SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: December 20, 1996
(Date of the earliest event reported)
RIGHT MANAGEMENT CONSULTANTS, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation)
0-15539 23-2153729
(Commission (IRS Employer Identification
file number) Number)
1818 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 988-1588
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Item 5: Other Matters
On December 20, 1996, Right Management Consultants, Inc. (the Company) signed a
new Credit Agreement (the Credit Agreement) with PNC Bank, National Association
and First Union National Bank (the Lenders) to increase its maximum unsecured
revolving line of credit to $40,000,000. The Credit Agreement became effective
December 23, 1996. The Credit Agreement replaces the previous $10,000,000
Amended and Restated Revolving Credit and Term Loan Agreement executed with the
Company's primary lender in June 1994 and amended various times thereafter, as
well as a separate $5,000,000 unsecured line of credit with a second lender.
The Credit Agreement has a three year maturity. Subsequent to the first
anniversary, and annually thereafter, the Company has the ability to extend the
Credit Agreement for an additional year upon Lenders' approval. The Company may
borrow, repay and re-borrow during the term of the Credit Agreement, with any
balance due at maturity. Interest rates are tiered at LIBOR plus a margin
contingent upon certain financial ratios of the Company. The Company also has
the option to borrow at a base rate equal to the lesser of the bank's Prime Rate
less 1/4% or the Federal Funds Effective Rate plus 1%. Under the terms of the
Credit Agreement, the effective borrowing rate was 6.53% at December 31, 1996.
The Credit Agreement contains covenants, which principally require the
maintenance of certain minimum financial ratios and restrict the level of
additional indebtedness with other lenders.
The Company used the initial $5,737,000 from the Credit Agreement to refinance
all existing indebtedness. The Company plans to utilize the Credit Agreement to
assist in the financing of acquisitions as they arise, and for other general
corporate purposes.
Item 7: Exhibits
Exhibit
Number Description
99.1 Credit Facility Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RIGHT MANAGEMENT CONSULTANTS, INC.
(Registrant)
Date: January 17, 1997 By: /s/ G. Lee Bohs
----------------
Executive Vice President and
Chief Financial Officer
CREDIT AGREEMENT
among
RIGHT MANAGEMENT CONSULTANTS, INC.,
RIGHT ASSOCIATES-GOVERNMENT SERVICES, INC.,
RIGHT ACQUISITION CO.,
CONVICTION RIGHT FRANCE, S.A.,
RIGHT ASSOCIATES BELGIUM, INC.,
RIGHT ASSOCIATES FRANCE, INC.,
RIGHT ASSOCIATES & CO., SNC,
RIGHT ASSOCIATES, LTD.,
RIGHT ASSOCIATES, INC.,
RIGHT ASSOCIATES LICENSE, INC.,
R.M.C. & CO., SNC
and
THE THinc CONSULTING GROUP INTERNATIONAL (U.K.), LTD.
as Borrowers,
The Several Lenders From Time to Time
Parties Hereto
and
PNC BANK, NATIONAL ASSOCIATION,
As Agent
Dated as of December 20, 1996
$40,000,000 CREDIT FACILITY
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms............................................. 1
1.2 Other Definitional Provisions............................. 17
SECTION 2. LOANS AND TERMS OF COMMITMENTS.................................. 18
2.1 Revolving Credit Commitments.............................. 18
2.2 Nature of Banks' Obligations with Respect to Revolving
Credit Loans.............................................. 19
2.3 Revolving Credit Notes.................................... 19
2.4 Procedure for Revolving Credit Loans...................... 19
2.5 Conversion and Continuation Options....................... 20
2.6 Utilization of Commitments in Optional Currencies......... 21
2.7 Fees...................................................... 22
2.8 Letter of Credit Subfacility.............................. 23
2.9 Interest Rates and Payment Dates.......................... 28
2.10 Default Interest.......................................... 28
2.11 Pro Rata Treatment of Loans and Payments; Commitment Fees. 29
2.12 Payments.................................................. 29
2.13 Eurodollar Rate Unascertainable; Illegality; Increased
Costs; Deposits Not Available............................. 30
2.14 Termination, Reduction and Extension of Commitments....... 31
2.15 Prepayment of Loans....................................... 32
2.16 Requirements of Law....................................... 33
2.17 Taxes..................................................... 34
2.18 Indemnity................................................. 36
2.19 Judgment Currency......................................... 36
2.20 Borrowers' Representative................................. 36
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................. 37
3.1 Financial Condition....................................... 37
3.2 No Change................................................. 37
3.3 Corporate Existence; Compliance with Law.................. 37
3.4 Corporate Power; Authorization; Enforceable Obligations... 38
3.5 No Legal Bar.............................................. 38
3.6 No Material Litigation.................................... 38
3.7 No Default................................................ 38
3.8 Taxes..................................................... 38
3.9 Federal Regulations....................................... 39
3.10 ERISA..................................................... 39
3.11 Investment Company Act.................................... 39
3.12 Public Utility Holding Company Act........................ 39
3.13 Environmental Matters..................................... 40
3.14 No Material Misstatements................................. 41
3.15 Title to Properties....................................... 41
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Page
3.16 Intellectual Property..................................... 41
3.17 No Burdensome Restrictions; List of Subsidiaries.......... 41
3.18 Solvency.................................................. 41
3.19 Insurance................................................. 42
3.20 Material Contracts; Franchise Agreements.................. 42
SECTION 4. CONDITIONS PRECEDENT............................................ 42
4.1 Conditions to Initial Extension of Credit................. 42
4.2 Conditions to Each Loan................................... 44
SECTION 5. AFFIRMATIVE COVENANTS........................................... 44
5.1 Financial Statements...................................... 44
5.2 Certificates; Other Information........................... 45
5.3 Payment of Obligations.................................... 46
5.4 Conduct of Business and Maintenance of Existence.......... 46
5.5 Maintenance of Insurance; Property........................ 46
5.6 Inspection of Property; Books and Records; Discussions.... 47
5.7 Notices................................................... 47
5.8 Environmental Laws........................................ 47
5.9 Management Changes........................................ 48
5.10 Subordination of Intercompany Loans, Other Loans
and Advances to the Borrowers............................. 48
5.11 Notice and Joinder of New Subsidiaries.................... 48
5.12 Use of Proceeds........................................... 48
5.13 Subsequent Credit Terms................................... 48
SECTION 6. NEGATIVE COVENANTS.............................................. 49
6.1 Financial Condition Covenants............................. 49
6.2 Limitation on Liens....................................... 49
6.3 Limitation on Indebtedness................................ 50
6.4 Limitations on Fundamental Changes........................ 50
6.5 Limitation on Sale of Assets.............................. 50
6.6 Limitation on Distributions............................... 51
6.7 Transactions with Affiliates.............................. 51
6.8 Sale and Leaseback........................................ 51
6.9 Limitation on Contingent Obligations...................... 51
6.10 Limitation on Investments, Loans and Advances............. 52
6.11 Negative Pledge........................................... 52
6.12 Fiscal Year............................................... 52
6.13 Limitation on Conduct of Business......................... 52
6.14 Partnerships and Joint Ventures........................... 52
6.15 Changes in Organizational Documents....................... 53
SECTION 7. EVENTS OF DEFAULT............................................... 53
7.1 Events of Default......................................... 53
SECTION 8. THE AGENT....................................................... 55
8.1 Appointment............................................... 55
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8.2 Delegation of Duties...................................... 56
8.3 Exculpatory Provisions.................................... 56
8.4 Reliance by Agent......................................... 56
8.5 Notice of Default......................................... 57
8.6 Non-Reliance on Agent and Other Banks..................... 57
8.7 Indemnification........................................... 57
8.8 Agent in Its Individual Capacity.......................... 58
8.9 Successor Agent........................................... 58
8.10 Beneficiaries........................................... 58
SECTION 9. MISCELLANEOUS................................................... 58
9.1 Amendments and Waivers.................................... 58
9.2 Notices; Lending Offices.................................. 59
9.3 No Waiver; Cumulative Remedies............................ 60
9.4 Survival of Representations and Warranties................ 60
9.5 Payment of Expenses and Taxes............................. 60
9.6 Successors and Assigns.................................... 61
9.7 Disclosure of Information................................. 64
9.8 Adjustments; Set-off...................................... 65
9.9 Counterparts.............................................. 65
9.10 Severability.............................................. 65
9.11 Integration............................................... 65
9.12 Governing Law............................................. 66
9.13 Submission To Jurisdiction; Waivers....................... 66
9.14 Acknowledgements.......................................... 66
9.15 No Right of Contribution.................................. 67
9.16 Waivers of Jury Trial..................................... 67
SCHEDULES
SCHEDULE I Bank and Commitment Information
SCHEDULE II Existing Liens
SCHEDULE 3.17 List of Subsidiaries
SCHEDULE 3.19 Insurance
SCHEDULE 3.20 Material Contracts
SCHEDULE 6.3 Exiting Indebtedness
SCHEDULE 6.9 Existing Contingent Obligations
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B Form of Assignment and Acceptance Agreement
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D Form of Joinder and Assumption Agreement
EXHIBIT E Matters to be Covered in Legal Opinion of Fox,
Rothschild, O'Brien & Frankel
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<PAGE>
CREDIT AGREEMENT
AGREEMENT, dated as of December 20, 1996, among RIGHT MANAGEMENT
CONSULTANTS, INC. (the "Company"), a Pennsylvania corporation, and its
wholly-owned subsidiaries RIGHT ASSOCIATES-GOVERNMENT SERVICES, INC., a Virginia
corporation, RIGHT ACQUISITION CO., a Delaware corporation, CONVICTION RIGHT
FRANCE, S.A., a French corporation, RIGHT ASSOCIATES BELGIUM, INC., a Delaware
corporation, RIGHT ASSOCIATES FRANCE, INC., a Delaware corporation, RIGHT
ASSOCIATES & CO., SNC, a Belgian corporation, RIGHT ASSOCIATES, LTD., a United
Kingdom corporation, RIGHT ASSOCIATES, INC., a Delaware corporation, RIGHT
ASSOCIATES LICENSE, INC., a Delaware corporation, R.M.C. & CO., SNC, a Belgian
corporation, and THE THinc CONSULTING GROUP INTERNATIONAL (U.K.), LTD., a United
Kingdom corporation (collectively, the "Borrowers"), the several banks and other
financial institutions from time to time parties hereto (the "Banks") and PNC
BANK, NATIONAL ASSOCIATION, as agent for the Banks hereunder (in such capacity,
the "Agent").
W I T N E S S E T H:
In consideration of the promises and the agreements hereinafter set
forth, and intending to be legally bound hereby, the parties hereto hereby agree
as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate": as to any Person, any other Person which, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person and any member, director, officer
or employee of any such Person. For purposes of this definition, "control" shall
mean the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) direct or in effect cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": on any date, for a Eurodollar Loan, the
percentage per annum set forth below in the column entitled Eurodollar Rate,
opposite the Total Debt/EBITDA Ratio shown
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on the last Total Debt/EBITDA Ratio Certificate delivered by the Borrowers to
the Agent pursuant to subsection 5.2(c) prior to such date:
Eurodollar
Level Total Debt/EBITDA Ratio Rate
I Less than or equal to
0.25 to 1.0 .50%
II Less than or equal to 0.75
to 1.0 but greater than
0.25 to 1.0 .625%
III Less than or equal to 1.25
to 1.0 but greater than
0.75 to 1.0 .75%
IV Less than or equal to 1.75
to 1.0 but greater than
1.25 to 1.0 1.00%
V Greater than 1.75 to 1.0 1.25%
; provided, however, that (a) in the event that no Total Debt/EBITDA Ratio
Certificate has been delivered for a fiscal quarter prior to the last date on
which it can be delivered without violation of subsection 5.2(c), the Applicable
Margin from such date until such Total Debt/EBITDA Ratio Certificate is actually
delivered shall be that applicable when the Total Debt/EBITDA Ratio is greater
than 1.75 to 1.0, (b) in the event that the actual Total Debt/EBITDA Ratio for
any fiscal quarter is subsequently determined to be greater than that set forth
in the Total Debt/EBITDA Ratio Certificate for such fiscal quarter, the
Applicable Margin shall be recalculated for the applicable period based upon
such actual Total Debt/EBITDA Ratio and (c) anything in this definition to the
contrary notwithstanding, until receipt by the Agent of the Total Debt/EBITDA
Ratio Certificate for the fiscal quarter ending December 31, 1996, the
Applicable Margin shall be that applicable when the Total Debt/EBITDA Ratio is
less than or equal to 0.75 to 1.0 but greater than 0.25 to 1.0. Any additional
interest on the Loans resulting from the operation of clause (b) above shall be
payable by the Borrowers jointly and severally to the Banks within five (5) days
after receipt of a written demand therefor from the Agent.
"Assignment and Acceptance": an assignment and acceptance entered into
by a Bank and a Purchasing Bank, and accepted by the Agent, in the form of
Exhibit B attached hereto, or such other form as shall be approved by the Agent.
"Available Commitments": at any particular time, an amount equal to
the excess, if any, of the Commitments at such time over the sum of (a) the
aggregate unpaid principal amount of the Revolving Credit Loans outstanding at
such time and (b) the Letters of Credit Outstanding at such time.
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"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16th of 1%) equal to the lesser of (a) the Prime Rate
in effect on such day minus 1/4 of 1% and (b) the Federal Funds Effective Rate
in effect on such day plus 1%. If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations in
accordance with the definition of such term, the Base Rate shall be determined
without regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, as the case may be.
"Base Rate Loan": any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrowers' Representative": has the meaning assigned to such term in
Section 2.20.
"Borrowing Date": any Business Day on which a Loan is to be made at
the request of the Borrowers under this Agreement.
"Borrowing Tranche": specified portions of Loans outstanding as
follows: (a) any Loans to which a Eurodollar Rate applies which become subject
to the same Eurodollar Rate under the same Notice of Borrowing by the Borrowers
and which have the same Interest Period and which are denominated either in
Dollars or in the same Optional Currency shall constitute one Borrowing Tranche,
and (b) all Loans to which the Base Rate applies shall constitute one Borrowing
Tranche.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Philadelphia, Pennsylvania are authorized or required
by law to close and (a) with respect to advances or payments of Loans or any
other matters relating to Loans denominated in an Optional Currency, such day
also shall be a day on which dealings in deposits in the relevant Optional
Currency are carried on in the applicable interbank market, and (b) with respect
to advances or payments of Loans denominated in an Optional Currency, such day
shall also be a day on which all applicable banks into which Loan proceeds may
be deposited are open for business and foreign exchange markets are open for
business in the principal financial center of the country of such currency.
"Capital Lease": at any time, a lease with respect to which the lessee
is required to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.
"Capital Lease Obligations": of any Person as of the date of
determination, the obligations of such Person to pay rent and other amounts
under any Capital Lease.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
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"Change of Control": (a) any Person or group of Persons (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of 20% or more of the
outstanding shares of any class of outstanding common stock of the Company or
(b) directors in office at the beginning of any fiscal year of the Company shall
cease to constitute at least one-half of the board of directors of the Company
in office at any time during such fiscal year.
"Closing Date": the date on which the Banks make their initial Loans.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment": as to any Bank, the obligation of such Bank to make
Revolving Credit Loans in an aggregate principal at any one time outstanding not
to exceed the amount set forth opposite such Bank's name on Schedule I hereto
under the caption "Commitment," or on the Register maintained by the Agent
pursuant to Section 9.6, as the same may be permanently terminated, reduced or
extended from time to time pursuant to the provisions of this Agreement.
"Commitment Fees": those certain fees payable to the Banks on the
Available Commitments as described in subsection 2.7(a).
"Commitment Fee Rate": on each day during each fiscal quarter of the
Company, the percentage per annum set forth below opposite the Total Debt/EBITDA
Ratio shown on the Total Debt/EBITDA Ratio Certificate delivered to the Agent
pursuant to subsection 5.2(c) for the immediately preceding fiscal quarter:
Level Total Debt/EBITDA Ratio Commitment Fee Rate
I Less than or equal to 0.25 to 1.0 .125%
II Less than or equal to 0.75 to 1.0 but
greater than 0.25 to 1.0 .150%
III Less than or equal to 1.25 to 1.0 but
greater than 0.75 to 1.0 .150%
IV Less than or equal to 1.75 to 1.0 but
greater than 1.25 to 1.0 .200%
V Greater than 1.75 to 1.0 .250%
; provided, however, that, (a) in the event that no Total Debt/EBITDA Ratio
Certificate has been delivered for a fiscal quarter prior to the last day of the
next succeeding fiscal quarter, the Commitment Fee Rate during such fiscal
quarter shall be that applicable when the Total Debt/EBITDA Ratio is greater
than 1.75 to 1.0, (b) in the event that the actual Total Debt/EBITDA Ratio for
any fiscal quarter is subsequently determined to be greater than that set forth
in the Total Debt/EBITDA
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<PAGE>
Ratio Certificate for such fiscal quarter, the Commitment Fee Rate shall be
recalculated for the applicable period based upon such actual Total Debt/EBITDA
Ratio and (c) anything in this definition to the contrary notwithstanding, until
receipt by the Agent of the Total Debt/EBITDA Ratio Certificate for the fiscal
quarter ending December 31, 1996, the Commitment Fee Rate shall be that
applicable when the Total Debt/EBITDA Ratio is less than or equal to 0.75 to 1.0
but greater than 0.25 to 1.0. Any additional Commitment Fees that is due to the
Banks resulting from the operation of clause (b) above shall be payable by the
Borrowers jointly and severally within five (5) days after receipt of a written
demand therefor from the Agent.
"Commitment Percentage": as to any Bank at any time, the percentage
which such Bank's Commitment then constitutes of the aggregate Commitments at
such time (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Bank's
Loans then outstanding bears to the aggregate principal amount of all Loans then
outstanding).
