Exhibit 99.1
TERM CREDIT AGREEMENT
Dated as of November 20, 2001
between
CAMINUS CORPORATION
and
BLUE RIDGE INVESTMENTS, LLC
This TERM CREDIT AGREEMENT ("Agreement") is entered into as of November
20, 2001 by and between CAMINUS CORPORATION, a Delaware corporation (the
"Borrower") and Blue Ridge Investments, LLC (the "Lender").
The Borrower has requested that the Lender provide a term credit
facility, and the Lender is willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Additional Credit Facility" means a revolving working capital credit
facility not exceeding $10,000,000 in aggregate principal amount at any time
provided that (i) any Liens securing the obligations of the Borrower thereunder
shall be limited to the current receivables and inventory of the Borrower that
would be classified as current assets on a balance sheet prepared in accordance
with GAAP, plus any additional collateral that customarily is associated and
required in connection with a receivables and inventory credit facility
(excluding, for the avoidance of doubt, Liens on cash and cash equivalents,
long-term fixed assets, long-term receivables and intellectual property); (ii)
except for the Liens permitted by clause (i) above, the obligations thereunder
shall rank at all times pari passu with the Obligations hereunder and the terms
and conditions thereof shall not be more restrictive on the Borrower than those
contained herein, including without limitation, tenor (the termination or
expiration of such facility shall not be before the Maturity Date), interest
rate (which shall not be higher than the maximum Applicable Rate provided
herein), representations and warranties, negative and positive covenants, and
events of default; and (iii) contains no Negative Pledge (other than Negative
Pledges on the collateral described in clause (i) above).
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.
"Agreement" means this Term Credit Agreement.
"Altra Software Acquisition" means the Borrower's acquisition of Altra
Software Services, Inc. on terms and conditions satisfactory to Lender in its
sole discretion.
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"Applicable Rate" means (a) from the Closing Date through and including
November 20, 2002, 10% per annum; (b) from November 21, 2002 through and
including May 20, 2003, 12% per annum; and (c) from May 21, 2003 to the Maturity
Date, 15% per annum.
"Attorney Costs" means and includes all fees and disbursements of any
law firm or other external counsel and the allocated cost of internal legal
services and all disbursements of internal counsel.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2000, and the related consolidated statements of income or operations,
stockholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries.
"Borrower" has the meaning set forth in the introductory paragraph
hereto.
"Borrower Party" means Borrower or any Guarantor.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where the Lending Office is located.
"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "option
right"), whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 50% or more of the
equity securities of such Person entitled to vote for members of the
board of directors or equivalent governing body of such Person on a
partially-diluted basis (i.e., taking into account all such securities
that such person or group has the right to acquire pursuant to any
option right); or
(b) during any period of 12 consecutive months, a majority of
the members of the board of directors or other equivalent governing
body of such Person cease to be
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composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that
board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied by the Borrower or waived by the Lender.
"Code" means the Internal Revenue Code of 1986.
"Commitment" means the obligation of the Lender to make the Loan to the
Borrower in a principal amount not to exceed $15,000,000, as such amount may be
reduced or adjusted from time to time in accordance with this Agreement.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.
"Default" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.
"Default Rate" means an interest rate equal to (a) the maximum
Applicable Rate of 15% plus (b) 2% per annum.
"Disposition" or "Dispose" means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
"Dollar" and "$" means lawful money of the United States of America.
"EBITA" means, for any period, for the Borrower and its Subsidiaries,
on a consolidated basis, an amount equal to operating income plus amortization
expense, both as reported in accordance with GAAP (excluding, for the avoidance
of doubt, interest charges, interest income, taxes and other non-operating
income).
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"Environmental Laws" means all Laws relating to environmental, health,
safety and land use matters applicable to any property.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
"Event of Default" means any of the events or circumstances specified
in Article VIII.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States of America.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
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"Guarantor" means any Subsidiary of the Borrower executing and
delivering the Subsidiary Guaranty or a joinder thereto.
"Guaranty Obligation" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guarantying any Indebtedness or other obligation payable or
performable by another Person (the "primary obligor") in any manner, whether
directly or indirectly, and including any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease
property, securities or services for the purpose of assuring the obligee in
respect of such Indebtedness or other obligation of the payment or performance
of such Indebtedness or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation, or (iv) entered into for the purpose of assuring in any other
manner the obligee in respect of such Indebtedness or other obligation of the
payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person;
provided, that the term "Guaranty Obligation" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guarantying Person in good faith.
"Indebtedness" means, as to any Person at a particular time, all of the
following, whether or not included as indebtedness or liabilities in accordance
with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations under any Swap Contract in an amount equal
to the Swap Termination Value thereof;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured
by a Lien on property owned or being purchased by such Person
(including indebtedness arising under
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conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guaranty Obligations of such Person in respect of any
of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person subject only to customary exceptions acceptable
to the Lender. The amount of any capital lease or Synthetic Lease Obligation as
of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.
"Indemnified Liabilities" has the meaning set forth in Section 9.05.
"Indemnitees" has the meaning set forth in Section 9.05.
"Interest Payment Date" means the last Business Day of each March,
June, September and December and the Maturity Date.
"Investment" means, as to any Person, any acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution to, guaranty of debt of, or purchase or other acquisition
of any other debt or equity participation or interest in, another Person,
including any partnership or joint venture interest in such other Person, or (c)
the purchase or other acquisition (in one transaction or a series of
transactions) of assets of another Person that constitute a business unit. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested (less capital returned to the Person making such
investment), without adjustment for subsequent increases or decreases in the
value of such Investment.
"IP Rights" has the meaning set forth in Section 5.16.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
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"Lending Office" means the office or offices of the Lender described as
such on Schedule 9.02, or such other office or offices as the Lender may from
time to time notify the Borrower.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Laws of any jurisdiction), including the
interest of a purchaser of accounts receivable.
"Loan" has the meaning set forth in Section 2.01.
"Loan Documents" means this Agreement, the Loan Notice, the Subsidiary
Guaranty and any document delivered in connection herewith.
"Loan Notice" means a notice of the borrowing of the Loan, which shall
be substantially in the form of Exhibit A.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries taken as a whole; (b) a material impairment of the ability of any
Borrower Party to perform its obligations under any Loan Document to which it is
a party; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower of any Loan Document to which it
is a party.
"Maturity Date" means the earliest to occur of (a) October 31, 2003;
and (b) any acquisition or merger of the Borrower in which at least 25% of the
assets or capital stock of the Borrower and its Subsidiaries, taken as a whole,
are acquired by or merged into another entity.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.
"Negative Pledge" means a Contractual Obligation that contains a
covenant binding on the Borrower or any of its Subsidiaries that prohibits Liens
on any of its or their property, other than (a) any such covenant contained in a
Contractual Obligation granting a Lien permitted under Section 7.01 which
affects only the property that is the subject of such permitted Lien and (b) any
such covenant that does not apply to Liens securing the Obligations.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Borrower Party arising under any Loan
Document, whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement by or
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against any Borrower Party or any Affiliate thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
secretary of state or other department in the state of its formation, in each
case as amended from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Responsible Officer" means the president, chief financial officer,
treasurer or assistant treasurer of the applicable Borrower Party. Any document
delivered hereunder that is signed by such a Responsible Officer shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Borrower Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
such Borrower Party.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock of the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such capital stock or of any option, warrant or other right to acquire any
such capital stock.
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than
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securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guaranty" means the Subsidiary Guaranty substantially in
the form of Exhibit B hereto, as amended, supplemented, modified, renewed or
replaced from time to time.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include the Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Threshold Amount" means $500,000.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
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1.02 OTHER INTERPRETIVE PROVISIONS.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein" and "hereunder" and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and
not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to
the Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not
limitation.
