EXHIBIT 10.3.4
Amended and Restated Revolving Credit and Term Loan Agreement, by and among TRC
Companies, Inc. and its subsidiaries and the First National Bank of Boston,
dated March 15, 1995.
AMENDED AND RESTATED REVOLVING
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CREDIT AND TERM LOAN AGREEMENT
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This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is made
as of the 15th day of March, 1995 among TRC Companies, Inc., a Delaware
corporation ("TRC"), the Subsidiaries listed on Schedule 1 hereto (TRC and such
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Subsidiaries herein collectively referred to as the "Borrowers"), each of which
Borrowers, unless otherwise listed on Schedule 1, has its principal place of
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business at 5 Waterside Crossing, Windsor, Connecticut 06095, THE FIRST NATIONAL
BANK OF BOSTON ("FNBB"), a national banking association having its principal
place of business at 100 Federal Street, Boston, Massachusetts 02110, and such
banks or financial institutions which may become a party hereto pursuant to
(S)15 hereof (herein referred to individually as a "Bank" and, collectively, as
the "Banks"), and FNBB, as agent for the Banks (the "Agent").
WHEREAS, the Borrowers and FNBB are parties to the original Revolving
Credit Agreement dated as of September 22, 1989 (the "Original Closing Date"),
and amended as of September 6, 1990, June 10, 1992, June 28, 1993, August 5,
1993, March 21, 1994, and October 31, 1994 (as so amended, the "Original Credit
Agreement);
WHEREAS, the Borrowers have requested that the Total Commitment Amount be
increased to $35,000,000;
NOW THEREFORE, in consideration of the foregoing, the Borrowers and FNBB,
individually and as Agent, agree that the Original Credit Agreement is hereby
amended and restated in its entirety as set forth herein.
(S)1. DEFINITIONS. (a) The following terms shall have the meanings set
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forth in this (S)1 or elsewhere in the provisions of this Agreement referred to
below:
Agent. FNBB acting as agent for the Banks.
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Agent's Head Office. The Agent's head office is located at 100 Federal
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Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agreement. This Amended and Restated Revolving Credit Agreement, including
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the Exhibits and Schedules hereto, as amended from time to time.
Amendment Date. See (S)7.
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Applicable Rate. The applicable rate per annum of interest on the
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Revolving Credit Loans set forth in the following table:
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Applicable Rate for Applicable Rate for
Funded Debt Ratio Base Rate Amounts Eurodollar Loans
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.30:1 or less Base Rate Eurodollar Rate plus
.75%
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greater than .30:1 but Base Rate Eurodollar Rate plus 1%
less than or equal to
.40:1
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greater than .40:1 but Base Rate Eurodollar Rate plus
less than or equal to 1.25%
.50:1
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greater than .50:1 but Base Rate plus .25% Eurodollar Rate plus
less than or equal to 1.50%
.60:1
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greater than .60:1 Base Rate plus .50% Eurodollar Rate plus
1.75%
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Any change in the Applicable Rate shall become effective (a) with respect to
Base Rate Amounts, on the first day after receipt by the Banks of financial
statements delivered pursuant to (S)5.2 hereof which indicate a change both in
the Funded Debt Ratio and in the Applicable Rate in accordance with the above
table, and (b) with respect to Eurodollar Loans, on the first day of each
Interest Period which begins after receipt by the Banks of such financial
statements.
Balance Sheet Date. June 30, 1994.
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Bank(s). See Preamble.
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Base Rate. A rate per annum (rounded upward, if necessary, to the next
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higher 1/100 of 1%) equal to the greater of: (a) the annual rate of interest
announced from time to time by the Agent at its head office in Boston,
Massachusetts, as its "Base Rate," or (b) the Federal Funds Effective Rate plus
one percent (1%). If for any reason the Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of the Agent to obtain sufficient bids or
publications in accordance with the terms thereof, the rate announced by the
Agent at its head office as its "Base Rate" shall be the Base Rate until the
circumstances giving rise to such inability no longer exist.
Base Rate Amounts. All or any portion of any Loans hereunder, the interest
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rate on which is calculated by reference to the Base Rate.
Borrowers. TRC and each Person listed on Schedule 1 hereto as such
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schedule may be amended from time to time.
Business Day. Any day on which commercial banking institutions in Boston,
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Massachusetts are open for the transaction of banking business, and, if the
applicable Business Day relates to a Eurodollar Loan, a day on which dealings
are carried on in the Eurodollar interbank market and dollar settlements of such
dealings may be effected in New York City.
Commitment. With respect to each Bank, the amount determined by
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multiplying such Bank's Commitment Percentage by the aggregate amount of the
Banks' Total Commitment Amount to make Loans to the Borrowers, as the same may
be reduced from time to time.
Commitment Percentage. With respect to each Bank, the percentage set forth
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beside its name below (subject to adjustment pursuant to (S)2.1 hereof or upon
any assignments pursuant to (S)16 hereof):
Amount of Initial Commitment
Bank Commitment Percentage
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FNBB $35,000,000 100%
Consolidated or consolidated. With reference to any term defined herein,
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shall mean that term as applied to the accounts of the Borrowers, consolidated
in accordance with Generally Accepted Accounting Principles, after eliminating
all intercompany items.
Consolidated Current Assets. All assets of the Borrowers which may
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properly be classified as current assets in accordance with Generally Accepted
Accounting Principles, provided that if unbilled and retainage accounts
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receivable exceed billed accounts receivable, such excess shall be deducted from
the face value amount of accounts receivable.
Consolidated Current Liabilities. All liabilities of the Borrowers
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maturing on demand or within one year from the date as of which Consolidated
Current Liabilities are to be determined, and all other liabilities as may
properly be classified as current liabilities in accordance with Generally
Accepted Accounting Principles.
Consolidated Earnings Before Interest and Taxes. For any period, the
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consolidated net income (or deficit) of the Borrowers, determined in accordance
with Generally Accepted Accounting Principles, plus (a) interest expense, (b)
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income taxes, and (c) acquisition costs permitted by (S)6.4.
Consolidated Funded Debt. With respect to the Borrowers, all Indebtedness,
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including obligations under capitalized leases and indebtedness in respect of
stand-by letters of credit to support financial obligations, incurred through
the borrowing of money or the obtaining of credit, as the same may properly
appear on a consolidated balance sheet of the Borrowers prepared in accordance
with Generally Accepted Accounting Principles.
Consolidated Net Worth. The excess of Consolidated Total Assets over
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Consolidated Total Liabilities, determined in accordance with Generally Accepted
Accounting Principles.
Consolidated Tangible Net Worth. The excess of the consolidated total
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assets of the Borrowers determined in accordance with Generally Accepted
Accounting Principles, less Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of the Borrowers which would be
treated as intangibles under Generally Accepted Accounting Principles including
without limitation, such items as goodwill, trademarks, trade names, service
marks, brand names, copyrights, patents and licenses, and rights with respect to
the foregoing; and
(b) all amounts representing any write-up in the book value of any assets
of the Borrowers resulting from a revaluation thereof
subsequent to the Balance Sheet Date, excluding adjustments to translate foreign
assets and liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52.
Consolidated Total Assets. All assets of the Borrowers determined in
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accordance with Generally Accepted Accounting Principles.
Consolidated Total Debt. Consolidated liabilities of the Borrowers for
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borrowed money, including without limitation any standby letters of credit
issued for the account of any Borrower and obligations under capitalized leases.
Consolidated Total Liabilities. All liabilities of the Borrowers
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determined in accordance with Generally Accepted Accounting Principles, and all
Indebtedness of the Borrowers whether or not so classified, after eliminating
all intercompany items but excluding acquisition accruals in excess of
$1,000,000 relating to the purchase by the Parent of all of the assets of the
former ESI, provided that the amount of such exclusion does not exceed
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$2,000,000.
Conversion Date. December 31, 1997.
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Current Ratio. The ratio of (a) Consolidated Current Assets to (b)
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Consolidated Current Liabilities.
Default. See (S)9.
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Distribution. The declaration or payment of any dividend on or in respect
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of any shares of any class of capital stock of any Borrower in an amount in
excess of an amount equal to the net income of such Borrower in any fiscal year,
other than dividends payable solely in shares of common stock of a Borrower; or
the purchase, redemption, or other retirement of any shares of any class of
capital stock of any Borrower, directly or indirectly through a Subsidiary or
otherwise; the return of capital by any Borrower to its shareholders as such;
any other distribution on or in respect of any shares of any class of capital
stock of any Borrower.
Drawdown Date. The date on which any Loan is made or is to be made or on
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which any Letter of Credit is issued or to be issued.
Environmental Laws. Any judgment, decree, order, law, license, rule or
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regulation pertaining to environmental matters, including those arising under
the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, the
Federal Water Pollution Control Act, the Federal Clean Air Act, the Toxic
Substances Control Act or any United States, state or local or any other
statute, regulation, ordinance, order or decree relating to health, safety or
the environment.
Environmental Services Contracts. All contracts or agreements of any
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Borrower or any of their Subsidiaries to provide consultation, work or services
with respect to matters related to any Environmental Laws.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
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from time to time.
ESI. Environmental Solutions, Inc., a California corporation.
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ESI Note. Promissory note of the Parent dated as of March 21, 1994 in
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favor of the former ESI in the original principal amount of not more than
$14,000,000.
Eurodollar Loans. In relation to any Interest Period, any portions of the
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principal amount of the Loans on which a Borrower has elected pursuant to
(S)2.6(b) hereof to pay interest based on the Eurodollar Rate.
Eurodollar Offered Rate. The rate per annum at which deposits of dollars
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are offered to the Agent by prime banks in whatever Eurodollar interbank market
may be selected by the Agent in its sole discretion, acting in good faith, at or
about 10:00 a.m. local time in such interbank market, two Business Days prior to
the commencement of an Interest Period for a period equal to such Interest
Period in an amount substantially equal to the principal amount requested to be
loaned at or converted to a rate based on the Eurodollar Offered Rate.
Eurodollar Rate. With respect to any Interest Period, the rate per annum,
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rounded upwards to the nearest 1/16 of 1%, determined by the Agent two Business
Days prior to the commencement of such Interest Period, in accordance with the
following formula:
Eurodollar Rate = Eurodollar Offered Rate
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1 - Reserve Rate
Event of Default. See (S)9.
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Federal Funds Effective Rate. For any period, a fluctuating interest rate
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per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers as published for such day by
the Federal Reserve Bank of New York, or for any day on which such rate is not
so published for such day by the Federal Reserve Bank of New York, the average
of the quotations for such day for such transactions received by the Agent from
three federal funds brokers of recognized standing selected by the Agent.
Final Maturity Date. December 31, 2001.
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Funded Debt Ratio. The ratio of (a) Consolidated Funded Debt to (b) Total
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Capitalization.
Generally Accepted Accounting Principles. (i) When used in general,
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Generally Accepted Accounting Principles means principles which are (1)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors or successors, in effect for the
fiscal year ended on the Balance Sheet Date and (2) such that a certified public
accountant would, insofar as the use of accounting principles is pertinent, be
in a position to deliver an unqualified opinion (other than a qualification
regarding changes in Generally Accepted Accounting Principles) as to financial
statements in which such principles have been properly applied; and (ii) when
used with reference to the Borrowers and/or any of their Subsidiaries such
principles shall include (to the extent consistent with such principles) the
accounting practice of the Borrowers reflected in their financial statements for
the year ended on the Balance Sheet Date.
Guaranteed Pension Plan. Any pension plan maintained by any Borrower or
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any of their Subsidiaries, or to which any Borrower or any of their Subsidiaries
contributes, which is required to pay plan termination insurance premiums to the
Pension Benefit Guaranty Corporation.
Hazardous Substances. See (S)4.17(b).
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Indebtedness. All obligations, contingent and otherwise, which in
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accordance with Generally Accepted Accounting Principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including, without limitation, in any event and
whether or not so classified: (i) all debt and similar monetary obligations,
whether direct or indirect; (ii) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed; and (iii) all
guarantees, endorsements and other contingent obligations whether direct or
indirect in respect of Indebtedness of others, including any obligation to
supply funds to or in any manner to invest in, directly or indirectly, the
debtor, to purchase Indebtedness, or to assure the owner of Indebtedness against
loss, through an agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the Indebtedness held by such
owner or otherwise, and the obligations to reimburse the issuer of any letters
of credit, excluding obligations under leases classified as operating leases
under Generally Accepted Accounting Principles.