"Commitment Period": the period from and including the date hereof to
but not including the Termination Date, or such earlier date on which the
Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with the Company within the meaning of Section
4001 of ERISA or is part of a group which includes the Company and which is
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.
"Computation Date": has the meaning assigned to such term in
subsection 2.6(a).
"Consolidated Capital Expenditures": for any period, the gross amount
of additions during such period to the fixed assets, property, plant and
equipment of the Company and its Subsidiaries, all as such additions would be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
prepared in accordance with GAAP.
"Consolidated Income Tax Expense": for any period, the amount of
income tax expense incurred by the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, the amount of cash
interest expense incurred by the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income": for any fiscal period, the net income (or
loss) after income taxes and excluding extraordinary items of the Company and
its Subsidiaries for such period determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth": as of the date of determination, all items
which in conformity with GAAP would be included under shareholders' equity on a
consolidated balance sheet of the Company and its Subsidiaries at such date.
5
<PAGE>
"Contingent Obligation": as to any Person any guarantee of payment or
performance by such Person of any Indebtedness or other obligation of any other
Person, or any agreement to provide financial assurance with respect to the
financial condition, or the payment of the obligations of, such other Person
(including, without limitation, purchase or repurchase agreements, reimbursement
agreements with respect to letters of credit or acceptances, indemnity
arrangements, grants of security interests to support the obligations of another
Person, keepwell agreements and take-or-pay or through-put arrangements) which
has the effect of assuring or holding harmless any third Person against loss
with respect to one or more obligations of such third Person; provided, however,
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation of any Person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made and (b) the maximum amount
for which such contingently liable Person may be liable pursuant to the terms of
the instrument embodying such Contingent Obligation, unless such primary
obligation and the maximum amount for which such contingently liable Person may
be liable are not stated or determinable, in which case the amount of such
Contingent Obligation shall be such contingently liable Person's maximum
reasonably anticipated liability in respect thereof as determined by the Company
in good faith. Contingent Obligations of any Person shall include the amount of
any future "earn-out" or similar payments to be made to any other Person in
connection with a Permitted Acquisition whether or not the same are reflected as
indebtedness on the financial statements of the contingently liable Person.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or any provision 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.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, or any
other condition precedent therein set forth, has been satisfied.
"Distribution": in respect of any corporation, (a) dividends or other
distributions on capital stock of the corporation (except distributions in
common stock of such corporation); (b) the redemption or acquisition of such
stock or of warrants, rights or other options to purchase such stock (except
when solely in exchange for common stock of such corporation); and (c) any
payment on account of, or the setting apart of any assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of any share of any class of Capital Stock of such corporation or
any warrants or options to purchase any such stock.
"Dollar Equivalent": with respect to any amount of any currency, the
Equivalent Amount of such currency expressed in Dollars.
"Dollar Equivalent Revolving Facility Usage": at any time the sum of
the Dollar Equivalent amount of Revolving Credit Loans then outstanding and the
Dollar Equivalent amount of Letters of Credit Outstanding.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
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"Drawing Date": has the meaning assigned to such term in subsection
2.8(c).
"EBITDA": for any period, Consolidated Net Income for such period,
plus the amount of income taxes, interest expense, depreciation and amortization
deducted from earnings in determining such Consolidated Net Income.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or binding requirements of any Governmental Authority, or binding Requirement of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment, as now or may at any time hereafter be
in effect.
"Equivalent Amount": at any time, as determined by the Agent (which
determination shall be conclusive absent manifest error), with respect to an
amount of any currency (the "Reference Currency") which is to be computed as an
equivalent amount of another currency (the "Equivalent Currency"), the amount of
such Equivalent Currency converted from such Reference Currency at Agent's spot
selling rate (based on the market rates then prevailing and available to the
Agent) for the sale of such Equivalent Currency for such Reference Currency at a
time determined by the Agent on the second Business Day immediately preceding
the event for which such calculation is made.
"Equivalent Currency": has the meaning assigned to such term in the
definition of Equivalent Amount.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Loan": any Loan bearing interest at a rate determined by
reference to the Eurodollar Rate.
"Eurodollar Rate":
(a) with respect to Dollar Loans comprising any Borrowing Tranche
to which the Eurodollar Rate applies for any Interest Period, the interest rate
per annum determined by the Agent by dividing (the resulting quotient rounded
upward to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the London
interbank offered rate of interest per annum appearing on Telerate display page
3750 or such other display page on the Telerate System as may replace such page
evidencing quotes by the British Bankers' Association (or appropriate successor
or, if the British Bankers' Association or its successor ceases to provide such
quotes, a comparable replacement determined by the Agent) at approximately 11:00
a.m., London time, two (2) Business Days prior to the first day of such Interest
Period for an amount comparable to such Borrowing Tranche and having a borrowing
date and a maturity comparable to such Interest Period by (ii) a number equal to
1.00 minus the Eurodollar Rate Reserve Percentage. Such Eurodollar Rate may also
be expressed by the following formula:
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Telerate page 3750 quoted by British Bankers'
Eurodollar Rate = Association or appropriate successor
-----------------------------------------------
1.00 - Eurodollar Rate Reserve Percentage
The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate
outstanding on the effective date of any change in the Eurodollar Rate Reserve
Percentage as of such effective date. The Agent shall give prompt notice to the
Borrowers of the Eurodollar Rate as determined or adjusted in accordance
herewith, which determination shall be conclusive absent manifest error.
(b) with respect to Optional Currency Loans comprising any
Borrowing Tranche to which the Eurodollar Rate applies for any Interest Period,
the interest rate per annum determined by Agent by dividing (the resulting
quotient rounded upward to the nearest 1/100th of 1% per annum) (i) the rate of
interest per annum determined by Agent in accordance with its usual procedures
(which determination shall be conclusive absent manifest error) to be the rate
of interest per annum for deposits in the relevant Optional Currency which
appears on the relevant Telerate Page (or, if no such quotation is available on
such Telerate Page, on the appropriate Reuters Screen) at approximately 9:00
a.m., Philadelphia time, two (2) Business Days prior to the first day of such
Interest Period for delivery on the first day of such Interest Period for a
period, and in an amount, comparable to such Interest Period and principal
amount of such Borrowing Tranche ("LIBO Rate") by (ii) a number equal to 1.00
minus the Eurodollar Rate Reserve Percentage. Such Eurodollar Rate may also be
expressed by the following formula:
Eurodollar Rate = LIBO Rate
-----------------------------------------------
1 - Eurodollar Rate Reserve Percentage
The Eurodollar Rate shall be adjusted on the effective date of any change in the
Eurodollar Rate Reserve Percentage as of such effective date. The Agent shall
give prompt notice to the Borrowers of the Eurodollar Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error. The Eurodollar Rate for any Loans shall be based upon the
Eurodollar Rate for the currency in which such Loans are requested.
"Eurodollar Rate Reserve Percentage": the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period: (i) as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System; and
(ii) to be maintained by a Bank as required for reserve liquidity, special
deposit, or a similar purpose by any governmental or monetary authority of any
country or political subdivision thereof (including any central bank), against
(A) any category of liabilities that includes deposits by reference to which a
Eurodollar Rate is to be determined, or (B) any category of extension of credit
or other assets that includes Loans or Borrowing Tranches to which a Eurodollar
Rate applies.
"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
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"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreements": (a) the Amended and Restated Revolving
Credit and Term Loan Agreement, dated as of June 30, 1994, among certain of the
Borrowers and PNC Bank, National Association, as heretofore amended,
supplemented or otherwise modified, and (b) the Revolving Credit Agreement,
dated as of May 1, 1996, as amended effective November 30, 1996, among certain
of the Borrowers and First Union National Bank, as heretofore amended,
supplemented or otherwise modified.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.
"Fee Letter": the letter, dated October 31, 1996, from the Agent to
the Company relating to the payment of certain fees and expenses in connection
with the transactions contemplated hereby.
"GAAP": at any time with respect to the determination of the character
or amount of any asset or liability or item of income or expense, or any
consolidation or other accounting computation, generally accepted accounting
principles as in effect in the United States on the date of, or at the end of
the period covered by, the financial statements from which such asset,
liability, item of income, or item of expense, is derived, or, in the case of
any such computation, as in effect on the date when such computation is required
to be determined, consistently applied.
"Governmental Acts": has the meaning assigned to such term in
subsection 2.8(h).
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Indebtedness": of any Person at any date:
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), except to the extent that any such
deferred purchase price constitutes a Contingent Obligation,
(b) any other indebtedness which is evidenced by a note, bond,
debenture or similar instrument,
(c) all Capital Lease Obligations of such Person,
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(d) all obligations of such Person in respect of outstanding
letters of credit, acceptances and similar obligations created for the account
of such Person,
(e) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof,
(f) net liabilities of such Person under interest rate cap
agreements, interest rate swap agreements, foreign currency exchange agreements,
netting agreements and other hedging agreements or arrangements (calculated on a
basis satisfactory to the Agent and in accordance with accepted practice), and
(g) withdrawal liabilities of such Person or any Commonly
Controlled Entity under a Plan.
The Indebtedness of any Person shall include any Indebtedness of any
partnership in which such Person is the general partner.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": has the meaning ascribed thereto in Section
3.16.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each calendar month while such Loan is outstanding, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any Eurodollar Loan having an Interest Period
longer than three months, the day which is (i) three months after the first day
of such Interest Period and (ii) the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially the period commencing on the borrowing or
continuation date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the Borrowers in
their Notice of Borrowing or notice of continuation, given with respect thereto;
and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrowers by
irrevocable notice to the Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided, that the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business
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Day unless such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end
on the next preceding Business Day;
(ii) with respect to Eurodollar Loans, any
Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month;
(iii) with respect to Eurodollar Loans, an
Interest Period that would extend beyond the Termination Date
shall end on the Termination Date; and
(iv) the Borrowers shall select Interest Periods
so as not to require a payment or prepayment of any Eurodollar
Loan during an Interest Period for such Loan.
"Law": any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ,
decree or award of any Governmental Authority.
"Lending Office": the lending office(s) of the Banks set forth on
Schedule I hereto.
"Letter of Credit": has the meaning assigned to that term in
subsection 2.8(a).
"Letter of Credit Borrowing": an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed on the
date when made and shall not have been converted into a Revolving Credit Loan
under subsection 2.8(c)(ii).
"Letter of Credit Fee": has the meaning assigned to that term in
subsection 2.8(b).
"Letters of Credit Outstanding": at any time the sum of (i) the
aggregate undrawn face amount of outstanding Letters of Credit and (ii) the
aggregate amount of all unpaid and outstanding Reimbursement Obligations.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Revolving Credit Notes and any
other instruments, certificates or documents delivered or contemplated to be
delivered hereunder or thereunder or in connection herewith or therewith, as the
same may be supplemented or amended from time to time in accordance herewith or
therewith, and Loan Document shall mean any of the Loan Documents.
"Loans": the collective reference to the Revolving Credit Loans.
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"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Company and the other Borrowers taken as a whole, (b) the ability of the Company
and the other Borrowers to perform their obligations under this Agreement, the
Revolving Credit Notes or any other Loan Document or (c) the validity or
enforceability of this Agreement, the Revolving Credit Notes or any of the other
Loan Documents or the rights or remedies of the Agent or the Banks hereunder or
thereunder.
"Material Contracts": has the meaning assigned to such term in Section
3.20.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphynels, and ureaformaldehyde insulation.
"Moody's": Moody's Investors Services, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": with respect to the sale or issuance of any Capital
Stock by a Borrower or its Subsidiary after the Closing Date, the net amount
equal to (a) the aggregate amount received in cash in connection with such sale
or issuance minus (b) the reasonable fees, commissions and other out-of-pocket
expenses incurred by such Borrower or its Subsidiary in connection with such
sale or issuance, other than to the Company or any Affiliate thereof.
"Notice of Borrowing": with respect to a Revolving Credit Loan of any
Type, a notice from the Borrowers in respect of such Loan, containing the
information in respect of such Loan and delivered to the Person, in the manner
and by the time specified pursuant to the terms hereof. A form of the Notice of
Borrowing for Revolving Credit Loans is attached hereto as Exhibit C.
"Optional Currency": each of the following currencies: French Francs,
Deutsche Marks, British Pounds Sterling, Spanish Pesetas, Italian Lira,
Australian Dollars, and any other currency (which, when referred to herein or in
the Revolving Credit Notes, shall be referred to using the currency codes in
effect from time to time under 150 International Standard 4217, or any successor
publication) approved by Agent and the Required Banks pursuant to subsection
2.6(d).
"Original Currency": has the meaning assigned to such term in Section
2.19.
"Other Currency": has the meaning assigned to such term in Section
2.19.
"Other Taxes": has the meaning assigned to such term in Section 2.17.
"Overnight Rate": for any day with respect to any Loans in an Optional
Currency, the rate of interest per annum as determined by the Agent at which
overnight deposits in such currency, in an amount approximately equal to the
amount with respect to which such rate is being determined, would be offered for
such day in the applicable offshore interbank market.
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"Participant": has the meaning assigned to such term in subsection
9.6(f).
"Participation Advance": with respect to any Bank, such Bank's payment
in respect of its participation in a Letter of Credit Borrowing according to its
Ratable Share pursuant to subsection 2.8(d).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition by a Borrower of the stock or
assets of a Person engaged in the career management, human resources staffing,
career recruiting, human resources product development and human resources
consulting services business, provided that: (a) the Person to be acquired (or
the assets of which are to be acquired) had either positive operating income or
no more than $500,000 in operating losses during the preceding 12 months ending
on the last day of the calendar quarter preceding the proposed date of
acquisition; (b) at the time that any definitive agreement is entered into in
respect of such acquisition, no Default or Event of Default shall exist or would
exist if such acquisition were consummated on such date (assuming for purposes
of the covenants contained in Section 6.1 that pro forma adjustments are made to
the financial statements of the Borrowers reflecting such acquisition; provided,
that historical EBITDA of the Person to be acquired (or the assets of which are
to be acquired) shall be included for purposes of calculating such covenant
compliance only if audited financial statements of such Person are received by
the Agent within 30 days prior to the consummation of such acquisition); (c) the
gross purchase price for such acquisition shall not result in the Available
Commitments falling below $2,500,000; and (d) with respect to any acquisition in
which the gross purchase price shall exceed $2,500,000, financial statements
covering the assets or operations proposed to be acquired are provided to the
Agent and each Bank within 30 days after the consummation of any such
acquisition.
"Permitted Investments": (a) direct obligations of the United States
of America or any agency or instrumentality thereof or obligations backed by the
full faith and credit of the United States of America maturing in twelve months
or less from the date of acquisition;
(b) commercial paper maturing in 180 days or less rated not
lower than A- 1 by S&P or P-1 by Moody's on the date of acquisition; and
(c) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by S&P or Moody's on the date of acquisition.
provided, that in each case, such obligations are payable in Dollars.
"Permitted Liens": (a) Liens for taxes, assessments, or similar
charges, incurred in the ordinary course of business and which are not yet due
and payable;
(b) Pledges or deposits made in the ordinary course of business
to secure payment of workmen's compensation, or to participate in any fund in
connection with workmen's compensation, unemployment insurance, old-age pensions
or other social security programs;
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(c) Liens of mechanics, materialmen, warehousemen, carriers, or
other like Liens, securing obligations incurred in the ordinary course of
business that are not yet due and payable and Liens of landlords securing
obligations to pay lease payments that are not yet due and payable or in
default;
(d) Good faith pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases, not in excess of the aggregate amount
due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(e) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially impairs
the use of such property or the value thereof, and none of which is violated in
any material respect by existing or proposed structures or land use;
(f) Any Lien existing on the date of this Agreement and described
on Schedule II hereto, provided, that the principal amount secured thereby is
not hereafter increased and no additional assets become subject to such Lien;
(g) Purchase Money Security Interests; provided, that the
aggregate amount of loans and deferred payments secured by all Purchase Money
Security Interests shall not exceed $500,000 (excluding for the purpose of this
computation any loans or deferred payments secured by Liens described on
Schedule II hereto); and
(h) The following, (i) if the validity or amount thereof is being
contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (ii) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry, and in either case they do not, in the
aggregate, materially impair the ability of the Borrowers to perform their
obligations hereunder or under the other Loan Documents:
(A) Claims or Liens for taxes, assessments or charges due
and payable and subject to interest or penalty, provided, that
the Borrowers maintain such reserves or other appropriate
provisions as shall be required by GAAP and pay all such taxes,
assessments or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;
(B) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property, including any attachment of
personal or real property or other legal process prior to
adjudication of a dispute on the merits; or
(C) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens which are due
and payable.
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"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate": the rate of interest per annum publicly announced from
time to time by PNC Bank, National Association as its prime rate in effect at
its principal office in Philadelphia, Pennsylvania; each change in the Prime
Rate shall be effective on the date such change is publicly announced as
effective.
"Principal Office": the main banking office of the Agent in
Philadelphia, Pennsylvania.
"Properties": the collective reference to the facilities and
properties owned, leased or operated by the Company or any of its Subsidiaries.
"Purchase Money Security Interest": Liens upon tangible personal
property securing loans to the Borrowers or deferred payments by the Borrowers
for the purchase of such tangible personal property.
"Purchasing Bank": has the meaning assigned to such term in subsection
9.6(b).
"Ratable Share": the proportion that a Bank's Commitment bears to the
Commitments of all of the Banks.
"Reference Currency": has the meaning assigned to such term in the
definition of Equivalent Amount.
"Register": has the meaning assigned to such term in subsection
9.6(d).
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Reimbursement Obligation": has the meaning assigned to such term in
subsection 2.8(c).
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
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"Reportable Event": any of the events set forth in Section 4043(c)(1),
(2), (4), (5), (6), (10) and (13) of ERISA.
