear on their
face to be in substantial compliance with the terms of a Letter of Credit,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and may make payment upon presentation of documents
that appear on their face to be in substantial compliance with the terms of such
Letter of Credit; provided that the Issuing Bank shall have the right, in its
--------
sole discretion, to decline to accept such documents and to make such payment if
such documents are not in strict compliance with the terms of such Letter of
Credit.
(h) Immediately upon the issuance by the Issuing Bank of any Letter
of
31
Credit, the Issuing Bank shall be deemed to have sold and transferred to each
other Lender, and each such Lender (each a "Letter of Credit Participant") shall
be deemed irrevocably and unconditionally to have purchased and received from
the Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Revolving Commitment Percentage,
in such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto and any security therefor or guaranty pertaining thereto. Upon any
change in the Commitments or Revolving Commitment Percentages of the Lenders
pursuant to Section 11.3, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.12(h) to reflect the
new Revolving Commitment Percentages of the assigning and assignee Lender or of
all Lenders, as the case may be.
(i) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation to the Letter of Credit Participants other
than to determine that any documents required to be delivered under such Letter
of Credit have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by the Issuing Bank under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for the Issuing Bank or the Administrative Agent any resulting
liability to any Letter of Credit Participant.
(j) In the event that the Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have repaid such amount in full to
the Issuing Bank pursuant to Section 2.12(f), the Issuing Bank shall promptly
notify the Administrative Agent, and the Administrative Agent shall notify each
Letter of Credit Participant of such failure, and each Letter of Credit
Participant shall promptly and unconditionally pay to the Administrative Agent
for the account of the Issuing Bank the amount of such Letter of Credit
Participant's Revolving Commitment Percentage of such unpaid amount in same day
funds. If the Administrative Agent so notifies any Letter of Credit Participant
required to fund a payment under a Letter of Credit prior to 11:00 a.m., Eastern
Time, on any Business Day, such Letter of Credit Participant shall make
available to the Administrative Agent for the account of the Issuing Bank such
Letter of Credit Participant's Revolving Commitment Percentage of the amount of
such payment on such Business Day in same day funds. If and to the extent such
Letter of Credit Participant shall not have so made its Revolving Commitment
Percentage of the amount of such payment available to the Administrative Agent
for the account of the Issuing Bank, such Letter of Credit Participant agrees to
pay to the Administrative Agent for the account of the Issuing Bank, forthwith
on demand, such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Administrative Agent for the
account of the Issuing Bank at the Federal Funds Rate. The failure of any
Letter of Credit Participant to make available to the Administrative Agent for
the account of the Issuing Bank its Revolving Commitment Percentage of any
payment under any Letter of Credit shall not relieve any other Letter of Credit
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of the Issuing Bank its Revolving Commitment Percentage of
any payment under any Letter of Credit on the date required, as specified above,
but no Letter of Credit Participant shall be responsible for the failure of any
other Letter of Credit Participant to make available to the Administrative
32
Agent for the account of the Issuing Bank such other Letter of Credit
Participant's Revolving Commitment Percentage of any such payment.
(k) Whenever the Issuing Bank receives a payment of a reimbursement
obligation as to which the Issuing Bank has received any payments from the
Letter of Credit Participants pursuant to clause (j) above, the Issuing Bank
shall pay such amount to the Administrative Agent and the Administrative Agent
shall promptly pay to each Letter of Credit Participant which has paid its
Revolving Commitment Percentage thereof in same day funds, an amount equal to
such Letter of Credit Participant's Revolving Commitment Percentage of the
principal amount thereof and interest thereon accruing after the purchase of the
respective participations.
(l) Except as otherwise expressly stated herein, any Letter of Credit
issued hereunder shall be subject to the Uniform Customs and Practices for
Documentary Credits, 1993 Revision, International Chamber of Commerce
Publication No. 500 or ISP98 ("Uniform Customs"). As to matters not governed by
this Agreement or by the Uniform Customs, any Letter of Credit shall be
construed in accordance with, and governed by, the laws of the State of
Maryland.
(m) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Administrative Agent or
the Required Lenders demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders, an amount in Dollars equal to the stated amount of all outstanding
Letters of Credit plus any accrued and unpaid interest thereon; provided that
--------
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in Sections 8.1(i). Such deposit shall
be held by the Administrative Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Investment of such deposits
shall, to the extent reasonably practicable, be made at the direction of the
Administrative Agent and at the Borrower's risk and expense. Unless invested in
accordance with the preceding sentence, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Monies in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for drawings for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the undrawn Letters of Credit at
such time or, if the maturity of the Loans has been accelerated (but subject to
the consent of the Required Lenders), be applied to satisfy other obligations of
the Borrower under this Agreement. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three (3) Business Days after all Events of Default have
been cured or waived.
(n) The Issuing Bank may be replaced at any time by written agreement
33
among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank, provided that the successor Issuing Bank must be a
--------
Lender or an Affiliate of a Lender. The Administrative Agent shall notify the
Lenders of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section 2.
11(b). From and after the effective date of any such replacement (i) the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued by it
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor Issuing Bank, any other Issuing Bank, or any previous
Issuing Bank, or to such successor Issuing Bank, all other Issuing Banks and all
previous Issuing Banks, as the context shall require. After the replacement of
an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement, but shall not be required to issue additional Letters of
Credit.
Section 2.13 Payments and Computations.
-------------------------
(a) Each payment hereunder and under the Notes shall be made not
later than 12:00 (noon), Eastern Time, on the day when due, in federal or other
immediately available funds, without setoff, deduction or counterclaim, by
payment of such funds to the Administrative Agent's Account for the account of
the Applicable Lending Office of each Lender. Amounts received after 12:00
(noon), Eastern Time, on any day shall be deemed received on the next succeeding
Business Day. With respect to any such payment received for the account of the
Lenders, the Administrative Agent will promptly thereafter cause to be wire
transferred ratably to each Lender like funds for the account of its Applicable
Lending Office in the amount thereof on the day such funds are deemed received
by the Administrative Agent. Whenever any payment to be made under this
Agreement or any Note shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall in such case be included in the computation of interest,
except that in the case of a Eurodollar Loan, if the next succeeding Business
Day is in the following calendar month, such payment shall be made on the next
preceding Business Day.
(b) If at any time funds are received by and available to the
Administrative Agent which are not sufficient to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be applied (i)
first, to pay interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to
such parties, and (ii) second, to pay principal then due hereunder or any other
Obligation then due hereunder or under any other Loan Document, ratably among
the parties entitled thereto in accordance with the amounts of principal then
due to such parties.
(c) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the
34
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Rate.
(d) If any Lender shall fail to make any payment required to be made
by it under this Agreement, the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under this Agreement until all such unsatisfied
obligations are fully paid.
ARTICLE 3
CHANGE IN CIRCUMSTANCES
-----------------------
Section 3.1 Increased Cost and Reduced Return.
---------------------------------
(a) If, after the date hereof, the adoption of any applicable law,
rule, or regulation, or any change in any applicable law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Applicable Lending Office) or the Issuing Bank with any request or directive
(whether or not having the force of law) of any such governmental authority,
central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) or the Issuing Bank to any tax, duty, or other charge with respect to
any Eurodollar Loan, its Note(s), any Letter of Credit or any participation
therein or its obligation to make Eurodollar Loans or to issue Letters of
Credit, or change the basis of taxation of any amounts payable to such Lender
(or its Applicable Lending Office) or the Issuing Bank under this Agreement or
its Notes in respect of any Eurodollar Loan, Letter of Credit or participations
therein (other than Taxes imposed on the overall Net Income of such Lender or
the Issuing Bank by the jurisdiction in which such Lender or such Issuing Bank
has its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, compulsory loan, or similar requirement (other than
the Reserve Requirement utilized in the determination of the Adjusted Eurodollar
Rate) relating to any extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender (or its Applicable
Lending Office) or the Issuing Bank, including the Commitment of the Lender or
such Issuing Bank hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the Issuing Bank or on the United States market for certificates of
deposit or the London interbank market any other condition affecting this
Agreement or its Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable
35
Lending Office) or such Issuing Bank of making, Converting into, Continuing, or
maintaining any Eurodollar Loan or to increase the cost of such Lender or the
Issuing Bank of participating in issuing or maintaining any Letter of Credit or
to reduce any sum received or receivable by such Lender (or its Applicable
Lending Office) or the Issuing Bank under this Agreement or its Notes with
respect to any Eurodollar Loan or any Letter of Credit, then the Borrower shall
pay to such Lender or the Issuing Bank on demand such amount or amounts as will
compensate such Lender or the Issuing Bank for such increased cost or reduction.
If any Lender or the Issuing Bank requests compensation by the Borrower under
this Section 3.1(a) the Borrower may, by notice to such Lender or the Issuing
Bank (with a copy to the Administrative Agent), suspend the obligation of such
Lender or the Issuing Bank to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, or to issue Letters of Credit until the
event or condition giving rise to such request ceases to be in effect (in which
case the provisions of Section 3.4 shall be applicable); provided that such
--------
suspension shall not affect the right of such Lender to receive the compensation
so requested.
(b) If, after the date hereof, any Lender or the Issuing Bank shall
have determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank, or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender or the Issuing Bank or any corporation controlling such
Lender or the Issuing Bank as a consequence of such Lender or the Issuing Bank's
obligations hereunder to a level below that which such Lender's or the Issuing
Bank or such corporation could have achieved but for such adoption, change,
request, or directive (taking into consideration its policies with respect to
capital adequacy), then from time to time upon demand the Borrower shall pay to
such Lender or the Issuing Bank such additional amount or amounts as will
compensate such Lender or the Issuing Bank for such reduction.
(c) Each Lender and the Issuing Bank shall promptly notify the
Borrower and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender or the Issuing
Bank, as the case may be, to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender or the Issuing Bank, be otherwise disadvantageous to it.
Any Lender or the Issuing Bank claiming compensation under this Section shall
furnish to the Borrower and the Administrative Agent a statement setting forth
the calculation of the additional amount or amounts to be paid to it hereunder
which statement shall be conclusive in the absence of manifest error. In
determining such amount, such Lender or the Issuing Bank may use any reasonable
averaging and attribution methods.