(iv) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical
or electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the words "to"
and "until" each mean "to but excluding;" and the word "through" means "to and
including."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Lender shall so request, the Lender and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Lender), provided that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Borrower shall provide to the Lender financial statements
and other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
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1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
SECTION 2.
THE COMMITMENT AND THE LOAN
2.01 THE LOAN.
(a) Subject to the terms and conditions set forth herein, the Lender
agrees to make a single term loan (the "Loan") on the date the Altra Software
Acquisition is being consummated in a principal amount not to exceed the amount
of the Commitment. This is not a revolving commitment and any principal amount
of the Loan repaid may not be reborrowed. After the initial borrowing and upon
each prepayment of the Loan, the Commitment shall reduce to the principal amount
of the Loan remaining outstanding.
(b) Upon satisfaction of the applicable conditions set forth in Section
4.01, the Lender shall make the proceeds of the Loan available to the Borrower
either by (i) crediting the account of the Borrower on the books of the Lender
with the amount of such proceeds or (ii) wire transfer of such proceeds, in each
case in accordance with instructions provided to the Lender by the Borrower.
2.02 PREPAYMENTS.
(a) Upon the consummation of the Borrower's sale of its securities in a
private or public offering after the Closing Date, the Borrower shall prepay the
amount of the Loan outstanding on such date to the extent of the gross cash
proceeds received by the Borrower from such sale; provided, however, that with
respect to proceeds from a private "equity line" program (that is, a committed
facility with a financial institution pursuant to which such institution, acting
as a placement agent, purchases shares of the Borrower's common stock up to a
fixed aggregate dollar amount, for a fixed period of time, and at an agreed upon
discount to the market price of Borrower's common stock at the time of such
purchase), the Borrower shall prepay the amount of the Loan outstanding on such
date to the extent of (i) fifty percent (50%) of the first $10,000,000 gross
cash proceeds received by the Borrower from such private "equity line" program
and (ii) one hundred percent (100%) of such gross cash proceeds in excess of
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$10,000,000; provided, further, that any grant of options by the Borrower to any
of its employees or directors shall not be deemed to be a sale of securities in
a public offering, a private placement or a private "equity line" program for
purposes of this Section 2.02(a).
(b) The Borrower may, upon notice to the Lender, at any time or from
time to time voluntarily prepay the Loan in whole or in part without premium or
penalty; provided that (i) such notice must be received by the Lender not later
than 11:00 a.m., California time on the date of prepayment. Any prepayment shall
be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess
thereof. Each such notice shall specify the date and amount of such prepayment.
If such notice is given by the Borrower, the Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein.
2.03 REPAYMENT OF LOAN. The Borrower shall repay to the Lender on the
Maturity Date the principal amount of the Loan outstanding on such date.
2.04 INTEREST.
(a) Subject to the provisions of subsection (b) below, the Loan shall
bear interest on the outstanding principal amount thereof at a rate per annum
equal to the Applicable Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), such amount
shall thereafter bear interest at a interest rate per annum at all times equal
to the Default Rate to the fullest extent permitted by applicable Law.
Furthermore, while any Event of Default exists or after acceleration, the
Borrower shall pay interest on the principal amount of the Loan at an interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Law. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon demand.
(c) Interest on the Loan shall be due and payable in arrears on each
Interest Payment Date and at such other times as may be specified herein.
Interest hereunder shall be due and payable in accordance with the terms hereof
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.
2.05 COMPUTATION OF INTEREST AND FEES. Interest on the Loan shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and
the actual number of days elapsed. Interest shall accrue on the Loan for the day
on which the Loan is made, and shall not accrue on the Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided that
the Loan that is repaid on the same day on which it is made shall bear interest
for one day.
2.06 EVIDENCE OF DEBT. The Loan shall be evidenced by one or more
accounts or records maintained by the Lender in the ordinary course of business.
The accounts or records maintained by the Lender shall be conclusive absent
manifest error of the amount of the Loan made by the Lender to the Borrower and
the interest and payments thereon. Any failure to so
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record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Loan.
2.07 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Lender at the applicable Lending Office in
Dollars and in immediately available funds not later than 12:00 Noon, California
time, on the date specified herein. All payments received by the Lender after
12:00 Noon, California time, shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) If at any time insufficient funds are received by and available to
the Lender to pay fully all amounts of principal and interest then due
hereunder, such funds shall be applied (i) first, toward costs and expenses
(including Attorney Costs and amounts payable under Article III) incurred by the
Lender, (ii) second, toward repayment of interest and fees then due hereunder,
and (iii) third, toward repayment of principal then due hereunder.
(d) Nothing herein shall be deemed to obligate the Lender to obtain the
funds for the Loan in any particular place or manner or to constitute a
representation by the Lender that it has obtained or will obtain the funds for
the Loan in any particular place or manner.
2.05 SUBSIDIARY GUARANTY. All obligations of the Borrower under this
Agreement shall be guarantied pursuant to the Subsidiary Guaranty.
SECTION 3.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding taxes imposed on or measured by its
net income, and franchise taxes imposed on it (in lieu of net income taxes), by
the jurisdiction (or any political subdivision thereof) under the Laws of which
the Lender is organized or maintains a lending office (all such non-excluded
taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or
similar charges, and liabilities being hereinafter referred to as "Taxes"). If
the Borrower shall be required by any Laws to deduct any Taxes from or in
respect of any sum payable under any Loan Document to the Lender, (i) the sum
payable shall be increased as
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necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), the Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Lender the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Lender, the Borrower shall also pay to the Lender, at the time interest is paid,
such additional amount that the Lender specifies is necessary to preserve the
after-tax yield (after factoring in all taxes, including taxes imposed on or
measured by net income) the Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Lender for (i) the full amount
of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted
by any jurisdiction on amounts payable under this Section) paid by the Lender,
(ii) amounts payable under Section 3.01(c) and (iii) any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, in
each case whether or not such Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. Payment under this
subsection (d) shall be made within 30 days after the date the Lender makes a
demand therefor.
3.02 CAPITAL ADEQUACY. If the Lender determines that the introduction
of any Law regarding capital adequacy or any change therein or in the
interpretation thereof, or compliance by the Lender (or its Lending Office)
therewith, has the effect of reducing the rate of return on the capital of the
Lender or any corporation controlling the Lender as a consequence of the
Lender's obligations hereunder (taking into consideration its policies with
respect to capital adequacy and the Lender's desired return on capital), then
from time to time upon demand of the Lender, the Borrower shall pay to the
Lender such additional amounts as will compensate the Lender for such reduction.
3.03 DESIGNATION OF DIFFERENT LENDING OFFICE; REQUESTS FOR
COMPENSATION.
(a) The Lender (including Eligible Assignees and Participants) agrees
to designate a different Lending Office if such designation will lessen or avoid
the need for additional amounts to be paid by the Borrower under this Article
III and will not, in the good faith judgment of the Lender, otherwise be
materially disadvantageous to Lender.
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(b) A certificate of the Lender claiming compensation under this
Article III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Lender may use any reasonable averaging and attribution
methods.
3.04 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of the Commitment and repayment of all other
Obligations.
SECTION 4.