"Required Banks": at any time, those Banks which are then in
compliance with their obligations hereunder holding (a) 66-2/3% of the
Commitments of such Banks or (b) in the event the Commitments shall have expired
or been terminated, 66-2/3% of the total outstanding Loans of such Banks.
"Requirement of Law": as to any Person, the Articles or Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case binding upon
such Person or any of its property or to which such Person or any of its
property is subject.
"Responsible Officer": with respect to any Borrower, the chief
executive officer, president or chief financial officer of such Borrower. Unless
otherwise qualified, all references to a "Responsible Officer" in this Agreement
shall refer to a Responsible Officer of the Company.
"Revolving Credit Loans": has the meaning assigned to such term in
Section 2.1.
"Revolving Credit Note": has the meaning assigned to such term in
Section 2.2, as the same may be amended, supplemented or otherwise modified from
time to time.
"S&P": Standard & Poor's Rating Group, a division of McGraw-Hill
Corporation.
"Security": "security" as defined in Section 2(1) of the Securities
Act of 1933, as amended.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only be reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Company.
"Taxes": has the meaning assigned to such term in Section 2.17.
"Termination Date": the earlier of (a) December 31, 1999 or any
anniversary of such date to which the Termination Date shall have been extended
pursuant to subsection 2.14(d) hereof and (b) the date the Commitments are
terminated as provided herein.
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"Total Debt": at any date, without duplication, the sum of (a) the
aggregate of all Indebtedness (including the current portion thereof and the
undrawn face amount of any Letters of Credit then outstanding) of the Company
and its Subsidiaries, determined on a consolidated basis in accordance with GAAP
and (b) the aggregate amount of all Contingent Obligations of the Company and
its Subsidiaries, determined on a consolidated basis, in each case as of such
date.
"Total Debt/EBITDA Ratio": on any date, the ratio of Total Debt on
such date to EBITDA for the four consecutive fiscal quarters of the Company most
recently ended prior to such date.
"Total Debt/EBITDA Ratio Certificate": has the meaning assigned to
such term in subsection 5.2(c).
"Type": when used in respect of any Loan, shall refer to the Rate by
reference to which interest on such Loan is determined. For purposes hereof,
"Rate" shall include the Eurodollar Rate and the Base Rate.
"Voting Stock": capital stock of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the directors (or Persons performing similar functions).
"Wholly-Owned Subsidiary": at any time, any Subsidiary one hundred
percent (100%) of all of the equity securities (except directors' qualifying
shares) and voting securities of which are owned by any one or more of the
Company and its other Wholly-Owned Subsidiaries at such time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Revolving Credit Notes, the other Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the Revolving Credit Notes and the
other Loan Documents, and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms relating to the Company and its
Subsidiaries not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined in this Agreement shall
be equally applicable to both the singular and plural forms of such terms.
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SECTION 2. LOANS AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Bank severally agrees to make revolving credit loans in
either Dollars or one or more Optional Currencies (the "Revolving Credit Loans")
to the Borrowers on a joint and several basis from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Bank's Commitment; provided, that (i) after
giving effect to each such Loan the aggregate Dollar Equivalent amount of Loans
from such Bank shall not exceed such Bank's Commitment minus such Bank's Ratable
Share of the Dollar Equivalent amount of Letters of Credit Outstanding, and (ii)
no Loan to which the Base Rate applies shall be made in an Optional Currency.
The Commitments may be terminated or reduced from time to time pursuant to
Section 2.14. Within the foregoing limits, the Borrowers may during the
Commitment Period borrow, repay and reborrow under the Commitments, subject to
and in accordance with the terms and limitations hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrowers and notified to the Agent in accordance with
Sections 2.4 and 2.5; provided, that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the date that is one month prior to the Termination Date.
(c) The failure of any Bank to make any Revolving Credit Loan
shall not in itself relieve any other Bank of its obligation to lend hereunder
(it being understood, however, that no Bank shall be responsible for the failure
of any other Bank to make any Loan required to be made by such other Bank). Each
Revolving Credit Loan shall be made in accordance with the procedures set forth
in Section 2.4.
2.2 Nature of Banks' Obligations with Respect to Revolving Credit
Loans. Each Bank shall be obligated to participate in each request for Revolving
Credit Loans pursuant to Section 2.4 in accordance with its Ratable Share. The
aggregate Dollar Equivalent amount of each Bank's Revolving Credit Loans
outstanding hereunder to the Borrowers at any time shall never exceed its
Commitment minus its Ratable Share of the Dollar Equivalent amount of Letters of
Credit Outstanding, subject to subsection 2.15(c). The obligations of each Bank
hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the obligations of the Borrowers to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to make Revolving
Credit Loans hereunder on or after the Termination Date.
2.3 Revolving Credit Notes. The Revolving Credit Loans made by each
Bank shall be evidenced by a promissory note of the Borrowers, substantially in
the form of Exhibit A, with appropriate insertions as to payee, date and
principal amount (a "Revolving Credit Note"), payable to the order of such Bank
and in a principal amount equal to the amount of the initial Commitment of such
Bank; provided, however, that the principal amount of each Loan evidenced by a
Revolving Credit Note shall be paid by the Borrowers in the Optional Currency in
which such Loan was made. Each Bank is hereby authorized to record the date,
Type and amount of each Revolving Credit Loan made by such Bank, each
continuation thereof, each conversion of all or a portion thereof to another
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Type, the date and amount of each payment or prepayment of principal thereof
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto, on the schedule annexed to and constituting a part of its
Revolving Credit Note, and any such recordation shall constitute prima facie
evidence of the accuracy of the information so recorded, provided, that the
failure of any Bank to make such recordation (or any error in such recordation)
shall not affect the obligations of the Borrowers hereunder or under such
Revolving Credit Note. Each Revolving Credit Note shall (a) be dated the Closing
Date, (b) be stated to mature on the Termination Date and (c) provide for the
payment of interest in accordance with Sections 2.9 and 2.10.
2.4 Procedure for Revolving Credit Loans. (a) Except as otherwise
provided herein, the Borrowers may from time to time prior to the Termination
Date request the Banks to make Revolving Credit Loans by delivering to the
Agent, not later than 10:00 a.m., Philadelphia time, (i) three (3) Business Days
prior to the proposed Borrowing Date with respect to the making of Revolving
Credit Loans in Dollars to which the Eurodollar Rate applies and four (4)
Business Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans in an Optional Currency and (ii) the Business Day of the
proposed Borrowing Date with respect to the making of a Revolving Credit Loan to
which the Base Rate applies, of a duly completed request therefor substantially
in the form of Exhibit C or a request by telephone immediately confirmed in
writing by letter, facsimile or telex in such form (each, a "Notice of
Borrowing"), it being understood that the Agent may rely on the authority of any
individual making such a telephonic request without the necessity of receipt of
such written confirmation. Each Notice of Borrowing shall be irrevocable and
shall specify (i) the proposed Borrowing Date; (ii) the aggregate amount of the
proposed Revolving Credit Loans (expressed in the currency in which such Loans
shall be funded and also as a Dollar Equivalent if such Loans shall be funded in
an Optional Currency) comprising each Borrowing Tranche, the Dollar Equivalent
amount of which shall be in integral multiples of $100,000 and not less than
$500,000 for each Borrowing Tranche to which the Eurodollar Rate applies and not
less than the lesser of $100,000 or the maximum amount available for Borrowing
Tranches to which the Base Rate applies; (iii) whether the Eurodollar Rate or
Base Rate shall apply to the proposed Revolving Credit Loans comprising the
applicable Borrowing Tranche; (iv) the currency in which such Loans shall be
funded if the Borrowers are electing the Eurodollar Rate, and (v) in the case of
a Borrowing Tranche to which the Eurodollar Rate applies, an appropriate
Interest Period for the proposed Revolving Credit Loans comprising such
Borrowing Tranche.
(b) The Agent shall, promptly after receipt by it of a Notice of
Borrowing pursuant to this Section 2.4, notify the Banks of its receipt of such
Notice of Borrowing specifying: (i) the proposed Borrowing Date and the time and
method of disbursement of the Revolving Credit Loans requested thereby; (ii) the
amount, currency, and Type of each such Revolving Credit Loan and the applicable
Interest Period (if any); and (iii) the apportionment among the Banks of such
Revolving Credit Loans as determined by the Agent in accordance with Section
2.2. Each Bank shall remit the principal amount of each Revolving Credit Loan in
the requested currency to the Agent such that the Agent is able to, and the
Agent shall, to the extent the Banks have made funds available to it for such
purpose and subject to Section 4.2, fund such Revolving Credit Loans to the
Borrower in the requested currency and immediately available funds at the
Principal Office prior to 2:00 p.m., Philadelphia time, on the applicable
Borrowing Date. Unless the Agent shall have received notice from a Bank prior to
the date of any borrowing that such Bank will not make available to the Agent
such Bank's portion of such borrowing, the Agent may assume that such Bank has
made such portion available in accordance
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with this subsection 2.4(b) and the Agent may, in reliance upon such assumption,
make available to the Borrowers on such date a corresponding amount. If and to
the extent that any Bank shall not have made such Bank's pro rata portion of
such borrowing available to the Agent, such Bank and the Borrowers (without
prejudice to the Borrowers' rights against such Bank) severally agree to repay
to the Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrowers until the date such amount is repaid to the Agent at (i) in the
case of the Borrowers, the interest rate applicable at the time to the Revolving
Credit Loans comprising such borrowing and (ii) in the case of such Bank, the
Federal Funds Effective Rate, provided, that, if such Bank shall not pay such
amount within three Business Days of such Borrowing Date, the interest rate on
such overdue amount shall, at the expiration of such three Business Day period,
be the rate per annum applicable to Base Rate Loans. If such Bank shall repay to
the Agent such corresponding amount, such amount shall constitute such Bank's
Revolving Credit Loan as part of such borrowing for purposes of this Agreement.
(c) If in a Notice of Borrowing no election as to the Type of
Revolving Credit Loan is specified in any such notice, then the requested
Revolving Credit Loan shall be a Base Rate Loan. If a Eurodollar Loan is
requested but no Interest Period with respect to such Loan is specified in any
such notice, then the Borrowers shall be deemed to have selected an Interest
Period of one month's duration.
2.5 Conversion and Continuation Options. The Borrowers shall have the
right at any time upon prior irrevocable notice to the Agent (i) not later than
12:00 noon, Philadelphia time, one Business Day prior to conversion, to convert
any Eurodollar Loan to a Base Rate Loan and (ii) not later than 10:00 a.m.,
Philadelphia time, three Business Days prior to conversion or continuation, to
convert any Base Rate Loan into a Eurodollar Loan or to continue any Eurodollar
Loan as a Eurodollar Loan for any additional Interest Period, subject in each
case to the following:
(a) a Eurodollar Loan may not be converted at a time other than
the last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such and no Base Rate
Loan may be converted to a Eurodollar Loan when any Default has occurred and is
continuing and the Agent or the Required Banks have determined that such a
continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be converted
into or continued as a Eurodollar Loan by reason of subsection 2.5(b) or 2.5(c)
or as to which the Borrowers have failed to give notice of conversion or
continuation automatically shall in the case of a Eurodollar Loan denominated in
an Optional Currency be prepaid on the last day of the Interest period in effect
for such Loan (subject to the provisions of subsection 2.12(c)), or in the case
of any other Eurodollar Loan be converted to a Base Rate Loan on the last day of
the Interest Period in effect for such Loan;
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(e) no Eurodollar Loan denominated in an Optional Currency may be
converted into a Base Rate Loan or converted into a Eurodollar Loan denominated
in another Optional Currency; and
(f) the provisions of subsection 2.6(c) limiting under certain
circumstances the continuation of Eurodollar Loans denominated in an Optional
Currency.
Each request by the Borrowers to convert or continue a Loan shall
constitute a representation and warranty that no Default shall have occurred and
be continuing. Accrued interest on a Loan (or portion thereof) being converted
shall be paid by the applicable Borrower(s) at the time of conversion.
2.6 Utilization of Commitments in Optional Currencies. (a) The Agent
will determine the Dollar Equivalent amount of (i) proposed Loans or Letters of
Credit to be denominated in an Optional Currency as of the requested Borrowing
Date or date of issuance, as the case may be, (ii) outstanding Loans or Letters
of Credit Outstanding denominated in an Optional Currency as of the last
Business Day of each month, and (iii) outstanding Loans denominated in an
Optional Currency as of the end of each Interest Period (each such date under
clauses (i) through (iii), a "Computation Date").
(b) The Banks shall be under no obligation to make the Loans
requested by the Borrowers which are denominated in an Optional Currency if any
Bank notifies the Agent by 5:00 p.m., Philadelphia time, three (3) Business Days
prior to the Borrowing Date for such Loans that such Bank cannot due to market
conditions provide its share of such Loans in such Optional Currency. In the
event the Agent timely receives a notice from a Bank pursuant to the preceding
sentence, the Agent will notify the Borrowers no later than 12:00 noon,
Philadelphia time, two (2) Business Days prior to the Borrowing Date for such
Loans that the Optional Currency is not then available for such Loans, and the
Agent shall promptly thereafter notify the Banks of the same. If the Borrowers
receive a notice described in the preceding sentence, the Borrowers may, by
notice to the Agent not later than 5:00 p.m., Philadelphia time, two (2)
Business Days prior to the Borrowing Date for such Loans, withdraw the Notice of
Borrowing for such Loans. If the Borrowers withdraw such Notice of Borrowing,
the Agent will promptly notify each Bank of the same and the Banks shall not
make such Loans. If the Borrowers do not withdraw such Notice of Borrowing
before such time, (i) the Borrowers shall be deemed to have requested that the
Loans referred to in their Notice of Borrowing shall be made in Dollars in an
amount equal to the Dollar Equivalent amount of such Loans and shall bear
interest at the Base Rate, and (ii) the Agent shall promptly deliver a notice to
each Bank stating: (A) that such Loans shall be made in Dollars and shall bear
interest at the Base Rate, (B) the aggregate amount of such Loans, and (C) such
Bank's Ratable Share of such Loans.
(c) If the Borrowers deliver a notice pursuant to Section 2.5
requesting that the Banks continue as a Eurodollar Loan an outstanding Borrowing
Tranche of Loans denominated in an Optional Currency, the Banks shall be under
no obligation to continue such Eurodollar Loan if any Bank delivers to the Agent
a notice by 5:00 p.m., Philadelphia time, three (3) Business Days prior to
effective date of such continuation that such Bank cannot due to market
conditions provide Loans in such Optional Currency. In the event the Agent
timely receives a notice from a Bank pursuant to the preceding sentence, the
Agent will notify the Borrowers no later than
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12:00 noon, Philadelphia time, two (2) Business Days prior to the effective date
of such continuation that the continuation of such Loans in such Optional
Currency is not then available, and the Agent shall promptly thereafter notify
the Banks of the same. If the Agent shall have so notified the Borrowers that
any such continuation of Optional Currency Loans is not then available, any
notice of continuation with respect thereto shall be deemed withdrawn, and such
Optional Currency Loans shall be prepaid on the last day of the Interest Period
with respect to any such Optional Currency Loans, subject to the provisions of
subsection 2.12(c) and to the Borrowers' right to reborrow in Dollars or in
another Optional Currency pursuant to Section 2.4.
(d) The Borrowers may deliver to the Agent a written request that
Loans hereunder also be permitted to be made in any other lawful currency (other
than Dollars), in addition to the currencies specified in the definition of
"Optional Currency" herein, provided, that such currency must be freely traded
in the offshore interbank foreign exchange markets, freely transferable, freely
convertible into Dollars and available to the Banks in the applicable interbank
market. The Agent will promptly notify the Banks of any such request promptly
after the Agent receives such request. The Agent and each Bank may grant or
accept such request in their sole discretion. The Agent will promptly notify the
Borrowers of the acceptance or rejection by the Agent and each of the Banks of
the Borrowers' request. The requested currency shall be approved as an Optional
Currency hereunder only if the Agent and the Required Banks approve of the
Borrowers' request.
(e) The Agent may, with respect to notices by the Borrowers for
Loans in an Optional Currency or voluntary prepayments of less than the full
amount of an Optional Currency Borrowing Tranche, engage in reasonable rounding
of the Optional Currency amounts requested to be loaned or repaid; and, in such
event, the Agent shall promptly notify the Borrowers and the Banks of such
rounded amounts and the Borrowers' request or notice shall thereby be deemed to
reflect such rounded amounts.
2.7 Fees. (a) The Borrowers jointly and severally agree to pay to the
Agent for the account of each Bank, on each March 31, June 30, September 30 and
December 31 during the Commitment Period and on the date on which the
Commitments shall be permanently reduced or terminated as provided herein,
commitment fees ("Commitment Fees") at a rate per annum equal to the Commitment
Fee Rate in effect from time to time on the average daily amount of the
Available Commitments during the preceding quarter (or shorter period commencing
with the date hereof or ending with the Termination Date or the date on which
the Commitments shall be terminated); provided, that with respect to any period
during which (i) the amount of the Available Commitments is greater than or
equal to (ii) the positive difference between the amount of the Commitments
minus $20,000,000 (such difference determined pursuant to this clause (ii) being
referred to as the "Upper Tier Commitment Level") for a period of 180
consecutive days or more (each, a "Reduced Usage Period"), the commitment fee on
that portion of the amount of the Available Commitments up to the amount of the
Upper Tier Commitment Level shall be calculated at a rate per annum equal to
one-half of the Commitment Fee Rate otherwise in effect from time to time;
provided, further, that if after any such Reduced Usage Period shall be
terminated because additional Loans are made which cause the amount of the
Available Commitments to fall below the Upper Tier Commitment Level, the
Borrowers shall pay promptly as billed by the Agent additional Commitment Fees
equal to one-half of the then applicable Commitment Fee Rate multiplied by the
amount of the Upper Tier Commitment Level, which additional Commitment Fees
shall be payable each time a Reduced Usage Period is so
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terminated. All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 360 days and shall be paid in Dollars. The
Commitment Fee due to each Bank shall commence to accrue on the date hereof, and
shall cease to accrue on the Termination Date. The Agent shall distribute the
Commitment Fees on the Revolving Credit Loans among the Banks pro rata in
accordance with their respective Commitment Percentages.