Section 3.2 Limitation on Types of Loans. If on or prior to the
----------------------------
first day of any Interest Period for any Eurodollar Loan:
(a) the Administrative Agent determines (which determination shall be
36
conclusive) that by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Adjusted Eurodollar
Rate will not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period, then the Administrative Agent shall
give the Borrower prompt notice thereof specifying the relevant amounts or
periods, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Eurodollar Loans, Continue Eurodollar
Loans, or to Convert Base Rate Loans into Eurodollar Loans, and the Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with the terms of this Agreement.
Section 3.3 Illegality. Notwithstanding any other provision of this
----------
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans, then such
Lender shall promptly notify the Borrower thereof, and such Lender's obligation
to make or Continue Eurodollar Loans and to Convert Base Rate into Eurodollar
Loans shall be suspended until such time as such Lender may again make,
maintain, and fund Eurodollar Loans (in which case the provisions of Section 3.4
shall be applicable). In the event that it becomes unlawful for the Issuing
Bank to issue Letters of Credit hereunder, then the Issuing Bank shall promptly
notify the Borrower thereof, and the Issuing Bank's obligation to issue Letters
of Credit shall be suspended until such time as the Issuing Bank may again issue
Letters of Credit.
Section 3.4 Treatment of Affected Loans. If the obligation of any Lender
---------------------------
to make a Eurodollar Loan or to Continue, or to Convert Base Rate Loans into
Eurodollar Loans shall be suspended pursuant to Section 3.1 or 3.3 hereof such
Lender's Eurodollar Loans shall be automatically Converted into Base Rate Loans
on the last day(s) of the then current Interest Period(s) for Eurodollar Loans
(or, in the case of a Conversion required by Section 3.3 hereof, on such earlier
date as such Lender may specify to the Borrower with a copy to the
Administrative Agent) and, unless and until such Lender gives notice as provided
below that the circumstances specified in Section 3.1 or 3.3 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be Converted
into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.1 or 3.3 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.4 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar
37
Loans made by other Lenders are outstanding, such Lender's Base Rate Loans shall
be automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by each of the Lenders are
held pro rata (as to principal amounts, Types, and Interest Periods) in
accordance with their respective Revolving Commitments.
Section 3.5 Compensation. Upon the request of any Lender, the Borrower
------------
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the maturity of
the Loans pursuant to Section 8.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 5 to be
satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan on the date
for such borrowing, Conversion, Continuation, or prepayment specified in the
relevant notice of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Section 3.6 Taxes.
-----
(a) Any and all payments by the Borrower to or for the account of any
Lender, the Issuing Bank or the Administrative Agent hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
---------
the case of each Lender, the Issuing Bank and the Administrative Agent, taxes
imposed on its income, and franchise taxes imposed on it, by the jurisdiction
under the laws of which such Lender (or its Applicable Lending Office) or the
Issuing Bank or the Administrative Agent (as the case may be) is organized or
any political subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as "Non-Excluded Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable under this Agreement
or any other Loan Document to any Lender, the Issuing Bank or the Administrative
Agent, (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.6), such Lender, the Issuing Bank or the
Administrative Agent receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 11.7, the original or a certified copy of a receipt evidencing
payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which
38
arise from any payment made under this Agreement or any other Loan Document or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender, the Issuing Bank
and the Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 3.6) paid by such Lender,
the Issuing Bank or the Administrative Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Administrative Agent (but only so long as such Lender remains lawfully
able to do so), shall provide the Borrower and the Administrative Agent with (i)
Internal Revenue Service Form 1001 or 4224, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii)
Internal Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate form
pursuant to Section 3.6(d) (unless such failure is due to a change in treaty,
law, or regulation occurring subsequent to the date on which a form originally
was required to be provided), such Lender shall not be entitled to
indemnification under Section 3.6(a) or 3.6(b) with respect to Taxes imposed by
the United States; provided, however, that should a Lender, which is otherwise
-------- -------
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.6, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of Taxes,
the Borrower shall furnish to the Administrative Agent the original or a
certified copy of a receipt
39
evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 3.6 shall survive the termination of the Commitments and the
payment in full of the Notes.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Administrative Agent and to the
Lenders (which representations and warranties shall survive the execution and
delivery of the Notes and the making of the Loans) that:
Section 4.1 Subsidiaries. The Subsidiaries as of the Closing Date are
------------
listed on the attached Schedule 4.1. Each Subsidiary listed thereon is a
------------
Consolidated Subsidiary.
Section 4.2 Good Standing. Each of the Borrower and its Subsidiaries is a
-------------
corporation or limited liability corporation, as the case may be, organized and
existing in good standing under the laws of the jurisdiction of its formation
and each Borrower and Subsidiary has the power to own its property and to carry
on its business as now being conducted and is duly qualified to do business and,
notwithstanding the failure of certain of the Loan Parties to be in good
standing under the laws of certain jurisdictions as set forth on the attached
Schedule 5.4, each Borrower and Subsidiary is in good standing in each
- ------------
jurisdiction in which the character of the properties owned by it therein or in
which the transaction of its business makes such qualification necessary and in
which the failure so to qualify would have a Materially Adverse Effect.
Section 4.3 Corporate Authority. The Borrower has full power and
-------------------
authority to enter into this Agreement, to make the borrowings hereunder, to
execute and deliver the Notes and to incur the obligations provided for herein
and therein, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of shareholders or consent or approval
of, notice to or filing with, any Governmental Authority is required as a
condition to the validity of this Agreement, the Notes, any Collateral Document,
or any of the applications for Letters of Credit.
Section 4.4 Binding Agreements. This Agreement and the other Loan
------------------
Documents constitute the valid and binding agreements of the Borrower and each
Subsidiary party thereto, and the Notes and applications for Letters of Credit,
when issued and delivered pursuant hereto for value, received will constitute
the valid and binding obligations of the Borrower, in each case enforceable in
accordance with their respective terms.
Section 4.5 Litigation. Except as disclosed on the attached Schedule 4.5
---------- ------------
or in the Annual Report of the Borrower on Form 10-K for the fiscal year ended
December 31, 1999, a copy of which has been delivered to the Administrative
Agent and each of the Lenders, there are no proceedings pending or, so far as
the officers of the Borrower know, threatened before any
40
court or administrative agency that, in the opinion of the officers of the
Borrower, will have a Materially Adverse Effect.
Section 4.6 No Conflicting Agreements. There is no charter, bylaw or
-------------------------
or preference stock provision of the Borrower or any of its Subsidiaries and no
provision of any existing mortgage, indenture, Material Contract or agreement
binding on the Borrower or any of its Subsidiaries or affecting their respective
properties, that would conflict with or in any way prevent the execution,
delivery, or carrying out of the terms of this Agreement, the Notes, or any of
the applications for Letters of Credit, or any of the other Loan Documents.
Section 4.7 Financial Condition.
-------------------
(a) Audited Statement. The consolidated balance sheets of the
-----------------
Borrower and its Subsidiaries as of December 31, 1997, December 31, 1998 and
December 31, 1999, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the period then ended, certified by
Ernst & Young heretofore delivered to the Administrative Agent and each of the
Lenders, fairly present in all material respects the consolidated financial
condition of the Borrower and its Consolidated Subsidiaries and the consolidated
results of operations and cash flows as of the date and for the periods referred
to therein and have been prepared in accordance with GAAP. There are no
liabilities, direct or indirect, fixed or contingent, of the Borrower or any of
its Consolidated Subsidiaries as of the date of such balance sheet which are
material (in relation to the financial condition or operations of the Borrower
and its Consolidated Subsidiaries) that are not reflected therein or in the
notes thereto. There has been no adverse change in the financial condition or
operations of the Borrower or any of its Consolidated Subsidiaries since the
date of such balance sheet, and there has been no other adverse change in the
Borrower, which is, in either case, material (in relation to the financial
condition or operations of the Borrower and its Consolidated Subsidiaries).
(b) Unaudited Statement. The unaudited consolidated balance sheet of
-------------------
the Borrower and its Consolidated Subsidiaries as of September 30, 2000, and the
related unaudited consolidated statement of income for the quarter then ended,
heretofore delivered to the Administrative Agent and each of the Lenders, fairly
present in all material respects the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries and the consolidated results of
operations as of the date and for the period referred to therein and have been
prepared in accordance with GAAP, subject to year-end adjustments.
Section 4.8 ERISA. The Borrower and each ERISA Affiliate and each of
-----
their respective Employee Plans are in compliance in all material respects with
ERISA and the Code, and neither the Borrower nor any of its ERISA Affiliates has
incurred any "accumulated funding deficiency" with respect to any such Plan
within the meaning of Section 402(a) of ERISA or Section 412 of the Code. The
Borrower and each of its ERISA Affiliates have complied with all requirements of
ERISA Sections 601 through 608 and Code Section 4980B. Neither the Borrower nor
any of its ERISA Affiliates have made any promises of retirement or other
benefits to employees, except as set forth in an Employee Plan. Neither the
Borrower nor any of its ERISA Affiliates has incurred any material liability to
PBGC in connection with any Employee Plan. The assets of each Employee Plan
which is subject to Title IV of ERISA are sufficient to
41
provide the benefits under such Employee Plan, payment of which the PBGC would
guarantee if such Employee Plan were terminated, and such assets are also
sufficient to provide all other "benefit liabilities" (as defined in ERISA
Section 4001(a)(16)) due under such Employee Plan upon termination. No
Reportable Event has occurred and is continuing with respect to any such
Employee Plan. No Employee Plan or trust created thereunder, or party in
interest (as defined in Section 4(14) of ERISA), or any fiduciary (as defined in
Section 4(21) of ERISA), has engaged in a Prohibited Transaction which would
subject such Employee Plan or any other Employee Plan of the Borrower or any of
its ERISA Affiliates, any trust created thereunder, or any such party in
interest or fiduciary, or any party dealing with any such Employee Plan or any
such trust to the tax or penalty on "prohibited transactions" imposed by Section
502 of ERISA or Section 4975 of the Code.