CONDITIONS PRECEDENT TO LOAN
4.01 CONDITIONS OF LOAN. The obligation of the Lender to make the Loan
hereunder is subject to satisfaction of the following conditions precedent:
(a) The Lender's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing
Borrower Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Lender and its legal counsel:
(i) executed counterparts of this Agreement, sufficient in
number for distribution to the Lender and the Borrower;
(ii) the Subsidiary Guaranty executed by each domestic
Subsidiary listed as a Guarantor on Schedule 5.13;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Borrower Party as the Lender may require to establish
the identities of and verify the authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to which
the Borrower is a party;
(iv) such evidence as the Lender may reasonably require to
verify that each Borrower Party is duly organized or formed, validly
existing, in good standing and qualified to engage in business in each
jurisdiction in which it is required to be qualified to engage in
business, including certified copies of such Borrower Party's
Organization Documents, certificates of good standing and/or
qualification to engage in business and tax clearance certificates;
(v) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that the conditions specified in Sections
4.01(d) and (e) have been satisfied, and (B) that there has been no
event or circumstance since the date of the Audited Financial
Statements which has or could be reasonably expected to have a Material
Adverse Effect;
(vi) an opinion of counsel to the Borrower in form and
substance satisfactory to Lender;
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(vii) copies of the acquisition agreement (including all
schedules and exhibits and any amendments thereto) relating to the
Altra Software Acquisition, certified as being true, correct and
complete on and as of the date hereof by the Secretary or Assistant
Secretary of the Borrower and which includes terms satisfactory to
Lender in its sole discretion. Lender shall also be satisfied that
there shall exist no order, decree, judgment, ruling or injunction
which restrains the consummation of the Altra Software Acquisition in
the manner contemplated by the purchase agreement and all documents
related thereto; and
(viii) such other assurances, certificates, documents,
consents or opinions as the Lender reasonably may require.
(b) The Lender shall have received an arrangement fee in the amount of
1% of the Commitment.
(c) The Borrower shall have paid all Attorney Costs of the Lender to
the extent invoiced prior to or on the Closing Date, plus such additional
amounts of Attorney Costs as shall constitute its reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final settling of
accounts between the Borrower and the Lender).
(d) The representations and warranties of the Borrower contained in
Article V, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct on and as of the
date of the Loan.
(e) No Default or Event of Default shall exist, or would result from
the Loan.
(f) The Altra Software Acquisition shall have been, or concurrently
herewith is being, consummated.
(g) The Lender shall have received the Loan Notice in accordance with
the requirements hereof.
(h) The Lender shall have received, in form and substance satisfactory
to it, such other assurances, certificates, documents or consents related to the
foregoing as the Lender reasonably may require.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Borrower Party (a) is a corporation duly organized or formed, validly existing
and in good standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all governmental
licenses, authorizations, consents and approvals to own its assets,
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carry on its business and to execute, deliver, and perform its obligations under
the Loan Documents to which it is a party, (c) is duly qualified and is licensed
and in good standing under the Laws of each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws, except in each
case referred to in clause (c) or this clause (d), to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Borrower Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or (c) violate any Law, except in each case referred to in clause (b)
or this clause (c), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Borrower
Party of this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Borrower Party. This Agreement constitutes, and each other Loan Document
when so delivered will constitute, a legal, valid and binding obligation of each
Borrower Party which is a party thereto, enforceable against such Borrower Party
in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition
of the Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (iii) show all material indebtedness and other liabilities of
the Borrower and its consolidated Subsidiaries as of the date thereof that are
required to be included on a balance sheet prepared in accordance with GAAP,
including liabilities for taxes, material commitments and Indebtedness.
(b) The unaudited consolidated financial statements of the Borrower and
its Subsidiaries dated June 30, 2001, and the related consolidated statements of
income or operations, stockholders' equity and cash flows for the fiscal quarter
ended on that date (i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein, subject to ordinary, good faith year end audit adjustments and
the absence of footnotes; (ii) fairly present the financial condition of the
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Borrower and its Subsidiaries as of the date thereof and their results of
operations for the period covered thereby; and (iii) show all material
indebtedness and other liabilities of the Borrower and its consolidated
Subsidiaries as of the date thereof that are required to be included on a
balance sheet prepared in accordance with GAAP, including liabilities for taxes,
material commitments and Indebtedness.
(c) Since the date of the Audited Financial Statements, there has been
no event or circumstance that has had or could reasonably be expected to have a
Material Adverse Effect.
5.06 LITIGATION. Except as specifically disclosed on Schedule 5.06,
there are no actions, suits, proceedings, claims or disputes pending or, to the
knowledge of any Borrower Party, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, by or against any Borrower
Party or any of their Subsidiaries or against any of their properties or
revenues that (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby, or (b) if
determined adversely, could reasonably be expected to have a Material Adverse
Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, (i) the property of the Borrower and its
domestic Subsidiaries is subject to no Liens, other than Liens permitted by
Section 7.01 and (ii) the property of the Borrower's foreign Subsidiaries is
subject to no Liens that are, individually or in the aggregate, material.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or its Subsidiaries operate.
5.11 TAXES. Except as specifically disclosed on Schedule 5.11, the
Borrower and its Subsidiaries have filed all Federal, state and other material
tax returns and reports required to be
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filed, and have paid all Federal, state and other material taxes, assessments,
fees and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
5.13 SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in Part (a) of Schedule
5.13 and has no equity investments in any other corporation or entity other than
those specifically disclosed in Part(b) of Schedule 5.13. Each Guarantor at
closing is indicated as such on Schedule 5.13.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) The Borrower is not engaged and will not engage, principally or as
one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning
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of Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock.
(b) None of the Borrower, any Person controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15 DISCLOSURE. No statement, information, report, representation, or
warranty made by any Borrower Party in any Loan Document or furnished to the
Lender by or on behalf of any Borrower Party in connection with any Loan
Document contains any untrue statement of a material fact or omits any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
5.16 INTELLECTUAL PROPERTY; LICENSES, ETC. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the knowledge of the Borrower,
no slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Borrower or any Subsidiary infringes upon any rights held by any other Person.
No claim or litigation regarding any of the foregoing is pending or, to the
knowledge of the Borrower, threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Borrower, proposed, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
SECTION 6.
AFFIRMATIVE COVENANTS
So long as the Commitment shall be in effect, the Loan or other
Obligation shall remain unpaid or unsatisfied, the Borrower shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and
6.11) cause each Subsidiary to:
6.01 FINANCIAL STATEMENTS. Deliver to the Lender, in form and detail
satisfactory to the Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail, audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Lender, which report and opinion shall be prepared
in accordance with GAAP and shall not be
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subject to any qualifications or exceptions as to the scope of the audit nor to
any qualifications and exceptions not reasonably acceptable to the Lender; and
(b) as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the related consolidated statements of income and
cash flows for such fiscal quarter and for the portion of the Borrower's fiscal
year then ended, setting forth in each case in comparative form the figures for
the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Lender, in form
and detail satisfactory to the Lender:
(a) concurrently with the delivery of the financial statements referred
to in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default or, if any such Default or Event of Default shall exist, stating the
nature and status of such event;
(b) within two Business Days after delivery of same, if any, to the
Borrower's stockholders, all operating and financial information provided by the
Borrower to the Borrower's stockholders generally;
(c) promptly after any request by the Lender, copies of any detailed
audit reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the Borrower
or any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of the Borrower, and copies of all annual, regular, periodic
and special reports and registration statements which the Borrower may file or
be required to file with the Securities and Exchange Commission under Section 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to
be delivered to the Lender pursuant hereto; and
(e) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as the Lender
may from time to time request.
Each document required to be delivered pursuant to Section 6.01(a) or
(b) or Section 6.02(d) shall be deemed to have been delivered on the date on
which the Borrower posts such document on the Borrower's website on the Internet
at the website address listed on Schedule 9.02 hereof, or when such document is
posted on the Securities and Exchange
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Commission's website at www.sec.gov or on IntraLinks; provided that (i) if the
Lender so requests, the Borrower shall deliver paper copies of all such
documents to the Lender until the Lender requests that the Borrower cease
delivering such paper copies and (ii) the Borrower shall notify the Lender by
facsimile of the posting of each such document.