Intercreditor Agreement. Intercreditor Agreement dated as of March 21,
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1994, by and among the Parent, the former ESI, the former shareholders of ESI,
and the First National Bank of Boston.
Interest Expense. For any period, the aggregate amount of cash interest
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required to be paid or accrued by the Borrowers during such period on all
Indebtedness of the Borrowers outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized.
Interest Period. With respect to each Eurodollar Loan:
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(a) initially, the period commencing on the date of a conversion from a
Base Rate Loan into a Eurodollar Loan or the making of a Eurodollar Loan, and
ending one (1), two (2), three (3), or six (6) months thereafter, as the case
may be, as the Borrowers may select; and
(b) thereafter, each subsequent Interest Period shall begin on the last day
of the preceding Interest Period, and end one (1), two (2), three (3), or six
(6) months thereafter, as the case may be, as the Borrowers may select;
(c) provided that any Interest Period which would otherwise end on a day
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which is not a Business Day shall be deemed to end on the next preceding
Business Day.
Interim Balance Sheet Date. December 31, 1994.
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Investments. All cash expenditures made and all liabilities incurred
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(contingently or otherwise) for the acquisition of stock, all or substantially
all of the assets of, or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, or in respect of
any guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of Investments
outstanding at any particular time, (i) the amount of any Investment represented
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by a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (ii) there shall be included as an
--
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid, (iii) there shall be deducted
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in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (iv) there shall not be deducted in respect of any
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Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (iii) may be deducted when paid; and (v) there
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shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Letters of Credit. Letters of credit issued or to be issued by the Agent
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under (S)2.2 hereof for the account of any Borrower.
Letter of Credit Agreements. Letter of Credit Agreements in such form as
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may be agreed upon by any Borrower and the Agent from time to time which are
entered into pursuant to (S)2.2 hereof, as such Letter of Credit Agreements are
amended, varied or supplemented from time to time.
Letter of Credit Fee. See (S)2.2(e).
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Loans. The Revolving Credit Loans and the Term Loan.
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Loan Documents. Collectively, this Agreement, the Revolving Credit Notes,
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the Term Notes and the Letter of Credit Agreements.
Loan Request. The Notice any Borrower must give the Agent, pursuant to
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(S)2.8, for each Revolving Credit Loan or Letter of Credit requested hereunder.
Majority Banks. As of any date, the Banks holding one hundred percent
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(100%) of the outstanding principal amount of the Loans on such date; and if no
such principal is outstanding, the Banks whose aggregate Commitments constitute
one hundred percent (100%) of the Total Commitment Amount.
Maximum Drawing Amount. With respect to any Letter of Credit, the maximum
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amount from time to time which the beneficiary may draw under such Letter of
Credit, as may be reduced from time to time pursuant to the Letter of Credit.
Notes. The Revolving Credit Notes and the Term Note.
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Notice. Fulfillment of any of the conditions set forth in (S)18.
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Obligations. All indebtedness, obligations and liabilities of the
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Borrowers, individually or collectively, to the Banks and the Agent individually
or collectively, existing on the date of this Agreement or arising thereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, arising or incurred under this
Agreement or a Letter of Credit Agreement or in respect of Loans made and the
Notes or other instruments at any time evidencing any thereof.
Original Closing Date. See Preamble.
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Original Credit Agreement. See Preamble.
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Person. Any individual, corporation, partnership, trust, unincorporated
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association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Reimbursement Obligation. The Borrowers' obligation to reimburse the Agent
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and the Banks on account of any drawing under any Letter of Credit as provided
in (S)2.2(d).
Reserve Rate. The rate in effect from time to time, expressed as a
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percentage, at which the Banks would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements) against
"Eurocurrency Liabilities" (as such term is used in Regulation D) if such
liabilities were outstanding.
Revolving Credit Loans. The revolving credit loans made or to be made to
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the Borrowers as contemplated by (S)2 hereof.
Revolving Credit Notes. (a) The amended and restated promissory note of
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the Borrowers in favor of FNBB evidencing the Revolving Credit Loans dated the
Amendment Date and (b) the promissory note(s) of the
Borrowers in favor of any Bank which becomes a party hereto pursuant to (S)16
hereof, in substantially the form of Exhibit A hereto.
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Senior Debt. All indebtedness of the Borrowers for borrowed money, and
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guaranties of any Person's like indebtedness, less Subordinated Debt.
Subordinated Debt. Indebtedness owing to the former ESI pursuant to the
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terms of the ESI Note.
Subsidiary. Any corporation, association, trust, or other business entity
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of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Term Loan. See (S)2A.1.
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Term Notes. The promissory notes of the Borrowers evidencing the Term Loan
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dated December 31, 1997 and substantially in the form of Exhibit B hereto.
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Total Capitalization. Consolidated Funded Debt plus the excess of
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Consolidated Total Assets over Consolidated Total Liabilities.
Total Commitment Amount. A maximum amount of $35,000,000, as the same may
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be reduced pursuant to (S)2.4 or (S)6.1(f) hereof.
TRC. See Preamble.
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(b) All terms of an accounting character not specifically defined herein
shall have the meanings assigned thereto by Generally Accepted Accounting
Principles. All terms not specifically defined herein which are defined in the
Uniform Commercial Code as in effect in the Commonwealth of Massachusetts shall
have the same meanings herein as therein. Each reference herein to a particular
Person (including, without limitation, the Banks) shall include a reference to
such Person's successors and permitted assigns. The words "herein", "hereof",
"hereunder" and words of like import shall refer to this Agreement as a whole
and not to any particular Section or subdivision of this Agreement.
(S)2. REVOLVING CREDIT LOANS.
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(S)2.1. Commitment to Lend. Subject to the terms and conditions set forth
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in this Agreement, each of the Banks severally agrees to lend to the Borrowers
and the Borrowers may borrow and reborrow from time to time
between the Amendment Date and the Conversion Date upon notice to the Agent
given in accordance with (S)2.8 hereof, such sums as requested by the Borrowers
up to a maximum aggregate principal amount outstanding (after giving effect to
all amounts requested) at any one time equal to the Total Commitment Amount
minus the aggregate Maximum Drawing Amount of all Letters of Credit issued
pursuant to (S)2.2 hereof. Each request for Revolving Credit Loans hereunder
shall constitute a representation by the Borrowers that the conditions set forth
in (S)(S)7 and 8 hereof have been satisfied on the date of such request.
(S)2.2. Letters of Credit.
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(a) Subject to the terms and conditions set forth in this Agreement, upon
written request from the Borrowers, the Agent, on behalf of the Banks and on
reliance upon the representations and warranties of the Borrowers contained
herein, agrees to issue stand-by letters of credit, in such form as the
Borrowers and the Agent may agree upon from time to time, for the account of the
Borrowers from time to time prior to the Final Maturity Date, provided, however,
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that the sum of (i) amounts drawn under Letters of Credit and remaining
unreimbursed by the Borrowers and (ii) the aggregate Maximum Drawing Amount of
all such Letters of Credit, shall not at any time exceed in the aggregate
$10,000,000. No Letter of Credit shall have an expiration date later than the
earlier of (i) one year after the date of issuance of the Letter of Credit or
(ii) 30 days prior to the Conversion Date.
(b) Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage thereof, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to this (S)2.2(d) (such
agreement for a Bank being called herein the "Letter of Credit Participation" of
such Bank). Each Bank agrees that its obligation to reimburse the Agent
pursuant to this (S)2.2(b) shall not be affected in any way by any circumstance
other than the gross negligence or willful misconduct of the Agent.
(c) Each such payment made by a Bank shall be treated as the purchase by
such Bank of a participating interest in the Borrowers' Reimbursement Obligation
under (S)2.2(d) in an amount equal to such payment. Each Bank shall share in
accordance with its participating interest in any interest which accrues
pursuant to (S)2.2(d).
(d) In order to induce the Agent to issue, extend and renew each Letter of
Credit, the Borrowers hereby agree that on each date that any draft presented
under any Letter of Credit is honored by the Agent or the Agent otherwise makes
payment with respect thereto, the Borrowers will reimburse the Agent, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other reasonable
out-of-pocket costs and expenses whatsoever incurred by the Agent or any Bank in
connection with any payment made by the Agent or any Bank under, or with respect
to, such Letter of Credit (at the Borrowers' option, any such Reimbursement
Obligation may be satisfied by conversion of such Reimbursement Obligation to
the Base Rate Loan hereunder, provided that the conditions set forth in (S)8
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hereof have been satisfied).
(e) The Borrowers shall pay Letter of Credit Fee to the Agent equal to (i)
one-half of one percent (1/2%) per annum of the Maximum Drawing Amount of all
performance standby Letters of Credit, and (ii) one percent (1%) per annum of
the Maximum Drawing Amount of all Letters of Credit that support financial
obligations, payable in advance on the date of issuance of the applicable letter
of credit (but in no case less than $350.00). One-eighth of one percent (1/8%)
of the Letter of Credit Fee shall be retained by the Agent, and the balance
shall be shared by the Banks pro-rata in accordance with their Commitment
Percentages.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this (S)2.2 at any time from the date such amounts become
due and payable (whether as stated in this (S)2.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in (S)2.7 for overdue amounts.
(S)2.3. Commitment Fee. The Borrowers agree to pay to the Banks a
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commitment fee at the rate of one-quarter of one percent (1/4%) per annum on the
unused portion of the Total Commitment Amount during each calendar month or
portion thereof from the Amendment Date until the Conversion Date (or to the
date of termination in full of the Commitment, if earlier).
(S)2.4. Reduction of Commitment. Any Borrower shall have the right at any
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time and from time to time upon five (5) Business Days' written notice to the
Agent to reduce by $1,000,000 or an integral multiple thereof or terminate
entirely the amount of the unborrowed portion of the Total
Commitment Amount, if any, which exceeds the aggregate Maximum Drawing Amount of
all Letters of Credit issued pursuant to (S)2.2 hereof, whereupon the Commitment
of the Banks shall be reduced pro rata in accordance with their respective
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Commitment Percentages by the amount specified in such notice or terminated, as
the case may be. The Agent will notify the Banks promptly after receiving any
notice of the Borrowers pursuant to this (S)2.4. No reduction or termination of
the Total Commitment Amount once made may be revoked; the portion of the Total
Commitment Amount reduced or terminated may not be reinstated; and amounts in
respect of such reduced or terminated portion may not be reborrowed.
(S)2.5. Revolving Credit Notes. The Revolving Credit Loans shall be
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evidenced by the Revolving Credit Notes. One Revolving Credit Note shall be
payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrowers irrevocably authorize each Bank to make or cause to be made, in
connection with a Drawdown Date of any Revolving Credit Loan or at the time of
receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's records reflecting the making of the
Revolving Credit Loan or the receipt of such payment (as the case may be). The
outstanding amount of the Revolving Credit Loans set forth on such Bank's record
shall be prima facie evidence of the principal amount thereof owing and unpaid
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to such Bank, but the failure to record, or any error in so recording, any such
amount shall not limit or otherwise affect the obligations of the Borrowers
hereunder or under the Revolving Credit Notes to make payments of principal of
or interest on any Revolving Credit Note when due.
(S)2.6. Interest on Loans.
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(a) As of the Amendment Date, the outstanding principal amount of the
Revolving Credit Loans shall bear interest at the Applicable Rate. Interest on
the Term Loan shall be equal to the Applicable Rate set forth in the first
sentence of this (S)2.6(a) with respect to Revolving Credit Loans, except that
interest on the Term Loan shall be payable at a rate of .375% above the
Applicable Rate when the Funded Debt Ratio is greater than or equal to .50:1.
Interest shall be payable (x) monthly in arrears on the last Business Day of
each calendar month for the immediately preceding month, on all Base Rate
Amounts, (y) on the last day of the applicable Interest Period for Eurodollar
Loans having an interest period of three months or shorter, and if such Interest
Period is longer than three
months, quarterly in arrears on the last business day for each calendar quarter
for the immediately preceding calendar quarter, and (z) on the Conversion Date
for all Revolving Credit Loans and on the Final Maturity Date for the Term Loan.