(b) The Borrowers jointly and severally agree to pay the Agent,
for its own account, administrative and other fees at the times and in the
amounts set forth in the Fee Letter.
(c) The foregoing fees shall be paid on the dates due, in
immediately available funds, to the Agent for distribution, if and as
appropriate, among the Banks. Once paid, none of the foregoing fees shall be
refundable under any circumstances.
2.8 Letter of Credit Subfacility. (a) The Borrowers may request the
issuance of a letter of credit (each, a "Letter of Credit") by delivering to the
Agent a completed application and agreement for letters of credit in such form
as the Agent may specify from time to time by no later than 10:00 a.m.,
Philadelphia time, at least ten (10) Business Days, or such shorter period as
may be agreed to by the Agent, in advance of the proposed date of issuance. Each
Letter of Credit may be denominated in either Dollars or an Optional Currency.
Subject to the terms and conditions hereof and in reliance on the agreements of
the other Banks set forth in this Section 2.8, the Agent will issue a Letter of
Credit, provided, that each Letter of Credit shall (A) have a maximum maturity
of thirty-six (36) months from the date of issuance, and (B) in no event expire
later than one Business Day prior to the Termination Date, and provided further,
that in no event shall the Dollar Equivalent amount of Letters of Credit
Outstanding exceed, at any one time, the Commitments minus the Dollar Equivalent
amount of the outstanding Loans.
(b) The Borrowers shall pay in Dollars (i) to the Agent for the
ratable account of the Banks a fee (the "Letter of Credit Fee") equal to the
Applicable Margin for a Eurodollar Loan and (ii) to the Agent for its own
account a fronting fee equal to .125% per annum, which fees shall be computed on
the daily average Dollar Equivalent undrawn face amount of outstanding Letters
of Credit (computed on the basis of the actual number of days such Letters of
Credit are outstanding in a year of 360 days) and shall be payable quarterly in
arrears commencing with the last Business Day of each March, June, September and
December following the issuance of a Letter of Credit. The Borrowers shall also
pay to the Agent in Dollars for the Agent's sole account the Agent's then in
effect customary fees and administrative expenses payable with respect to the
Letters of Credit as the Agent may generally charge or incur from time to time
in connection with the issuance, maintenance, modification (if any), assignment
or transfer (if any), negotiation, and administration of Letters of Credit.
(c) (i) Immediately upon the issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Agent a
participation in such Letter of Credit and each drawing
thereunder in an amount equal to such Bank's Ratable Share of the
maximum amount available to be drawn under such Letter of Credit
and the amount of such drawing, respectively.
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(ii) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the
Agent will promptly notify the Borrowers. Provided that they
shall have received such notice, the Borrowers shall reimburse
(such obligation to reimburse the Agent shall sometimes be
referred to as a "Reimbursement Obligation") the Agent in Dollars
prior to 12:00 noon, Philadelphia time, on each date that an
amount is paid by the Agent under any Letter of Credit (each such
date, a "Drawing Date") in an amount equal to the Dollar
Equivalent amount so paid by the Agent. In the event the
Borrowers fail to reimburse the Agent for the full Dollar
Equivalent amount of any drawing under any Letter of Credit by
12:00 noon, Philadelphia time, on the Drawing Date, the Agent
will promptly notify each Bank thereof, and the Borrowers shall
be deemed to have requested that Revolving Credit Loans be made
by the Banks in Dollars at the Base Rate to be disbursed on the
Drawing Date under such Letter of Credit, subject to the
conditions set forth in Section 4.2. Any notice given by the
Agent pursuant to this subsection 2.8(c)(ii) may be oral if
promptly confirmed in writing; provided, that the lack of such a
prompt confirmation shall not affect the conclusiveness or
binding effect of such notice.
(iii) Each Bank shall upon any notice pursuant to subsection
2.8(c)(ii) make available to the Agent an amount in Dollars in
immediately available funds equal to its Ratable Share of the
Dollar Equivalent amount of the drawing, whereupon the
participating Banks shall (subject to subsection 2.8(c)(iv)) each
be deemed to have made a Revolving Credit Loan in Dollars at the
Base Rate to the Borrowers in that amount. If any Bank so
notified fails to make available in Dollars to the Agent for the
account of the Agent the amount of such Bank's Ratable Share of
such Dollar Equivalent amount by no later than 2:00 p.m.,
Philadelphia time, on the Drawing Date, then interest shall
accrue on such Bank's obligation to make such payment, from the
Drawing Date to the date on which such Bank makes such payment,
at a rate per annum equal to the Federal Funds Effective Rate in
effect from time to time during such period. The Agent will
promptly give notice of the occurrence of the Drawing Date, but
failure of the Agent to give any such notice on the Drawing Date
or in sufficient time to enable any Bank to effect such payment
on such date shall not relieve such Bank from its obligation
under this subsection 2.8(c)(iii).
(iv) With respect to any unreimbursed drawing that is not
converted into Revolving Credit Loans at the Base Rate to the
Borrowers in whole or in part as contemplated by subsection
2.8(c)(ii), because of the Borrowers' failure to satisfy the
conditions set forth in Section 4.2 other than any notice
requirements or for any other reason, the Borrowers shall be
deemed to have incurred from the Agent a Letter of Credit
Borrowing in Dollars in the Dollar Equivalent amount of such
drawing. Such Letter of Credit Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
rate per annum applicable to the Revolving Credit Loans at the
Base Rate. Each Bank's payment to the Agent pursuant to
subsection 2.8(c)(iii) shall be deemed to be a payment in respect
of its participation
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in such Letter of Credit Borrowing and shall constitute a
Participation Advance from such Bank in satisfaction of its
participation obligation under this subsection 2.8(c).
(d) (i) Upon (and only upon) receipt by the Agent for its
account of immediately available funds from the Borrowers (A) in
reimbursement of any payment made by the Agent under the Letter
of Credit with respect to which any Bank has made a Participation
Advance to the Agent, or (B) in payment of interest on such a
payment made by the Agent under such a Letter of Credit, the
Agent will pay to each Bank, in the same funds as those received
by the Agent, the amount of such Bank's Ratable Share of such
funds, except the Agent shall retain the amount of the Ratable
Share of such funds of any Bank that did not make a Participation
Advance in respect of such payment by Agent.
(ii) If the Agent is required at any time to return to the
Borrowers, or to a trustee, receiver, liquidator, custodian, or
any official in any insolvency proceeding, any portion of the
payments made by the Borrowers to the Agent pursuant to
subsection 2.8(d)(i) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank shall, on
demand of the Agent, forthwith return to the Agent the amount of
its Ratable Share of any amounts so returned by the Agent plus
interest thereon from the date such demand is made to the date
such amounts are returned by such Bank to the Agent, at a rate
per annum equal to the Federal Funds Effective Rate in effect
from time to time.
(e) Each Borrower agrees jointly and severally to be bound by the
terms of the Agent's application and agreement for letters of credit and the
Agent's written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such Borrower's own. In
the event of a conflict between such application or agreement and this
Agreement, this Agreement shall govern. It is understood and agreed that, except
in the case of gross negligence or willful misconduct, the Agent shall not be
liable for any error, negligence and/or mistakes, whether of omission or
commission, in following the Borrowers' instructions or those contained in the
Letters of Credit or any modifications, amendments or supplements thereto.
(f) In determining whether to honor any request for drawing under
any Letter of Credit by the beneficiary thereof, the Agent shall be responsible
only to determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on their
face with the requirements of such Letter of Credit.
(g) Each Bank's obligation in accordance with this Agreement to
make the Revolving Credit Loans or Participation Advances, as contemplated by
subsection 2.8(c), as a result of a drawing under a Letter of Credit, and the
obligations of the Borrowers to reimburse the Agent upon a draw under a Letter
of Credit, shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Section 2.8 under all
circumstances, including the following circumstances:
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(i) any set-off, counterclaim, recoupment, defense or other
right which such Bank may have against the Agent, the Borrowers
or any other Person for any reason whatsoever;
(ii) the failure of the Borrowers or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the
conditions set forth in Sections 2.1, 2.4 or 4.2 or as otherwise
set forth in this Agreement for the making of a Revolving Credit
Loan, it being acknowledged that such conditions are not required
for the making of a Letter of Credit Borrowing and the obligation
of the Banks to make Participation Advances under subsection
2.8(c);
(iii) any lack of validity or enforceability of any Letter
of Credit;
(iv) the existence of any claim, set-off, defense or other
right which the Borrowers or any Bank may have at any time
against a beneficiary or any transferee of any Letter of Credit
(or any Persons for whom any such transferee may be acting), the
Agent or any Bank or any other Person or, whether in connection
with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction
between the Borrowers and the beneficiary for which any Letter of
Credit was procured);
(v) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect even
if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of the Borrowers;
(viii) any breach of this Agreement or any other Loan
Document by any of the Borrowers;
(ix) the occurrence or continuance of an insolvency
proceeding with respect to the Borrowers;
(x) the fact that an Event of Default or a Default shall
have occurred and be continuing;
(xi) the fact that the Termination Date shall have passed or
this Agreement or the Commitments hereunder shall have been
terminated; and
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(xii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; provided, that
each Bank's obligation to make Revolving Credit Loans under
subsection 2.8(c)(iii) is subject to the conditions set forth in
Section 4.2.
(h) In addition to amounts payable as provided in Section 9.5,
the Borrowers hereby agree to protect, indemnify, pay and save harmless the
Agent from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
(i) As between the Borrowers and the Agent, the Borrowers assume
all risks of the acts and omissions of, or misuse of the Letters of Credit by,
the respective beneficiaries of such Letters of Credit. In furtherance and not
in limitation of the foregoing, the Agent shall not be responsible for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged
(even if the Agent shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of
any such Letter of Credit, or any other party to which such Letter of Credit may
be transferred, to comply fully with any conditions required in order to draw
upon such Letter of Credit or any other claim of the Borrowers against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among the Borrowers and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any such Letter of Credit or
of the proceeds thereof; (vii) the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of the Agent,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of the Agent's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent under or in
connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall not
create any liability of the Agent to the Borrowers or any Bank.
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2.9 Interest Rates and Payment Dates. The Borrowers shall pay interest
in respect of the outstanding unpaid principal amount of the Loans as selected
by it from the Base Rate or Eurodollar Rate set forth below applicable to the
Loans, it being understood that, subject to the provisions of this Agreement,
the Borrowers may select different interest rates and different Interest Periods
to apply simultaneously to the Loans comprising different Borrowing Tranches and
may convert to or renew one or more interest rates with respect to all or any
portion of the Loans comprising any Borrowing Tranche, provided, that there
shall not be at any one time outstanding more than five (5) Borrowing Tranches
in the aggregate among all of the Loans accruing interest at a Eurodollar Rate.
If at any time the designated rate applicable to any Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on such Bank's
Loan shall be limited to such Bank's highest lawful rate. Interest on the
principal amount of each Revolving Credit Loan made in an Optional Currency
shall be paid by the Borrowers in such Optional Currency.
(a) Subject to the provisions of Section 2.10, each Base Rate
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be) at a rate per annum
equal to the Base Rate.
(b) Subject to the provisions of Section 2.10, each Eurodollar
Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days, provided that, for Loans
made in an Optional Currency for which a 365-day basis is the only market
practice available to the Agent, such rate shall be calculated on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be) equal to the Eurodollar Rate for the Interest Period in effect for such
Eurodollar Loan plus the Applicable Margin.
(c) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan; provided, that (i) interest
accruing on overdue amounts pursuant to Section 2.10 shall be payable on demand
as provided in such Section and (ii) accrued and unpaid interest on the
Revolving Credit Loans shall be payable on the Termination Date.
(d) As soon as practicable the Agent shall notify the Borrowers
and the Banks of (i) each determination of a Eurodollar Rate and (ii) the
effective date and the amount of each change in the interest rate on a
Eurodollar Loan or Base Rate Loan. Each determination of an interest rate by the
Agent, pursuant to any provision of this Agreement (including this Section 2.9
and Section 2.10) shall be conclusive and binding on the Borrowers and the Banks
in the absence of clearly demonstrable error. At the request of the Borrowers,
the Agent shall deliver to the Borrowers a statement showing the quotations used
by it in determining any interest rate pursuant to subsections 2.9(a) and (b).
2.10 Default Interest. If the Borrowers shall default in the payment
of the principal of or interest on any Loan or any other amount becoming due
hereunder, the Borrowers shall on demand from time to time pay interest on any
overdue payment of principal (in lieu of the interest otherwise payable on such
principal under Section 2.9) and, to the extent permitted by law, on overdue
payments of interest and other amounts due hereunder up to the date of actual
payment (after as well as before judgment):
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(a) in the case of overdue principal of a Base Rate Loan or a
Eurodollar Loan, at a rate determined by the Agent to be 2% per annum above the
rate which would otherwise be payable on such Loans in accordance with the
provisions hereof; and
(b) in the case of any other amount payable hereunder (whether
for interest, fees or otherwise), at a rate equal to 2% per annum above the Base
Rate.
2.11 Pro Rata Treatment of Loans and Payments; Commitment Fees. (a)
Except as required under Section 2.13, each borrowing by the Borrowers
hereunder, each payment or prepayment of principal of the Loans, each payment of
interest on the Loans, each payment of Commitment Fees, and each reduction of
the Commitments, shall be made pro rata among the Banks in accordance with their
respective Commitment Percentages.
(b) Each Bank agrees that in computing such Bank's portion of any
borrowing to be made hereunder, the Agent may, in its discretion, round each
Bank's percentage of such borrowing to the next higher or lower whole dollar
amount.
2.12 Payments. (a) The Borrowers shall make each payment (including
principal of or interest on any borrowing or any fees or other amounts)
hereunder not later than 11:00 a.m., Philadelphia time, on the date when due to
the Agent at its offices set forth in Section 9.2 for the ratable accounts of
the Banks in Dollars in immediately available funds, and if in any other
currency, in such funds as may then be customary for the settlement of
international transactions in such other currency. Such payments shall be made
without set-off or counterclaim of any kind. The Agent shall distribute to the
Banks any payments received by the Agent promptly upon receipt in like funds as
received. The Agent shall promptly distribute such amounts to the Banks in
immediately available funds, provided, that in the event payments are received
by 11:00 a.m., Philadelphia time, by the Agent with respect to the Loans and
such payments are not distributed to the Banks on the same day received by the
Agent, the Agent shall pay the Banks the Federal Funds Effective Rate in the
case of Loans or other amounts due in Dollars, or the Overnight Rate in the case
of Loans or other amounts due in an Optional Currency, with respect to the
amount of such payments for each day held by the Agent and not distributed to
the Banks. The Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement (including the Equivalent Amounts of the
applicable currencies where such computations are required).
(b) Whenever any payment (including principal of or interest on
any borrowing or any fees or other amounts) hereunder (other than payments on
Eurodollar Loans) shall become due, or otherwise would occur, on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest or fees, if applicable.
(c) The entire amount of principal of and interest on any Loan
made in an Optional Currency shall be repaid in the same Optional Currency in
which such Loan was made, provided, however, that if it is impossible or illegal
for the Borrowers to effect payment of a Loan in the Optional Currency in which
such Loan was made, or if the Borrowers default in their obligations
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to do so, the Required Banks may at their option permit such payment to be made
(i) at and to a different location, subsidiary, affiliate or correspondent of
the Agent, or (ii) in the Equivalent Amount of Dollars or (iii) in an Equivalent
Amount of such other currency (freely convertible into Dollars) as the Required
Banks may solely at their option designate. Upon any events described in (i)
through (iii) of the preceding sentence, the Borrowers shall make such payment
and the Borrowers agree to hold each Bank harmless from and against any loss
incurred by any Bank arising from the cost to such Bank of any premium, any
costs of exchange, the cost of hedging and covering the Optional Currency in
which such Loan was originally made, and from any change in the value of
Dollars, or such other currency, in relation to the Optional Currency that was
due and owing. Such loss shall be calculated for the period commencing with the
first day of the Interest Period for such Loan and continuing through the date
of payment thereof. Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the Borrowers' obligations under this subsection shall
survive termination of this Agreement.
2.13 Eurodollar Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available. (a) If on any date on which a Eurodollar Rate would
otherwise be determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Eurodollar Rate, or
(ii) a contingency has occurred which materially and
adversely affects the secondary market for negotiable
certificates of deposit maintained by dealers of recognized
standing relating to the London interbank eurodollar market
relating to the Eurodollar Rate,
then the Agent shall have the rights specified in subsection 2.13(c).
(b) If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to which
a Eurodollar Rate applies has been made impracticable or unlawful
by compliance by such Bank in good faith with any Law or any
interpretation or application thereof by any Governmental
Authority or with any request or directive of any such
Governmental Authority (whether or not having the force of Law),
or
(ii) such Eurodollar Rate will not adequately and fairly
reflect the cost to such Bank of the establishment or maintenance
of any such Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars or in the Optional Currency (as
applicable) for the relevant Interest Period for a Loan to which
a Eurodollar Rate applies are not available to such Bank in the
London interbank market,
then the Agent shall have the rights specified in subsection 2.13(c).