6.03 NOTICES.
Promptly notify the Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or may result in a Material Adverse
Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Borrower or any
Subsidiary and any Governmental Authority; or (iii) the commencement of, or any
material development in, any litigation or proceeding affecting the Borrower or
any Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of any litigation, investigation or proceeding affecting any
Borrower Party in which the amount involved exceeds the Threshold Amount, or in
which injunctive relief or similar relief is sought, which relief, if granted,
could reasonably be expected to have a Material Adverse Effect;
(d) of the occurrence of any ERISA Event;
(e) of any material change in accounting policies or financial
reporting practices by the Borrower or any Subsidiary;
(f) of the closing of any equity line program referred to in Section
2.02(a), together with a copy of the principal agreements relating thereto; and
(g) of any funding under any equity line program referred to in Section
2.02(a).
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to Section
6.03(a) shall describe with particularity any and all provisions of this
Agreement or other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary; (b) all lawful claims which, if
unpaid, would by law become a Lien upon its property, unless the same are not
material, are being contested in good faith by appropriate proceedings and
adequate reserves in accordance
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with GAAP are being maintained by the Borrower or such Subsidiary; and (c) all
Indebtedness, as and when due and payable, but subject to any subordination
provisions contained in any instrument or agreement evidencing such
Indebtedness.
6.05 PRESERVATION OF EXISTENCE, ETC. Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization; take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except in a transaction permitted by Section
7.04 or 7.05; and preserve or renew all of its registered patents, trademarks,
trade names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear excepted;
(b) make all necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) use the standard of care typical in the
industry in the operation and maintenance of its facilities.
6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
6.08 COMPLIANCE WITH LAWS.
Comply in all material respects with the requirements of all Laws
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law is being contested in good faith or a bona
fide dispute exists with respect thereto; or (ii) the failure to comply
therewith could not reasonably be expected to have a Material Adverse Effect.
6.09 BOOKS AND RECORDS.
(a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower or such Subsidiary, as the case may be; and (b) maintain such books
of record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Subsidiary, as the case may be.
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6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Lender to visit and inspect any of its properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants, all at the expense of
the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the Lender (or
any of its representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
6.11 COMPLIANCE WITH ERISA. Do, and cause each of its ERISA Affiliates to
do, each of the following: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other Federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
6.12 USE OF PROCEEDS. Use the proceeds of the Loan to finance the Altra
Software Acquisition and any fees and expenses related thereto.
6.13 COOPERATION. To take any action reasonably requested by the Lender
to carry out the intent of this agreement.
6.14 ADDITIONAL GUARANTORS. Borrower may, in its sole discretion, elect
to have additional domestic Subsidiaries become Guarantors. With respect to each
such Subsidiary, Borrower shall do or provide the following, each in form and
substance satisfactory to the Lender:
(a) cause such Subsidiary to become a Guarantor under the Subsidiary
Guaranty by executing and delivering a joinder in the form of Exhibit A to the
Subsidiary Guaranty with respect thereto;
(b) cause such Subsidiary, to the extent not previously delivered to the
Lender, to deliver documents of the type specified in Section 4.01(a)(iii) and,
with respect to a Subsidiary representing more than 10% of Borrower's
consolidated stockholders equity as shown on the most recent financial
statements delivered pursuant to Section 6.01, in Section 4.01(a)(iv);
(c) deliver an officer's certificate signed by a Responsible Officer of
Borrower certifying as to the matters covered by Sections 5.02, 5.03 and 5.04 as
to such Subsidiary; and
(d) deliver such other assurances, certificates, documents, consents or
opinions as Lender reasonably may require.
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SECTION 7.
NEGATIVE COVENANTS
So long as the Commitment shall be in effect, the Loan or other Obligation
shall remain unpaid or unsatisfied, the Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly:
7.01 LIENS AND NEGATIVE PLEDGES. Create, incur, assume or suffer to
exist, any Lien or Negative Pledges upon any of its property, assets or
revenues, whether now owned or hereafter acquired, other than the following:
(a) Liens and Negative Pledges pursuant to any Loan Document;
(b) Liens and Negative Pledges that are (i) existing on the date hereof
and (ii) in the case of Liens or Negative Pledges upon the property of the
Borrower or any of its domestic Subsidiaries, listed on Schedule 7.01, and, in
the case of each of clause (i) or (ii), any renewals or extensions thereof,
provided, that the property covered thereby is not increased and any renewal or
extension of the obligations secured or benefited thereby is permitted by
Section 7.03(b);
(c) Liens and Negative Pledges incurred in connection with capital
leases, Synthetic Lease Obligations and purchase money obligations permitted
under Section 7.03(e) and any renewals or extensions thereof, provided that (i)
such Liens and Negative pledges do not encumber any property other than the
property acquired or financed in such transaction; and (ii) the Indebtedness
secured thereby does not exceed the cost or fair market value, whichever is
lower, of the property being acquired on the date of acquisition;
(d) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the applicable Person in accordance with GAAP;
(e) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the applicable Person;
(f) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(g) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds, utilities and other obligations of a like nature
incurred in the ordinary course of business;
(h) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case
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materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable Person;
(i) Liens securing judgments for the payment of money in an aggregate
amount not in excess of the Threshold Amount (except to the extent covered by
independent third-party insurance as to which the insurer has acknowledged in
writing its obligation to cover), unless any such judgment remains undischarged
for a period of more than 30 consecutive days during which execution is not
effectively stayed; and
(j) Liens on property described in clause (i) of the definition of
"Additional Credit Facility" (excluding, for the avoidance of doubt, Liens on
cash and cash equivalents, long-term fixed assets, long-term receivables and
intellectual property) to secure the Additional Credit Facility permitted under
Section 7.03(f).
7.02 INVESTMENTS. Make any Investments, except:
(a) Investments other than those permitted by subsections (b) through
(i) that are existing on the date hereof and listed on Schedule 7.02;
(b) Investments held by the Borrower or such Subsidiary pursuant to the
written cash management/investment policy of the Borrower, a copy of which shall
have previously been supplied to the Lender;
(c) loans and advances to officers, directors and employees of the
Borrower and Subsidiaries for travel, entertainment and analogous ordinary
business purposes;
(d) loans and advances to officers, directors and employees of the
Borrower and Subsidiaries, other than those permitted by subsection (c), in an
aggregate amount not to exceed the Threshold Amount at any time outstanding;
(e) Investments of any Subsidiary in the Borrower or another Subsidiary;
(f) Investments of the Borrower in any wholly-owned Subsidiary, provided
that (i) in the case of domestic Subsidiaries, such Subsidiary shall be (or
concurrently become) a Guarantor hereunder and (ii) in the case of foreign
Subsidiaries, such Investments shall not, together with Restricted Payments
permitted by Section 7.07(b), exceed $10,000,000 in the aggregate at any time
outstanding;
(g) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the sale or lease of goods
or services in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss;
(h) Guaranty Obligations permitted by Section 7.03; and
(i) Investments permitted by Section 7.04.