(b) At the Borrowers' option, so long as no Default or Event of Default has
occurred and is then continuing, the Borrowers may (i) elect to convert any Base
Rate Amount or a portion thereof to a Eurodollar Loan, (ii) at the time of any
Loan Request, specify that such requested Loan shall be a Eurodollar Loan, or
(iii) upon expiration of the applicable Interest Period, elect to maintain an
existing Eurodollar Loan as such, provided that the Borrowers give notice to the
--------
Agent pursuant to (S)2.6(c) hereof. Upon determining any Eurodollar Rate, the
Agent shall forthwith provide notice thereof to the Borrowers, and each such
notice to the Borrowers shall be considered prima facie correct and binding,
-----------
absent manifest error.
(c) Three (3) Business Days prior to the making of any Loan which will be a
Eurodollar Loan or the conversion of any Base Rate Amount to a Eurodollar Loan,
or, in the case of an outstanding Eurodollar Loan, the expiration date of the
applicable Interest Period, the Borrowers shall give written or telecopy notice
received by the Agent not later than 2:00 p.m. (Boston time) of its election
pursuant to (S)2.6(b). Each such notice delivered to the Agent shall specify
the aggregate principal amount of the Loans to be borrowed or maintained as or
converted to Eurodollar Loans and the requested duration of the Interest Period
that will be applicable to such Eurodollar Loans, and shall be irrevocable and
binding upon the Borrowers. If the Borrowers shall fail to give the Agent
notice of their election hereunder together with all of the other information
required by this (S)2.6(c) with respect to any Loan, whether at the end of an
Interest Period or otherwise, such Loan shall be deemed a Base Rate Amount.
(d) Notwithstanding anything herein to the contrary, the Borrower may not
specify an Interest Period that would extend beyond (i) the Conversion Date with
respect to any Revolving Credit Loans, or (ii) the Final Maturity Date with
respect to all or any portion of the Term Loan.
(e) All Eurodollar Loans shall be in a minimum amount of not less than
$1,000,000. In no event shall the Borrowers have more than five (5) different
maturities of Eurodollar Loans outstanding at any time. All requests for
Revolving Credit Loans which will be Base Rate Amounts
shall be in a minimum amount of $100,000 or a greater integral multiple thereof.
(f) The Borrowers agree to indemnify the Agent and the Banks and to hold
them harmless from and against any reasonable loss, cost or expense that the
Agent or any Bank may sustain or incur as a consequence of (a) default by the
Borrowers in payment of the principal amount of or any interest on any
Eurodollar Loans as and when due and payable, including any such loss or expense
arising from interest or fees payable by the Agent or any Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Loans, (b) default by
the Borrowers in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) notice pursuant to (S)2.6(c), and (c) the making of
any payment of a Eurodollar Loan or the making of any conversion of any such
Eurodollar Loan to a Base Rate Amount on a day that is not the last day of the
applicable Interest Period with respect thereto. Such loss or reasonable
expense shall include an amount equal to the excess, if any, as reasonably
determined by the Agent of (i) its cost of obtaining the funds for the Loan
being paid, prepaid, converted, or not borrowed (based on the Eurodollar Rate)
for the period from the date of such payment, prepayment, conversion, or failure
to borrow to the last day of the Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for the Loan which would have
commenced on the date of such failure to borrow) over (ii) the amount of
interest (as reasonably determined by the Agent) that would be realized by the
Agent or any Bank in reemploying the funds so paid, prepaid, converted, or not
borrowed for such period or Interest Period, as the case may be.
(g) Notwithstanding any other provisions of this Agreement, if (a) the
introduction of, any change in, or any change in the interpretation of, any law
or regulation applicable to the Agent or any Bank shall make it unlawful, or any
central bank or other governmental authority having jurisdiction thereof shall
assert that it is unlawful, for the Agent or any Bank to perform its obligations
in respect of any Eurodollar Loans, or (b) if the Agent or any Bank shall
reasonably determine with respect to Eurodollar Loans that (i) by reason of
circumstances affecting any Eurodollar interbank market, adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate which would otherwise
be applicable during any Interest Period, or (ii) deposits of Dollars in the
relevant amount for the relevant Interest Period are not available to the Agent
or such Bank in any Eurodollar interbank market, or (iii) the Eurodollar Rate
does not or will not accurately reflect the cost to the Agent or such Bank for
obtaining or maintaining the applicable Eurodollar Loans during any Interest
Period, then the Agent shall
promptly give telephonic or telecopy notice of such determination to the
Borrowers (which notice shall be conclusive and binding upon the Borrowers
absent manifest error). Upon such notification by the Agent, the obligation of
the Banks to make Revolving Credit Loans which will become Eurodollar Loans
shall be suspended until the Agent and the affected Bank(s) determines that such
circumstances no longer exist, and the outstanding Eurodollar Loans shall
continue to bear interest at the Applicable Rate based on the Eurodollar Rate
until the end of the applicable Interest Period, and thereafter shall be deemed
converted to Base Rate Amounts in equal principal amounts.
(S)2.7. Interest on Overdue Amounts. Except as otherwise limited by
-------- -- ------- -------
(S)3.3 hereof, overdue principal and interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder shall bear interest payable on
demand at a rate per annum equal to one percent (1%) above the Applicable Rate,
until such amount shall be paid in full (after as well as before judgment).
(S)2.8. Requests for Revolving Credit Loans and Letters of Credit. The
-------- --- --------- ------ ----- --- ------- -- ------
Borrowers shall give to the Agent written notice (or telephonic notice confirmed
in a writing or a telecopy) of each Revolving Credit Loan requested hereunder (a
"Revolving Credit Loan Request") not later than 11:00 a.m. (a) on the proposed
Drawdown Date of any Base Rate Loan, or (b) two (2) Business Days prior to the
requested date of issuance of any Letter of Credit. Any Revolving Credit Loan
Request for a Eurodollar Rate Amount shall be given within the time frame
specified in (S)2.6(c). Each such notice shall specify the principal amount of
the Revolving Credit Loan requested and shall reflect the Maximum Drawing Amount
of all Letters of Credit outstanding. Each Revolving Credit Loan Request shall
be irrevocable and binding on the Borrowers, and shall obligate the Borrowers to
accept the Revolving Credit Loan requested from the Agent on the proposed
Drawdown Date.
(S)2.9. Funds for Revolving Credit Loans.
----- --- ---------------- -----
(a) Not later than 2:00 p.m. (Boston time) on the proposed Drawdown Date of
any Revolving Credit Loan, each of the Banks will make available to the Agent,
at its Head Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit Loan. Upon
receipt from each Bank of such amount, and if the Bank is in receipt of the
documents required by (S)(S)7 or 8, as the case may be, and the other conditions
set forth therein are satisfied, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Revolving Credit Loan
made
available to the Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown Date the
amount of its Commitment Percentage of the requested Revolving Credit Loan shall
not relieve any other Bank from its several obligations hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage of
any requested Revolving Credit Loan.
(b) The Agent may (unless notified to the contrary by any Bank by 12:00
noon (Boston time) on any Drawdown Date assume that each Bank has made available
to the Agent the amount of such Bank's Commitment Percentage with respect to the
Revolving Credit Loan to be made on such Drawdown Date, and the Agent may (but
shall not be required to), in reliance upon such assumption, make available to
the Borrowers a corresponding amount. If any Bank makes such amount available
to the Agent on a date after such Drawdown Date, such Bank shall pay the Agent
on demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average annual
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period times (ii) the amount equal to such Bank's
-----
Commitment Percentage of such Revolving Credit Loans, times (iii) a fraction,
-----
the numerator of which is the number of days that elapse from and including such
Drawdown Date to but not including the date on which the amount equal to such
Bank's Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent or such Bank, as applicable, and the
denominator of which is 365. A statement of the Agent submitted to such Bank
with respect to any amounts owing under this paragraph shall be prima facie
----- -----
evidence of the amount due and owing to the Agent by such Bank. If such amount
is not in fact made available to the Agent by such Bank within three (3)
Business Days of such Drawdown Date, the Agent shall be entitled to debit the
Borrowers' accounts to recover such amount from the Borrowers, with interest
thereon at the rate per annum applicable to any Revolving Credit Loans made on
such Drawdown Date.
(S)2.10. Termination of Credit. If any Event of Default shall occur, any
----------- -- ------
unused portion of the Commitment Amount hereunder shall forthwith terminate and
the Banks shall be relieved of all obligations to make Revolving Credit Loans
to, and the Agent shall be relieved of all obligations to issue Letters of
Credit for the account of, any of the Borrowers; or if on any Drawdown Date the
conditions precedent to the making of the Revolving Credit Loans to be made on
such Drawdown Date or the issuance of any Letters of Credit to be issued on such
date are not satisfied (except as a consequence of a default on the part of the
Agent or
any Bank), the Agent may by Notice to the Borrowers, terminate the unused
portion of the Commitment Amount hereunder, and upon such Notice being given
such unused portion of the Commitment Amount hereunder shall terminate
immediately and the Banks shall be relieved of all further obligations to make
Revolving Credit Loans to, and the Agent shall be relieved of all further
obligations to issue Letters of Credit for the account of, the Borrowers
hereunder. No termination of any portion of the Commitment Amount hereunder
shall relieve the Borrowers of any of their existing Obligations to the Banks
hereunder or elsewhere.
(S)2.11. Optional Prepayment. Each Borrower shall have the right to
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prepay Eurodollar Loans of the Revolving Credit Loans made to such Borrower
hereunder as a whole or in part, on the last day of the Interest Period relating
thereto, without premium or penalty. Each Borrower shall also have the right at
any time to prepay Base Rate Amounts of the Revolving Credit Loans at any time,
as a whole or in part, without premium or penalty; provided that the Agent may
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require one (1) Business Days' Notice of such prepayments and, provided, further
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that each partial prepayment shall be in the aggregate principal amount of
$25,000 or a multiple thereof. Subject to the conditions of (S)2.1 hereof,
amounts so prepaid may be reborrowed. In addition, each Borrower may, upon
three (3) Business Days' Notice, prepay all, but not less than all, of the
Eurodollar Loans of the Revolving Credit Loans subject to a particular Interest
Period on a date other than the last day of the Interest Period relating thereto
subject to the terms and conditions of (S)2.6(f) hereof.
(S)2.12. Mandatory Prepayment. If at any time the sum of (i) the
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outstanding Revolving Credit Loans and (ii) the aggregate Maximum Drawing Amount
of all Letters of Credit issued pursuant to (S)2.2 shall exceed the Total
Commitment Amount then in effect, the Borrowers shall immediately make a payment
to the Agent in the amount required to eliminate any such excess, together with
all amounts, if any, due under (S)2.10 hereof.
(S)2A. The Term Loan
-------------
(S)2A.1. Conversion of Revolving Credit Loans; the Term Loan. Subject to
---------- -- --------- ------ ----- --- ---- ----
the terms and conditions set forth herein, including, without limitation, the
satisfaction of the conditions set forth in (S)(S)7 and 8 hereof, the Borrowers
may elect to convert the outstanding principal amount of the Revolving Credit
Loans to a single term loan (the "Term Loan") on the Conversion Date. On the
Conversion Date, the Borrowers shall pay to the Agent for the benefit of the
Banks all interest accrued to
date on the principal amount of all Revolving Credit Loans, together with any
Commitment Fees or other fees hereunder.
(S)2A.2. The Term Notes. One Term Note shall be payable to the order of
--- ---- -----
each Bank in a principal amount equal to such Bank's Commitment and shall
represent the obligation of the Borrowers to pay to such Bank such amount plus
interest accrued thereon as set forth in (S)2.6(a) hereof. The Borrowers
irrevocably authorize each Bank to make or cause to be made a notation on such
Bank's records reflecting the original principal amount of the Term Loan and any
repayments of principal thereon. The aggregate unpaid amount set forth on such
Bank's records shall be prima facie evidence of the principal amount thereof
----- -----
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's records shall not affect the
obligations of the Borrowers hereunder or under the Term Note to make payments
of principal and interest on the Term Note when due.
(S)2A.3. Schedule of Installment Payments of Principal of the Term Loan.