Section 4.9 Taxes. The Borrower and each of its Subsidiaries have timely
-----
filed or caused to be timely filed all tax returns and reports required to be
filed by any of them in any jurisdiction, and all taxes upon the Borrower and
its Subsidiaries and upon their respective properties, assets, income and
franchises which are due and payable have been paid when due and payable. The
charges, accruals and reserves on the books of the Borrower and its Consolidated
Subsidiaries with respect to taxes are, in the reasonable opinion of the
Borrower, adequate under GAAP. No examination or audit of any tax return of the
Borrower or any of its Subsidiaries is currently in progress.
Section 4.10 Ownership of Property: Liens. Each of the Borrower and its
----------------------------
Subsidiaries has good and marketable and legal title in fee simple (or its
equivalent under applicable law) to all of the real property and has good title
to all the other properties and assets it purports to own, including those
referred to in the financial statements described in Section 4.7, except for
defects in title which could not reasonably be expected to have a Materially
Adverse Effect. Except as permitted by this Agreement, all such properties and
assets are free and clear of Liens. Each of the Borrower and its Subsidiaries
enjoys full, peaceful and undisturbed possession under all leases necessary in
any material respect for the operation of its respective properties and assets,
none of which contains any unusual or burdensome provisions which might
materially affect or impair the operation of such properties or assets. All such
leases are valid and subsisting and are in full force and effect, and no event
has occurred and no circumstance exists which with the lapse of time or giving
of notice or both would constitute a default thereunder.
Section 4.11 No Violations. Neither the Borrower nor any of its
-------------
Subsidiaries is in violation of its organizational documents, by-laws, or other
governing instruments. Each of the Borrower and its Subsidiaries is in
compliance with all laws applicable to it, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which it is a party or by
which it is bound, where failure to comply would have a Materially Adverse
Effect. Neither the Borrower nor any of its Subsidiaries is in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture or note, or in any indenture, loan agreement, Material Contract or
other agreement, which default could reasonably be expected to have a Materially
Adverse Effect. The execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents to which it is a party do not and will
not (i) require any consent or approval of the shareholders or owners of the
Borrower; (ii) violate any
42
provision of any law (including, without limitation, Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System) presently in effect having
applicability to the Borrower or any of its Subsidiaries or any provision of
their respective organizational papers or by-laws; (iii) violate, conflict or be
inconsistent with, or result in a breach of, or constitute a default under, or
cause the termination or acceleration of, the organizational documents or by-
laws of the Borrower or any of its Subsidiaries or any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Borrower or any of its Subsidiaries is a party or by which it or its properties
may be bound or affected; or (iv) result in, or require, the creation or
imposition of a Lien, upon or with respect to any properties now owned or
hereafter acquired by the Borrower or any of its Subsidiaries, except as
permitted by this Agreement.
Section 4.12 Patents, Trademarks, Franchises, etc. As of the Closing Date,
------------------------------------
the Borrower and its Subsidiaries have no patents, trademarks, trademark rights,
service marks, trade names, trade name rights, copyrights, franchises and
licenses, other than those set forth in Schedule 4.12. The Borrower will
-------------
promptly notify the Administrative Agent in the event it, or any Subsidiary,
obtains any such intellectual property after the Closing Date and thereafter
properly execute and deliver and cause its Subsidiaries to execute and deliver,
to Administrative Agent an Intellectual Property Agreement covering such
intellectual property.
Section 4.13 Compliance with Laws; Environmental and Safety Matters. Each
------------------------------------------------------
of the Borrower and its Subsidiaries is in compliance in all respects with all
applicable laws, including but not limited to, all Environmental Laws and laws
relating to occupational safety or health, the failure to comply with which
could reasonably be expected to have a Materially Adverse Effect. There are no
past or present events, conditions, circumstances, activities, practices,
incidents, actions or plans which reasonably could be expected to interfere with
or prevent continued compliance with, or which reasonably could be expected to
give rise to any common law or statutory liability, under, relating to or in
connection with, any Environmental Law, or otherwise form the basis of any
claim, action, suit, proceeding, hearing or investigation under applicable law
based on or related to the manufacture, processing, distribution, use,
treatment, storage, transport or handling, or the release or threatened release
into the environment, of any Hazardous Material with respect to the Borrower or
any of its Subsidiaries or their respective businesses which could reasonably be
expected to have a Materially Adverse Effect.
Section 4.14 No Material Misstatement. All information, reports and other
------------------------
papers and data with respect to the Borrower or any of its Subsidiaries
furnished to the Administrative Agent or to any Lender were, at the time the
same were so furnished, complete and correct in all material respects, or have
been subsequently supplemented by other information, reports or other papers or
data to the extent necessary to give the Administrative Agent or such Lender a
true and accurate knowledge of the subject matter in all material respects. No
information, report, financial statement, exhibit, or schedule furnished by or
on behalf of the Borrower in connection with the negotiation, preparation or
execution of this Agreement or any of the other Loan Documents or included
therein contains any material misstatement of fact or omitted or omits to state
any material fact necessary to make the statements therein not misleading. No
fact is currently known to the Borrower which could reasonably be expected to
have a Materially Adverse Effect.
43
Section 4.15 Investment Company Act; Public Utility Holding Company Act;
-----------------------------------------------------------
Federal Power Act. Neither the Borrower nor any of its Subsidiaries is required
- -----------------
to register under the provisions of the Investment Company Act of 1940, as
amended, or is a "holding company" or a "subsidiary company" of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or a
"public utility", as such term is defined in the Federal Power Act, as amended.
Section 4.16 Indebtedness. Except as permitted under Section 7.1, neither
------------
the Borrower nor any of its Subsidiaries has any outstanding Debt.
Section 4.17 Casualties; Taking of Properties etc. Since the date of the
------------------------------------
most recent financial statements of the Borrower as described in Section 4.7,
neither the business nor the properties of the Borrower or any of its
Subsidiaries have been affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of property or cancellation of contracts, permits or
concessions by any Governmental Authority, riot, activities of armed forces or
acts of God or of any public enemy which could reasonably be expected to have a
Materially Adverse Effect.
Section 4.18 Solvency. As of the Closing Date and after giving effect to
--------
the transactions to be consummated on the Closing Date:
(a) The fair saleable value of the assets of the Borrower and each
Subsidiary will exceed the amount that will be required to be paid on or in
respect of the existing debts and other liabilities (including without
limitation contingent liabilities) of the Borrower or such Subsidiary as such
debts and liabilities become absolute and mature.
(b) Neither the assets of the Borrower nor the assets of any
Subsidiary will constitute unreasonably small capital for the Borrower or such
Subsidiary to carry out its businesses as now conducted and as proposed to be
conducted including the capital needs of the Borrower or such Subsidiary, taking
into account the particular capital requirements of the business conducted by
the Borrower or such Subsidiary and projected capital requirements and capital
availability thereof.
(c) Neither the Borrower nor any of its Subsidiaries intends to incur
Debts beyond its ability to pay such Debts as they mature, taking into account
the timing and amounts of cash to be received by it, and of amounts to be
payable on or in respect of its Debts. The cash flow of the Borrower and each
Subsidiary, after taking into account all anticipated uses of the cash of the
Borrower or such Subsidiary, will at all times be sufficient to pay all such
amounts on or in respect of Debt of the Borrower or such Subsidiary when such
amounts are required to be paid.
Section 4.19 Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice which reasonably could be
expected to have a Materially Adverse Effect. There is (i) no unfair labor
practice complaint pending or, to the best knowledge
44
of the Borrower, threatened against the Borrower or any of its Subsidiaries
before the National Labor Relations Board which could reasonably be expected to
have a Materially Adverse Effect, and no grievance or arbitration proceeding
arising out of or under a collective bargaining agreement is so pending or, to
the best knowledge of the Borrower, threatened; and (ii) no strike, labor
dispute, slowdown or stoppage is pending or threatened against the Borrower or
any of its Subsidiaries.
ARTICLE 5
CONDITIONS OF LENDING
---------------------
Section 5.1 Conditions Precedent to the First Loan. The obligation of
--------------------------------------
the Lenders to make the first Loan and of the Issuing Bank to issue the first
Letter of Credit is subject to the following conditions:
(a) each Lender shall have received a Note or Notes duly executed and
delivered by the Borrower payable to the order of such Lender; and
(b) all legal matters incident to this Agreement and the borrowings
hereunder and the other Loan Documents shall be satisfactory to the Lenders and
their counsel and to Mays & Valentine, L. L. P., counsel for the Administrative
Agent; and
(c) the Administrative Agent shall have received a closing
certificate substantially in the form of EXHIBIT D completed on behalf of the
---------
Borrower and substantially in the form of EXHIBIT E completed on behalf of any
---------
Guarantor; and
(d) the Administrative Agent shall have received an opinion of
counsel to the Borrower and each of the Guarantors substantially in the form of
EXHIBIT F hereto; and
- ---------
(e) the Administrative Agent shall have received such supplemental
certificates, opinions and documents as the Administrative Agent may reasonably
request; and
(f) there shall have occurred no change in the financial condition of
the Borrower since December 31, 1999, which could result in an Material Adverse
Effect; and
(g) the Administrative Agent shall have received duly executed copies
of the Guaranties of all Guarantors in existence on the Closing Date; and
(h) the Administrative Agent shall have received executed copies of
the Collateral Documents of the Borrower, and all Guarantors in existence on the
Closing Date, granting to the Administrative Agent a first Lien in all the
Collateral described therein; and
(i) the Administrative Agent shall have received certificates
representing the shares of any stock pledged under the Pledge Agreements in
effect on the Closing Date, duly endorsed in blank or accompanied by stock
powers duly executed in blank; and
45
(j) (A) each document (including, without limitation, each Uniform
Commercial Code financing statement but excluding filings with the U.S.