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7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the date hereof and listed on part (a)
of Schedule 7.03 and any refinancings, refundings, renewals or extensions
thereof; provided that the amount of such Indebtedness is not increased at the
time of such refinancing, refunding, renewal or extension except by an amount
equal to a reasonable premium or other reasonable amount paid, and fees and
expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder;
(c) Guaranty Obligations of the Borrower or any Subsidiary in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any wholly-owned
Subsidiary or as listed on part (b) of Schedule 7.03;
(d) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party;
(e) Indebtedness in respect of capital leases, Synthetic Lease
Obligations and purchase money obligations for fixed or capital assets occurring
in the ordinary course of business within the limitations set forth in Section
7.01(c); provided, however, that the aggregate amount of all such Indebtedness
at any one time outstanding shall not exceed $2,000,000; and
(f) Indebtedness under the Additional Credit Facility incurred on or
after December 31, 2001; provided, however, that the Borrower may not enter into
the Additional Credit Facility nor from time to time request borrowings
thereunder (other than continuations or conversions of extensions of credit
outstanding thereunder which do not increase the aggregate outstanding principal
amount of extensions of credit then outstanding thereunder), unless, on such
date, all of the following incurrence criteria are satisfied:
(i) Unencumbered cash and cash equivalent balances have been
greater than $25,000,000 for at least 90 consecutive days ending on such
date; and
(ii) Cumulative EBITA for the Borrower (as shown on the financial
statements delivered pursuant to Section 6.01) for the period indicated in
the table below ended immediately preceding the date of such incurrence
shall be at least the minimum cumulative EBITA indicated in the table
opposite such period:
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MINIMUM
CUMULATIVE
EBITA FOR
PERIOD SUCH PERIOD
- ---------------------------------------------------- ------------
Fiscal quarter ending December 31, 2001 $ 5,400,000
Two fiscal quarters ending March 31, 2002 7,600,000
Three fiscal quarters ending June 30, 2002 10,200,000
Four fiscal quarters ending September 30, 2002 14,700,000
Four fiscal quarters ending December 31, 2002
and each rolling four fiscal quarter period
thereafter 15,500,000
7.04 FUNDAMENTAL CHANGES. Merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of the assets of the Borrower
and its Subsidiaries, taken as a whole (whether now owned or hereafter
acquired), to or in favor of any Person, except that, so long as no Default or
Event of Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
Subsidiaries, provided that when any wholly-owned Subsidiary is merging with
another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person; and
(b) any Subsidiary may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise), to the Borrower or to another Subsidiary;
provided that if the seller in such a transaction is a wholly-owned Subsidiary,
then the purchaser must also be a wholly-owned Subsidiary.
7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property, (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property or (iii) the
board of directors or senior management of the Borrower or such Subsidiary has
determined in good faith that the failure to replace such property will not be
detrimental to the business of the Borrower or such Subsidiary;
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(d) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; and
(e) Dispositions permitted by Section 7.04;
provided, however, that any Disposition pursuant to clauses (a) through (e)
shall be for fair market value.
7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except:
(a) leases in existence on the date hereof and listed on Schedule 7.06,
and any renewal, extension or refinancing thereof; and
(b) operating leases (other than those constituting Synthetic Lease
Obligations) entered into or assumed by the Borrower or any Subsidiary after the
date hereof in the ordinary course of business; provided, however, that the
aggregate amount of annual expenses from all operating leases shall not exceed
$7,000,000.
7.07 RESTRICTED PAYMENTS. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and to
wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a
non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each
other owner of capital stock of such Subsidiary on a pro rata basis based on
their relative ownership interests);
(b) the Borrower may make Restricted Payments to any wholly-owned
Subsidiary, provided, that (i) in the case of domestic Subsidiaries, such
Subsidiary shall be a Guarantor and (ii) in the case of foreign subsidiaries,
such Restricted Payments shall not exceed $250,000, in the aggregate.
(c) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the capital stock of such
Person; and
(c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire shares of its capital stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its capital stock.
7.08 ERISA. At any time engage in a transaction which could be subject to
Section 4069 or 4212(c) of ERISA, or permit any Plan to (a) engage in any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code);
(b) fail to comply with ERISA or any other applicable Laws; or (c) incur any
material "accumulated funding deficiency" (as defined in Section 302 of ERISA),
which, with respect to each event listed above, could reasonably be expected to
have a Material Adverse Effect.
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7.09 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the date hereof.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any kind
with any Affiliate or person who is a director, officer, or beneficial owner of
more than ten percent of any class of capital stock of the Borrower, other than
(i) arm's-length transactions with Affiliates or such other persons that are
otherwise permitted hereunder or (ii) compensation paid to Affiliates or such
other persons in the ordinary course of business, as duly approved by the
Borrower's board of directors.
7.11 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation that
limits the ability (a) of any Subsidiary to make Restricted Payments to the
Borrower or to otherwise transfer property to the Borrower or (b) of the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person.
7.12 USE OF PROCEEDS. Use the proceeds of the Loan, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or
carry margin stock (within the meaning of Regulation U of the FRB) or to extend
credit to others for the purpose of purchasing or carrying margin stock or to
refund indebtedness originally incurred for such purpose.
SECTION 8.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following events shall constitute an
Event of Default:
(a) Non-Payment. The Borrower fails to pay (i) when and as required to
be paid herein, any amount of principal of the Loan or (ii) within three days
after the same becomes due, any interest on the Loan, or any fee due hereunder,
or (iii) within three days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05,
6.10 or 6.12 or Article VII; or
(c) Other Defaults. Any Borrower Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
(d) Representations and Warranties. Any representation or warranty made
or deemed made by any Borrower Party herein, in any other Loan Document, or in
any document delivered in connection herewith or therewith proves to have been
incorrect when made or deemed made; or
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(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty
Obligation (other than Indebtedness hereunder and Indebtedness under Swap
Contracts), or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guaranty Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guaranty Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to be demanded or to become due
or to be repurchased or redeemed (automatically or otherwise) prior to its
stated maturity, or such Guaranty Obligation to become payable or cash
collateral in respect thereof to be demanded, provided, that in each case
referred to in clause (i)(A) or this clause (i)(B), such Indebtedness or
Guaranty Obligation exceeds $250,000; or (ii) there occurs under any Swap
Contract an Early Termination Date (as defined in such Swap Contract) resulting
from (A) any event of default under such Swap Contract as to which the Borrower
or any Subsidiary is the Defaulting Party (as defined in such Swap Contract) or
(B) any Termination Event (as so defined) under such Swap Contract as to which
the Borrower or any Subsidiary is an Affected Party (as so defined); or
(f) Insolvency Proceedings, Etc. The Borrower or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any part of its property is instituted
without the consent of such Person and continues undismissed or unstayed for 60
calendar days, or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 days after its issue or levy, provided, that the underlying
obligation with respect to such writ or warrant of attachment exceeds $250,000;
or
(h) Judgments. There is entered against the Borrower or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any non-monetary final judgment that has, or could reasonably be expected
to have, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of 10 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or
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Caminus Term Credit Agreement
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than the agreement of the
Lender or satisfaction in full of all the Obligations, ceases to be in full
force and effect, or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any material respect; or any Borrower
Party denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Material Adverse Effect. There occurs any event or circumstance that
has a Material Adverse Effect.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the
Lender may
(a) declare the commitment of the Lender to make the Loan to be
terminated, whereupon such commitment shall be terminated;
(b) declare the unpaid principal amount of the Loan, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; and
(c) exercise all rights and remedies available to it under the Loan
Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) of Section 8.01, the obligation of the Lender to make the Loan shall
automatically terminate, the unpaid principal amount of the Loan and all
interest and other amounts as aforesaid shall automatically become due and
payable, without further act of the Lender.
SECTION 9.
MISCELLANEOUS
9.01 AMENDMENTS; ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by any
Borrower Party therefrom, shall be effective unless in writing signed by the
Lender and any Borrower Party party thereto,
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and each such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
9.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including by
facsimile transmission) and mailed, faxed or delivered, to the address,
facsimile number or (subject to subsection (c) below) electronic mail address
specified for notices on Schedule 9.02; or to such other address as shall be
designated by either party in a notice to the other party. All such notices and
other communications shall be deemed to be given or made upon the earlier to
occur of (i) actual receipt by the intended recipient and (ii) (A) if delivered
by hand or by courier, when signed for by the intended recipient; (B) if
delivered by mail, four Business Days after deposit in the mails, postage
prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed
by telephone; and (D) if delivered by electronic mail (which form of delivery is
subject to the provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Lender pursuant to Article
II shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the
intended recipient at the number specified on Schedule 9.02, it being understood
and agreed that a voicemail message shall in no event be effective as a notice,
communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on each Borrower
Party and the Lender. The Lender may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit the
effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in Section 6.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
used for any other purpose.