-------- -- ----------- -------- -- --------- -- --- ---- ----
The Borrowers promise to pay to the Agent for the account of the Banks the
principal amount of the Term Loan in fifteen (15) consecutive and equal
quarterly installments plus interest thereon as set forth in (S)2.6(a) hereof,
such installments to be due and payable on the last day of each calendar quarter
commencing on March 31, 1998, with a final payment on the Final Maturity Date in
an amount equal to the unpaid balance of the Term Loan.
(S)2A.4. Optional Prepayment of the Term Loan. The Borrowers shall have
-------- ---------- -- --- ---- ----
the right at any time to prepay the Term Loan on or before the Final Maturity
Date, in whole or in part, upon not less than three (3) Business Days' prior
written notice to the Agent, without premium or penalty, provided that the
--------
Borrowers may make prepayments of any Eurodollar Loan only in accordance with
(S)2.6(f) hereof. All such prepayments shall be in a minimum amount of
$1,000,000. Any prepayment of principal of the Term Loan shall be applied
against the scheduled installments of principal due on the Term Loan in the
inverse order of maturity. No amount repaid with respect to the Term Loan may
be reborrowed.
(S)3. PAYMENTS AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY.
-------- --- ------------ ----- --- ------- ---------
(S)3.1. Payments. All payments of principal, interest, commitment fees,
--------
letter of credit fees and any other amounts due hereunder shall be made by the
Borrowers to the Agent in immediately available funds at the Agent's head office
at 100 Federal Street, Boston, Massachusetts 02110. The Agent shall be entitled
to debit the Borrowers' account with the Agent in the amount of each such
payment when due in order to effect timely payment thereof.
(S)3.2. Computations. All computations of interest on the Loans and of
------------
commitment fees, and letter of credit fees shall be based on a 360-day year and
paid for the actual number of days elapsed. Whenever a payment hereunder or
under the Note becomes due on a day which is not a Business Day, the due date
for such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension.
(S)3.3. Interest Limitation. Notwithstanding any other term of this
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Agreement or the Note or any other document referred to herein or therein, the
maximum amount of interest which may be charged to or collected from any person
liable hereunder or under any Note by any Bank shall be absolutely limited to,
and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any person liable therefor such lawful
maximum, and any term of this Agreement, the Notes, the Letter of Credit
Agreements or any other document referred to herein or therein which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph.
(S)3.4. Additional Costs, Etc. If any present or future applicable law,
---------- ----- ---
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject such Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, such Bank's Commitment Amount, the Loans or the Letters of
Credit (other than taxes based upon or measured by the income or profits of such
Bank), or
(b) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to such Bank of the principal or of the interest
on any Loans or any other amounts payable to such Bank under this Agreement or
the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by, or deposits in
or for the account of, or loans by, or commitments of, or letters of credit
issued by, an office of such Bank, or
(d) impose on such Bank any other conditions or requirements with respect
to this Agreement, the other Loan Documents, the Loans, the Bank's Commitment
Amount, the Letters of Credit or any class of loans or commitments or letters of
credit of which any of the Loans, the Bank's Commitment Amount or the Letters of
Credit forms a part, and the result of any of the foregoing is
(i) to increase the cost to such Bank of making, funding, issuing,
renewing, extending or maintaining the Loans, the Bank's Commitment Amount, or
the Letters of Credit; or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank hereunder on account of the Bank's Commitment Amount, the
Loans, drawings under the Letters of Credit, or
(iii) to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by the Bank from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
or the Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Bank such additional amounts as will be
sufficient to compensate such Bank for such additional cost, reduction, payment
or foregone interest or other sum (after such
Bank shall have allocated the same fairly and equitably among all customers of
any class generally affected thereby).
(S)3.5. Capital Adequacy. If any present or future applicable law,
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governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Bank or any corporation
controlling such Bank determines that the amount of capital required to be
maintained by it is increased by or based upon such Bank's commitment to make,
or maintenance of, Loans or Letters of Credit hereunder, then such Bank may
notify the Borrowers of such fact. To the extent that the costs of such
increased capital requirements are not reflected in the Base Rate, the Borrowers
and such Bank shall thereafter attempt to negotiate in good faith, within thirty
(30) days of the day on which the Borrowers receive such notice, an adjustment
payable hereunder that will adequately compensate such Bank in light of these
circumstances. If the Borrowers and such Bank are unable to agree to such
adjustment within thirty (30) days of the date on which the Borrowers receive
such notice, then commencing on the date of such notice (but not earlier than
the effective date of any such increased capital requirement), the rate payable
hereunder shall increase by an amount that will, in such Bank's reasonable
determination, provide adequate compensation, such amount to be considered prima
-----
facie correct and binding, absent manifest error. Such Bank shall allocate such
- - -----
cost increases among its customers in good faith and on an equitable basis.
(S)3.6. Concerning Joint and Several Liability of the Borrowers.
---------- ----- --- ------- --------- -- --- ---------
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Banks under this Agreement,
for the mutual benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each other Borrower to accept joint and
several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this (S)3.6), it being the intention
of the parties hereto that all the Obligations shall be
the joint and several Obligations of each of the Borrowers without preferences
or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event the other Borrowers will make such payment with respect to, or perform,
such Obligation.
(d) The Obligations of each of the Borrowers under the provisions of
this (S)3.6 constitute full recourse Obligations of each of the Borrowers
enforceable against each such corporation to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each of
the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Revolving Loans made under this Agreement, notice of
any action at any time taken or omitted by the Agent or the Banks under or in
respect of any of the Obligations, and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement. Except as otherwise expressly provided in this
Agreement, each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Agent or the Banks at any time or times in respect of any default by any of
the Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Agent or the Banks in respect of any of the Obligations, and
the taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any of the Borrowers. Without
limiting the generality of the foregoing, each of the Borrowers assents to any
other action or delay in acting or failure to act on the part of the Agent or
the Banks with respect to the failure by any of the Borrowers to comply with any
of its respective Obligations, including, without limitation, any failure
strictly or diligently to assert any right or to pursue any remedy or to comply
fully with applicable laws or regulations thereunder, which might, but for the
provisions of this (S)3.6, afford grounds for terminating, discharging or
relieving any of the Borrowers, in whole or in part, from any of its Obligations
under this (S)3.6, it being the intention of each of the Borrowers
that, so long as any of the Obligations hereunder remain unsatisfied, the
Obligations of such Borrowers under this (S)3.6 shall not be discharged except
by performance and then only to the extent of such performance. The Obligations
of each of the Borrowers under this (S)3.6 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any of the Borrowers, the
Agent or the Banks. The joint and several liability of the Borrowers hereunder
shall continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of any of the Borrowers, the Agent or Banks.
(f) The provisions of this (S)3.6 are made for the benefit of the
Agent and the Banks and their successors and assigns, and may be enforced by it
or them from time to time against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part of the Agent and
the Banks first to marshall any of their claims or to exercise any of their
rights against any other Borrower or to exhaust any remedies available to them
against any other Borrower or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this (S)3.6 shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied. If at
any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by the Agent
and the Banks upon the insolvency, bankruptcy or reorganization of any of the
Borrowers, or otherwise, the provisions of this (S)3.6 will forthwith be
reinstated in effect, as though such payment had not been made.
(g) Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to the Agent or any Bank with respect to any of the
Obligations or any collateral security therefor until such time as all
Obligations have been paid in full or such other Borrower shall be released of
all Obligations by the Agent or such Bank. If, notwithstanding the foregoing,
any payment shall be made to any Borrower on account of such subrogation or
contribution rights at any time when the Obligations shall not have been paid in
full, each and every amount so paid will forthwith be paid over to such Bank to
be credited and applied to the Obligations.
(S)3.7. New Borrowers. The Majority Banks may, in their sole discretion,
-------------
require that any newly-created Subsidiaries, any Subsidiaries acquired pursuant
to (S)6.4 hereof, or any Inactive Subsidiaries listed on Schedule 3.7 hereto,
------------
become Borrowers hereunder by signing Notes, entering into an amendment to this
Agreement with the other parties hereto providing that such Subsidiary shall
become a Borrower hereunder, and providing such other documentation as the
Majority Banks may reasonably request including, without limitation,
documentation with respect to conditions noted in (S)7 hereof. In such event,
the parties hereto will amend Schedule 1 hereto.
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(S)3.8. Amendment Fee. The Borrower shall pay to the Agent on the
-------------
Amendment Date, an amendment fee in the amount of $12,500 (the "Amendment Fee").
(S)4. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and severally
--------------- --- ----------
represent and warrant to the Bank that on and as of the date of this Agreement:
(S)4.1. Corporate Authority.
--------- ---------
(a) Incorporation; Good Standing. Each of the Borrowers and their
------------- ---- --------
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of its respective state of incorporation, (ii) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated, and (iii) is in good standing as a
foreign corporation and is duly authorized to do business in each jurisdiction
in which its property or business as presently conducted or contemplated makes
such qualification necessary except where a failure to be so qualified would not
have a material adverse effect on the business, assets or financial condition of
such Borrower or Subsidiary.
(b) Authorization. The execution, delivery and performance of the Loan
-------------
Documents and the transactions contemplated hereby and thereby (i) are within
the corporate authority of each of the Borrowers and their Subsidiaries, (ii)
have been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any material breach or contravention of any provision
of law, statute, rule or regulation to which any of the Borrowers or any of
their Subsidiaries is subject or any judgment, order, writ, injunction, license
or permit applicable to any of the Borrowers or any of their Subsidiaries so as
to materially adversely affect the assets, business or any activity of any of
the Borrowers or any of their Subsidiaries, and (iv) do not conflict with any
provision of the
corporate charter or bylaws of any of the Borrowers or any of their Subsidiaries
or any agreement or other instrument binding upon any of the Borrowers or any of
their Subsidiaries.
(c) Enforceability. The execution, delivery and performance of the Loan
--------------
Documents will result in valid and legally binding obligations of each of the
Borrowers enforceable against each in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
(S)4.2. Governmental Approvals. The execution, delivery and performance
------------ ---------
by the Borrowers of the Loan Documents and the transactions contemplated hereby
and thereby do not require any approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
(S)4.3. Title to Properties; Leases. The Borrowers and their Subsidiaries
----- -- ---------- ------
own all of their respective assets reflected in the consolidated balance sheet
of the Borrowers and their Subsidiaries as at the Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary course of business since that date), subject to no mortgages,
capitalized leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except those permitted by (S)6.2 hereof.
(S)4.4. Financial Statements; Solvency. (a) There has been furnished to
--------- ---------- --------
the Agent a consolidated balance sheet of the Borrowers and their Subsidiaries
dated the Balance Sheet Date, and a consolidated statement of operations for the
fiscal year then ended, certified by the Borrowers' independent certified public
accountants. Such balance sheet and statement of operations have been prepared
in accordance with Generally Accepted Accounting Principles and fairly present
the financial condition of the Borrowers as at the close of business on the date
thereof and the results of operations for the period then ended. There are no
contingent liabilities of the Borrowers or any of their Subsidiaries as of such
date involving material amounts, known to the officers of any of the Borrowers
not disclosed in said balance sheet and the related notes thereto.
(b) The Borrowers (both before and after giving effect to the transactions
contemplated by this Agreement) are solvent, have assets having a fair value in
excess of the amount required to pay their probable liabilities on their
existing debts as they become absolute and matured, and have, and will have,
access to adequate capital for the conduct of their business and the ability to
pay their debts from time to time incurred in connection therewith as such debts
mature.
(S)4.5. No Material Changes, Etc. Since the Balance Sheet Date, there
-- -------- ------- ---
have occurred no material adverse changes in the financial condition or business
of the Borrowers and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrowers and their Subsidiaries as at the
Balance Sheet Date, or the consolidated statement of operations for the fiscal
year then ended other than changes in the ordinary course of business which have
not had any material adverse effect either individually or in the aggregate on
the business or financial condition of the Borrowers or their Subsidiaries.
Since the Balance Sheet Date, there has not been any Distribution by any of the
Borrowers.
(S)4.6. Franchises, Patents, Copyrights, Etc. Each of the Borrowers and
---------- ------- ---------- ---
their Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
(S)4.7. Litigation. Except as set forth on Schedule 4.7 hereto, there are
---------- -------- ---
no actions, suits, proceedings or investigations of any kind pending or
threatened against any of the Borrowers or any of their Subsidiaries before any
court, tribunal or administrative agency or board which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrowers
and their Subsidiaries, considered as a whole, or materially impair the right of
the Borrowers and their Subsidiaries, considered as a whole, to carry on
business substantially as now conducted, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheets of the Borrowers, or which
question the validity of any of the Loan Documents, or any action taken or to be
taken pursuant hereto or thereto.