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(c) In the case of any event specified in subsection 2.13(a)
above, the Agent shall promptly so notify the Banks and the Borrowers thereof,
and in the case of an event specified in subsection 2.13(b) above, such Bank
shall promptly so notify the Agent and endorse a certificate to such notice as
to the specific circumstances of such notice, and the Agent shall promptly send
copies of such notice and certificate to the other Banks and the Borrowers. Upon
such date as shall be specified in such notice (which shall not be earlier than
the date such notice is given), the obligation of (A) the Banks, in the case of
such notice given by the Agent, or (B) such Bank, in the case of such notice
given by such Bank, to allow the Borrowers to select, convert to or renew a
Eurodollar Rate or select an Optional Currency (as applicable) shall be
suspended until the Agent shall have later notified the Borrowers, or such Bank
shall have later notified the Agent, of the Agent's or such Bank's, as the case
may be, determination that the circumstances giving rise to such previous
determination no longer exist. If at any time the Agent makes a determination
under subsection 2.13(a) and the Borrowers have previously notified the Agent of
their selection of, conversion to or renewal of a Eurodollar Rate and such
interest rate has not yet gone into effect, such notification shall be deemed to
provide for selection of, conversion to or renewal of the Base Rate otherwise
available with respect to such Loans. If any Bank notifies the Agent of a
determination under subsection 2.13(b), the Borrowers shall, subject to the
Borrowers' indemnification obligations under subsection 2.18 as to any Loan of
the Bank to which a Eurodollar Rate applies, on the date specified in such
notice either (i) as applicable, convert such Loan to the Base Rate or select a
different Optional Currency or Dollars, or (ii) prepay such Loan in accordance
with Section 2.15. Absent due notice from the Borrowers of conversion or
prepayment, such Loan shall automatically be converted to the Base Rate upon
such specified date.
2.14 Termination, Reduction and Extension of Commitments. (a) The
Commitments shall be automatically terminated on the Termination Date.
(b) Upon at least five Business Days' prior irrevocable written
(including telecopy) notice to the Agent, the Borrowers may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in a minimum principal amount of $1,000,000 or in a whole
multiple thereof, and (ii) the Commitments may not be reduced or terminated if,
after giving effect thereto and to any prepayments of the Loans made on the
effective date thereof, the Dollar Equivalent Revolving Facility Usage at such
time would exceed the aggregate amount of the Commitments at such time.
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Banks in accordance with their respective Commitment
Percentages. The Borrowers shall pay to the Agent for the account of the Banks
on the date of each termination or reduction of the Commitments, the Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to the
date of such termination or reduction.
(d) During the period beginning one hundred and eighty days prior
to the second and any subsequent anniversary of the Closing Date and ending on
such anniversary, the Borrowers may deliver to the Agent (which shall promptly
transmit to each Bank) a notice requesting that the Commitments be extended to
the first anniversary of the Termination Date then in effect. Within sixty days
after its receipt of any such notice, each Bank shall notify the Agent of its
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willingness or unwillingness so to extend its Commitment. Any Bank that shall
fail so to notify the Agent within such period shall be deemed to have declined
to extend its Commitment. If each (but only if each) Bank agrees to extend its
Commitment, the Agent shall so notify the Company and each Bank, whereupon (i)
the respective Commitments of the Banks shall, without further act by any party
hereto, be extended to the first anniversary of the Termination Date then in
effect, (ii) the term "Termination Date" shall thereafter mean such first
anniversary and (iii) the term "Termination Date" shall thereafter mean the
first anniversary of the Termination Date then in effect. Any such extension
shall be evidenced by a written agreement among the Agent, the Banks and the
Borrowers, such agreement to be in form and substance acceptable to the Agent
and the Banks.
2.15 Prepayment of Loans. (a) The Borrowers shall have the right at
their option from time to time to prepay the Loans in whole or part without
premium or penalty (except as provided in Section 2.18) in the currency in which
such Loan was made:
(i) at any time with respect to any Base Rate Loan;
(ii) on the last day of the applicable Interest Period with
respect to Eurodollar Loans; or
(iii) on the date specified in a notice by any Bank pursuant
to Section 2.13.
Whenever the Borrowers desire to prepay any part of the Loans, they shall
provide a prepayment notice to the Agent no later than (I) 12:00 noon,
Philadelphia time, at least one (1) Business Day prior to the date of prepayment
of Base Rate Loans and (II) 10:00 a.m., Philadelphia time, three (3) Business
Days prior to the date of prepayment of Eurodollar Loans, setting forth the
following information: (y) the date, which shall be a Business Day, on which the
proposed prepayment is to be made; and (z) the total principal amount and
currency of such prepayment, the Dollar Equivalent amount of which shall not be
less than $100,000.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.14, the Borrowers shall pay or prepay so much
of the Loans as shall be necessary in order that the Dollar Equivalent Revolving
Facility Usage at such time would not exceed the aggregate amount of the
Commitments at such time.
(c) If on any Computation Date the amount of the Dollar
Equivalent Revolving Facility Usage is equal to or greater than the aggregate
amount of the Commitments as a result of a change in exchange rates between one
or more Optional Currencies and Dollars, then the Agent shall notify the
Borrowers of the same and the Borrowers shall within one (1) Business Day after
receiving such notice prepay so much of the Loans as shall be necessary in order
that the Dollar Equivalent Revolving Facility Usage shall not exceed the
aggregate amount of the Commitments after giving effect to such prepayments.
(d) All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Base Rate Loans, shall
be due and payable on the date specified in such
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prepayment notice as the date on which the proposed prepayment is to be made in
the currency in which such Loan was made. If the Borrowers prepay a Loan but
fail to specify the applicable Borrowing Tranche which the Borrowers are
prepaying, the prepayment shall be applied first to Base Rate Loans, then to
Dollar Eurodollar Loans and then to Optional Currency Loans. Any prepayment
hereunder shall be subject to the Borrowers' obligation to indemnify the Banks
under Section 2.18.
(e) Upon receipt of any notice of prepayment, the Agent shall
promptly notify each Bank thereof.
(f) Amounts prepaid pursuant to this Section may be reborrowed,
subject to the terms and conditions hereof.
2.16 Requirements of Law. (a) In the event that any change in any
Requirement of Law or in the interpretation, or application thereof or
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever
with respect to this Agreement, any Revolving Credit Note or any
Eurodollar Loan made by it or payments by the Borrowers of
principal, interest, fees or other amounts due from the Borrowers
hereunder, or change the basis of taxation of payments to such
Bank in respect thereof (except for taxes covered by Section 2.17
and changes in the rate of tax on the net income of such Bank);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the
account of, advances, loans, letters of credit or other
extensions of credit by, or any other acquisition of funds by,
any Bank or any Lending Office of any Bank which is not otherwise
included in the determination of the interest rate on such
Eurodollar Loan hereunder; or
(iii) shall impose on any Bank or any Lending Office of any
Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank or
its Lending Office, by an amount which such Bank deems to be material, of
making, converting into, continuing or maintaining Eurodollar Loans, maintaining
any Commitment hereunder or issuing Letters of Credit or to reduce any amount
receivable hereunder in respect thereof then, in any such case, the Borrowers
shall as promptly as practicable pay such Bank, upon its demand, any additional
amounts necessary to compensate such Bank for such increased cost or reduced
amount receivable. If any Bank becomes entitled to claim any additional amounts
pursuant to this subsection, it shall as promptly as practicable notify the
Company, through the Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Bank, through the Agent, to the Company shall be
conclusive in the absence of clearly demonstrable error. This covenant shall
survive the termination of this Agreement and the payment of the Revolving
Credit Notes and all other amounts payable hereunder.
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(b) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Bank
or such corporation could have achieved but for such change or compliance
(taking into consideration such Bank's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, the Borrowers shall as promptly as practicable pay such
Bank, upon its demand, such additional amount or amounts as will compensate such
Bank for such reduction. If any Bank becomes entitled to claim any additional
amounts pursuant to this subsection, it shall as promptly as practicable notify
the Company, through the Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Bank, through the Agent, to the Company shall be
conclusive in the absence of clearly demonstrable error. This covenant shall
survive the termination of this Agreement and the payment of the Revolving
Credit Notes and all other amounts payable hereunder.
(c) Each Bank agrees that it will use reasonable efforts in order
to avoid or to minimize, as the case may be, the payment by the Borrowers of any
additional amount under subsections 2.16(a) or (b); provided, however, that no
Bank shall be obligated to incur any expense, cost or other amount in connection
with utilizing such reasonable efforts.
2.17 Taxes. (a) All payments made by the Borrowers hereunder and under
each Revolving Credit Note shall be made free and clear of and without deduction
for any present or future taxes, levies, imposts, deductions, charges, or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on the net income of any Bank and all income and franchise taxes applicable to
any Bank of the United States (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "Taxes"). If the Borrowers shall be required by Law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) each Bank receives an amount equal to the sum it would have
received had no such deductions been made, (ii) Borrower shall make such
deductions and (iii) the Borrowers shall timely pay the full amount deducted to
the relevant tax authority or other authority in accordance with applicable Law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, this
Agreement or any Revolving Credit Note (hereinafter referred to as "Other
Taxes").
(c) The Borrowers shall indemnify each Bank for the full amount
of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this subsection) paid by
any Bank and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
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Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date a Bank makes written demand therefor.
(d) Within 30 days after the date of any payment of any Taxes by
the Borrowers, the Borrowers shall furnish to each Bank, at its address referred
to herein, the original or a certified copy of a receipt evidencing payment
thereof. If no Taxes are payable in respect of any payment by the Borrowers, the
Borrowers shall, if so requested by a Bank, provide a certificate of a
Responsible Officer to that effect.
(e) Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in subsections 2.17(a) through (d) shall survive the payment in full
of principal and interest hereunder and under any instrument delivered
hereunder.
(f) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Borrowers and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Bank also agrees to deliver to the Borrowers and the Agent two
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrowers, and such extensions or renewals thereof as may
reasonably be requested by the Borrowers or the Agent, unless in any such case
an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank so advises the Company and the Agent. Each such Bank shall
certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax.
(g) Notwithstanding the foregoing subsections 2.17(a) through
(e), the Borrowers shall not be required to pay any additional amounts to any
Bank in respect of United States withholding tax pursuant to such subsections if
(i) the obligation to pay such additional amounts would not have arisen but for
a failure by such Bank to comply with the requirements of subsection 2.17(f) or
(ii) such Bank shall not have furnished the Company with such forms listed in
subsection 2.17(f) and shall not have taken such other steps as reasonably may
be available to it under applicable tax laws and any applicable tax treaty or
convention to obtain an exemption from, or reduction (to the lowest applicable
rate) of, such United States withholding tax.
2.18 Indemnity. The Borrowers jointly and severally agree to indemnify
each Bank
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and to hold each Bank harmless from any loss or expense which such Bank may
sustain or incur as a consequence of (i) default by the Borrowers in payment
when due of the principal amount of or interest on any Eurodollar Loan, (ii)
default by the Borrowers in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrowers have given a notice
requesting the same in accordance with the provisions of this Agreement, (iii)
default by the Borrowers in making any prepayment after the Borrowers have given
a notice thereof in accordance with the provisions of this Agreement or (iv) the
making of a prepayment (whether voluntary, mandatory, as a result of
acceleration or otherwise) of Eurodollar Loans on a day which is not the last
day of an Interest Period with respect thereto, including, without limitation,
in each case, any such loss or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate the deposits from which such
funds were obtained. A certificate as to any amounts that a Bank is entitled to
receive under this Section 2.18 submitted by such Bank, through the Agent, to
the Company shall be conclusive in the absence of clearly demonstrable error and
all such amounts shall be paid by the Borrowers promptly upon demand by such
Bank. This covenant shall survive the termination of this Agreement and the
payment of the Revolving Credit Notes and all other amounts payable hereunder.
2.19 Judgment Currency. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder or under a Revolving
Credit Note in any currency (the "Original Currency") into another currency (the
"Other Currency"), the parties hereby agree, to the fullest extent permitted by
Law, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Agent could purchase the Original Currency with
the Other Currency after any premium and costs of exchange on the Business Day
preceding that on which final judgment is given.
(b) The obligation of the Borrowers in respect of any sum due
from the Borrowers to any Bank hereunder shall, notwithstanding any judgment in
an Other Currency, whether pursuant to a judgment or otherwise, be discharged
only to the extent that, on the Business Day following receipt by any Bank of
any sum adjudged to be so due in such Other Currency, such Bank may in
accordance with normal banking procedures purchase the Original Currency with
such Other Currency. If the amount of the Original Currency so purchased is less
than the sum originally due to such Bank in the Original Currency, the Borrowers
jointly and severally agree, as a separate obligation and notwithstanding any
such judgment or payment, to indemnify such Bank against such loss.
2.20 Borrowers' Representative. Each of the Borrowers hereby appoints
Right Management Consultants, Inc. as its non-exclusive representative, and
grants to Right Management Consultants, Inc. an irrevocable power of attorney to
act as its attorney-in-fact, with regard to all matters relating to this
Agreement and each other Loan Documents, including, without limitation,
execution and delivery of any Notice of Borrowing, and amendments, supplements,
waivers or other modifications hereto or thereto, receipt of any notices
hereunder or thereunder and receipt of service of process in connection herewith
or therewith and making all elections as to interest rates and interest payment
dates. (In such capacity, Right Management Consultants, Inc. is herein referred
to as the "Borrowers' Representative.") The Agent and the Banks shall be
entitled to rely exclusively on the Borrowers' Representative's authority so to
act in each instance without inquiry or investigation, and each of the Borrowers
hereby agrees to indemnify and hold harmless the Agent and the Banks for any
losses, costs, delays, errors, claims, penalties or charges arising from or out
of the Borrowers' Representative's actions pursuant to this Section 2.20 and the
Agent's and the Banks' reliance thereon
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and hereon. Notice from the Borrowers' Representative shall be deemed to be
notice from all of the Borrowers and notice to the Borrowers' Representative
shall be deemed to be notice to all of the Borrowers. Nothing in this Section
2.20 shall vitiate or be held contrary to the Borrowers' representations and
covenants regarding the Loans or the net worth or solvency of the Borrowers made
herein or in any of the Loan Documents.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Agreement and to
make the Loans, each of the Borrowers hereby represents and warrants to the
Agent and each Bank that:
3.1 Financial Condition. The consolidated balance sheet of the Company
and its consolidated Subsidiaries as at September 30, 1996 and the related
consolidated statements of income and of cash flows for the period ended on such
date, copies of which have heretofore been furnished to each Bank, present
fairly the consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the period then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Neither the Company nor any of its consolidated Subsidiaries had, at
the date of the most recent balance sheet referred to above, any material
Contingent Obligation, liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is required by GAAP
to be but is not reflected in the foregoing statements or in the notes thereto.
3.2 No Change. Since September 30, 1996, there has been no development
or event nor any prospective development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of the Borrowers
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate or other power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified to transact
business and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each of
the Borrowers has the corporate or other power, authority, and legal right to
make, deliver and perform this Agreement and each other Loan Document to which
it is a party and to borrow hereunder and has taken all necessary corporate or
other action to authorize the borrowings on the terms and conditions of this
Agreement and each other Loan Document to which it is a party and to authorize
the execution, delivery and performance of this Agreement and each other Loan
Document to which it is a party. No
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consent or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person (including stockholders and creditors
of the Borrowers) is required in connection with the borrowings hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement, the Revolving Credit Notes or any other Loan Document. This Agreement
has been and each other Loan Document to which it is a party will be, duly
executed and delivered on behalf of such Borrower. This Agreement constitutes
and each other Loan Document when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrowers party thereto enforceable
against such Borrowers in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the Revolving Credit Notes and the other Loan Documents by the
Borrowers, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or Contractual Obligation of any Borrower or any
of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any properties or revenues of any Borrower pursuant to
any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrowers, threatened against any Borrower or any of their
respective Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Agreement, the Revolving Credit Notes, the
other Loan Documents or any of the transactions contemplated hereby, or (b) as
to which there is a reasonable likelihood of an adverse determination and which,
if adversely determined, could have a Material Adverse Effect.
3.7 No Default. Neither the Company, any other Borrower nor any of its
or their Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
3.8 Taxes. Each of the Borrowers has filed or caused to be filed all
tax returns which, to its knowledge, are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves, if any, in
conformity with GAAP have been provided on the books of the Company or its
Subsidiaries, as the case may be); no tax Lien has been filed against any of the
Borrowers or any of their Subsidiaries, and, to the knowledge of each of the
Borrowers, no claim is being asserted, with respect to any such tax, fee or
other charges.
3.9 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose which
violates the provisions of Regulation U or any other Regulations of the Board of
Governors of the Federal Reserve System. If requested by any
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Bank or the Agent, the Borrowers will furnish to the Agent and each Bank a
statement to the foregoing effect in conformity with the requirements of FR Form
U-l referred to in said Regulation U. No part of the proceeds of the Loans
hereunder will be used for any purpose which violates, or which is inconsistent
with, the provisions of Regulation X.
3.10 ERISA. Each Plan (such representations in respect of any
Multiemployer Plan being made to the best knowledge of each Borrower) has
complied in all material respects with the applicable provisions of ERISA and
the Code. No prohibited transaction or accumulated funding deficiency (each as
defined in subsection 7.1(j)) or Reportable Event has occurred with respect to
any Single Employer Plan. The present value of all accrued benefits under each
Single Employer Plan of which any Borrower or a Commonly Controlled Entity is a
sponsor (based on those assumptions used to fund the Plans), as calculated by
such Borrower's actuaries, did not, as of the last annual valuation date prior
to the date on which this representation is made or deemed made, exceed the
value of the assets of the Plans allocable to such benefits. Neither any
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan and neither any Borrower nor any Commonly
Controlled Entity would become subject under ERISA to any liability if any
Borrower or any such Commonly Controlled Entity were to withdraw completely from
any Multiemployer Plan as of the valuation date most closely preceding the date
this representation is made or deemed made. Such Multiemployer Plans are neither
in Reorganization as defined in Section 4241 of ERISA nor Insolvent as defined
in Section 4245 of ERISA. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrowers and each Commonly
Controlled Entity for post-retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits. Neither any Borrower nor any Commonly
Controlled Entity has any or has received notice of any liability under the Coal
Industry Retiree Health Benefit Act of 1992. Neither a Reportable Event nor an
"accumulated funding deficiency" within the meaning of Section 412 of the Code
or Section 302 of ERISA has occurred during the five-year period to the date on
which this representation is made or deemed made with respect to any Single
Employer Plan or Multiemployer Plan. No termination of a Single Employer Plan
has occurred, and no Lien on assets of any of the Borrowers or any Commonly
Controlled Entity in favor of the PBGC or a Plan has arisen during such
five-year period.