(d) Reliance by Lender. The Lender shall be entitled to rely and act
upon any notices (including telephonic Loan Notices) purportedly given by or on
behalf of any Borrower Party even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Lender, its Affiliates, and their respective officers, directors, employees
agents and attorneys-in-fact from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of any Borrower Party. All
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telephonic notices to and other communications with the Lender may be recorded
by the Lender, and the Borrower hereby consents to such recording.
9.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by the Lender to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein or therein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.04 ATTORNEY COSTS, EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Lender for all costs and expenses incurred in connection with
the development, preparation, negotiation and execution of this Agreement and
the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the Lender
for all costs and expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or the other Loan Documents (including all such costs and expenses
incurred during any "workout" or restructuring in respect of the Obligations and
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs. The foregoing costs and expenses shall
include all search, filing, recording, title insurance and appraisal charges and
fees and taxes related thereto, and other out-of-pocket expenses incurred by the
Lender and the cost of independent public accountants and other outside experts
retained by the Lender. Any amount payable to the Lender under this Section
shall bear interest at the Default Rate from the second Business Day following
the date of receipt by the Borrower of a written invoice for payment. The
agreements in this Section shall survive the termination of the Commitment and
repayment of all other Obligations.
9.05 INDEMNIFICATION BY THE BORROWER. Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless the Lender and its Affiliates, directors, officers, employees, counsel,
agents and attorneys-in-fact (collectively the "Indemnitees") from and against
any and all liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution, delivery,
enforcement, performance or administration of any Loan Document or any other
agreement, letter or instrument delivered in connection with the transactions
contemplated thereby or the consummation of the transactions contemplated
thereby, (b) the Commitment, the Loan or the use or proposed use of the proceeds
therefrom, or (c) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory (including any investigation of, preparation for, or defense of
any pending or threatened claim, investigation, litigation or proceeding) and
regardless of whether any Indemnitee is a party thereto (all the
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Caminus Term Credit Agreement
foregoing, collectively, the "Indemnified Liabilities; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. The agreements in this
Section shall survive the termination of the Commitment and the repayment,
satisfaction or discharge of all the other Obligations. All amounts due under
this Section 9.05 shall be payable within ten Business Days after demand
therefor.
9.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a payment
to the Lender, or the Lender exercises its right of set-off, and such payment or
the proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including
pursuant to any settlement entered into by the Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred.
9.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) The Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of the Commitment and the Loan at the time owing to it)
pursuant to documentation acceptable to the Lender and the assignee. From and
after the effective date specified in such documentation, such Eligible Assignee
shall be a party hereto and, to the extent of the interest assigned by the
Lender, have the rights and obligations of the Lender under this Agreement, and
the Lender shall, to the extent of the interest so assigned, be released from
its obligations under this Agreement (and, in the case of an assignment of all
of the Lender's rights and obligations under this Agreement, shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 3.01
and 3.02. Upon request, the Borrower (at its expense) shall, and shall cause
each Borrower Party to, execute and deliver any documents reasonably necessary
or appropriate to give effect to such assignment and to provide for the
administration of this Agreement after giving effect thereto.
(c) The Lender may at any time, without the consent of, or notice to,
the Borrower, sell participations to any Person (other than a natural person) (a
"Participant") in all or a portion
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Caminus Term Credit Agreement
of the Lender's rights and/or obligations under this Agreement (including all or
a portion of its Commitment and/or the Loan); provided that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the Borrower for the performance of such
obligations and (iii) the Borrower shall continue to deal solely and directly
with the Lender in connection with the Lender's rights and obligations under
this Agreement. Any agreement or instrument pursuant to which the Lender sells
such a participation shall provide that the Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that the Lender will not, without the consent of the Participant,
agree to any amendment, waiver or other modification that would (i) postpone any
date upon which any payment of money is scheduled to be paid to such Participant
or (ii) reduce the principal, interest, fees or other amounts payable to such
Participant. Subject to subsection (d) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 3.01 and 3.02 to
the same extent as if it were the Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 9.09
as though it were the Lender.
(d) A Participant shall not be entitled to receive any greater payment
under Section 3.01 or 3.02 than the Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower's prior written
consent. A Participant that is not a "United States person" within the meaning
of Section 7701(a)(30) of the Code shall not be entitled to the benefits of
Section 3.01 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
provide to the Lender such tax forms prescribed by the IRS as are necessary or
desirable to establish an exemption from, or reduction of, U.S. withholding tax.
(e) The Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
the Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release
the Lender from any of its obligations hereunder or substitute any such pledgee
or assignee for the Lender as a party hereto.
(f) As used herein, the following terms have the following meanings:
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of the
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by the Borrower (such approval not to be
unreasonably withheld or delayed); provided that no such approval shall be
required if (i) such Person is taking delivery of an assignment in
connection with physical settlement of a credit derivative transaction or
(ii) an Event of Default has occurred and is continuing; and provided,
further, that notwithstanding the foregoing, "Eligible Assignee" shall not
include the Borrower or any of the Borrower's Affiliates or Subsidiaries.
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Caminus Term Credit Agreement
"Fund" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course
of its business.
"Approved Fund" means any Fund that is administered or managed by
(a) the Lender or (b) an Affiliate of the Lender.
9.08 CONFIDENTIALITY. The Lender agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential); (b) to the extent requested by any regulatory authority; (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process; (d) to any other party to this Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder;
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty's or prospective
counterparty's professional advisor) to any credit derivative transaction
relating to obligations of the Borrower; (g) with the consent of the Borrower;
(h) to the extent such Information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the Lender on
a nonconfidential basis from a source other than the Borrower; or (i) to any
nationally recognized rating agency that requires access to information about
the Lender's or its Affiliates' investment portfolio in connection with ratings
issued with respect to the Lender or its Affiliates. For the purposes of this
Section, "Information" means all information received from the Borrower relating
to the Borrower or its business, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified in writing at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
9.09 SET-OFF. In addition to any rights and remedies of the Lender
provided by law, upon the occurrence and during the continuance of any Event of
Default, the Lender is authorized at any time and from time to time, without
prior notice to the Borrower, any such notice being waived by the Borrower to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, the Lender to or for the credit or
the account of the Borrower against any and all Obligations owing to the Lender,
now or hereafter existing, irrespective of whether or not the Lender shall have
made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured. The
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Caminus Term Credit Agreement
Lender agrees promptly to notify the Borrower after any such set-off and
application made by the Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
9.10 INTEREST RATE LIMITATION. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loan or, if it exceeds such unpaid principal,
refunded to the Borrower. In determining whether the interest contracted for,
charged, or received by the Lender exceeds the Maximum Rate, the Lender may, to
the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations.
9.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.12 INTEGRATION. This Agreement, together with the other Loan Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Lender in any other Loan Document shall not be deemed a
conflict with this Agreement. Each Loan Document was drafted with the joint
participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair
meaning thereof.
9.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
or Event of Default at the time of the Loan, and shall continue in full force
and effect as long as the Loan or any other Obligation shall remain unpaid or
unsatisfied.
9.14 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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Caminus Term Credit Agreement
9.15 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, the LAW OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
SITTING IN SAN FRANCISCO OR LOS ANGELES OR OF THE UNITED STATES FOR THE CENTRAL
OR NORTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER AND THE LENDER EACH CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER
AND THE LENDER EACH IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO.
THE BORROWER AND THE LENDER EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
9.16 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9.17 TIME OF THE ESSENCE. Time is of the essence of the Loan Documents.
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Caminus Term Credit Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CAMINUS CORPORATION
By: /s/ Joseph P. Dwyer
______________________________________________
Name: Joseph P. Dwyer
Title: Executive Vice President and Chief
Financial Officer
BLUE RIDGE INVESTMENTS, LLC
By: /s/ George C. Carp
______________________________________________
George C. Carp
Senior Vice President - Finance
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Caminus Term Credit Agreement
EXHIBIT A
FORM OF LOAN NOTICE
Date:_______________ , _____
To: Blue Ridge Investments, LLC
Ladies and Gentlemen:
Reference is made to that certain Term Credit Agreement, dated as of
November 20, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "Agreement;" the terms defined
therein being used herein as therein defined), between Caminus Corporation, a
Delaware corporation, and Blue Ridge Investments, LLC.