(S)4.8. No Materially Adverse Contracts, Etc. None of the Borrowers nor
-- ---------- ------- --------- ---
any of their Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Borrowers' officers has or is expected in the future
to have a materially adverse effect on the business, assets or financial
condition of the Borrowers and their Subsidiaries as a whole. None of the
Borrowers nor any of their Subsidiaries is a party to any contract or agreement
which in the judgment of the Borrowers' officers has or is expected to have any
materially adverse effect on the business of the Borrowers and their
Subsidiaries as a whole, except as otherwise reflected in adequate reserves.
(S)4.9. Compliance With Other Instruments, Laws, Etc. None of the
---------- ---- ----- ----------- ---- ---
Borrowers nor any of their Subsidiaries is violating any provision of their
charter documents or bylaws or any agreement or instrument by which any of them
may be subject or by which any of them or any of their properties may be bound
or any decree, order, judgment, or any statute, license, rule or regulation, in
a manner which could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of any of the Borrowers or any of their Subsidiaries.
(S)4.10. Tax Status. The Borrowers and their Subsidiaries have made or
--- ------
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them are subject
(unless and only to the extent that such Borrower or such Subsidiary has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes); and have paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith; and have set aside on their books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Borrowers and their Subsidiaries know of no basis for
any such claim.
(S)4.11. No Event of Default. No Default or Event of Default has occurred
-- ----- -- -------
and is continuing as of the date of this Agreement.
(S)4.12. Holding Company and Investment Company Acts. None of the
------- ------- --- ---------- ------- ----
Borrowers nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor
are any of them a "registered investment company", or an "affiliated company" or
a "principal
underwriter" of a "registered investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(S)4.13. Absence of Financing Statements, Etc. Except as contemplated by
------- -- --------- ---------- ---
(S)6.2 of this Agreement, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry, or other public office, which purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of any of the Borrowers or any of their
Subsidiaries or rights thereunder.
(S)4.14. Certain Transactions. Except as may be disclosed in the
------- ------------
Borrowers' proxy statements, none of the officers, directors, or employees of
the Borrowers nor their Subsidiaries is presently a party to any transaction
with any other Borrower or Subsidiary (other than for services as employees,
officers and directors), including, without limitation, any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of any of the Borrowers, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
(S)4.15. ERISA Compliance. To the best of the Borrowers' knowledge, the
----- ----------
Borrowers and their Subsidiaries have complied in all material respects with
ERISA, including without limitation, the provisions thereof respecting funding
requirements for, and the termination of, plans and respecting prohibited
transactions thereunder, and the funding of any Guaranteed Pension Plan of any
of the Borrowers and their Subsidiaries complies with the minimum funding
standards of Section 412 of the Internal Revenue Code for 1954, as amended.
(S)4.16. Use of Proceeds. The proceeds of the Revolving Loans shall be
--- -- --------
used for working capital, capital expenditures, acquisitions permitted by (S)6.4
and other general corporate purposes. No proceeds of the Revolving Loans shall
be used in any way that will violate Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
(S)4.17. Environmental Compliance. The Borrowers have taken all necessary
------------- ----------
steps to investigate the past and present condition and usage of their and their
Subsidiaries' properties and the operations conducted thereon and, based upon
such diligent investigation, has determined that,
(a) Neither the Borrowers, their Subsidiaries or any operator of their
properties is in violation, or alleged violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation would have a
material adverse effect on the environment or the business, assets or financial
condition of the Borrowers on a consolidated basis.
(b) Neither the Borrowers nor their Subsidiaries has received notice from
any third party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. (S) 6903(5), any hazardous substances as defined
by 42 U.S.C. (S) 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
(S) 9601(33) and any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any Borrower or any of their
Subsidiaries conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
(c) Except as set forth on Schedule 4.17 attached hereto: (i) no portion
-------------
of any Borrower's or any of their Subsidiaries' properties has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on such
properties; (ii) in the course of any activities conducted by any of the
Borrowers, their Subsidiaries or operators of their properties, no Hazardous
Substances have been generated or are being used on such properties except in
accordance with
applicable Environmental Laws; (iii) there have been no unpermitted releases
(i.e. any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of any of the Borrowers or any of their Subsidiaries, which releases
would have a material adverse effect on the value of such properties or adjacent
properties or the environment; (iv) to the best of the Borrowers' knowledge,
there have been no releases on, upon, from or into any real property in the
vicinity of the real properties of any of the Borrowers or any of their
Subsidiaries which, through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse effect on the value of,
any properties of any of the Borrowers or any of their Subsidiaries; and (v) in
addition, any Hazardous Substances that have been generated on the properties of
the Borrowers or any of their Subsidiaries, have been transported offsite only
by carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid permits
as required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrowers' knowledge, operating
in compliance with such permits and applicable Environmental Laws.
(d) None of the properties of the Borrowers or any of their Subsidiaries
are or shall be subject to any applicable environmental clean up responsibility
law or environmental restrictive transfer law or regulation, by virtue of the
transactions set forth herein and contemplated hereby.
(e) The Borrowers further represent that they have provided the Bank with
true and complete copies of all documents, reports, site assessments, data,
communication and other materials in any of their possession or to which they
have access, which contain information with respect to potential environmental
liabilities of the Borrowers or their Subsidiaries related to compliance with
Environmental Laws.
(S)5. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly and
----------- --------- -- --- ---------
severally covenant and agree that, so long as any Loan or Note is outstanding or
the Banks have any obligation to make Loans or the Agent has any obligation to
issue Letters of Credit hereunder:
(S)5.1. Records and Accounts. Each of the Borrowers will keep, and will
------- --- --------
cause each of its Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in
accordance with Generally Accepted Accounting Principles and with the
requirements of all regulatory authorities and maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, all other contingencies, and all other proper reserves.
(S)5.2. Financial Statements, Certificates and Information. The Borrowers
--------- ---------- ------------ --- -----------
will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than 90 days after
the end of each fiscal year of the Borrowers, the consolidated balance sheet of
the Borrowers as at the end of such year, statements of cash flows, and the
related consolidated statement of operations, each setting forth in comparative
form the figures for the previous fiscal year, all such consolidated statements
to be in reasonable detail, prepared in accordance with Generally Accepted
Accounting Principles, and certified without qualification by Price Waterhouse
L.L.P. or by other independent nationally recognized certified public
accountants, together with a written statement from such accountants to the
effect that they have read a copy of this Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall disclose
in such statement any such Default or Event of Default; provided, that such
--------
accountants shall not be liable to the Bank for failure to obtain knowledge of
any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days after
the end of each fiscal quarter of each fiscal year of The Borrowers, copies of
the unaudited consolidated and consolidating balance sheet and statement of
operations of the Borrowers as at the end of such quarter, subject to year end
audit adjustments, and consolidated statement of cash flows, all in reasonable
detail and prepared in accordance with Generally Accepted Accounting Principles,
together with a certification by the principal financial or accounting officer
of the Borrowers that such financial statements have been prepared in accordance
with Generally Accepted Accounting Principles and fairly present the financial
condition of the Borrowers as at the close of business on the date thereof and
the results of operations for the period then ended;
(c) simultaneously with the delivery of the financial statements referred
to in (a) and (b) above, a statement certified by the principal financial or
accounting officer of the Borrowers that the Borrowers are in
compliance with the covenants contained in (S)(S)5 and 6 hereof as of the end of
the applicable period and setting forth in reasonable detail computations
evidencing such compliance;
(d) When requested by the Agent, within 20 days after the end of each
calendar month, copies of the unaudited consolidated balance sheet and income
statements of the Borrowers as at the end of such calendar month, statements of
cash flows, and an accounts receivable aging summary;
(e) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the stockholders of the Borrowers; and
(f) from time to time such other financial data and information (including
accountants' management letters) as the Agent may reasonably request.
The Borrowers hereby authorize the Banks to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law; provided, however, that the Banks shall, to
-------- -------
the extent allowable under law, notify the Borrowers at the time any such
disclosure is made; and provided further, this authorization shall not be deemed
-------- -------
to be a waiver of any rights to object to the disclosure by the Banks of any
such information which any Borrower has or may have under the federal Right to
Financial Privacy Act of 1978 or other applicable laws, as in effect from time
to time.
(S)5.3. Corporate Existence and Conduct of Business. Each Borrower and
--------- --------- --- ------- -- --------
its Subsidiaries will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence, corporate rights and
franchises; effect and maintain its foreign qualifications, licensing,
domestication or authorization except as terminated by its Board of Directors in
the exercise of its reasonable judgment; use its best efforts to comply with all
applicable laws; and shall not become obligated under any contract or binding
arrangement which, at the time it was entered into would materially adversely
impair the financial condition of the Borrowers, on a consolidated basis. Each
Borrower will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses.
(S)5.4. Maintenance of Properties. Each Borrower will cause all of its
----------- -- ----------
properties and those of its Subsidiaries used or useful in the conduct of
its business or the business of its Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
such Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
--------
however, that nothing in this section or in (S)5.3 above shall prevent any
- - -------
Borrower from discontinuing the operation and maintenance of any of its
properties or those of its Subsidiaries if such discontinuance is, in the
judgment of such Borrower, desirable in the conduct of its or their business and
which do not in the aggregate materially adversely affect the business of the
Borrowers and their Subsidiaries on a consolidated basis.
(S)5.5. Insurance. The Borrowers will maintain, and cause their
---------
Subsidiaries to maintain, with financially sound and reputable insurance
companies, funds or underwriters insurance of the kinds, covering the risks and
in the relative proportionate amounts usually carried by reasonable and prudent
companies conducting businesses similar to that of the Borrowers, including, to
the extent it is commercially available, feasible, and reasonably priced
environmental impairment insurance.
(S)5.6. Taxes. Each Borrower will and will cause each of its Subsidiaries
-----
to duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
(other than taxes, assessments and other governmental charges imposed by foreign
jurisdictions which in the aggregate are not material to the business or assets
of any Borrower on an individual basis or of the Borrowers and their
Subsidiaries on a consolidated basis) imposed upon it and its real properties,
sales and activities, or any part thereof, or upon the income or profits
therefrom, as well as all claims for labor, materials, or supplies, which if
unpaid might by law become a lien or charge upon any of its property; provided,
--------
however, that any such tax, assessment, charge, levy or claim need not be paid
- - -------
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if such Borrower or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto; and provided,
--------
further, that such Borrower and such Subsidiary will pay all such taxes,
- - -------
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security therefor.
(S)5.7. Inspection of Properties, Books, and Contracts. The Borrowers
---------- -- ---------- ----- --- ---------
shall permit the Agent or any of its designated representatives,
to visit and inspect any of the properties of the Borrowers or any of their
Subsidiaries, to examine the books of account of the Borrowers and their
Subsidiaries and contracts under which any of the Borrowers performs services
(and to make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrowers and their Subsidiaries with, and to be
advised as to the same by, their officers, all at such reasonable times and
intervals as the Agent may reasonably request.
(S)5.8. Compliance with Laws, Contracts, Licenses and Permits. Each
---------- ---- ---- --------- -------- --- -------
Borrower will and will cause each of its Subsidiaries to comply with (i) the
provisions of its charter documents and by-laws and all agreements and
instruments by which it or any of its properties may be bound; and (ii) all
applicable laws and regulations (including Environmental Laws), decrees, orders
and judgments ("Applicable Laws") except where noncompliance with such
Applicable Laws would not have a material adverse effect in the aggregate on the
financial condition, properties or business of any Borrower or any Subsidiary.
If at any time while the Notes, Loan or Letter of Credit is outstanding or the
Banks or the Agent have any obligation to make Loans or the Agent has any
obligation to issue Letters of Credit hereunder, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that any Borrower may
fulfill any of its obligations hereunder, such Borrower will immediately take or
cause to be taken all reasonable steps within the power of such Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Agent with evidence thereof.