Copyright Office and the U.S. Patent and Trademark Office) required by law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent a perfected
first priority security interest in the Collateral shall have been properly
filed, registered or recorded in each jurisdiction in which the filing,
registration or recordation thereof is so required or requested; (B) within ten
(10) days after the Closing Date, each filing with the U.S. Copyright Office and
the U.S. Patent and Trademark Office required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded with respect to the
Collateral shall have been properly filed, registered or recorded in the
appropriate office; and (C) the Administrative Agent shall have received, within
thirty (30) days after the date of such Loan, an acknowledgment copy, or other
evidence satisfactory to it, of each of the foregoing filings, registrations and
recordations; and
(k) receipt by the Administrative Agent of certified copies of
Requests for Information or Copies (Form UCC-11), or equivalent reports, listing
the financing statements referred to in paragraph (j) above and all other
effective financing statements that name the Borrower (under its present names
and any previous names) as debtors or sellers and that are filed in the
jurisdictions referred to in paragraph (j) above, together with copies of such
other financing statements (none of which shall cover the Collateral, except as
otherwise disclosed in writing to, and accepted by, the Administrative Agent);
(l) receipt by the Administrative Agent of evidence of the insurance
required by Section 6.4 and the Collateral Documents; and
(m) receipt by the Administrative Agent of all documents it may
reasonably request relating to the existence of the Borrower and the Guarantors,
and their respective authority to execute, deliver and perform, as applicable,
this Agreement, the Notes, the Guaranties, and the Collateral Documents and the
validity of this Agreement, the Notes, the Guaranties and the Collateral
Documents and any other matters relevant hereto or thereto, all in form and
substance reasonably satisfactory to the Administrative Agent.
Section 5.2 Conditions Precedent to Each Loan. The obligation of each
---------------------------------
Lender to make each Loan and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit is subject to the satisfaction of the following
conditions:
(a) receipt by the Administrative Agent of a Notice of Borrowing, or
a Letter of Credit Request, as the case may be;
(b) each of the representations and warranties of the Borrower
contained in this Agreement and in any other Loan Document or certificate
delivered to the Administrative Agent or any Lender hereunder shall be true,
complete and accurate on and as of the date of such Loan or Letter of Credit
issuance as though made on and as of such date, except that representations and
warranties under Section 4.7 shall refer to the most recent financial statements
provided pursuant to Section 6.1;
46
(c) no event shall have occurred and be continuing, or shall result
from such Loan or such Letter of Credit, which constitutes a Default or an Event
of Default;
(d) since the date of the financial statements described in Section
4.7, no event shall have occurred which could reasonably be expected to have a
Materially Adverse Effect; and
(e) receipt by the Administrative Agent of such supplemental
certificates, opinions and documents as the Administrative Agent may reasonably
request.
Each Loan made and each Letter of Credit issued shall be deemed to be a
representation and warranty by the Borrower on the date of such Loan or Letter
of Credit as to the facts specified in clauses (b), (c) and (d) of this Section
5.2.
Section 5.3 Permitted Acquisitions. In the case of each Revolving Loan
----------------------
made to finance all or any portion of a Permitted Acquisition (and in addition
to the requirements of Section 5.2):
(a) The Borrower shall deliver to the Administrative Agent a
certificate, dated as of the date of disbursement of said Revolving Loan,
pursuant to which the Borrower shall warrant and represent to the Administrative
Agent and each Lender that (i) to the best of its knowledge, each of the
representations and warranties made by the sellers of the Target to the
Acquisition Company under such Acquisition Agreement is true and correct; (ii)
except as specifically disclosed in writing to the Administrative Agent prior to
the date of said Revolving Loan, no broker or finder brought about the making or
closing of such Revolving Loan made with respect to such Acquisition Agreement,
and none of the Borrower, the Acquisition Company, any Lender, or the
Administrative Agent has any obligation to any Person in respect of any finder's
or brokerage fees in connection with such Revolving Loan; (iii) the parties to
the Acquisition Agreement have complied with all requirements of every bulk
sales or transfer law that may be applicable to the sale of the acquired assets
to the Acquisition Company, or the Acquisition Company has obtained
indemnification against any and all liability arising from the failure to so
comply; (iv) the Acquisition Agreement has not been amended except as set forth
in written amendments thereto delivered to the Administrative Agent prior to the
date of said Revolving Loan, (v) the applicable Acquisition Analysis and Pro
Forma Financials remain accurate and complete in all material respects; and (vi)
as of the date immediately after the consummation of all the agreements and
transactions under and pursuant to such Acquisition Agreement, the Acquisition
Company and its Subsidiaries will not have any material amount of liabilities,
contingent or otherwise, not reflected in the Pro Forma Financials.
(b) Not later than sixty (60) days after the date of each such
Acquisition, termination statements or releases shall have been filed with
respect to any financing statements or Liens covering any portion of the
Acquired assets, except for financing statements perfecting Liens permitted by
this Agreement.
(c) The Administrative Agent shall have received evidence
satisfactory to it that, after giving effect to the Revolving Loan, neither the
Borrower nor any Subsidiary of the
47
Borrower is or will be rendered insolvent within the meaning of Section 548 of
the Federal Bankruptcy Code and any applicable state fraudulent conveyance laws.
This condition may be satisfied by delivering to the Administrative Agent a
Solvency Certificate, in substantially the form of EXHIBIT L attached to this
---------
Agreement, dated as of the disbursement date of the Revolving Loan.
(d) The Acquisition shall comply with all of the requirements of
Section 2.5 hereof.
Section 5.4 Conditions Precedent to Each Loan after February 15, 2001.
---------------------------------------------------------
The obligation of each Lender to make each Loan and of the Issuing Bank to
issue, amend, renew or extend any Letter of Credit after February 15, 2001 is
subject to the receipt by the Agent of evidence from the Borrower satisfactory
to the Agent, that each of the Loan Parties not in good standing as of the
Closing Date in the jurisdictions set forth in Schedule 5.4 attached hereto, are
------------
on or before February 15, 2001 in good standing in each of such jurisdictions.
ARTICLE 6
AFFIRMATIVE COVENANTS
---------------------
So long as any Lender has a commitment or any Letter of Credit shall be
outstanding and until payment in full of the Notes and performance of all other
obligations of the Borrower hereunder, the Borrower will:
Section 6.1 Financial Statements and Reports. Furnish to the
--------------------------------
Administrative Agent and each Lender:
(a) as soon as available but in no event within ninety (90) days
after the end of each fiscal year of the Borrower, its audited consolidated and
consolidating balance sheet and related statements of earnings, changes in
shareholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by an independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial position, results of operations and cash flows
of the Borrower and its Consolidated Subsidiaries in accordance with GAAP;
provided, that the Borrower may deliver, in lieu of the foregoing, the annual
- --------
report of the Borrower for such fiscal year on Form 10-K filed with the SEC, but
only so long as the financial statements contained in such annual report on Form
10-K are substantially the same in content as the financial statements referred
to in the preceding provisions of this paragraph (a);
(b) as soon as available but in any event within forty-five (45) days
after the end of each of the first three fiscal quarters of each fiscal year of
the Borrower, its consolidated and consolidating balance sheet and related
statements of earnings and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by its Principal Financial
48
Officer as presenting fairly in all material respects the financial position,
results of operations and cash flows of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP, subject to normal year-end audit
adjustments and the absence of footnotes provided, however, that the Borrower
-------- -------
may deliver, in lieu of the foregoing, the quarterly report of the Borrower for
such fiscal quarter on Form 10-Q filed with the SEC, but only so long as the
financial statements contained in such quarterly report on Form 10-Q are
substantially the same in content as the financial statements referred to in the
preceding provisions of this paragraph (b);
(c) concurrently with each delivery of financial statements under
clause (a) or (b) above, a Non-Default Certificate;
(d) concurrently with each delivery of financial statements under
clause (a) above, a letter signed by the accounting firm that reported on such
financial statements to the effect that, in the course of the examination upon
which its report for such fiscal year was based (but without any special or
additional audit procedures for that purpose other than review of the terms and
provisions of this Agreement), nothing came to its attention that caused it to
believe that there were any Defaults or Events of Default involving accounting
matters or, if such firm became aware of any such Defaults or Events of Default,
specifying the nature thereof;
(e) promptly after the same become publicly available, copies of all
periodic and other reports on Forms 8-K, 10-Q and 10-K and all proxy statements
filed by the Borrower or any Subsidiary with the SEC or any other documents
distributed by the Borrower to its shareholders generally which contain the
information equivalent to that contained in such forms or proxy statements;
(f) promptly following any request therefor, such other information
regarding the operations and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as any Lender and
Administrative Agent may reasonably request.
Section 6.2 Litigation and Other Notices. Furnish to the Administrative
----------------------------
Agent and each Lender the following:
(a) as soon as possible and, in any event, within five (5) days of
any officer of the Borrower obtaining knowledge of any Default or Event of
Default, a certificate of the Principal Financial Officer of the Borrower
setting forth the details of such Default or Event of Default and the action
which the Borrower has taken or proposes to take with respect thereto, provided
--------
that the failure of the Borrower to give such notice shall not affect the right
and power of the Lenders to exercise any or all of the remedies on default
specified herein;
(b) promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations which involve claims which exceed the
Borrower's insurance or indemnification by more than Five Hundred Thousand
Dollars ($500,000), or which involve more than One Million Dollars ($1,000,000)
in excess of such insurance or indemnification in the aggregate; and
(c) promptly after such change, notice of any material change in the
49
management of the Borrower or any of its Subsidiaries and any changes in the
business, assets, liabilities, condition (financial or other), results of
operations or business of the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Materially Adverse Effect.
Section 6.3 Taxes. File or cause to be filed within the required time
-----
period all tax returns which are required to be filed by the Borrower or any of
its Subsidiaries and pay or cause to be paid prior to the time they become
delinquent or a penalty attaches thereto all taxes shown to be due and payable
on said returns or on any written assessments made against the Borrower or any
Subsidiary or any of their respective properties and all other taxes, fees or
other charges imposed on any of them or any of their property by any
Governmental Authority (other than those the amount or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be), provided that
--------
nothing contained in this Section 6.3 shall obligate the Borrower or any
Subsidiary to pay any taxes which are of an inconsequential amount.
Section 6.4 Insurance. Maintain, and cause each of its Subsidiaries to
---------
maintain, adequate insurance, with responsible companies in such amounts and
against such risks as is customarily carried by owners of similar businesses and
property.
Section 6.5 Corporate Existence. Maintain and cause each of its
-------------------
Subsidiaries to maintain its corporate existence in good standing except that
nothing contained in this Section 6.5 shall prohibit any transaction not
prohibited by Section 7.4.