The undersigned hereby requests the Loan on __________(a Business Day) in
the amount of $_____________.
The borrowing requested herein complies with the proviso to the first
sentence of Section 2.01 of the Agreement.
CAMINUS CORPORATION
By: ______________________________
Name: ______________________________
Title:______________________________
A-1
Form of Loan Notice
EXHIBIT B
SUBSIDIARY GUARANTY
To: Blue Ridge Investments, LLC ("Lender")
RECITALS
A. Reference is made to that certain Term Credit Agreement dated as of
November 20, 2001 between Caminus Corporation, a Delaware corporation
("Borrower") and Lender (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the "Credit Agreement;" the
terms defined therein being used herein as therein defined).
B. Each Guarantor (as hereafter defined) is a direct or indirect
domestic Subsidiary of Borrower and has derived, and expects to continuing
deriving, direct and indirect benefits from extensions of credit made to
Borrower, and now desires to guaranty the Obligations.
C. It is a requirement of the Credit Agreement that each direct or
indirect domestic Subsidiary of Borrower execute and delivery this Subsidiary
Guaranty or a joinder hereto (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, this "Guaranty").
NOW, THEREFORE, each Guarantor agrees as follows:
1. For valuable consideration, each of the undersigned (together with
each Person becoming a party hereto pursuant to Paragraph 18 hereof, each, a
"Guarantor" and collectively, "Guarantors") unconditionally, absolutely and
irrevocably jointly and severally guarantees and promises to pay to Lender, or
order, on demand, in lawful money of the United States and in immediately
available funds, any and all present or future Obligations owing to Lender and
Indemnitees (collectively, the "Guarantied Parties"). The term Obligations has
the meaning assigned to such term under the Credit Agreement and is used herein
in its most comprehensive sense and includes any and all advances, debts,
obligations, and liabilities of all Borrower Parties, now, or hereafter made,
incurred, or created, whether voluntarily or involuntarily, and however arising,
including, without limitation, any and all attorneys' fees (including the
allocated cost of inhouse counsel), costs, premiums, charges, or interest owed
by any Borrower Party to any Guarantied Party under the Loan Documents, whether
due or not due, absolute or contingent, liquidated or unliquidated, determined
or undetermined, whether a Borrower Party may be liable individually or jointly
with others, whether recovery upon such indebtedness may be or hereafter becomes
barred by any statute of limitations or whether such indebtedness may be or
hereafter become otherwise unenforceable.
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause a Borrower Party to incur new Obligations, continue the
Obligations from time to time, or renew them after they have been satisfied.
Each Guarantor agrees that nothing shall discharge or satisfy its
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Form of Subsidiary Guaranty
obligations created hereunder except for the full payment of the Obligations.
Any payment by any Guarantor shall not reduce its maximum obligation hereunder.
3. Each Guarantor agrees that it is directly and primarily liable to
the Guarantied Parties, that its obligations hereunder are independent of the
Obligations of any Borrower Party, or of any other guarantor, and that a
separate action or actions may be brought and prosecuted against any Guarantor,
whether action is brought against a Borrower Party or whether a Borrower Party
is joined in any such action or actions. Each Guarantor agrees that any releases
which may be given by the Guarantied Parties to any Borrower Party or any other
guarantor shall not release it from this Guaranty.
4. The obligations of each Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of any Guarantor (a)
the compromise, settlement, change, modification, amendment (whether material or
otherwise) or partial termination of any or all of the Obligations; (b) the
failure to give notice to any Guarantor of the occurrence of any Event of
Default under the terms and provisions of the Credit Agreement; (c) the waiver
of the payment, performance or observance of any of the Obligations; (d) the
taking or omitting to take any actions referred to in any Loan Document or of
any action under this Guaranty; (e) any failure, omission or delay on the part
of the Guarantied Parties to enforce, assert or exercise any right, power or
remedy conferred in this Guaranty, the Credit Agreement, any other Loan Document
or any other indulgence or similar act on the part of the Guarantied Parties in
good faith and in compliance with applicable law; (f) the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshalling of assets, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors or readjustment
of, or other similar proceedings which affect any Guarantor, any other guarantor
of any of the Obligations of a Borrower Party or any of the assets of any of
them, or any allegation of invalidity or contest of the validity of this
Guaranty in any such proceeding; (g) to the extent permitted by law, the release
or discharge of any other guarantors of the Obligations from the performance or
observance of any obligation, covenant or agreement contained in any guaranties
of the Obligations by operation of law; or (h) the default or failure of any
other guarantors of the Obligations fully to perform any of their respective
obligations set forth in any such guaranties of the Obligations. To the extent
any of the foregoing refers to any actions which the Guarantied Parties may
take, each Guarantor hereby agrees that the Guarantied Parties may take such
actions in such manner, upon such terms, and at such times as the Guarantied
Parties, in their discretion, deem advisable, without, in any way or respect,
impairing, affecting, reducing or releasing any Guarantor from its undertakings
hereunder and each Guarantor hereby consents to each and all of the foregoing
actions, events and occurrences.
5. Each Guarantor hereby waives (a) any and all rights to require the
Guarantied Parties to prosecute or seek to enforce any remedies against a
Borrower Party or any other party liable to the Guarantied Parties on account of
the Obligations; (b) any right to assert against the Guarantied Parties any
defense (legal or equitable), set-off, counterclaim, or claim which such
Guarantor may now or at any time hereafter have against a Borrower Party or any
other party liable to the Guarantied Parties in any way or manner under the
Credit Agreement; (c) all
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Form of Subsidiary Guaranty
defenses, counterclaims and off-sets of any kind or nature, arising directly or
indirectly from the present or future lack of perfection, sufficiency, validity
or enforceability of any Loan Document and the security interest granted
pursuant thereto; (d) any defense arising by reason of any claim or defense
based upon an election of remedies by the Guarantied Parties including, without
limitation, any direction to proceed by judicial or nonjudicial foreclosure or
by deed in lieu thereof, which, in any manner impairs, affects, reduces,
releases, destroys or extinguishes such Guarantor's subrogation rights, rights
to proceed against a Borrower Party for reimbursement, or any other rights of
such Guarantor to proceed against a Borrower Party, against any other guarantor,
or against any other security, with such Guarantor understanding that the
exercise by the Guarantied Parties of certain rights and remedies may offset or
eliminate such Guarantor's right of subrogation against a Borrower Party, and
that such Guarantor may therefore incur partially or totally non-reimbursable
liability hereunder; (e) all presentments, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor, notices of
default, notice of acceptance of this Guaranty, and notices of the existence,
creation, or incurring of new or additional indebtedness, and all other notices
or formalities to which such Guarantor may be entitled; and (f) without limiting
the generality of the foregoing, such Guarantor hereby expressly waives any and
all benefits of California Civil Code Sections 2809, 2810, 2819, 2825, 2839 and
2845 through 2850.
6. Each Guarantor hereby agrees that unless and until all Obligations
have been paid to the Guarantied Parties in full, it shall not have any rights
of subrogation, reimbursement or contribution as against a Borrower Party or any
other guarantor, if any, and shall not seek to assert or enforce the same. Each
Guarantor understands that the exercise by the Guarantied Parties of certain
rights and remedies contained in the Loan Documents may affect or eliminate such
Guarantor's right of subrogation if any, against a Borrower Party and that such
Guarantor may therefore incur a partially or totally non-reimbursable liability
hereunder; nevertheless, such Guarantor hereby authorizes and empowers the
Guarantied Parties to exercise, in their sole discretion, any right and remedy,
or any combination thereof, which may then be available, since it is the intent
and purpose of such Guarantor that the obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances.