3.11 Investment Company Act. None of the Borrowers is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
3.12 Public Utility Holding Company Act. No Borrower is subject to
regulation as a "holding company", subject to regulation as an "affiliate" of a
"holding company", or subject to regulation as a "subsidiary company" of a
"holding company", in each case under the Public Utility Holding Company Act of
1935, as amended.
3.13 Environmental Matters. Except to the extent that all of the
following could not reasonably be expected to have a Material Adverse Effect:
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(a) To the best knowledge of each of the Borrowers, the
Properties do not contain, and have not previously contained, in, on, or under,
including, without limitation, the soil and groundwater thereunder, any
Materials of Environmental Concern in amounts or concentrations that constitute
or constituted a violation of, or reasonably could give rise to liability under
Environmental Laws.
(b) To the best knowledge of each of the Borrowers, the
Properties and all operations and facilities at the Properties are in
compliance, and have in the last five years been in compliance with all
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the business operated by any Borrower or any Subsidiary thereof which could
interfere with the continued operation of any of the Properties or impair the
fair saleable value of any thereof. None of the Borrowers or any of their
respective Subsidiaries have assumed any liability of any Person under
Environmental Laws.
(c) Neither the Company, any other Borrower, nor any of their
Subsidiaries has received or is aware of any claim, notice of violation, alleged
violation, non-compliance, investigation or advisory action or potential
liability regarding environmental matters or compliance of Environmental Law
with regard to the Properties which has not been satisfactorily resolved by the
Company, such other Borrower, or such Subsidiary, nor is the Company nor any
other Borrower aware or have reason to believe that any such action is being
contemplated, considered or threatened.
(d) To the best knowledge of each of the Borrowers, Materials of
Environmental Concern have not been generated, treated, stored, transported,
disposed of, at, on, from or under any of the Properties by any of the
Borrowers, nor have any Materials of Environmental Concern been transferred by
any of the Borrowers from the Properties to any other location except in either
case in the ordinary course of business of the Borrowers or any of their
respective Subsidiaries, in compliance with all Environmental Laws and such that
it could not reasonably be expected to give rise to liability under any
applicable Environmental Law.
(e) There are no governmental, administrative actions or judicial
proceedings pending or, to the best knowledge of each Borrower after diligent
inquiry, contemplated or threatened under any Environmental Laws to which the
Company, any other Borrower or any of their respective Subsidiaries is or will
be named as a party with respect to the Properties, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties.
3.14 No Material Misstatements. No financial statement, exhibit or
schedule furnished by or on behalf of any Borrower to the Agent or any Bank in
connection with the negotiation of this Agreement, any Revolving Credit Note or
any other Loan Document contains any misstatement of fact, or omitted or omits
to state any fact necessary to make the statements therein not misleading under
the circumstances under which they were made or given, where such misstatement
or omission would be material to the interests of the Banks with respect to the
performance of each Borrower of its obligations hereunder or thereunder. Prior
to the date hereof, the Borrowers have
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disclosed to the Banks in writing any and all facts which materially and
adversely affect (to the extent the Borrowers can as of the date hereof
reasonably foresee), the business, operations or financial condition of the
Company and its Subsidiaries taken as a whole, and the ability of the Borrowers
to perform their obligations under this Agreement, the Revolving Credit Notes
and the other Loan Documents.
3.15 Title to Properties. The Borrowers and any Subsidiaries have good
and marketable title to or valid leasehold interest in all properties, assets
and other rights which they purports to own or lease or which are reflected as
owned or leased on their respective books and records, free and clear of all
Liens and encumbrances except Permitted Liens, and subject to the terms and
conditions of the applicable leases. All leases of property are in full force
and effect without the necessity for any consent which has not previously been
obtained upon consummation of the transactions contemplated hereby unless the
failure to obtain such consent would not have a Material Adverse Effect.
3.16 Intellectual Property. Each of the Borrowers and each of their
respective Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted (the "Intellectual Property") except for those
as to which the failure to own or license could not reasonably be expected to
have a Material Adverse Effect. No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property, nor
does such Borrower know of any valid basis for any such claim. The use of such
Intellectual Property by the Borrowers and their Subsidiaries does not infringe
the rights of any Person, except for such claims and infringements that, in the
aggregate, do not have such a Material Adverse Effect.
3.17 No Burdensome Restrictions; List of Subsidiaries. No Requirement
of Law or Contractual Obligation of any of the Borrowers or any of their
Subsidiaries could reasonably be expected to have a Material Adverse Effect. All
of the Subsidiaries of each Borrower as of the date hereof are listed on
Schedule 3.17 to this Agreement under its name, and the respective number of
shares of authorized Capital Stock and issued and outstanding Capital Stock are
as set forth on such schedule. There are no Subsidiaries of the Company or any
Borrower which are not Borrowers hereunder.
3.18 Solvency. Each of the Borrowers is, and after receipt and
application of the initial Loans hereunder will be, solvent such that: (a) the
fair value of its assets (including without limitation the fair salable value of
the goodwill and other intangible property of such Borrower) is greater than the
total amount of its liabilities, including without limitation, Contingent
Obligations, (b) the present fair salable value of its assets (including without
limitation the fair salable value of the goodwill and other intangible property
of such Borrower) is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and matured, and (c) it
is able to realize upon its assets and pay its debts and other liabilities and
commitments (including Contingent Obligations) as they mature in the normal
course of business. Each Borrower (a) does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay as such debts
and liabilities mature, and (b) is not engaged in a business or transaction, or
about to engage in a business or transaction, for which its property would
constitute unreasonably small capital after giving due consideration to the
prevailing practice and industry in which it is engaged.
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3.19 Insurance. Schedule 3.19 hereto lists, as of the Closing Date,
all insurance policies and other bonds to which any Borrower or any Subsidiary
is a party, all of which are valid and in full force and effect. No notice has
been given or claim made and no grounds exist to cancel or avoid any of such
policies or bonds or to reduce the coverage provided thereby or any replacements
thereof. Such policies and bonds or any replacements thereof provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of the Borrowers and their subsidiaries in
accordance with prudent business practice in the industry of the Borrowers and
their Subsidiaries.
3.20 Material Contracts; Franchise Agreements. As of the Closing Date,
all material contracts relating to the business operations of the Borrowers
which would be required by the provisions of Regulation S-K promulgated by the
Securities and Exchange Commission to be filed as exhibits to any periodic
report under the Exchange Act (collectively, the "Material Contracts") are
listed on Schedule 3.20 hereto. As of the Closing Date, all such Material
Contracts are valid, binding and enforceable upon the Borrowers and each of the
parties thereto in accordance with their respective terms, and there is no
default thereunder with respect to any of the Borrowers or, to the Borrowers'
knowledge, with respect to parties other than the Borrowers. All franchise
agreements to which any of the Borrowers is a party are valid, binding and
enforceable upon such Borrower and each of the parties thereto in accordance
with their respective terms, and to the best of the Borrowers' knowledge, all
required disclosures required by law to be given in connection with those
franchise agreements have been given as required and the Borrowers and to the
best of the Borrowers' knowledge each of the other parties thereto are in
compliance in all material respects with such franchise agreements. From and
after the Closing Date, Schedule 3.20 shall be deemed to be automatically
modified by adding thereto, on the date of filing by the Company with the
Securities and Exchange Commission of any periodic report under the Exchange
Act, any and all Material Contracts filed as exhibits to such report.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement of each
Bank to make the initial Loans requested to be made by it is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loans
on the Closing Date, of the following conditions precedent:
(a) Credit Agreement and Revolving Credit Notes. The Agent shall
have received (i) this Agreement, (A) executed and delivered by a duly
authorized officer of each Borrower, with a counterpart for each Bank, and (B)
executed and delivered by a duly authorized officer of each Bank and (ii) for
the account of each Bank, a Revolving Credit Note conforming to the requirements
hereof and executed by a duly authorized officer of each Borrower.
(b) Corporate Proceedings; No Default. The Agent shall have
received, with a counterpart for each Bank, a certificate of the Secretary or an
Assistant Secretary of each Borrower dated as of the Closing Date certifying (A)
that attached thereto is a true and complete copy of the resolutions, in form
and substance satisfactory to the Agent, of the Board of Directors of such
Borrower authorizing (i) the execution, delivery and performance of this
Agreement, the Revolving
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Credit Notes and the other Loan Documents to which it is a party, and (ii) the
borrowings contemplated hereunder and that such resolutions attached thereto
have not been amended, modified, revoked or rescinded, (B) as to the incumbency
and specimen signature of each officer executing any Loan Document on behalf of
a Borrower and (C) that the representations contained in Section 3 are true and
correct, that the Borrowers are in compliance with all covenants contained
herein and there exists no Default after giving effect to the initial Loans
hereunder.
(c) Corporate Documents. The Agent shall have received, with a
counterpart for each Bank, true and complete copies of the articles or
certificate of incorporation and by-laws of each Borrower, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Borrower, provided that copies of such documents for
any of the Borrowers formed under the laws of a jurisdiction not located in the
United States may be delivered not later than sixty (60) days after the Closing
Date.
(d) Fees and Expenses. The Agent shall have received (i) the fees
required to be paid on the Closing Date pursuant to the Fee Letter and (ii) all
other fees and expenses due and payable hereunder on or before the Closing Date
(if then invoiced), including, without limitation, the reasonable fees and
expenses accrued through the Closing Date of Ballard Spahr Andrews & Ingersoll,
counsel to the Agent in connection with the transactions contemplated by the
Loan Documents.
(e) Legal Opinion. The Agent shall have received the executed
legal opinion of Fox, Rothschild, O'Brien & Frankel, counsel to the Borrowers,
covering the matters set forth in Exhibit E. Such opinion shall be addressed to
the Banks and the Agent and cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably require.
(f) Existing Credit Arrangements. All existing credit
arrangements between any of the Borrowers and any Bank, including the Existing
Credit Agreements, shall have been terminated and all Indebtedness thereunder
shall have been repaid in full.
(g) Insurance. The Agent shall have received Certificates of
Insurance with respect to each Borrower's fire, casualty, liability and other
insurance covering its respective property and business.
(h) Good Standing. The Agent shall have received certificates of
good standing, subsistence and/or status dated a recent date from the Secretary
of State or appropriate taxing or other authorities in the jurisdiction of
incorporation or organization of each Borrower.
(i) No Material Adverse Effect. There shall have been no Material
Adverse Effect since September 30, 1996.
4.2 Conditions to Each Loan. The agreement of each Bank to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) is subject to the satisfaction of the following conditions
precedent:
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(a) Representations and Warranties. Each of the representations
and warranties made by each Borrower herein or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection herewith or therewith, shall be true and correct in all
material respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each request by the Borrowers for a Loan hereunder shall constitute a
representation and warranty by the Borrowers as of the date of such Loan that
the conditions contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Revolving Credit Note remains outstanding and unpaid, or
any other amount is owing to any Bank or the Agent hereunder, such Borrower
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Bank:
(a) as soon as available, but in any event not later than 120
days after the close of each fiscal year of the Company, a copy of the annual
audit report for such year for the Company and its consolidated Subsidiaries,
including therein a consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such fiscal year, and related
consolidated statements of income and retained earnings and changes in cash
flows of the Company and its consolidated Subsidiaries for such fiscal year, all
in reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with the prior year
with such changes thereon as shall be approved by the Company's independent
certified public accountants, such financial statements to be certified by
Arthur Andersen LLP or other independent certified public accountants selected
by the Company and reasonably acceptable to the Banks, without a "going concern"
or like qualification or exception or qualification arising out of the scope of
the audit; and
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal year
of the Company, unaudited consolidated financial statements of the Company and
its consolidated Subsidiaries, including therein (i) a consolidated balance
sheet of the Company and its consolidated Subsidiaries as at the end of such
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fiscal quarter, (ii) the related consolidated statements of income and retained
earnings of the Company and its consolidated Subsidiaries, and (iii) the related
consolidated statement of changes in financial position of the Company and its
consolidated Subsidiaries all for the period from the beginning of such fiscal
quarter to the end of such fiscal quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the corresponding figures for the like period of the preceding fiscal year; all
in reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with prior periods
and accompanied by a certificate of a Responsible Officer of the Company stating
that the financial statements fairly present the financial condition of the
Company and its consolidated Subsidiaries as of the date and for the periods
covered thereby (subject to normal year-end audit adjustments).
5.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the Company's independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary for certifying such financial statements no
knowledge was obtained of any Default or Event of Default, except as
specifically indicated;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and 5.1(b), a certificate of a Responsible
Officer of the Company showing in detail the calculations demonstrating
compliance with the financial covenants set forth in Section 6.1, together with
a certificate of the chief financial officer or treasurer of the Company stating
that, to the best of his or her knowledge, each of the Borrowers during such
period has kept, observed, performed and fulfilled each and every covenant and
condition contained in this Agreement and in the Revolving Credit Notes and the
other Loan Documents to which it is a party and that such officer has obtained
no knowledge of any Default or Event of Default except as specifically
indicated; if the certificate above shall indicate that such officer has
obtained knowledge of a Default or Event of Default, such certificate shall
state what efforts the Borrowers are making to cure such Default or Event of
Default;
(c) within 60 days after the end of the first three fiscal
quarters in each fiscal year of the Company, and within 105 days after the end
of each fiscal year of the Company, a certificate of a Responsible Officer of
the Company setting forth the Total Debt/EBITDA Ratio as of the end of such
fiscal quarter or fiscal year, as the case may be, and detailing the
computations necessary in calculating such Ratio (a "Total Debt/EBITDA Ratio
Certificate");
(d) within five days after the same are sent, copies of all
financial statements and reports which the Company sent to its stockholders and
within 15 days after the same are filed, copies of all financial statements and
reports which any Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority;
(e) written notice within the time limits set forth in Section
6.15 of any amendment to the organizational documents of the Borrowers;
(f) promptly upon the request of the Agent or any Bank, copies of
the annual budget and any forecasts or projections of the Borrowers for the
succeeding fiscal year;
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(g) no later than the thirtieth (30th) day after the consummation
of any Permitted Acquisition the total consideration for which exceeds
$2,500,000, financial statements of the Person acquired (or the assets of which
were acquired); and
(h) promptly, such additional financial and other information as
the Agent or any Bank may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Company or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. Except as
otherwise permitted in Section 6.4, continue to engage in business of the same
general type as now conducted by it and, preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
5.5 Maintenance of Insurance; Property. (a) Insure its properties and
assets against loss or damage by fire and such other insurable hazards as such
assets are commonly insured (including fire, extended coverage, property damage,
worker's compensation, public liability and business interruption insurance) and
against other risks in such amounts as similar properties and assets are insured
by prudent companies in similar circumstances carrying on similar businesses,
and with reputable and financially sound insurers, including self insurance to
the extent customary. The Borrowers shall deliver (i) on the Closing Date and
annually thereafter an original certificate of insurance signed by the
Borrowers' independent insurance broker describing and certifying as to the
existence of the insurance on the properties and assets of the Borrowers
required to be maintained by this Agreement and (ii) at the request of the Agent
or any Bank, from time to time a summary schedule indicating all insurance then
in force with respect to the Borrowers.
(b) Maintain in good repair, working order and condition
(ordinary wear and tear and casualty excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, each of
the Company and its Subsidiaries will make or cause to be made all appropriate
repairs, renewals or replacements thereof.
5.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and upon reasonable
notice permit representatives of any Bank to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
during normal business hours and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Company and its Subsidiaries with officers and employees of the Company
and its Subsidiaries and with its independent certified public accountants.
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5.7 Notices. Promptly give notice to the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the Company or any of
its Subsidiaries in which the amount involved is $500,000 or more and not
covered by insurance as reasonably determined by the Company's corporate counsel
or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, any Lien in favor
of PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or any Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan or (iii) an
assessment of liability under the Coal Industry Retiree Health Benefit Act of
1992; and
(e) an event which has had or could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers propose to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and require compliance by all
tenants and all subtenants, if any, with, all Environmental Laws and obtain and
comply with and maintain, and require that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws, except to the extent that failure to so
comply or obtain or maintain such documents could not reasonably be expected to
have a Material Adverse Effect;
(b) Comply with all lawful and binding orders and directives of
all Governmental Authorities respecting Environmental Laws; and
(c) Defend, indemnify and hold harmless the Agents and the Banks,
and their respective employees, agents, officers, directors, successors and
assigns from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to any
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violation of or noncompliance with or liability under any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities related thereto
which in each case relate to or arise in connection with any Borrower, any
Property or any activities relating to any other property or business of a
Borrower or the enforcement of any rights provided herein or in the other Loan
Documents, including, without limitation, attorneys' and consultants' fees,
response costs, investigation and laboratory fees, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of any of the foregoing enumerated parties.
This indemnity shall continue in full force and effect regardless of the
termination of this Agreement and the payment of the Revolving Credit Notes.
5.9 Management Changes. Except in the case of his death, retain
Richard Pinola as the Chairman and Chief Executive Officer of the Company and
notify the Agent in writing within thirty (30) days after any change in his
titles or responsibilities.
5.10 Subordination of Intercompany Loans, Other Loans and Advances to
the Borrowers. Cause any intercompany indebtedness, loans or advances owed by
the Borrowers to each other or to any other Subsidiary to be subordinated on
terms satisfactory to the Agent to the Loans and other obligations owed to the
Agent and the Banks hereunder or under the other Loan Documents.