Section 6.6 Properties. Maintain, preserve, and protect all franchises
----------
and trade names; preserve all the remainder of its property which in the
reasonable judgment of the Borrower is necessary in the proper conduct of its
business; keep the same in good repair, working order, and condition, ordinary
wear and tear excepted, and from time to time make or cause to be made all
needful and proper repairs, renewals, replacements, betterments, and
improvements thereto so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; cause each of its
Subsidiaries so to maintain its respective properties; and permit the
Administrative Agent or any Lender and their respective agents at all reasonable
times to enter upon and inspect such properties.
Section 6.7 Employee Benefit Pension Plans. Promptly during each year,
------------------------------
pay and cause its Subsidiaries to pay or otherwise cause to be paid
contributions adequate to meet at least the minimum funding standards set forth
in Sections 302 through 305 of ERISA, with respect to each Employee Plan of the
Borrower and each ERISA Affiliate; file or cause to be filed each annual report
required to be filed pursuant to Section 103 of ERISA in connection with each
such Employee Plan for each year; and notify each Lender within ten (10) days of
the occurrence of a Reportable Event that might constitute grounds for
termination of any such Employee Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any such
Employee Plan, provided that nothing contained herein shall prohibit the
--------
Borrower or any ERISA Affiliate from terminating any such Employee Plan if it
has theretofore complied with the provisions of this Section.
50
Section 6.8 Compliance with Laws; Material Contracts. Comply and cause
----------------------------------------
each of its Subsidiaries to comply in all material respects with all Material
Contracts and with all applicable laws, rules, regulations and orders of any
Governmental Authority having jurisdiction over it, including, without
limitation, all Environmental Laws if and to the extent the failure to comply
therewith would have a Materially Adverse Effect, and in the event it shall fail
to do so, promptly advise the Administrative Agent in writing of such failure
and the action it is taking or proposes to take to remedy such condition.
Nothing contained in this Section 6.8 shall prevent either the Borrower or any
of its Subsidiaries from contesting in good faith and by appropriate proceedings
any such law, rule, regulation or order.
Section 6.9 Additional Subsidiaries. Promptly notify the Administrative
-----------------------
Agent in writing if it Acquires any Subsidiary.
Section 6.10 Financial Covenants. So long as any Note shall remain unpaid,
-------------------
any Letter of Credit remains outstanding, or any Lender shall have any
Commitment hereunder, the Borrower shall maintain at all times, unless the
Required Lenders shall otherwise consent in writing:
(a) Net Worth. Tested as of the end of each fiscal quarter of the
---------
Borrower, Net Worth of not less than the Minimum Net Worth Level.
(b) Leverage Ratio. For each twelve (12) month period ending on the
--------------
last day of each fiscal quarter of the Borrower, a Leverage Ratio of not more
than the following amounts tested at the following times:
Leverage Ratio Fiscal Quarters Ending
-------------- -----------------------
2.50 to 1.0 Closing Date through December 30, 2001;
2.25 to 1.0 December 31, 2001 through December 30, 2002;
2.00 to 1.0 December 31, 2002 and thereafter.
(c) Fixed Charge Coverage Ratio. For each twelve (12) month period
---------------------------
ending on the last day of each fiscal quarter of the Borrower, a Fixed Charge
Coverage Ratio of not less than (1) 1.35 to 1.0 for each fiscal quarter through
March 30, 2002, and (2) 1.50 to 1.0 as of March 31, 2002 and for each fiscal
quarter thereafter.
Section 6.11 Use of Proceeds. The proceeds of the Loans will be used by
---------------
the Borrower for working capital, capital expenditures, Permitted Acquisitions,
to repay certain subordinated Debt and other lawful corporate purposes. None of
the proceeds of the Loans will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock.
ARTICLE 7
NEGATIVE COVENANTS
------------------
So long as any Lender has a commitment hereunder and until payment in full
of the
51
Notes and performance of all other obligations of the Borrower hereunder,
without the written consent of the Required Lenders, the Borrower will not:
Section 7.1 Funded Debt. Create, incur, assume or suffer to exist or
-----------
permit any Subsidiary to create, incur, assume or suffer to exist any Funded
Debt except:
(a) Funded Debt of the Borrower or the Subsidiaries under this
Agreement or the Notes;
(b) Funded Debt of the Borrower and each Subsidiary secured by Liens
permitted by Section 7.2 (e) not to exceed Three Million Dollars ($3,000,000) in
the aggregate;
(c) Funded Debt or other obligations incurred in connection with Earn
Out Provisions;
(d) Funded Debt listed on Schedule 7.1 attached hereto;
------------
(e) Up to Five Million Dollars ($5,000,000) of unsecured Funded Debt
incurred in favor of any seller in connection with any Permitted Acquisition in
an aggregate amount not to exceed Five Million Dollars ($5,000,000);
(f) Up to Two Million Dollars ($2,000,000) in the aggregate of any
Funded Debt (other than the Funded Debt referred to in Sections 7.1(a)-(e)
above) assumed in connection with the Permitted Acquisitions, and which not less
than One Million Dollars ($1,000,000) of which has been or will be, paid or
refinanced within six (6) months from the date of the closing of the Permitted
Acquisition by a Revolving Loan; and
(g) Additional Funded Debt, including, but not limited to Funded Debt
incurred by the Borrower arising out of any swap agreement (as defined in 11
U.S.C. 101) or under any foreign exchange contracts on a mark to market basis,
in an amount when combined with the Funded Debt referred to in Sections 7.1(b)-
(e) above) does not exceed Two Million Dollars ($2,000,000) in the aggregate.
Section 7.2 Mortgages and Pledges. Create, incur, assume, or suffer to
---------------------
exist any Lien upon any of its property or assets other than Unrestricted Margin
Stock, whether now owned or hereafter acquired, or permit any Subsidiary so to
do, except:
(a) Liens existing at the date of this Agreement and securing Debt
outstanding on the date of this Agreement and listed on Schedule 7.2 attached
------------
hereto;
(b) Liens securing Debt owing by any Subsidiary to the Borrower or to
another Subsidiary which is wholly-owned;
(c) Liens on assets of any corporation existing at the time such
corporation becomes a Subsidiary;
52
(d) Liens on assets existing at the time of acquisition thereof;
provided that such Lien shall not extend to any other property of the Borrower
- --------
or a Subsidiary;
(e) Liens to secure indebtedness incurred or guaranteed by the
Borrower or a Subsidiary to finance the purchase price of land, buildings or
equipment or improvements to or construction of land, buildings or equipment,
which indebtedness is incurred or guaranteed prior to, at the time of, or within
one hundred eighty (180) days after such acquisition (or in the case of real
property, completion of such improvement or construction or commencement of full
operation of such property, whichever is later); provided that such Lien shall
--------
extend only to the asset to be acquired or improved with such financing;
(f) Liens on any assets of a corporation existing at the time such
corporation is merged into or consolidated with the Borrower or a Subsidiary;
provided that such Lien shall not extend to any other property of the Borrower
- --------
or a Subsidiary;
(g) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part, of any lien referred to in the
foregoing paragraphs (a) to (f), inclusive;
(h) Liens for property taxes and assessments or governmental charges
or levies and liens securing claims or demands of mechanics, suppliers,
carriers, landlords and other like Persons, provided that payment thereof is not
--------
at the time required by Section 6.3;
(i) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment insurance,
social security and other like laws, or to secure the performance of letters of
credit, bids, sales contracts, leases, statutory obligations, surety, appeal and
performance bonds and other similar obligations, in each case not incurred in
connection with the borrowing of money, the obtaining of advances or the payment
of the deferred purchase price of property;
(j) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided that execution and other enforcement
--------
of such liens are effectively stayed and all claims which the Liens secure are
being actively contested in good faith and by appropriate proceedings;
(k) Liens arising in the ordinary course of the business or
incidental to the conduct of such business or the ownership of the assets of the
Borrower or any Subsidiary which Liens arise out of transactions involving the
sale or purchase of goods or services and which do not, in the opinion of the
Administrative Agent, materially impair the use of such assets in the operations
of the business of the Borrower or such Subsidiary;
(l) Liens other than those described in clauses (a) through (k) above
provided the sum of (i) the aggregate principal amount secured thereby at any
time outstanding does not exceed One Million Dollars ($1,000,000); and
53
(m) Liens to secure any Funded Debt incurred or maintained by the
Borrower arising out of any swap agreement (as defined in 11 U.S.C. 101) or
under any foreign exchange contact and permitted under Section 7.1(g) of this
Agreement.
Section 7.3 Sale and Lease-Back. Sell, or permit any Subsidiary to sell,
-------------------
any property (other than Unrestricted Margin Stock), and then lease-back that
property or similar property for a term of more than three years.
Section 7.4 Merger, Consolidation, or Sale of Assets. Enter into any
----------------------------------------
merger or consolidation with any Person, other than Permitted Acquisitions, or
sell, lease, or otherwise Dispose of all or substantially all of its assets,
except in the ordinary course of its business, or permit any Subsidiary so to
do, except that a Subsidiary may be merged or consolidated with another
Subsidiary, a Subsidiary may be merged or consolidated with any other
corporation which is or will upon the consummation of such merger or
consolidation be a Subsidiary not less than eighty percent (80%) of the capital
stock of which is owned directly or indirectly by the Borrower, or into the
Borrower, and any other corporation may be merged into the Borrower, provided
--------
that, (a) in the case of any such merger or consolidation with the Borrower, the
Borrower is the surviving corporation and the management of the Borrower
continues as the management of the surviving corporation, (b) in any case, such
merger or consolidation does not violate any other provision of this Agreement
and upon the effective date of the merger or consolidation there exists no
Default or Event of Default hereunder and (c) the Borrower and its Subsidiaries
will be permitted to sell, transfer and otherwise Dispose of Unrestricted Margin
Stock without regard to the foregoing restrictions.