7. Each Guarantor is presently informed of the financial condition of
each Borrower Party and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Obligations. Each
Guarantor hereby covenants that it will continue to keep itself informed of the
financial condition of each Borrower Party, the status of other guarantors, if
any, and of all other circumstances which bear upon the risk of nonpayment. Each
Guarantor hereby waives its right, if any, to require the Guarantied Parties to
disclose to it any information which Lender may now or hereafter acquire
concerning such condition or circumstances including, but not limited to, the
release of any other guarantor.
8. Lender's books and records evidencing the Obligations shall be
admissible in any action or proceeding and shall be binding upon the Guarantors
for the purpose of establishing the terms set forth therein and shall constitute
prima facie proof thereof.
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Form of Subsidiary Guaranty
9. Notwithstanding anything to the contrary contained herein, the
obligations of each Guarantor hereunder shall be limited to an aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance under Section 548 of the Bankruptcy Code (Title 11, United
States Code) or any comparable provisions of any applicable state law.
10. Each Guarantor represents and warrants for and with respect to
itself that:
(a) Such Guarantor (i) is a corporation duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction
of its incorporation or organization, (ii) has all requisite power and
authority and all governmental licenses, authorizations, consents and
approvals to own its assets, carry on its business and to execute,
deliver, and perform its obligations under this Guaranty, (iii) is duly
qualified and is licensed and in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license, and (iv)
is in compliance with all Laws, except in each case referred to in clause
(iii) or this clause (iv), to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(b) The execution, delivery and performance by such Guarantor of
this Guaranty, have been duly authorized by all necessary corporate or
other organizational action, and do not and will not (i) contravene the
terms of any of such Guarantor's Organization Documents; (ii) conflict
with or result in any breach or contravention of, or the creation of any
Lien under, any Contractual Obligation to which such Guarantor is a party
or any order, injunction, writ or decree of any Governmental Authority to
which such Guarantor or its property is subject; or (iii) violate any Law,
except in each case referred to in clause (ii) or this clause (iii), to
the extent that failure to do so could not reasonably be expected to have
a Material Adverse Effect;
(d) No approval, consent, exemption, authorization, or other
action by, or notice to, or filing with, any Governmental Authority is
necessary or required in connection with the execution, delivery or
performance by, or enforcement against, such Guarantor of this Guaranty;
(e) This Guaranty has been duly executed and delivered by such
Guarantor. This Guaranty constitutes a legal, valid and binding obligation
of such Guarantor, enforceable against such Guarantor in accordance with
its terms;
(f) Except as specifically disclosed on Schedule 5.06 to the
Credit Agreement, there are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of such Guarantor, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against such Guarantor or against any of its properties
or revenues that (a) purport to affect or pertain to this Guaranty, or any
of the transactions contemplated hereby, or (b) if determined adversely,
could reasonably be expected to have a Material Adverse Effect; and
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Form of Subsidiary Guaranty
(g) The execution, delivery and performance by such Guarantor of
this Guaranty does not constitute, to the knowledge of Guarantor, a
"fraudulent conveyance," "fraudulent obligation" or "fraudulent transfer"
within the meanings of the Uniform Fraudulent Conveyances Act or Uniform
Fraudulent Transfer Act, as enacted in any jurisdiction.
11. All notices and other communications hereunder shall be delivered,
in the manner and with the effect provided in the Credit Agreement and, in the
case of Guarantors, in care of Borrower.
12. This Guaranty shall be binding upon the successors and assigns of
each Guarantor and shall inure to the benefit of the Guarantied Parties'
successors and assigns. This Guaranty cannot be assigned by any Guarantor
without the prior written consent of the Guarantied Parties which shall be in
the Guarantied Parties' sole and absolute discretion.
13. No failure or delay by the Guarantied Parties in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
14. Guarantors shall jointly and severally pay (a) all reasonable
out-of-pocket expenses of the Guarantied Parties, including reasonable fees and
disbursements of counsel (including the allocated cost of inhouse counsel and
staff) for Lender, in connection with any waiver or consent hereunder or any
amendment hereof and (b) all out-of-pocket expenses incurred by the Guarantied
Parties, including fees and disbursements of counsel (including the allocated
cost of inhouse counsel and staff), in connection with the enforcement of this
Guaranty (whether or not suit is brought).
15. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of Lender authorized to do
so. This Guaranty merges all negotiations, stipulations and provisions relating
to the subject matter of this Guaranty which preceded or may accompany the
execution of this Guaranty.
16. Any indebtedness of Borrower Parties now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of Borrower Parties to the
Guarantied Parties; and after the occurrence and during the continuance of an
Event of Default, such indebtedness of Borrower Parties to any Guarantor if
Lender so requests shall be collected, enforced and received by each Guarantor
as trustee for the Guarantied Parties and be paid over to Lender on account of
the indebtedness of Borrower Parties to the Guarantied Parties but without
reducing or affecting in any manner the liability of any Guarantor under the
other provisions of this guaranty.
17. It is not necessary for the Guarantied Parties to inquire into the
powers of any Borrower Party or of the officers, directors or agents acting or
purporting to act on their behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
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Form of Subsidiary Guaranty
18. Any Person becoming a domestic Subsidiary shall become a Guarantor
hereunder by executing and delivering a joinder agreement in the form of Exhibit
A hereto and by complying with the terms of Section 6.14 of the Credit
Agreement. Upon Lender's receipt of a duly executed and delivered joinder
agreement, this Guaranty shall be deemed amended to include such additional
Person as a Guarantor, and such Person shall become a party hereto as through a
signatory hereto, with no amendment or further action required hereunder, and
thereafter, all references to Guarantors shall include such additional Person.
19. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF
THE STATE OF CALIFORNIA WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
20. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
DATED AS OF: November 20, 2001
"GUARANTORS"
____________________________________
By: ______________________________
Name: ______________________________
Title:______________________________
ACKNOWLEDGED:
BLUE RIDGE INVESTMENTS, LLC
By: ________________________________
George C. Carp
Senior Vice President - Finance
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Form of Subsidiary Guaranty
EXHIBIT A TO SUBSIDIARY GUARANTY
INSTRUMENT OF JOINDER FOR ADDITIONAL GUARANTORS
Dated: ______, _____
Reference is made to that certain Term Credit Agreement dated as of
November 20, 2001 between Caminus Corporation, a Delaware corporation
("Borrower") and Lender (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the "Credit Agreement;" the
terms defined therein being used herein as therein defined). This Instrument of
Joinder is being delivered pursuant to Section 6.14 of the Credit Agreement.
_____________________________, a direct or indirect domestic Subsidiary of
Borrower ("Subsidiary") hereby agrees to become a Guarantor under the Subsidiary
Guaranty and agrees to be bound by all the terms and conditions of the
Subsidiary Guaranty applicable to a Guarantor from and after the date hereof as
if a signatory to the Subsidiary Guaranty. The undersigned Subsidiary hereby
represents and warrants to the matters set forth in Paragraph 10 of the
Subsidiary Guaranty as of the date hereof. Concurrently herewith, the conditions
precedent set forth in Section 6.14 of the Credit Agreement are being satisfied.
The undersigned hereby consent to the Subsidiary becoming a party to the
Subsidiary Guaranty. This Instrument of Joinder is executed by the parties
hereto as of the date first written above.
GUARANTOR
By: ______________________________
Name: ______________________________
Title:______________________________
CONSENTED:
EXISTING GUARANTORS
By: ______________________________
Name: ______________________________
Title:______________________________
CONSENTED:
BLUE RIDGE INVESTMENTS, LLC
By: ______________________________
Name: ______________________________
Title:______________________________
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Form of Continuing Guaranty