(S)5.9. Pension Plans. Each Borrower and each Subsidiary shall:
------- -----
(a) fund each pension plan as required by Section 412 of the Internal
Revenue Code of 1954, as amended (the "Code");
(b) furnish to the Agent a copy of any actuarial statement related to any
pension plan required to be submitted under (S)103(d) of ERISA, no later than
the date on which such statement is submitted to the Department of Labor or the
Internal Revenue Service;
(c) furnish to the Agent forthwith, a copy of (i) any notice of a pension
plan termination sent to the Pension Benefit Guaranty Corporation under
(S)4041(a) of ERISA or (ii) any notice, report or demand sent or received by a
pension plan under (S)(S)4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA;
and
(d) furnish to the Agent a copy of any request for waiver from the funding
standards or extension of the amortization periods required by (S)412 of the
Code no later than the date on which the request is submitted to the Department
of Labor or the Internal Revenue Service, as the case may be.
(S)5.10. Further Assurances. The Borrowers will cooperate with the Banks
------- ----------
and execute such further instruments and documents as the Agent or the Banks
shall reasonably request to carry out to the Banks' satisfaction the
transactions contemplated by this Agreement.
(S)5.11. Notice of Potential Claims or Litigation. Each of the Borrowers
------ -- --------- ------ -- ----------
shall deliver to the Banks, within 30 days of receipt thereof, written notice of
any pending action, claim, complaint, or any other notice of dispute or
potential litigation (including without limitation any alleged violation of any
Environmental Law), wherein the potential liability is unspecified or in excess
of $1,000,000, together with a copy of each such notice received by any Borrower
or its Subsidiary.
(S)5.12. Notices. The Borrowers will promptly notify the Banks in writing
-------
of (i) the change in status of any inactive Subsidiary listed on Schedule 3.7
------------
hereto, or (ii) the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Agreement
or any other note, evidence of indebtedness, indenture or other obligation as to
which any Borrower or any of their Subsidiaries is a party or obligor, whether
as principal or surety, the Borrowers shall forthwith give written notice
thereof to the Banks, describing the notice of action and the nature of the
claimed default.
(S)5.13. New Borrowers. Any newly-created Subsidiaries shall become
-------------
Borrowers hereunder by signing Notes, entering into an amendment to this
Agreement with the other parties hereto providing that such Subsidiary shall
become a Borrower hereunder, and providing such other documentation as the Banks
or the Agent may reasonably request including, without limitation, documentation
with respect to conditions noted in (S)7 hereof. In such event, the Agent is
hereby authorized by the parties to amend Schedule 1 hereto to include such
----------
Subsidiary as a Borrower hereunder.
(S)6. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers agree
------- -------- --------- -- --- ---------
that, so long as the Notes are outstanding, the
Banks or the Agent have any obligation to make Loans or the Agent has any
obligation to issue Letters of Credit hereunder:
(S)6.1. Restrictions on Indebtedness. The Borrowers will not, and will
------------ -- ------------
not permit any Subsidiary to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under this Agreement or
the other Loan Documents;
(b) Existing Indebtedness as listed on Schedule 6.1 hereto, on the terms
-------- ---
and conditions in effect as of the date hereof;
(c) Current liabilities of the Borrowers incurred in the ordinary course of
business not incurred through (i) the borrowing of money, or (ii) the obtaining
of credit except for credit on an open account basis customarily extended and in
fact extended in connection with normal purchases of goods and services;
(d) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of (S)5.6 and Indebtedness secured by liens of carriers,
warehousemen, mechanics and materialmen permitted by (S)6.2;
(e) Indebtedness in respect of judgments or awards which have been in force
for less than the applicable period for taking an appeal so long as execution is
not levied thereunder or in respect of which such Borrower shall at the time in
good faith be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal or review
and in respect of which the Borrowers have maintained adequate reserves; and
Indebtedness in respect of a final judgment against any Borrower which is
undischarged, unsatisfied and unstayed and which, with other outstanding final
judgments, undischarged against the Borrowers does not exceed $1,000,000 in
aggregate amount;
(f) Other Indebtedness, not to exceed $5,000,000 in the aggregate, incurred
after the date hereof (including existing Indebtedness of any Subsidiaries of
the Borrowers acquired after the date hereof), through the borrowing of money or
the obtaining of credit, incurred in connection with the lease or acquisition of
property or fixed assets useful
or intended to be used in carrying on the business of the Borrowers and their
Subsidiaries, provided that all such Indebtedness in excess of $1,000,000
-------------
("Additional Indebtedness") shall have a final maturity date after the
Conversion Date, and provided further that to the extent that scheduled
----------------
principal payments of such Additional Indebtedness are payable after the
Conversion Date, the Total Commitment Amount or the amount of the Term Loan, as
applicable, shall be reduced by the amount of such payments.
(S)6.2. Restrictions on Liens. No Borrower will, nor will any Borrower
------------ -- -----
permit any Subsidiary to, create or incur or suffer to be created or incurred or
to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
security interest of any kind upon any of its property or assets of any
character (other than upon any margin stock, as defined in Regulation U of the
Board of Governors of the Federal Reserve System, owned by any Borrower or any
Subsidiary), whether now owned or hereafter acquired, or upon the income or
profits therefrom; or transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of
Indebtedness or performance of any other obligation in priority to payment of
its general creditors; or acquire, or agree or have an option to acquire, any
property or assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; or suffer to exist for a period
of more than 30 days after the same shall have been incurred any Indebtedness or
claim or demand against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles or chattel paper, with or without recourse, except:
------
(a) To the extent permitted under (S)6.1(f) hereof, Liens securing the
Indebtedness incurred in connection with the acquisition of property or assets
useful or intended to be used in carrying on the business of the Borrowers or
the acquiring Subsidiary, provided that such Liens shall encumber only the
-------- ----
property or assets so acquired and do not exceed the fair market value thereof;
and
(b) Liens to secure taxes, assessments and other government charges or
claims for labor, material or supplies in respect of obligations not overdue;
(c) Deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other social
security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness with respect
to which is permitted by (S)6.1(e);
(e) Liens of carriers, warehousemen, mechanics and materialmen, and other
like liens, in existence less than 120 days from the date of creation thereof in
respect of obligations not overdue; and
(f) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under leases
to which any Borrower or any Subsidiary is a party, and other minor liens or
encumbrances none of which in the opinion of the respective Borrower or
Borrowers interferes materially with the use of the property affected in the
ordinary conduct of the business of such Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a material adverse effect
on the business of such Borrower individually or of the Borrowers and their
Subsidiaries on a consolidated basis.
(S)6.3. Restrictions on Investments. No Borrower will, nor will any
------------ -- -----------
Borrower permit any Subsidiary to, make or permit to exist or to remain
outstanding any Investment except the following:
(a) Marketable direct or guaranteed obligations of the United States of
America which mature within one year from the date of purchase by the Borrowers;
(b) Demand deposits, certificates of deposit, bankers' acceptances, time
deposits and variable rate demand obligations of United States banks having
total assets in excess of $1,000,000,000 United States Dollars;
(c) Securities commonly known as "commercial paper" issued by a corporation
organized and existing under the laws of the United States of America or any
state thereof which at the time of purchase have been rated and the ratings for
which are less than "P-1" if rated by Moody's Investors Services, Inc. and less
than "A-1" if rated by Standard and Poor's, provided that such investments
--------------
shall not exceed $2,000,000;
(d) Debt securities of U.S. corporations or U.S. governmental entities
under which full payment of principal and interest is assured by a letter of
credit issued by United States banks having total assets in excess of
$1,000,000,000 United States Dollars and which at the time of purchase are rated
and the ratings for which are not less than "P-1" if rated by
Moody's Investors Services, Inc. and not less than "A-1" if rated by Standard
and Poor's;
(e) (i) Securities commonly known as "municipal securities" issued by a
municipality organized and existing under the laws of any state of the United
States of America which at the time of purchase have been rated and the ratings
for which are not less than "P-1" if rated by Moody's Investors Services, Inc.,
and not less than "A-1" if rated by Standard and Poor's, and (ii) securities
known as the John Nuveen & Co. MuniPreferred series of tax-exempt mutual funds,
all of which funds have a triple-A rating by Standard and Poor's and Moody's
Investor Services, Inc.;
(f) Trade payables, accrued payroll and vacation, and taxes payable, all
accrued in the ordinary course of business;
(g) Present and future Investments by the Borrowers in any Person which is
a Borrower listed on Schedule 1 hereto;
-------- -
(h) Other Investments in addition to the existing Investments listed on
Schedule 6.3(i) hereto, provided that such other Investments shall not exceed
- - --------------- --------
$5,000,000 (such amount determined on the basis of cost) at any one time
outstanding;
(i) Existing Investments listed on Schedule 6.3(i) hereto;
---------------
(j) Short term money market investments in money market loans or portions
of such loans sold by the Agent; and
(k) Investments in acquisitions permitted by (S)6.4.
(S)6.4. Merger, Consolidation, and Acquisitions. No Borrower will become
---------------------------------------
a party to any merger, consolidation, or acquisition except (a) for the merger
or consolidation of a Borrower with another Borrower or (b) where (i) such
Borrower is the surviving corporation of a merger; (ii) such merger,
consolidation, or acquisition is of a company in the environmental consulting,
engineering or related field; (iii) the Banks have been provided with a
certificate demonstrating that the Borrowers are in current compliance with and,
giving effect to the proposed acquisition (including any borrowings made or to
be made in connection therewith), will continue to be in compliance with, all of
the covenants in this (S)6; (iv) all of the assets to be acquired shall be owned
by an existing or newly created Subsidiary of TRC which is a Borrower or, in the
case of a stock acquisition, the acquired company shall become or shall be
merged with a
wholly-owned Subsidiary of TRC that is a Borrower; and (v) the required majority
of the Board of Directors of the target company incumbent at the time such
acquisition is proposed has acquiesced either voluntarily or by order of a court
of competent jurisdiction, or the transaction is otherwise deemed in the
reasonable judgment of the Banks to be a "friendly" acquisition, and provided
--------
that both immediately before and after such merger, consolidation or acquisition
- - ----
no Defaults or Events of Default shall have occurred or be continuing.
(S)6.5. Sale and Leaseback. None of the Borrowers will enter into any
------------------
arrangement, directly or indirectly, whereby any Borrower or any Subsidiary
shall sell or transfer any property owned by it in order then or thereafter to
lease such property or lease other property which any Borrower or any Subsidiary
intends to use for substantially the same purpose as the property being sold or
transferred.
(S)6.6. Sales of Assets. None of the Borrowers will, and no Borrower will
---------------
permit any Subsidiary to, sell or otherwise dispose of any of their respective
assets consisting of securities (other than any margin stock, as defined in
Regulation U of the Board of Governors of the Federal Reserve System, held by
any Borrower or any Subsidiary), real property or personal property, including
without limitation all or any part of any of any Borrower's operating divisions
(excluding sales of assets in the ordinary course of the business), without the
prior written approval of the Bank, with the following exceptions: (i) any
Borrower may sell obsolete or worn-out property not used or useful in its
business, and (ii) Monitoring Instruments for the Environment, Inc. ("MIE") may
be sold at the Borrowers' discretion, provided that, in such event, MIE's rights
--------
under this Agreement and the Note shall terminate.
(S)6.7. Consolidated Tangible Net Worth. The Borrowers will not at any
-------------------------------
time permit Consolidated Tangible Net Worth to be less than (a) $4,000,000 plus
----
(b) the sum of (i) 50% of all quarterly positive net income earned after March
31, 1994 on a cumulative basis, and (ii) 50% of the value of all property
received by the Borrowers in exchange for the issuance of new common or
preferred shares (or the sale of treasury shares) of the Borrowers.
(S)6.8. Current Ratio. The Borrowers will not permit the Current Ratio at
-------------
the end of each fiscal quarter to be less than 1.75:1.
(S)6.9. Interest Coverage. The Borrowers will not permit the ratio of
-------- --------
Consolidated Earnings Before Interest and Taxes to Interest Expense to be less
than 3:1 at any time.
(S)6.10. Consolidated Liabilities. The Borrowers will not permit the
------------------------
ratio of Consolidated Total Liabilities to Consolidated Net Worth to be greater
than 1.50:1.