Section 7.5 Restricted Payments. Make, or permit any Subsidiary to make,
-------------------
any Restricted Payments, except that provided no Default or Event of Default has
occurred and is continuing or would exist after giving effect to any of the
following, (i) any Subsidiary of the Borrower may pay dividends to the Borrower
or to any other Subsidiary that is its parent, and (ii) the Borrower may
repurchase stock and/or stock options from employees or directors of the
Borrower under the terms of applicable repurchase agreements in an aggregate
amount not to exceed Two Million Dollars ($2,000,000.00) in the aggregate in any
twelve (12) month period and Seven Million Five Hundred Thousand Dollars
($7,500,000) in the aggregate during the term of this Agreement.
Section 7.6 Investments. Purchase or hold beneficially, or permit any
-----------
of its Subsidiaries to acquire or hold beneficially, any stock or other
securities or evidences of debt of, or make or permit to exist any interest
whatsoever in, or make or permit to exist any loans or advances to, any Person,
except that an Acquisition Company may make Permitted Acquisitions and the
Borrower and its Subsidiaries may make investments:
(i) in certificates of deposit of or time deposits with a maturity of
one (1) year or less with any Lender or any commercial bank whose deposits are
insured by federal deposit insurance and having capital and surplus in excess of
One Hundred Million Dollars ($100,000,000);
(ii) in securities issued or guaranteed by the United States of
America or any
54
agency thereof with maturities of one year or less;
(iii) in short-term commercial paper rated A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc.; or
(iv) in any of its Subsidiaries.
Section 7.7 Change in Business. Make, or permit any Subsidiary to make,
------------------
any material change in the nature of its business as carried on at the date
hereof, including any such change by reason of Acquisition.
Section 7.8 Affiliate Transactions. Engage, or permit any of its
----------------------
Subsidiaries to engage, at any time in any transaction with an Affiliate, or
make an assignment or other transfer of any of its properties or assets to an
Affiliate, whether or not in the ordinary course of business, other than on
terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an Affiliate.
ARTICLE 8
DEFAULT
-------
Section 8.1 Events of Default. Each of the following shall constitute an
-----------------
"Event of Default" hereunder:
(a) The Borrower shall fail to make any payment of any interest upon
any of the Notes within three (3) Business Days of when such interest is due and
payable; or
(b) The Borrower shall fail to pay any Administrative Agent's Fee,
Commitment Fee on the Unused Portion of the Loan or Letter of Credit Fee payable
hereunder when such fee is due and payable; or
(c) The Borrower shall fail to make any payment of any principal of
the Notes when and as the same becomes due and payable; or
(d) The Borrower shall fail to observe or perform any term, covenant
or agreement contained in Sections 5.4, 6.1, 6.10 or Article 7 of this
Agreement; or
(e) The Borrower shall fail to observe or perform any term, covenant
or agreement contained in this Agreement or in any other Loan Document (other
than those specified in clause (a), (b), (c) or (d) of this Section) and such
Default shall continue unremedied for a period of thirty (30) days after written
notice from the Administrative Agent; or
(f) A custodian, other than a trustee, receiver or agent appointed or
authorized to take charge of less than substantially all of the property of the
Borrower or any Subsidiary for the purpose of enforcing a Lien against such
property, is appointed for, or takes possession of
55
any property or assets of, the Borrower or any Subsidiary; or
(g) Any representation or warranty made by the Borrower herein or in
any other Loan Document or any statement or representation made in any
certificate, report, or opinion delivered pursuant hereto or in any other Loan
Document shall prove to have been incorrect in any material respect when made;
or
(h) The Borrower or any Subsidiary shall be generally not paying its
Debts as such Debts become due, shall become insolvent or unable to meet its
obligations as they mature, shall make an assignment for the benefit of
creditors, shall consent to the appointment of a trustee or a receiver, or shall
admit in writing its inability to pay its Debts as they mature; or
(i) A trustee or receiver (other than a custodian described in
Section 8.1(f)) shall be appointed for the Borrower or any Subsidiary or for a
substantial part of its properties without the consent of the Borrower or such
Subsidiary and not be discharged within sixty (60) days; or
(j) Any case in bankruptcy shall be commenced, or any reorganization,
arrangement, insolvency, or liquidation proceeding shall be instituted by or
against the Borrower or any Subsidiary, and if commenced or instituted against
it, be consented to by the Borrower or such Subsidiary or remain undismissed for
a period of sixty (60) days; or
(k) Any default shall be made in the performance of any other
obligation or obligations incurred in connection with any indebtedness for
borrowed money of the Borrower or any Subsidiary aggregating Five Hundred
Thousand Dollars ($500,000) or more, if the effect of such default is to permit
the holder of such notes or indebtedness (or a trustee on behalf of such holder)
to cause them or it to become due prior to their or its stated maturity, or any
such note or indebtedness becomes due prior to its stated maturity or shall not
be paid when due; or
(l) Any final judgment or judgments for the payment of money in
excess of Five Hundred Thousand Dollars ($500,000) which is or are not
adequately insured or indemnified against shall be rendered against the Borrower
or any Subsidiary and the same shall remain undischarged for a period of more
than thirty (30) days during which time execution shall not be effectively
stayed; or
(m) Any substantial part of the properties of the Borrower or any
part of the properties of any Subsidiary having a value, as reasonably
determined by the Administrative Agent, of Five Hundred Thousand Dollars
($500,000) or more shall be sequestered or attached and shall not have been
returned to the possession of the Borrower or such Subsidiary or released from
such attachment within sixty (60) days; or
(n) A Change in Control shall occur.
(o) Any Collateral Document shall for any reason cease to create a
valid and perfected first priority Lien on and security interest in the
collateral purported to be covered thereby.
56
Section 8.2. Remedies. In addition to all other rights and remedies
--------
provided hereunder or under any of the Loan Documents or as shall exist at law
or in equity from time to time, upon the occurrence of an Event of Default or at
any time during the continuance of any such Event of Default, the Administrative
Agent may, and the Administrative Agent shall, if requested to do so by the
Required Lenders, by sending written notice to the Borrower take either or both
of the following actions, at the same or different times: (a) terminate
forthwith the Commitments hereunder and (b) declare the Notes to be forthwith
due and payable, whereupon all such Notes shall be forthwith due and payable,
both as to principal and interest, without presentment, demand, protest, or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Notes to the contrary notwithstanding; provided,
--------
however, that notwithstanding anything to the contrary contained herein, upon
- -------
the commencement of any case in bankruptcy by the Borrower or the entry of an
order for relief in any case in bankruptcy instituted against the Borrower or
the consent by the Borrower to such an order, the Commitments shall terminate
and all Notes, including all principal and interest thereon, shall be
immediately due and payable.
ARTICLE 9
SET-OFFS AND SHARING OF PAYMENTS
--------------------------------
Section 9. 1 Right of Set-off; Adjustments. (a) Upon the occurrence and
-----------------------------
during the continuance of any Event of Default, each Lender (and each of its
Affiliates) is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its Affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and
the Note or Notes held by such Lender, irrespective of whether such Lender shall
have made any demand under this Agreement or such Note or Notes and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application made by such Lender; provided,
--------
however, that the failure to give such notice shall not affect the validity of
- -------
such set-off and application. The rights of each Lender under this Section are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender may have.
(b) If any Lender (a "benefited Lender") shall at any time receive
any payment of all or part of the Loans owing to it, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such Collateral, or the proceeds thereof,
as shall be necessary to cause such benefited Lender to share the excess payment
or benefits of such Collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
- -------- -------
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The
57
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this Article 9 may, to the fullest extent permitted by law, exercise
all of its rights of payment (including the right of set-off) with respect to
such participation as fully as if such Person were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE 10
THE ADMINISTRATIVE AGENT
------------------------
Section 10.1 Appointment, Powers, and Immunities. Each Lender and the
-----------------------------------
Issuing Bank hereby irrevocably appoints and authorizes the Administrative Agent
to act as its agent under this Agreement and the other Loan Documents with such
powers and discretion as are specifically delegated to the Administrative Agent
by the terms of this Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere herein and the other Loan Documents, the
Administrative Agent (which term as used in this sentence and in Section 10.5
and the first sentence of Section 10.7 hereof shall include its Affiliates and
its own and its Affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement or any of the other Loan Documents and shall not be a trustee
or fiduciary for any Lender; (b) shall not be responsible to the Lenders, or any
of them, for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Loan Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Loan Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Loan Document, or any other
document referred to or provided for therein or for any failure by any Loan
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any Loan
Party or the satisfaction of any condition or to inspect the property (including
the books and records) of any Loan Party or any of its Subsidiaries or
Affiliates; (d) shall not be required to initiate or conduct any litigation or
collection proceedings under any Loan Document; and (e) shall not be responsible
for any action taken or omitted to be taken by it under or in connection with
any Loan Document, except for its own gross negligence or willful misconduct.
The Administrative Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or attorneys-
in-fact selected by it with reasonable care. The provisions of this Section 10.1
are solely for the benefit of the Administrative Agent and the Lenders, and none
of the Loan Parties shall have any rights as a third party beneficiary of the
provision hereto. In performing its functions and duties under this Agreement
and the other Loan Documents, the Administrative Agent shall act solely as
Administrative Agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligations or relationship of agency or trust with or for
any Loan Party or any of their respective Affiliates.
Section 10.2 Reliance By Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely upon any certification, notice, instrument, writing,
or other communication (including, without limitation, any thereof by telephone
or telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or
58
Persons, and upon advice and statements of legal counsel (including counsel for
any Loan Party), independent accountants, and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until the
Administrative Agent receives and accepts an Assignment and Acceptance executed
in accordance with Section 11.3 hereof. As to any matters not expressly provided
for by this Agreement, the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
-------- -------
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Loan
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.
Section 10.3 Defaults. The Administrative Agent shall not be deemed
--------
to have knowledge or notice of the occurrence of a Default or Event of Default
unless the Administrative Agent has received written notice from a Lender or the
Borrower specifying such Default or Event of Default and stating that such
notice is a "Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 10.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Required Lenders, provided that, unless and until the Administrative
-------- ----
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders.