5.11 Notice and Joinder of New Subsidiaries. Notify the Agent as soon
as practicable after acquiring or creating a new Subsidiary, and cause such new
Subsidiary to execute and deliver to the Agent a Joinder and Assumption
Agreement in the form of Exhibit D attached hereto, joining in this Agreement
and becoming a Borrower hereunder.
5.12 Use of Proceeds. Use the proceeds of the Revolving Credit Loans
(i) for working capital and general corporate purposes in the ordinary course of
business, (ii) to repay Indebtedness under the Existing Credit Agreements and
(iii) to the extent permitted hereunder, to pay all or a portion of the purchase
price for Permitted Acquisitions. None of the Commitments or the Loans shall be
used for currency speculation or similar purposes.
5.13 Subsequent Credit Terms. Notify the Agent in writing prior to
entering into any new credit agreement or any amendment or modification of any
existing credit arrangement, pursuant to which any of the Borrowers agrees to
financial and other affirmative and negative covenants (other than any of the
foregoing pursuant to which a Borrower provides or agrees to provide collateral
for its obligations) which are less favorable in any material respect to any of
the Borrowers than those contained in this Agreement. Effective upon any
Borrower's entry into any such agreement, amendment or modification, the
corresponding covenants, terms and conditions of this Agreement shall be and
shall, unless otherwise provided by the Banks, be deemed to be automatically and
immediately amended to conform with and to include the applicable covenants,
terms and/or conditions of such other agreement (until such agreement is
terminated and all amounts owing thereunder are repaid); provided, however, that
the foregoing shall not be applicable to or be deemed to affect any provision of
this Agreement if any such agreement, amendment or modification is more
favorable to such Borrower. Each of the Borrowers hereby agrees promptly to
execute and deliver any and all such documents and instruments and to take all
such further actions as the Agent may, in its sole discretion, deem necessary or
appropriate to effectuate the provisions of this Section 5.13.
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SECTION 6. NEGATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Revolving Credit Note remains outstanding and unpaid, or
any other amount is owing to any Bank or Agent hereunder, such Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Maintenance of Net Worth. Permit Consolidated Net Worth on
any day to be less than (i) from the Closing Date until December 31, 1996,
$40,085,000 and (ii) thereafter, the sum of (A) $40,085,000 plus (B) fifty
percent (50%) of Consolidated Net Income (I) for the final quarter ending on
December 31, 1996 and (II) for each fiscal year thereafter commencing with the
fiscal year ending December 31, 1997, exclusive of any fiscal year in which
Consolidated Net Income is a negative, plus (C) one-hundred percent (100%) of
the Net Proceeds from the issuance after the Closing Date of Capital Stock of
any Borrower or Subsidiary thereof.
(b) Total Debt/EBITDA Leverage Ratio. At the last day of any
fiscal quarter of the Company, permit the Total Debt/EBITDA Ratio to be greater
than 2.50 to 1.00.
(c) Fixed Charge Coverage Ratio. At the last day of any fiscal
quarter of the Company commencing with the fiscal quarter ending December 31,
1996, permit the ratio of (i) EBITDA for the four fiscal quarters ending on such
date to (ii) the sum of Consolidated Interest Expense, Consolidated Income Tax
Expense, Consolidated Capital Expenditures (excluding Permitted Acquisitions),
Distributions and scheduled principal payments, in each case for the four fiscal
quarters ending on such date, to be less than 1.25 to 1.00; provided, that the
outstanding principal balance of the Loans under this Agreement shall be
excluded from the sum under paragraph (ii) above with respect to any calculation
made during the twelve months prior to the Termination Date.
6.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.3 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness except:
(a) Indebtedness in respect of the Loans, the Revolving Credit
Notes and other obligations of the Borrowers under this Agreement;
(b) Indebtedness which is subordinated in accordance with the
provisions of Section 5.10;
(c) Indebtedness listed on Schedule 6.3, and renewals, extensions
and modifications thereof which do not increase the principal amount thereof or
otherwise significantly change the terms thereof unless otherwise specified in
Schedule 6.3;
(d) Indebtedness secured by Purchase Money Security Interests not
exceeding $500,000;
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(e) Indebtedness described in subsection (f) of the definition of
"Indebtedness"; and
(f) other unsecured Indebtedness in an amount not to exceed
$3,000,000, and renewals, extensions and modifications thereof which do not
increase the principal amount thereof or otherwise significantly change the
terms thereof.
6.4 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that:
(a) any Subsidiary of the Company may be merged or consolidated
with or into the Company (provided that the Company shall be the continuing or
surviving corporation) or with or into any other Borrower (provided that such
Borrower shall be the continuing or surviving corporation); and
(b) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to a Borrower;
provided, that immediately after any such transaction referred to in paragraphs
(a) and (b) above and after giving effect thereto, each of the Borrowers is in
compliance with this Agreement and no Default or Event of Default shall have
occurred and be continuing or result from such transaction.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) any sale, transfer or lease of assets in the ordinary course
of business which are no longer necessary or required in the conduct of the
Borrowers' business;
(b) transactions involving the sale or lease of inventory in the
ordinary course of business;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection in the ordinary course of business of such accounts receivable;
(d) as permitted by Section 6.4; and
(e) in addition to the above subsections 6.5(a) through 6.5(d),
conveyances, sales, leases, assignments, transfers or other dispositions of
assets of the Borrowers; provided, that the aggregate amount of such
conveyances, sales, leases, assignments, transfers and other dispositions,
determined in accordance with GAAP, in any fiscal year does not exceed five
percent (5%) of the Company's consolidated total assets as of the beginning of
such fiscal year, and provided, further, that such conveyances, sales, leases,
assignments, transfers or other dispositions are
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for cash consideration which the officers or Board of Directors of the
respective Borrower deems to be fair and reasonable.
6.6 Limitation on Distributions. At any time make (or incur any
liability to make) or pay any Distribution (whether in cash or property or
obligations of a Borrower or any Subsidiary thereof) in respect of the Borrowers
or any Subsidiary (other than a Distribution payable to the Company or from a
Borrower to another Borrower), unless as of the declaration date after giving
effect to the declaring, paying or making of any such Distribution, no Event of
Default would exist.
6.7 Transactions with Affiliates. Except as expressly permitted in
this Agreement and except for Permitted Acquisitions of an existing Affiliate,
directly or indirectly enter into any transaction or arrangement whatsoever
(including without limitations any purchase, sale, lease or exchange of property
or the rendering of any service) or make any payment to or otherwise deal with
any Affiliate, except, as to all of the foregoing in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's and its Subsidiary's
business and upon fair and reasonable terms no less favorable to such Borrower
or such Subsidiary, as the case may be, than would be obtained in a comparable
arm's length transaction with a Person not an Affiliate.
6.8 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by such Borrower or any Subsidiary thereof of real or
personal property which has been or is to be sold or transferred by such
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations thereof.
6.9 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) Contingent Obligations described on Schedule 6.9; and
(b) Contingent Obligations incurred in the ordinary course of
business by any of the Borrowers or its Subsidiaries or in connection with
Permitted Acquisitions.
6.10 Limitation on Investments, Loans and Advances. Purchase, hold or
acquire beneficially any stock, other securities or evidences of indebtedness
of, make or permit to exist any loans or advances (other than employee
compensation paid in the ordinary course of business) to, or make or permit to
exist any investment or acquire any interest whatsoever in, any other Person,
except:
(a) extensions of trade credit to customers in the ordinary
course of business;
(b) Permitted Investments;
(c) advances to employees of the Borrowers or their Subsidiaries
for travel, entertainment and relocation expenses in the ordinary course of
business;
(d) Capital Stock of any Subsidiary (subject to subsection (g)
below);
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(e) loans and advances by a Borrower to another Borrower, which
loans are subordinated in accordance with Section 5.10;
(f) Permitted Acquisitions; and
(g) loans and advances by a Borrower to or additional capital
contributions in its Subsidiaries which are not Borrowers which, from the date
hereof through the Termination Date, do not exceed in the aggregate $5,000,000.
6.11 Negative Pledge. Enter into any agreement with any Person other
than the Banks pursuant to which any Borrower or any of its Subsidiaries
creates, incurs, assumes or suffers to exist any Lien upon any of its
properties, assets or revenues, whether now owned or hereafter acquired;
provided, that a Borrower may enter into such an agreement in connection with a
Purchase Money Security Interest permitted hereunder, provided that such Lien is
by its terms effective only against the assets subject to such Purchase Money
Security Interest.
6.12 Fiscal Year. Permit the fiscal year of a Borrower to end on a day
other than December 31.
6.13 Limitation on Conduct of Business. Enter into any business either
directly or through any Subsidiary except for businesses in which the Borrowers
and their Subsidiaries are engaged on the date of this Agreement and any career
management, human resources staffing, career recruiting, human resources product
development and human resources consulting service business related to such
existing businesses.
6.14 Partnerships and Joint Ventures. None of the Borrowers shall
become or agree to become a general or limited partner in any general or limited
partnership or a joint venturer in any joint venture.
6.15 Changes in Organizational Documents. None of the Borrowers shall
amend in any respect its articles or certificate of incorporation (including any
provisions or resolutions relating to Capital Stock), by-laws or other
organizational documents without providing at least thirty (30) calendar days'
prior written notice to the Agent, in the event such change would be adverse to
the Agent and/or the Banks as determined by the Agent in its sole discretion.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur and
be continuing:
(a) A Borrower (i) shall fail to pay when due any principal of
any Revolving Credit Note, or (ii) shall fail to pay any interest on any
Revolving Credit Note or any other amount payable hereunder or thereunder
(including without limitation any fees) when due in accordance with the terms
thereof or hereof and such failure described in this clause (ii) shall continue
for three (3) days after notice to such Borrower from the Agent or any Bank,
provided, that such
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notice shall not be required to be given more than two (2) times in any
consecutive twelve (12) month period; or
(b) Any representation or warranty made or deemed made by a
Borrower herein or in any other Loan Document or which is contained in any
certificate or financial statement furnished at any time under or in connection
with this Agreement shall prove to have been incorrect or misleading in any
material respect on or as of the date made or deemed made; or
(c) A Borrower shall default in the observance or performance of
any agreement contained in Section 6 of this Agreement; or
(d) A Borrower shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
subsections (a) through (c) above) or any other Loan Document, and such default
shall continue unremedied for a period of 20 days after the earlier of (i) the
date such failure first became known to any senior executive officer of any
Borrower, and (ii) the date the Agent or any Bank gives notice to any Borrower
of such failure; or
(e) A Borrower or any Subsidiary thereof shall (i) default in the
payment of any principal of or interest on or any other amount payable on any
Indebtedness (other than the Revolving Credit Notes) or in the payment of any
Contingent Obligation, beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such Indebtedness or
Contingent Obligation was created and the aggregate amount of such Indebtedness
and/or Contingent Obligations in respect of which such default or defaults shall
have occurred is at least $250,000; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Contingent 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 become due
and payable prior to its stated maturity or such Contingent Obligation to become
payable; or
(f) (i) A Borrower or any Subsidiary thereof shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or a Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against a Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 90 days; or (iii) there shall be commenced against a
Borrower or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any
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such relief which shall not have been vacated, discharged, satisfied, or stayed
or bonded pending appeal within 90 days from the entry thereof; or (iv) a
Borrower or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clause (i), (ii), or (iii) above; or (v) a Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they generally become due; or
(g) One or more judgments or decrees shall be entered against a
Borrower or any of its Subsidiaries involving in the aggregate a liability
(excluding any such judgments or orders which are fully covered by insurance,
subject to any customary deductible, and under which the applicable insurance
carrier has acknowledged such full coverage in writing) of $500,000 or more and
all such judgments or decrees shall not have been vacated, discharged, settled,
satisfied or paid, or stayed or bonded pending appeal, within 30 days from the
entry thereof; or
(h) Any Change of Control shall occur; or
(i) A Borrower shall fail to (i) comply with all Environmental
Laws or obtain and comply with and maintain any and all licenses, approvals,
registrations or permits required by Environmental Laws except to the extent
that failure to so comply or obtain or maintain such documents could not
reasonably be expected to have a Material Adverse Effect; or (ii) comply with
all lawful and binding orders and directives of all Governmental Authorities
respecting Environmental Laws except to the extent that failure to so comply
could not reasonably be expected to have a Material Adverse Effect; or
(j) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the Company or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or institution of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Banks, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Company
or any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Banks is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist in regard to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(k) the Company shall cease to own, directly or indirectly,
one-hundred percent (100%) of the legal and beneficial ownership of each other
Borrower except pursuant to a transaction permitted under Section 6.4; or
(l) Any other event shall have occurred which could reasonably be
expected to have a Material Adverse Effect;
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then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to a Borrower,
automatically the Commitments and the obligations of the Agent to issue Letters
of Credit and the Banks to participate therein shall immediately terminate, and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Revolving Credit Notes and the other Loan Documents
shall automatically and immediately become due and payable, and (B) if such
event is any other Event of Default, with the consent of the Required Banks, the
Agent may, or upon the written request of the Required Banks, the Agent shall,
(i) by notice to the Company declare the Commitments to be terminated forthwith,
whereupon the Commitments and the obligations of the Banks to make Revolving
Credit Loans, and the obligation of the Agent to issue Letters of Credit and the
Banks to participate in any Letters of Credit thereafter issued shall
immediately terminate; (ii) by notice of default to the Company, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Revolving Credit Notes and the other Loan Documents to
be due and payable forthwith, whereupon the same shall immediately become due
and payable; and/or (iii) by notice to the Company require the Borrowers to, and
the Borrowers shall thereupon, deposit in a non-interest bearing account with
the Agent, as cash collateral for their obligations under this Agreement and the
Revolving Credit Notes, an amount equal to the Letters of Credit Outstanding,
and the Borrowers hereby pledge to the Agent and the Banks, and grant to the
Agent and the Banks a security interest in, all such cash as security for such
obligations. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and appoints
PNC Bank, National Association as the Agent of such Bank under this Agreement
and the other Loan Documents, and each such Bank irrevocably authorizes PNC
Bank, National Association, as the Agent for such Bank, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement and
the other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement and the other Loan Documents or otherwise exist against the Agent. PNC
Bank, National Association agrees to act as the Agent on behalf of the Banks to
the extent provided in this Agreement and the other Loan Documents.
8.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for the advice and
services of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible to the Banks for the negligence or misconduct of any
agents or attorneys in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or
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omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to any of the
Banks for any recitals, statements, representations or warranties made by a
Borrower or any officer thereof contained in this Agreement, the other Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, the Revolving Credit Notes or the other Loan
Documents or for any failure of the Borrowers (or any of them) to perform their
obligations hereunder or thereunder. The Agent shall not be under any obligation
to any Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or the
other Loan Documents, or to inspect the properties, books or records of the
Borrowers (or any of them).
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Revolving Credit Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to one or
more of the Borrowers), independent accountants and other experts selected by
such Agent. The Agent may deem and treat the payee of any Revolving Credit Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Banks as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement, the Revolving Credit Notes
or the other Loan Documents in accordance with a request of the Required Banks,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Banks and all future holders of the Revolving Credit
Notes.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it has received notice from a Bank or a Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, the
Agent shall give notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Banks; provided, that unless and until the Agent shall have
received such directions, it may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has,
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independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and made its
own decision to make its Loans hereunder and enter into this Agreement and each
other Loan Document to which it is a party. Each Bank also represents that it
will, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrowers which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation, if any, of the Borrowers to do so) in Dollars, ratably
according to their respective Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Revolving Credit Notes) be imposed on, incurred by or asserted against the Agent
in any way relating to or arising out of this Agreement, the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided, that no
Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's gross negligence or
willful misconduct. The agreements in this Section 8.7 shall survive the payment
of the Revolving Credit Notes and all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers (or any of them) as though the Agent were not the Agent
hereunder. With respect to its Loans made or renewed by it and any Revolving
Credit Note issued to it, the Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Bank and may exercise the
same as though it were not the Agent, and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
8.9 Successor Agent. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign as Agent upon 30 days'
notice to the Banks and the Borrowers. If the Agent shall resign as Agent under
this Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, which appointment shall be subject to the
approval of the Borrowers (which approval shall not be unreasonably withheld and
shall not be required if there shall then exist a Default or Event of Default).