(S)6.11. Subordinated Debt. The Borrowers will not (a) amend, supplement
------------------
or otherwise modify the terms of any of the Subordinated Debt, (b) make any
payment of principal or other amounts owing with respect thereto (other than
payments of interest and scheduled payments of principal so long as no Default
or Event of Default shall exist or would be created by the making of such
payment), or (c) prepay any of the Subordinated Debt.
(S)7. CONDITIONS OF FIRST LOANS.
---------- -- ----- -----
The obligation of the Banks to make the first Revolving Loan hereunder
(including without limitation the obligation of the Agent to issue Letters of
Credit) and otherwise be bound by the terms of this Agreement shall be subject
to the satisfaction of each of the following conditions precedent (the date such
conditions precedent are satisfied being the "Amendment Date"):
(S)7.1. Representations and Warranties. The representations and
--------------- --- ----------
warranties contained in (S)4 hereof and otherwise made by the Borrowers in
writing in connection with the transactions contemplated by this Agreement shall
have been correct as of the date on which made and shall also be correct at and
as of the date of the first Revolving Loan with the same effect as if made at
and as of such time, except to the extent that the facts upon which such
representations and warranties are based may in the ordinary course be changed
by the transactions permitted or contemplated hereby.
(S)7.2. Performance; No Default. The Borrowers shall have performed and
----------- -- -------
complied with all terms and conditions herein required to be performed or
complied with by them prior to or at the time of the first Revolving Loan, and
at the time of the first Revolving Loan, as certified by the chief financial
officer of TRC, there shall exist no Default or Event of Default or condition
which would, with either or both the giving of notice or the lapse of time,
result in a Default or Event of Default upon consummation of the first Loans.
(S)7.3. No Adverse Change. As of the date of the first Revolving Loan, no
-- ------- ------
material adverse change since the Interim Balance Sheet shall have occurred
since the date hereof in the business or financial condition of the Borrowers in
the aggregate.
(S)7.4. Corporate Action. All corporate action necessary for the valid
--------- ------
execution, delivery and performance by each Borrower of the Loan Documents shall
have been duly and effectively taken, and evidence thereof satisfactory to the
Agent shall have been provided to the Agent.
(S)7.5. Delivery of Revolving Credit Notes. The Borrowers shall have
-------- -- --------- ------ -----
executed and delivered to each of the Banks a Revolving Credit Note,
appropriately completed in accordance with (S)2.5.
(S)7.6. Opinion of Borrower's Counsel. The Bank shall have received from
------- -- ---------- -------
Borrowers' counsel a favorable opinion addressed to the Agent, dated the
Amendment Date.
(S)7.7. No Legal Impediment. No change shall have occurred in any law or
-- ----- ----------
regulations thereunder or interpretations thereof which in the reasonable
opinion of the Agent would make it illegal for the Agent to make Loans
hereunder.
(S)7.8. Governmental Regulation. The Agent shall have received such
------------ ----------
statements in substance and form reasonably satisfactory to the Agent as it
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
(S)7.9 Financial Statements. The Borrowers shall have delivered to the
--------- ----------
Banks unaudited financial statements dated the Interim Balance Sheet Date.
(S)7.10. Proceedings and Documents. All proceedings in connection with
----------- --- ---------
the transactions contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Banks as of the date hereof in
substance and in form satisfactory to the Banks, and the Banks shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Banks may reasonably request.
(S)8. CONDITIONS OF SUBSEQUENT LOANS.
---------- -- ---------- -----
The obligation of the Banks to make any Revolving Loan (including without
limitation the obligation of the Agent to issue any Letter of Credit) subsequent
to the first Revolving Loan is subject to the following conditions precedent:
(S)8.1. Representations True; No Event of Default. Each of the
--------------- ---- -- ----- -- -------
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Revolving Loan with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
changes occurring in the ordinary course of business which singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
(S)8.2. Performance; No Event of Default. The Borrowers shall have
------------ -- ----- -- -------
performed and complied with all terms and conditions herein required to be
performed or complied with by them prior to or at the time of the Revolving
Loan, and at the time of the Revolving Loan, there shall exist no Event of
Default or condition which would result in an Event of Default upon consummation
of the Revolving Loan (including without limitation any amounts to be drawn
under a Letter of Credit).
Each request by any Borrower for a Revolving Loan (including without limitation
each request for issuance of a Letter of Credit) subsequent to the first
Revolving Loan shall constitute certification by such Borrower that the
conditions specified in (S)(S)8.1 and 8.2 will be duly satisfied on the date of
such Revolving Loan or Letter of Credit issuance.
(S)9. EVENTS OF DEFAULT; ACCELERATION. If any of the following events
------ -- ------- ------------
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice and/or lapse of time, "Defaults") shall
occur:
(a) if the Borrowers shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) if the Borrowers shall fail to pay any interest, letter of credit fees
or commitment fees on the Loans within five (5) Business Days after
the same shall become due and payable whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
(c) if the Borrowers shall fail to comply with their covenants contained in
(S)5 (excepting (S)(S)5.2, 5.4, and 5.9,) or (S)6 hereof;
(d) if the Borrowers shall fail to perform any term, covenant or agreement
herein contained (other than those specified in subsections (a), (b), and (c)
above) within 45 business days after written notice of such failure has been
given to such Borrower by the Agent;
(e) if any representation or warranty contained in this Agreement or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall prove to have been false in any material respect upon the date
when made;
(f) if any Borrower or any Subsidiary shall fail to pay at maturity, or
within any applicable period of grace, any and all obligations for borrowed
money in an aggregate amount greater than $1,000,000 (excluding, however, any
agreement relating to any pledge of, or restriction on the pledge or disposition
of, margin stock, as defined in Regulation U of the Board of Governors of the
Federal Reserve System, owned by any Borrower), or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing borrowed money in an aggregate amount greater
than $1,000,000 for such period of time as would, or would have permitted
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof; or
(g) if any Borrower makes an assignment for the benefit of creditors, or
admits in writing its inability to pay or generally fails to pay its debts as
they mature or become due (excluding, however, any agreement relating to any
pledge of, or restriction on the pledge or disposition of, margin stock, as
defined in Regulation U of the Board of Governors of the Federal Reserve System,
owned by any Borrower), or petitions or applies for the appointment of a trustee
or other custodian, liquidator or receiver of any of the Borrowers or of any
substantial part of the assets of any of the Borrowers or their Subsidiaries or
commences any case or other proceeding relating to any of the Borrowers or their
Subsidiaries under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or takes any action to
authorize or in furtherance of any of the foregoing, or if any such petition or
application is filed or any such case or other proceeding is commenced against
any of the Borrowers or their Subsidiaries and any of the Borrowers or their
Subsidiaries indicates its approval thereof, consent thereto or acquiescence
therein;
(h) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any of the Borrowers or their
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of any
Borrower or any Subsidiary in an involuntary case under Federal bankruptcy laws
as now or hereafter constituted, and such decree or order remains in effect for
more than 30 days, whether or not consecutive; or
(i) if there shall remain in force, undischarged, unsatisfied and unstayed,
for more than thirty days, whether or not consecutive, any final judgment
against any Borrower or any Subsidiary which, with other outstanding final
judgments, undischarged, against the Borrowers exceeds in the aggregate
$1,000,000 after taking into account any insurance coverage;
then, the Agent may, and at the request of the Majority Banks shall, by notice
in writing to the Borrowers declare all amounts owing with respect to this
Agreement and the Note to be, and they shall thereupon forthwith mature and
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, that in the event of any Event of Default specified in
--------
(S)(S)9(g) or 9(h) hereof, all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent.
Upon demand by the Agent after the occurrence of any Event of Default, the
Borrowers shall immediately provide to the Agent cash in an amount equal to the
aggregate Maximum Drawing Amount of all Letters of Credit outstanding, to be
held by the Agent as collateral security for the Obligations. In case any one
or more of the Events of Default shall have occurred and be continuing, and
whether or not the Agent shall have accelerated the maturity of the Loans
pursuant to the foregoing, any Bank, if owed any amount with respect to the
Loans may proceed to protect and enforce its rights by suit in equity, action at
law and/or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or any instrument pursuant
to which the obligations of the Borrowers to such Bank hereunder are evidenced,
including as permitted by applicable law the obtaining of the ex parte
-- -----
appointment of a receiver, and, if such
amount shall have become due, by declaration or otherwise, proceed to enforce
the payment thereof or any other legal or equitable right of such Bank. No
remedy herein conferred upon the Agent or Banks or the holders of the Notes is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
(S)10. (Intentionally Omitted)
(S)11. SETOFF. Regardless of the adequacy of any collateral, during the
------
continuance of an Event of Default, any deposits or other sums credited by or
due from any Bank to the Borrowers and any securities or other property of the
Borrowers in the possession of any Bank may be applied to or set off against the
payment of obligations of the Borrowers hereunder and under the Note and any and
all other liabilities, direct, or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, of the Borrowers to the Banks.
(S)12. EXPENSES. Whether or not the transactions contemplated herein
--------
shall be consummated, the Borrowers hereby promise to reimburse the Agent for
all reasonable out-of-pocket attorneys' fees and disbursements, incurred or
expended in connection with the preparation, syndication or interpretation of
this Agreement, the Notes, the Letter of Credit Agreements, or any amendment
hereof or thereof, or with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrowers hereunder or thereunder, or in
connection with any litigation, proceeding or dispute hereunder in any way
related to the credit hereunder, including without limitation the so-called
"work-out" thereof after the occurrence of a Default or Event of Default. The
Borrowers will pay any taxes (including any interest and penalties in respect
thereof), other than the Banks' federal and state income taxes, payable on or
with respect to the transactions contemplated by this Agreement (the Borrowers
hereby agreeing to indemnify the Banks with respect thereto). The Borrower
further promises to reimburse the Agent and the Banks for all such fees and
disbursements incurred or expended in connection with the enforcement of any
Obligations or the satisfaction of any indebtedness of the Borrower hereunder or
thereunder, or in connection with any litigation, proceeding or dispute in any
way related to the credit hereunder.
(S)13. THE AGENT.
--- -----
(S)13.1. Appointment of Agent, Powers and Immunities. Each Bank hereby
----------- -- - --- ------ --- ----------
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents. Each Bank irrevocably authorizes the Agent to
execute all other instruments relating thereto and to take such action on behalf
of each of the Banks and to exercise all such powers as are expressly delegated
to the Agent hereunder and in all related documents, together with such other
powers as are reasonably incidental thereto. It is agreed that the duties,
rights, privileges and immunities of the Agent, in its capacity as issuer of
Letters of Credit hereunder, shall be identical to its duties, rights,
privileges and immunities as Agent as provided in this (S)13. The Agent shall
not have any duties or responsibilities or any fiduciary relationship with any
Bank except those expressly set forth in this Agreement. Neither the Agent nor
any of its affiliates shall be responsible to the Banks for any recitals,
statements, representations or warranties made by the Borrowers or any other
Person whether contained herein or otherwise or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
other Loan Documents or any other document referred to or provided for herein or
therein or for any failure by the Borrowers any other Person to perform its
obligations hereunder or thereunder or in respect of the Revolving Credit Notes
and Term Notes. The 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. Neither the Agent nor any of its
directors, officers, employees or agents shall be responsible for any action
taken or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or willful misconduct. The Agent
in its separate capacity as a Bank shall have the same rights and powers
hereunder as any other Bank.
(S)13.2. Actions By Agent. The Agent shall be fully justified in failing
------- -- -----
or refusing to take any action under this Agreement as it reasonably deems
appropriate unless it shall first have received such advice or concurrence of
the Banks and shall be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any of the Loan Documents in accordance with a request of the Banks, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Banks and all future holders of the Revolving Credit Notes, Term Notes
or any Letter of Credit Participation.
(S)13.3. Indemnification. Without limiting the obligations of the
---------------
Borrowers hereunder or under any other Loan Document, the Banks agree to
indemnify the Agent, ratably in accordance with their respective Commitment
Percentages, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements or any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the enforcement of any of the terms hereof or thereof or of any such other
documents; provided, that no Bank shall be liable for any of the foregoing to
-------- ----
the extent they arise from the gross negligence or willful misconduct of the
Agent (or any agent thereof).