Section 10.4 Rights as Lender. With respect to its Commitment and the
----------------
Loans made by it, Bank of America (and any successor acting as Administrative
Agent) in its capacity as a Lender or the Issuing Bank hereunder shall have the
same rights and powers hereunder as any other Lender or any other Issuing Bank
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" and the term "Issuing Bank" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent (and any successor acting as
Administrative Agent) and its Affiliates may (without having to account therefor
to any Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Loan Party or any of its Subsidiaries or Affiliates as if it
were not acting as Administrative Agent, and the Administrative Agent (and any
successor acting as Administrative Agent) and its Affiliates may accept fees and
other consideration from any Loan Party or any of its Subsidiaries or Affiliates
for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
Section 10.5 Delegation of Duties. The Administrative Agent may execute
--------------------
any of its duties hereunder or under the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
59
attorney-in-fact selected by it with reasonable care.
Section 10.6 Indemnification. The Lenders agree ratably in
---------------
accordance with their respective Commitments (to the extent not reimbursed under
Section 11.1 hereof, but without limiting the obligations of the Borrower under
such Section) to indemnify and hold harmless the Administrative Agent and, the
Issuing Bank and each of their respective Affiliates and their respective
officers, directors, employees, agents, and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities,
costs, and expenses (including, without limitation, reasonable attorneys' fees)
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the Loan
Documents, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Loans or any Letter of Credit (including any refusal
by an Issuing Bank to honor a demand for payment under a Letter of Credit issued
by it if the documents presented in connection with such demand do not strictly
comply with the terms of the Letter of Credit), except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 10.5(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party and whether any
other Person or any Indemnified Party is otherwise a party thereto and whether
or not the transactions contemplated hereby are consummated. Without prejudice
to the survival of any other agreement of the Borrower hereunder, the agreements
and obligations of the Borrower contained in this Section 10.6 shall survive the
payment in full of the Loans and all other amounts payable under this Agreement.
Section 10.7 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------
Each Lender expressly agrees that it has, independently and without reliance on
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Loan Parties and their Subsidiaries and its own decision to enter into this
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Loan Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Administrative Agent or any
of its Affiliates.
Section 10.8 Exculpatory Provisions. The Administrative Agent and
----------------------
its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall not be (i) liable for any action lawfully taken or omitted to be taken by
it or such Person under or in connection herewith or in connection with any of
the other Loan Documents (except for its or such Person's own gross negligence
or willful misconduct), or (ii) responsible in any manner to any of the Lenders
for any
60
recitals, statements, representations or warranties made by any of the Loan
Parties contained herein or in any of the other Loan Documents or in any
certificate, report, documents, financial statements or other written or oral
statement referred to or provided for in, or received by the Administrative
Agent under or in connection herewith or in connection with the other Loan
Documents, or enforceability or sufficiency therefor of any of the other Loan
Documents, or for any failure of any Loan Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be responsible to
any Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Loan Agreement or any of the other Loan
Documents or for any representations, warranties, recitals or statements made
herein or therein or made by the Borrower or any Loan Party in any written or
oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Loan Parties to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or of the existence or possible existence of any Default or Event of Default or
to inspect the properties, books or records of the Loan Parties or any of their
respective Affiliates.
Section 10.9 Resignation of Administrative Agent. The Administrative
-----------------------------------
Agent may resign at any time by giving written notice to the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent will, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be either a Lender or a commercial bank
organized under the laws of the United States of America or any state thereof
having combined capital and surplus of at least $5,000,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor,
such successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article 10 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 Administrative Agent.
ARTICLE 11
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1 Expenses; Indemnification. (a) The Borrower agrees to
-------------------------
pay on demand (i) all costs and expenses of the Administrative Agent in
connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder; including, without
limitation, the reasonable fees and expenses of counsel for the Administrative
Agent with respect thereto and with respect to advising the Administrative Agent
as to its rights and responsibilities under the Loan Documents and (ii) all out
of pocket expenses incurred by the
61
Issuing Bank in connection with the issuance, amendment, renewal or extension by
it of any Letter of Credit or demand for payment thereunder. The Borrower
further agrees to pay on demand all costs and expenses of the Administrative
Agent, the Issuing Bank and the Lenders, if any (including, without limitation,
reasonable attorneys' fees and expenses) incurred in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Loan Documents and the other documents to be delivered hereunder or in
connection with the Loans made or Letters of Credit issued hereunder.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Issuing Bank and each Lender and each of their
respective Affiliates and their respective officers, directors, employees,
agents, and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation, or proceeding or preparation of defense in
connection therewith) the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans or any Letter
of Credit (including any refusal by an Issuing Bank to honor a demand for
payment under a Letter of Credit issued by it if the documents presented in
connection with such demand do not strictly comply with the terms of the Letter
of Credit), except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.1(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or creditors
or an Indemnified Party or any other Person, whether or not any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. The Borrower agrees not to assert any claim
against the Administrative Agent, any Issuing Bank, any Lender, any of their
respective Affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of or
otherwise relating to the Loan Documents, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Loans or Letters of
Credit (including any refusal by an Issuing Bank to honor a demand for payment
under a Letter of Credit issued by it if the documents presented in connection
with such demands do not strictly comply with the terms of the Letter of Credit)
and waives any such claim it may now or hereafter have.
Section 11.2 Changes in GAAP. The Administrative Agent and the
---------------
Lenders covenant and agree that in the event there is a change in GAAP which
affects in any material respect the computation of compliance with any financial
covenant or Default contained herein, the Administrative Agent will confer with
the Borrower and the Administrative Agent and the Lenders will undertake in good
faith to reach agreement as to amendments to such covenants so that they will
effectively provide for tests of compliance similar to the tests which were used
prior to such amendment to GAAP.
Section 11.3 Assignments and Participations. (a) Each Lender may
------------------------------
assign to one or
62
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Loans,
its Note or Notes, and its Commitment and its rights and obligations as a Letter
of Credit Participant); provided, however, that
-------- -------
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, any
such partial assignment shall be in an amount equal to Five Million Dollars
($5,000,000) or an integral multiple of One Million Dollars ($1,000,000) in
excess thereof,
(iii) each such assignment by a Lender shall be of a constant, and
not varying, percentage of all of its rights and obligations under this
Agreement and the Notes and Letters of Credit; and
(iv) the parties to such assignment shall execute and deliver to the
Administrative Agent for its acceptance an Assignment and Acceptance in the form
of EXHIBIT H hereto, together with any Note subject to such assignment and a
---------
processing fee of $3,500.00.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of America or a
state thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 3.6(d).
(b) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
EXHIBIT H hereto, (i) accept such Assignment and Acceptance, (ii) record the
- ---------
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(c) The Administrative Agent shall maintain at its address referred
to in Section 11.7 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from
63
time to time upon reasonable prior notice.
(d) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Commitment and its Loans);
rovided, however, that (i) such Lender's obligations under this Agreement shall
- -------- -------
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participant
shall be entitled to the benefit of the yield protection provisions contained in
Article 3 and the right of set-off contained in Article 9, and (iv) the Borrower
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to its
Loans and its Note and to approve any amendment, modification, or waiver of any
provision of this Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Note, extending any scheduled principal payment date or date
fixed for the payment of interest on such Loans or Note, or extending its
Commitment), or releasing all or substantially all of the Collateral or
releasing all or substantially all of the Guaranties.
(e) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time assign and pledge all or any portion of
its Loans and its Notes to any Federal Reserve Bank as collateral security
pursuant to Regulation A of the Board of Governors of the Federal Reserve System
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning the Borrower
or any of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 11.15 hereof.
Section 11.4 Several Obligations of Lenders. The obligation of each
------------------------------
Lender to make the Loans provided for herein is several, and no Lender shall be
liable in the event that the other Lender fails to make any Loan it has agreed
to make hereunder.
Section 11.5 Cumulative Rights and No Waiver. Each and every right
-------------------------------
granted to the Lenders or any of them hereunder or under any other document
delivered hereunder or in connection herewith, or allowed them or any of them by
law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of the Lenders or any of them to exercise, and no delay in
exercising, any right shall operate as a waiver thereof, nor shall any single or
partial exercise by the Lenders or any of them of any right preclude any other
or future exercise thereof or the exercise of any other right.
Section 11.6 Amendments and Waivers. Any provision of this Agreement or
----------------------
any other Loan Document may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Borrower and the Required Lenders
(and, if Article 10 or the rights or duties of the Administrative Agent are
affected thereby, by the Administrative Agent); provided that no such
--------
amendment or waiver shall, unless signed by each Lender directly affected
64
thereby, (i) increase the Commitments of the Lenders, (ii) reduce the amount of
any scheduled payment, or the principal of, or rate of interest on, any Loan or
any fees or other amounts payable hereunder, (iii) postpone any date fixed for
the payment of any scheduled installment of principal of or interest on any Loan
or any fees or other amounts payable hereunder or for termination of any
Commitment, or (iv) change the percentage of the Commitments or of the unpaid
principal amount of the Notes, or the number of Lenders, which shall be required
for the Lenders or any of them to take any action under this Section or any
other provision of this Agreement, (v) release any Guarantor or a material
release of the Collateral, (vi) amend this Section 11.6, or (vii) amend the
definition of "Required Lenders".
Section 11.7 Notices. Any notice shall be conclusively deemed
-------
to have been received by a party hereto and be effective on the day on which
delivered to such party at the address or addresses set forth below (or at such
other address as such party shall specify to the other parties in writing) or if
sent by registered or certified mail, on the third business day after the day on
which mailed, addressed to such party at said address:
If to the Borrower to: FTI Consulting, Inc.
2021 Research Drive
Annapolis, Maryland 21401
Attention: Theodore I. Pincus
With a copy to: Piper Marbury Rudnick & Wolfe LLP
6225 Smith Avenue
Baltimore, Maryland 21209-3600
Attn: Richard C. Tilghman, Jr., Esq.
If to the Administrative
Agent or
BAS: Bank of America, N.A.
231 S. LaSalle Street
Chicago, Illinois 60697
Attention: Susan J. Ryan
Senior Agency Officer
With a copy to: Bank of America, N. A.
6610 Rockledge Drive, Third Floor
Bethesda, Maryland 20817
Attention: Mr. Michael J. Landini
Senior Vice President
With a copy to: Mays & Valentine, L.L.P.
1660 International Drive, Suite 600
McLean, Virginia 22102
Attention: Richard M. Pollak, Esquire
If to any Lender, at the address shown opposite its name on the signature pages
as its Address for Notices.
65
Section 11.8 Applicable Law. This Agreement and the Loan Documents
--------------
shall be construed in accordance with and governed by the laws of the State of
Maryland.
Section 11.9 Entire Agreement. This Agreement and the other Loan
----------------
Documents and any other documents, together with the Exhibits and schedules
attached hereto and thereto, executed in connection herewith represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
Section 11.10 Submission to Jurisdiction; Waiver. The Borrower hereby
----------------------------------
irrevocably and unconditionally:
(a) Submits for itself and its property in any legal action
or proceeding relating directly or indirectly, to this Agreement or any other
Loan Documents, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
Maryland, the courts of the United States of America for the District of
Maryland and appellate courts from any thereof; consents that any such action or
proceeding may be brought in such courts, and waives any objection that it may
now or hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient forum,
and agrees not to plead or claim the same;
(b) Waives personal service of any and all process upon it
and agrees that all such service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 11.7 and that service so made shall be deemed to be
completed upon the earlier of actual receipt or three (3) Business Days after
the same shall have been posted to the Borrower's address as set forth in
Section 11.7;
(c) Waives any bond or security which might be required by
any court prior to allowing the Administrative Agent or any Lender to exercise
any remedies set forth herein or in any of the other Loan Documents; and
(d) Agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit or
otherwise affect the right of any Lender to bring any action or proceeding
against the Borrower or its property in the courts of other jurisdictions.
Section 11.11 WAIVER OF JURY TRIAL; PUNITIVE DAMAGES. EACH PARTY
--------------------------------------
HERETO HEREBY INTENTIONALLY AND VOLUNTARILY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY IN
CONNECTION WITH ANY MATTER DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENTS AND ANY CLAIMS FOR PUNITIVE DAMAGES. EACH PARTY HERETO
ACKNOWLEDGES THAT NO OTHER PARTY OR ANY PERSON ACTING ON BEHALF OF SUCH OTHER
PARTY HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE
66
THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. EACH
PARTY FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE
OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE
WILL.
Section 11.12 Survivorship. All covenants, agreements,
------------
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by the Lenders of the Loans herein
contemplated and the execution and delivery to the Lenders of the Notes
evidencing such Loans and shall continue in full force and effect so long as (i)
any of the Notes or Letter of Credit is outstanding and unpaid or undrawn or
(ii) the Commitments have not expired or been terminated. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower which are contained in
this Agreement shall bind and inure to the benefit of the successors and assigns
of the Lenders.
Section 11.13 Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
Section 11.14 Headings. Section and section headings in this
--------
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 11.15 Confidentiality. The Administrative Agent and each
---------------
Lender (each, a "Lending Party") agree to keep confidential any information
-------------
furnished or made available to it by the Borrower or its Subsidiary, or any
Target pursuant to this Agreement; provided that nothing herein shall prevent
--------
any Lending Party from disclosing such information (a) to any other Lending
Party or any Affiliate of any Lending Party, or any officer, director, employee,
agent, or advisor of any Lending Party or Affiliate of any Lending Party on a
need to know basis, (b) to any other Person on a need to know basis if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any law, rule, or regulation, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public,
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement or by the Borrower,
(g) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party provided Administrative Agent will take reasonable
steps to obtain a protective order for all such information, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
Section 11.16 Right of Set-Off. In addition to any rights now or
----------------
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Lender is authorized at any time and from time to time, without
67
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation branches, agencies or
Affiliates of such Lender wherever located) to or for the credit or the account
of any Loan Party against obligations and liabilities of such Person to such
Lender hereunder, under the Notes, the other Loan Documents or otherwise,
irrespective of whether such Lender shall have made any demand hereunder and
although such obligations, liabilities or claims, or any of them, may be
contingent or unmatured, and any such set-off shall be deemed to have been made
immediately upon the occurrence of any Event of Default even though such charge
is made or entered on the books of such Lender subsequent thereto. Any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 11.3 may exercise all rights of set-off with respect to it participation
interest as fully as if such person were a Lender hereunder.
Section 11.17 Source of Funds. Each of the Lenders hereby represents
---------------
and warrants to the Borrower that at least one of the following statements is an
accurate representation as to the source of funds to be used by such Lender in
connection with the financing hereunder:
(a) no part of such funds constitutes assets allocated to
any separate account maintained by the Lender in which any employee benefit plan
(or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes
assets allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan whose
assets in such account exceed 10% of the total assets of such account as of the
date of such purchase (and, for purposes of this subsection (b), employee
benefit plans maintained by the same employer or employee organization are
deemed to be a single plan);
(c) to the extent that any part of such funds constitutes
assets of an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under Section
401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific
benefits plans which such Lender has identified in writing to the Borrower.
As used in this Section 11.17, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
[SIGNATURES BEGIN ON NEXT PAGE]
68
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be duly
executed as of the date first above written by its duly authorized officer and
the Administrative Agent, BAS and each Lender have caused it to be executed by
their duly authorized officers.
WITNESS/ATTEST: FTI CONSULTING, INC.
/s/ Nancy B. Currie By /s/ Theodore Pincus
- ----------------------------------- -------------------------------
Name: Theodore Pincus
Title: EVP/CFO
69
WITNESS: BANK OF AMERICA, N.A.,
as Administrative Agent
/s/ Laura B. Schmuck By: /s/ Susan J. Ryan
- ----------------------- ------------------------------
Susan J. Ryan
Senior Agency Officer
70
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $10,156,250 31.250%
Revolving $14,843,750 31.250%
BANK OF AMERICA, N.A.
By: /s/ Michael J. Landini
--------------------------------
Michael J. Landini,
Senior Vice President
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) BANK OF AMERICA, N.A.
6610 Rockledge Drive, Suite 300
Bethesda, Maryland 20817
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans) BANK OF AMERICA, N.A.
6610 Rockledge Drive, Suite 300
Bethesda, Maryland 20817
Address for Notices: BANK OF AMERICA, N.A.
6610 Rockledge Drive, Suite 300
Bethesda, Maryland 20817
Attn: Mr. Michael J. Landini
Senior Vice President
Telephone: (301) 493-2976
71
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $6,093,750 18.750%
Revolving $8,906,250 18.750%
SUNTRUST BANK
By: /s/ Kathy Boozer
--------------------------------
Kathy Boozer, Vice President
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) SUNTRUST BANK
25 Park Place, 26/th/ Floor
Atlanta, GA 30303
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans)
Address for Notices: SUNTRUST BANK
25 Park Place, 26/th/ Floor
Atlanta, GA 30303
Attn: Kathy Boozer
Telephone: (404) 724-3609
72
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $6,093,750 18.750%
Revolving $8,906,250 18.750%
ALLFIRST BANK
By: /s/ John C. Acker
--------------------------------
John C. Acker, Vice President
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) ALLFIRST BANK
25 S. Charles Street
MC: 101-560
Baltimore, MD 21201
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans) ALLFIRST BANK
25 S. Charles Street
MC: 101-560
Baltimore, MD 21201
Address for Notices: ALLFIRST BANK
25 S. Charles Street
MC: 101-560
Baltimore, MD 21201
Attn: John C. Acker
Telephone: (410) 244-4954
73
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $4,062,500 12.500%
Revolving $5,937,500 12.500%
SUMMIT BANK
By: /s/ Richard Mady
--------------------------------
Richard Mady, Vice President
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) SUMMIT BANK
250 Moore Street
Hackensack, NJ 07602
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans) SUMMIT BANK
250 Moore Street
Hackensack, NJ 07602
Address for Notices: SUMMIT BANK
250 Moore Street
Hackensack, NJ 07602
Attention: Richard Mady, Vice President
Telephone: (201) 646-5786
74
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $4,062,500 12.500%
Revolving $5,937,500 12.500%
COMERICA BANK
By: /s/ Robert Wilson
--------------------------------
Robert Wilson, Account Officer
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) COMERICA BANK
U.S. Banking East
500 Woodward Avenue
9/th/ Floor, MC 3279
Detroit, MI 48275-3279
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans) COMERICA BANK
U.S. Banking East
500 Woodward Avenue
9/th/ Floor, MC 3279
Detroit, MI 48275-3279
Address for Notices: COMERICA BANK
U.S. Banking East
500 Woodward Avenue
9/th/ Floor, MC 3279
Detroit, MI 48275-3279
Attn: Robert Wilson, Account Officer
Telephone: (313) 222-3463
75
Type of Amount of Commitment
Loan Commitment Percentage
- -------- ---------- ----------
Term $2,031,250 6.250%
Revolving $2,968,750 6.250%
PROVIDENT BANK OF MARYLAND
By: /s/ Samuel B. Bayne, Jr.
--------------------------------
Samuel B. Bayne, Jr.
Vice President
Lending Office for Eurodollar Loans:
(Term Loan and Revolving Loans) PROVIDENT BANK OF MARYLAND
C/O FIRST UNION NATIONAL BANK
Global Cash Management Area
Philadelphia, Pennsylvania 19107
ABA # 031201467
Swift Code PNBPUD22
Credit: Provident Bank
Acct: 2000090254822
Lending Office for Base Rate Loans:
(Term Loan and Revolving Loans) PROVIDENT BANK OF MARYLAND
114 East Lexington Street, MC 465
Baltimore, MD 21202
Address for Notices: PROVIDENT BANK OF MARYLAND
114 East Lexington Street, MC 465
Baltimore, MD 21202
Attn: Jennifer Kissner
Assistant Vice President
Telephone: (410) 277-2862
76
EXHIBITS
--------
A-1 REVOLVING CREDIT NOTE
A-2 TERM NOTE
A-3 SWING LINE NOTE
B NOTICE OF BORROWING
C NOTICE OF CONTINUATION/CONVERSION
D CLOSING CERTIFICATE OF BORROWER
E CLOSING CERTIFICATE OF GUARANTOR
F FORM OF OPINION OF BORROWER'S AND GUARANTOR'S COUNSEL
G LETTER OF CREDIT APPLICATION AND AGREEMENT FORM
H ASSIGNMENT AND ACCEPTANCE
I INTELLECTUAL PROPERTY ASSIGNMENT
J [RESERVED]
K [RESERVED]
L SOLVENCY CERTIFICATE