(S)13.4. Reimbursement. Without limiting the provisions of (S)13.3, the
-------------
Banks and the Agent hereby agree that the Agent shall not be obliged to make
available to any Person any sum which the Agent is expecting to receive for the
account of that Person until the Agent has determined that it has received that
sum. The Agent may, however, disburse funds prior to determining that the sums
which the Agent expects to receive have been finally and unconditionally paid to
the Agent, if the Agent wishes to do so. If and to the extent that the Agent
does disburse funds and it later becomes apparent that the Agent did not then
receive a payment in an amount equal to the sum paid out, then any Person to
whom the Agent made the funds available shall, on demand from the Agent, refund
to the Agent the sum paid to that Person. If, in the opinion of the Agent, the
distribution of any amount received by it in such capacity hereunder or under
the Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(S)13.5. Documents. The Agent will forward to each Bank, promptly after
---------
the Agent's receipt thereof, a copy of each notice or other document furnished
to the Agent for such Bank hereunder; provided, however, that, notwithstanding
-------- -------
the foregoing, the Agent may furnish to the Banks a monthly summary with respect
to Letters of Credit issued hereunder in lieu of copies of the related Letter of
Credit Applications.
(S)13.6. Non-Reliance on Agent and Other Banks. Each Bank represents that
------------ -- ----- --- ----- -----
it has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of the financial condition and affairs of the Borrowers and the
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement or any other Loan Document. The Agent shall
not be required to keep informed as to the performance or observance by the
Borrowers of this Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein or by any other Person of any
other agreement or to make inquiry of, or to inspect the properties or books of,
any Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning any person which may come into the
possession of the Agent or any of its affiliates. Each Bank shall have access
to all documents relating to the Agent's performance of its duties hereunder at
such Bank's request. Unless any Bank shall promptly object to any action taken
by the Agent hereunder (other than actions to which the provisions of (S)13.8
are applicable and other than actions which constitute gross negligence or
willful misconduct by the Agent), such Bank shall conclusively be presumed to
have approved the same.
(S)13.7. Resignation of Agent. The Agent may resign at any time by giving
----------- -- -----
60 days prior written notice thereof to the Banks and the Borrowers. Upon any
such resignation, the Banks shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Banks and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
combined capital and surplus in excess of $150,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation, the provisions of this Agreement shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent. Any new Agent appointed
pursuant to this (S)13.7 shall immediately issue new Letters of Credit in place
of Letters of Credit previously issued by the Agent.
(S)13.8. Action by the Banks, Consents, Amendments, Waivers, Etc. Except
------ -- --- ----- -------- ---------- ------- ---
as otherwise expressly provided in this (S)13.8, any action to be taken
(including the giving of notice) may be taken or any consent or approval
required or permitted by the Agreement or any other Loan Document to be given by
the Banks may be given, and any term of this Agreement, any other Loan Document
or any other instrument, document or agreement related to this Agreement or the
other Loan Documents or mentioned therein may be amended and the performance or
observance by the Borrowers or any other person of any of the terms thereof and
any Default or Event of Default (as defined in any of the above-referenced
documents or instruments) may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Majority Banks; provided, however, that no such consent or
-------- -------
amendment which affects the rights, duties or liabilities of the Agent shall be
effective without the written consent of the Agent. Notwithstanding the
foregoing, no amendment, waiver or consent shall do any of the following unless
in writing and signed by ALL of the Banks (a) increase the Total Commitment
---
Amount (or subject the Banks to any additional obligations), (b) reduce the
principal of or interest on the Revolving Credit Notes or Term Notes (including,
without limitation, interest on overdue amounts) or any fees payable hereunder,
(c) postpone any date fixed for any payment in respect of principal or interest
(including, without limitation, interest on overdue amounts) on the Revolving
Credit Notes or Term Notes, or any fees payable hereunder; (d) change the
definition of "Majority Banks" or the number of Banks which shall be required
for the Banks or any of them to take any action under the Loan Documents; (e)
amend this (S)13.8; or (f) change the Commitment Percentage of any Bank, except
as permitted under (S)16 hereof.
(S)14. INDEMNIFICATION. The Borrowers agree to indemnify and hold
---------------
harmless the Banks, as well as the Banks' shareholders, directors, agents,
officers, subsidiaries and affiliates, from and against all damages, losses,
settlement payments, obligations, liabilities, claims, actions or causes of
action, whether statutorily created or under the common law, and reasonable
costs and expenses incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the transactions contemplated
hereby and to the extent not caused by the gross negligence or willful
misconduct of the Banks. In any investigation, proceeding or litigation, or the
preparation therefor, the Banks shall be entitled to select its own counsel and,
in addition to the foregoing indemnity, the Borrowers agree to pay promptly the
reasonable fees and
expenses of such counsel. In the event of the commencement of any such
proceeding or litigation, the Borrowers shall be entitled to participate in such
proceeding or litigation with counsel of their choice at their expense, provided
--------
that such counsel shall be reasonably satisfactory to the Banks. The covenants
of this (S)14 shall survive payment or satisfaction of payment of amounts owing
with respect to the Revolving Credit Notes or Term Notes or any other Loan
Document.
(S)15. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
-------- -- --------- ---
representations and warranties made herein, in the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrowers
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by it, and
shall survive the making by the Banks of the Loans and the issuance by the Agent
of the Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement, any Letter of
Credit Agreement or the Revolving Credit Notes or Term Notes remains outstanding
and unpaid or any Bank or the Agent has any obligation to make any Loans or
issue any Letters of Credit hereunder. All statements contained in any
certificate or other paper delivered to the Banks or the Agent at any time by or
on behalf of the Borrowers pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrowers hereunder.
(S)16. SYNDICATION AND PARTICIPATION. It is understood and agreed that
----------- --- -------------
each Bank shall have the right, at any time after making Revolving Credit Loans
and after participation in issuance of Letters of Credit hereunder in excess of
$5,000,000, to syndicate or participate at any time the Commitment Amount and
interests in the risk relating to any Revolving Credit Loans, to additional
banks or other financial institutions so long as FNBB will be the Agent
thereunder, and so long as the Borrowers and the Agent have consented to such
assignment (such consent not to be unreasonably withheld). It is further agreed
that each bank or other financial institution which executes and delivers to the
Agent and the Borrowers hereunder a counterpart joinder in form and substance
satisfactory to the Agent and such bank or financial institution shall, on the
date specified in such counterpart joinder, become a party to this Agreement and
the other Loan Documents for all purposes of this Agreement and the other Loan
Documents, and its Commitment shall be as set forth in such counterpart joinder.
Upon the execution and delivery of such counterpart joinder, (a) the Borrowers
shall issue to the bank or other financial institution a Revolving Credit Note
or Term Note in the amount of such bank's or other financial institution's
Commitment dated
as of the date of such assignment or such other date as may be specified by the
Bank and otherwise completed in substantially the form of Exhibit A; (b)
------- -
(S)(S)2.1, 2.2, and 3.1 shall be deemed to be amended to reflect the Commitment
and interest in the risk related to Revolving Credit Loans of such bank or other
financial institution and the Total Commitment Amount of the Banks shall be
reduced by a like amount; (c) Commitment the Agent shall distribute to the
Borrowers, the Banks, and such bank or financial institution a schedule
reflecting such changes; and (d) this Agreement shall be appropriately amended
to reflect (i) the status of such bank or financial institution as a party
hereto and (ii) the status and rights of the Bank as agent for itself and such
other bank or financial institution hereunder. Notwithstanding the foregoing, no
syndication or participation shall operate to increase the Total Commitment
Amount hereunder or reduce the sum of (a) the Commitment of any Bank plus (b)
----
the principal amount of such Bank's Loans to be less than $5,000,000 or
otherwise alter the substantive terms of this Agreement.
(S)17. PARTIES IN INTEREST. All the terms of this Agreement and the other
------- -- --------
Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; provided, that no Borrower shall assign or transfer its rights
--------
hereunder without the prior written consent of the Banks.
(S)18. NOTICES, ETC. Except as otherwise expressly provided in this
------- ---
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States first-class mail, postage
prepaid, or sent by telecopier and confirmed by letter, addressed as follows:
(a) if to the Borrowers, at 5 Waterside Crossing, Windsor, Connecticut
06095, Attention: Peter J. Russo, Senior Vice President and Chief Financial
Officer, telecopy number 203-298-6291, or at such other address for notice as
the Borrowers, shall last have furnished in writing to the Person giving the
notice; or
(b) if to the Agent or The First National Bank of Boston, at 100 Federal
Street, Boston, Massachusetts 02110, USA, Attention: Arthur J. Oberheim, Vice-
President, telecopy number 617-434-2160, or such other address for notice as the
Bank shall last have furnished in writing to the Person giving the notice; or
(c) if to the Banks, at the First National Bank of Boston, 100 Federal
Street, Boston, Massachusetts 02110, USA, Attention: Arthur J. Oberheim, Vice-
President, telecopy number 617-434-2160, or such other address for notice as the
Bank shall last have furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand to a responsible officer
of the party to which it is directed, at the time of the receipt thereof by such
officer, (b) if sent by registered or certified first-class mail, postage
prepaid, five business days after the posting thereof, and (c) if sent by telex
or cable, at the time of the dispatch thereof, if in normal business hours in
the country of receipt, or otherwise at the opening of business on the following
business day.
(S)19. MISCELLANEOUS. The rights and remedies herein expressed are
-------------
cumulative and not exclusive of any other rights which the Banks or the Agent
would otherwise have. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
(S)20. ENTIRE AGREEMENT, ETC. This Agreement, together with the other
------ --------- ---
Loan Documents and any other documents executed in connection herewith or
therewith, express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally or in writing, except as
provided in (S)22.
(S)21. GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS
--------- ---
ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR
ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID
COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE
BORROWERS CONSENT TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS
LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO
ENFORCE THE RIGHTS OF THE BANKS UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
(S)22. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
-------- ---------- ------- ---
provided in this Agreement, any consent or approval required or permitted by
this Agreement to be given by the Banks may be given, and any term of this
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrowers of any terms of this
Agreement or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrowers and the written consent of the Banks. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
the Banks in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon any Borrower shall entitle
such Borrower or any other Borrower to other or further notice or demand in
similar or other circumstances.
(S)23. NO RESTRICTIONS WITH RESPECT TO MARGIN STOCK. Notwithstanding any
-- ------------ ---- ------- -- ------ -----
other provisions of this Agreement or the Note, and further implementing the
exceptions with respect to margin stock (as defined in Regulation U of the Board
of Governors of the Federal Reserve System) from the restrictions on Liens in
(S)6.2, the restrictions on sale of assets in (S)6.6, and certain defaults in
(S)(S)9(f) and (g), (a) nothing in this Agreement or in the Notes shall prevent
any Borrower or any Subsidiary from selling, transferring, pledging or otherwise
disposing of any such margin stock, and (b) no Borrower's or Subsidiary's right
or ability to sell, transfer, pledge or otherwise dispose of any such margin
stock shall in any way be restricted while any Loan or Note is outstanding, nor
shall any such sale, transfer, pledge or other disposition ever be the cause for
acceleration of the maturity of the Note, it being the intention of the parties
hereto that in no event or manner shall the Loans, the Notes or any obligations
of any of the Borrowers under this Agreement be secured, directly or indirectly,
by any such margin stock.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the date first set forth above.
(Corporate Seal)
TRC COMPANIES, INC.
By: /s/
------------------------
Title: Chairman and CEO
---------------------
MONITORING INSTRUMENTS
FOR THE ENVIRONMENT, INC.
By: /s/
------------------------
Title: Chairman
---------------------
TRC ENVIRONMENTAL
CORPORATION
By: /s/
------------------------
Title: Chairman
---------------------
TRC ENGINEERS, INC. (d/b/a/
Raymond Keyes Associates)
By: /s/
------------------------
Title: Chairman
---------------------
TRC INVESTMENT
CORPORATION
By: /s/
------------------------
Title: Chairman
---------------------
NORTH AMERICAN
WEATHER CONSULTANTS,
INC.
By: /s/
------------------------
Title: Chairman
---------------------
ENVIRONMENTAL
SOLUTIONS, INC.
By: /s/
------------------------
Title: Chairman
---------------------
MARIAH ASSOCIATES, INC.
By: /s/
------------------------
Title: Chairman
---------------------
THE FIRST NATIONAL BANK OF
BOSTON, as Agent and individually
By: /s/
------------------------
Title: Vice President
---------------------