If no successor agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 60 days after the
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retiring Agent's giving of notice of resignation then the retiring Agent may, on
behalf of the Banks, appoint an interim successor agent which shall be a bank
which has an office in Philadelphia, Pennsylvania or New York, New York. Any
interim successor agent appointed under the preceding sentence may be replaced
at any time by a successor agent designated by the Required Banks and subject to
the approval of the Borrowers (which approval shall not be unreasonably withheld
and shall not be required if there shall then exist a Default or Event of
Default). Any such successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such successor agent
effective upon its appointment, and the former Agent's rights, powers and duties
as Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or any holders
of the Revolving Credit Notes. After any retiring Agent's resignation as Agent,
the provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
8.10 Beneficiaries. Except as expressly provided herein, the
provisions of this Section 8 are solely for the benefit of the Agent and the
Banks, and the Borrowers shall not have any rights to rely on or enforce any of
the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Agent shall act solely as agent of
the Banks and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for the Borrowers.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Revolving
Credit Note any other Loan Document, nor any terms hereof or thereof may be
amended, supplemented or modified except in accordance with the provisions of
this Section. With the written consent of the Required Banks, the Agent and the
Borrowers may, from time to time, enter into written amendments (including
letter amendments), supplements or modifications hereto and to the Revolving
Credit Notes and the other Loan Documents for the purpose of adding any
provisions to this Agreement, the Revolving Credit Notes or any other Loan
Document or changing in any manner the rights of the Banks or of the Borrowers
hereunder or thereunder or waiving, on such terms and conditions as the Agent
may specify in such instrument, any of the requirements of this Agreement, the
Revolving Credit Notes or any other Loan Document or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall directly or indirectly (a) reduce
the amount or extend the maturity of any Revolving Credit Note or any
installment thereof, or reduce the rate of interest or extend the time of
payment of interest thereon, or reduce any fee payable to any Bank hereunder or
extend the period for payment thereof, or change the duration or the amount of
any Bank's Commitment in each case without the consent of the Bank affected
thereby or (b) or amend, modify or waive any provision of this Section or reduce
the percentage specified in the definition of Required Banks, or consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement, the Revolving Credit Notes and the other Loan Documents,
in each case without the written consent of all the Banks, or (c) amend, modify
or waive any provision of Section 8 without the written consent of the then
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Banks and shall be binding upon the Borrowers, the
Banks, the Agent and all future holders of the Revolving Credit Notes. In the
case of any waiver, the Borrowers, the Banks and the Agent shall be
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restored to their former position and rights hereunder and under the outstanding
Revolving Credit Notes, and any Default or Event of Default waived shall be
deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
9.2 Notices; Lending Offices. All notices, requests and demands to or
upon the respective parties hereto to be effective shall be in writing
(including by telecopy, telegraph or telex confirmed in writing), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or upon receipt if mailed, postage prepaid, by
certified mail, return receipt requested, or the next Business Day if sent by
reputable overnight courier, charges prepaid, for delivery on the next Business
Day, or, in the case of telecopy notice, when received during normal business
hours, or, in the case of telegraphic notice, when delivered to the telegraph
company, or, in the case of telex notice, when sent, answerback received,
addressed as follows in the case of the Borrowers or the Agent, and as set forth
in Schedule I in the case of the other parties hereto, or to such other address
as may be hereafter notified by the respective parties hereto and any future
holders of the Revolving Credit Notes:
The Borrowers c/o Right Management Consultants, Inc.
or any of them: 1818 Market Street
Philadelphia, PA 19103
Attention: G. Lee Bohs, Executive Vice President
and Mark S. Turgyan, Vice President
Telecopy: 215-988-9112
The Agent: PNC Bank, National Association
630 Dresher Road
Horsham, PA 19044
Attention: Kevin D. Wheatley
Telecopy: 215-773-5270
with a copy to:
PNC Bank, National Association
Multibank Loan Administration
4th Floor
Annex One PNC Plaza
5th Avenue and Wood Street
Pittsburgh, PA 15222
Attention: Arlene Ohler
Telecopy: 412-762-8672
provided that (a) any notice, request or demand to or upon the Agent or the
Banks pursuant to Sections 2.4, 2.5 and 2.15 shall not be effective until
received and (b) any notice of a Default or Event of Default hereunder shall be
sent by telecopy or reputable overnight courier. Schedule I lists the Lending
Offices of each Bank. Each Bank may change its Lending Office by written notice
to the other parties hereto.
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9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Agent or any Bank, 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 provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Revolving Credit Notes and the other Loan
Documents.
9.5 Payment of Expenses and Taxes. Each of the Borrowers jointly and
severally agrees (a) to pay or reimburse the Agent for all its out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and the syndication of, this Agreement, the Revolving Credit
Notes, the other Loan Documents and any other documents executed and delivered
in connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent (subject to the cap on such fees agreed to
by the Agent and the Company), (b) to pay or reimburse the Agent for all its
out-of-pocket costs and expenses incurred in connection with any amendment,
supplement or modification to this Agreement, the Revolving Credit Notes and the
other Loan Documents and any other documents executed and delivered in
connection therewith, including without limitation, the reasonable fees and
disbursements of counsel, (c) pay or reimburse the Bank and each Agent for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Revolving Credit Notes, the
other Loan Documents and any such other documents, including, without
limitation, reasonable fees and disbursements of counsel to the Agent and to the
several Banks, (d) to pay, indemnify, and hold each Bank and the Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Revolving Credit Notes,
the other Loan Documents and any such other documents, and (e) to pay,
indemnify, and hold each Bank and the Agent harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions (whether
sounding in contract, in tort or on any other ground), judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of or in any
other way arising out of or relating to, this Agreement, the Revolving Credit
Notes, the other Loan Documents or any such other documents contemplated by or
referred to herein or therein or any action taken by any Bank or the Agent with
respect to the foregoing (all the foregoing, collectively, the "indemnified
liabilities"), provided, that the Borrowers shall have no obligation hereunder
to the Agent or any Bank with respect to indemnified liabilities arising from
(i) the gross negligence or willful misconduct of such person or (ii) legal
proceedings commenced against such person by any other Bank. The agreements in
this Section shall survive repayment of the Revolving Credit Notes and all other
amounts payable hereunder.
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9.6 Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of a Borrower, the Agent or the Banks that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns. The Borrowers may not assign or transfer any
of their rights or obligations under this Agreement or the other Loan Documents
without the prior written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, sell to any
Bank or Affiliate thereof and, with the consent of the Company (which consent
shall not be unreasonably withheld) and the Agent, to one or more banks or other
financial institutions (each, a "Purchasing Bank") all or any part of its
interests, rights and obligations under this Agreement, the Revolving Credit
Notes and the other Loan Documents (including all or a portion of its Commitment
and the Loans at the time owing to it and the Revolving Credit Notes held by
it); provided, however, that (i) so long as no Event of Default shall exist and
be continuing, such assignment shall be in an amount not less than $10,000,000
(or such lesser amount as the Company and the Agent shall agree in their sole
discretion) and (ii) the parties to each such assignment shall execute and
deliver to the Agent and the Company for its acceptance and recording in the
Register an Assignment and Acceptance, together with the Revolving Credit Note
or Revolving Credit Notes subject to such assignment and a processing and
recordation fee of $3,000. Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.6, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof, (A) such Purchasing Bank shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Bank under this Agreement and
(B) the assigning Bank thereunder shall, to the extent of the interest assigned
by such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Bank's rights and obligations under this
Agreement and the other Loan Documents, such Bank shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.16, 2.17
and 2.18 (to the extent that such Bank's entitlement to such benefits arose out
of such Bank's position as a Bank prior to the applicable assignment), as well
as to any Commitment Fees accrued for its account and not yet paid). Such
Assignment and Acceptance shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such Purchasing
Bank and the resulting amounts and percentages held by the Banks arising from
the purchase by such Purchasing Bank of all or a portion of the rights and
obligations of such assigning Bank under this Agreement, the Revolving Credit
Notes and the other Loan Documents. Notwithstanding any provision of this
Section 9.6, the consent of the Company shall not be required for any assignment
which occurs at any time when an Event of Default shall have occurred and be
continuing.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the Purchasing Bank thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its Commitment, and the outstanding balances of its Loans, without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations
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made in or in connection with this Agreement or the other Loan Documents, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto, or the financial condition of the
Borrowers or any Subsidiary thereof or the performance or observance by the
Borrowers or any Subsidiary thereof of any of its obligations under this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such Purchasing Bank represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such Purchasing Bank confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.1 and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such Purchasing Bank will independently
and without reliance upon the Agent, such assigning Bank or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (vi) such Purchasing Bank
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Bank including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section 2.17
to deliver the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Purchasing Bank's exemption from United States
withholding taxes with respect to all payments to be made to the Purchasing Bank
under this Agreement.
(d) The Agent shall maintain at its offices in Philadelphia,
Pennsylvania a copy of each Assignment and Acceptance and the names and
addresses of the Banks, and the Commitment of, and principal amount of the Loans
owing to, each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the Borrowers, the Agent and the Banks may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers and any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and a Purchasing Bank (and in the case
of a Purchasing Bank that is not then a Bank or an Affiliate thereof, by the
Company and the Agent) together with the Revolving Credit Note or Revolving
Credit Notes subject to such assignment and the processing and recordation fee
referred to in paragraph (b) above, the Agent shall promptly (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give notice thereof to the Banks. Within five Business Days
after receipt of notice, the Borrowers, at their own expense, shall execute and
deliver to the Agent, in exchange for the surrender of the original Revolving
Credit Note(s) (A) with respect to the assignment of Revolving Credit Loans of
any Bank, a new Revolving Credit Note to the order of such Purchasing Bank in an
amount equal to the Commitment assumed and (B) if the assigning Bank has
retained a Commitment, a new Revolving Credit Note to the order of such assignor
in the amount equal to the Commitment retained by it. Such new Revolving Credit
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such
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surrendered Revolving Credit Note(s); such new Revolving Credit Notes shall be
dated the date of the surrendered Revolving Credit Notes which they replace and
shall otherwise be in substantially the form of Exhibit A hereto. Canceled
Revolving Credit Notes shall be returned to the Company.
(f) Each Bank may without the consent of the Company or the Agent
(except to the extent provided below) sell participations to one or more banks
or other entities (each a "Participant") in any Loan owing to such Bank, any
Revolving Credit Note held by such Bank, any Commitment of such Bank or any
other interest of such Bank hereunder and under the other Loan Documents,
provided, however, that (i) such Bank's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Bank shall remain the holder of any such Revolving
Credit Note for all purposes under this Agreement and the other Loan Documents,
(iv) the Borrowers, the Banks and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and the other Loan Documents, (v) in any proceeding under
the Bankruptcy Code such Bank shall be, to the extent permitted by law, the sole
representative with respect to the obligations held in the name of such Bank,
whether for its own account or for the account of any Participant, (vi) such
Bank shall retain the sole right to approve, without the consent of any
Participant, any amendment, modification or waiver of any provision of this
Agreement or the Revolving Credit Note or Revolving Credit Notes held by such
Bank or any other Loan Document, other than any such amendment, modification or
waiver with respect to any Loan or Commitment in which such Participant has an
interest that forgives principal, interest or fees or reduces the interest rate
or fees payable with respect to any such Loan or Commitment, postpones any date
fixed for any regularly scheduled payment of principal of, or interest or fees
on, any such Loan, releases any guarantor of such Loan or releases all or
substantially all of the Collateral, if any, securing any such Loan.
(g) If amounts outstanding under this Agreement and the Revolving
Credit Notes are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement and any Revolving Credit Note to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or any Revolving Credit Note,
provided that in purchasing such participation such Participant shall be deemed
to have agreed to share with the Banks the proceeds thereof as provided in
Section 9.8. The Borrowers also agree that each Participant shall be entitled to
the benefits of Sections 2.16, 2.17, 2.18 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such Sections than the assigning Bank would have been entitled to
receive in respect of the amount of the participation transferred by such
assigning Bank to such Participant had no such transfer occurred.
(h) If any Participant of a Bank is organized under the laws of
any jurisdiction other than the United States or any state thereof, the
assigning Bank, concurrently with the sale of a participating interest to such
Participant, shall cause such Participant (i) to represent to the assigning Bank
(for the benefit of the assigning Bank, the other Banks, the Agent and the
Borrowers) that under applicable law and treaties no taxes will be required to
be withheld by the Agent, the Borrowers or the assigning Bank with respect to
any payments to be made to such Participant in
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respect of its participation in the Loans and (ii) to agree (for the benefit of
the assigning Bank, the other Banks, the Agent and the Borrowers) that it will
deliver the tax forms and other documents required to be delivered pursuant to
subsection 2.17(f) and comply from time to time with all applicable U.S. laws
and regulations with respect to withholding tax exemptions.
(i) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Revolving Credit Notes issued to it to a
Federal Reserve Bank; provided that no such assignment shall release a Bank from
any of its obligations hereunder.
9.7 Disclosure of Information. Unless otherwise consented to by the
Company in writing, each of the Banks and the Agent agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of the same nature
and in accordance with safe and sound banking practices, any non-public
information supplied to it by the Company pursuant to this Agreement; provided
that nothing herein shall limit the disclosure of any such information (a) to
the extent required by statute, rule, regulation or judicial process, (b) to
counsel for any Bank or the Agent, (c) to bank examiners, auditors or
accountants, (d) to the Agent or any other Bank, (e) in connection with any
litigation to which any one or more of the Banks or the Agent is a party and (f)
to any Participant or Purchasing Bank (or prospective Participant or Purchasing
Bank) so long as such Participant or Purchasing Bank (or prospective Participant
or Purchasing Bank) agrees to comply with the requirements of this section.
9.8 Adjustments; Set-off. (a) If any Bank (a "benefitted Bank") shall
at any time receive any payment of all or part of its Loans owing to it, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in subsection 7.1(f), or otherwise), in a greater
proportion than any such payment to or collateral received by any other Bank, if
any, in respect of such other Bank's Loans, or interest thereon, such benefitted
Bank shall purchase for cash from the other Banks such portion of each such
other Bank's Loans owing to it, or shall provide such other Banks with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Bank to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Banks; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Bank, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each of the Borrowers, jointly and severally agrees that each Bank so
purchasing a portion of another Bank's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Bank were the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks provided
by law, upon the occurrence and during the continuance of an Event of Default,
each Bank shall have the right, without prior notice to the Borrowers (or any of
them), any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder or under the Revolving Credit Notes (whether at the stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute
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or contingent, matured or unmatured, at any time held or owing by such Bank to
or for the credit or the account of one or more Borrowers. Each Bank agrees
promptly to notify the Company and the Agent after any such set-off and
application made by such Bank, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
9.9 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company, on behalf of the Borrowers, and each of the
Banks.
9.10 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement and the other Loan Documents
represent the agreement of the parties hereto with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Agent or any Bank relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
9.12 GOVERNING LAW. THIS AGREEMENT AND THE REVOLVING CREDIT NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE REVOLVING
CREDIT NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE COMMONWEALTH OF PENNSYLVANIA.
9.13 Submission To Jurisdiction; Waivers. Each of the Borrowers hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the Revolving Credit Notes, or for
recognition and enforcement of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the Commonwealth of
Pennsylvania, the courts of the United States of America for the Eastern
District of Pennsylvania, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Company at its address set forth in Section 9.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
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(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
9.14 Acknowledgements. Each of Borrowers hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement, the Revolving Credit Notes and the other Loan
Documents;
(b) neither the Agent nor any Bank has any fiduciary relationship
to the Borrowers (or any of them) and the relationship hereunder between the
Agent and Banks, on the one hand, and the Borrowers, on the other hand, is
solely that of debtor and creditor; and
(c) no joint venture exists among the Banks or among the
Borrowers (or any of them) and the Banks.
9.15 No Right of Contribution. On and after the occurrence of an Event
of Default hereunder, no Borrower shall seek or be entitled to any reimbursement
from any other Borrower, or be subrogated to any rights of the Banks against the
Borrowers, in respect of any payments made pursuant to the Loan Documents, until
all amounts owing to the Banks hereunder and under the Revolving Credit Notes
are paid in full.
9.16 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR
ANY OTHER LOAN DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
RIGHT MANAGEMENT CONSULTANTS, INC.
RIGHT ASSOCIATES-GOVERNMENT
SERVICES, INC.
RIGHT ACQUISITION CO.
CONVICTION RIGHT FRANCE, S.A.
RIGHT ASSOCIATES BELGIUM, INC.
RIGHT ASSOCIATES FRANCE, INC.
RIGHT ASSOCIATES & CO., SNC
RIGHT ASSOCIATES, LTD.
RIGHT ASSOCIATES, INC.
RIGHT ASSOCIATES LICENSE, INC.
R.M.C. & CO., SNC
THE THinc CONSULTING GROUP
INTERNATIONAL (U.K.), LTD.
By: /s/ G. Lee Bohs
---------------------------------------
Name: G. Lee Bohs
Title: Chief Financial Officer,
Secretary, Treasurer, Executive
Vice President or Assistant
Secretary
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PNC BANK, NATIONAL ASSOCIATION, as a
Bank and as Agent
By: /s/ Kevin Wheatley
Name: Kevin Wheatley
Title: Vice President
FIRST UNION NATIONAL BANK, as a Bank
By: /s/ Henry F. Bullitt
Name: Henry F. Bullitt
Title: Vice President
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SCHEDULE I
BANKS AND COMMITMENT INFORMATION
Bank and Lending Office(s) Commitment
PNC Bank, National Association $20,000,000
1600 Market Street
Philadelphia, PA 19103
First Union National Bank $20,000,000
Broad and Walnut Streets
Philadelphia, PA 19109
<PAGE>
SCHEDULE II
EXISTING LIENS
NONE
<PAGE>
SCHEDULE 3.17
SUBSIDIARIES
Shares of Capital Stock
Name Authorized Issued and Outstanding
Right Associates-Government Services, Inc.
Right Acquisition Co.
Conviction Right France, SA
Right Associates Belgium, Inc.
Right Associates France, Inc.
Right Associates & Co., SNC
Right Human Resources, Inc.
Right Associates, Ltd.
Right Associates, Inc.
Right Associates License, Inc.
R.M.C. & Co., SNC
The THinc Consulting Group
International (U.K.), Ltd.
People Tech Consulting Ltd.
People Tech Consulting Corporation
Pro Transitions Inc.
<PAGE>
SCHEDULE 3.19
INSURANCE
<PAGE>
EVIDENCE OF PROPERTY INSURANCE DATE (MM/DD/YY)
12/18/96
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
PRODUCER COMPANY
CLAIR ODELL GROUP Vigilent Insurance Co.
12D WEST GERMANTOWN PIKE
PLYMOUTH MEETING,
PA 19462
610-825-5555
CODE SUB-CODE
INSURED LOAN NUMBER POLICY NUMBER
Right Management Consultants, 35286924
Inc., et al (see attached) EFFECTIVE DATE EXPIRATION DATE
1818 Market Street, 33rd Flr 1/07/96 1/07/97
Philadelphia
PA 19103-3614
THIS REPLACES PRIOR EVIDENCE DATED:
PROPERTY INFORMATION
LOCATION/DESCRIPTION
COVERAGE INFORMATION
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
Pers.Prop/Bus.Inc/Ex.Exp. 5,000,000 1,000
Special Causes of Loss
REMARKS (including Special Conditions)
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 60 Days WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
ADDITIONAL INTEREST NATURE OF INTEREST
NAME AND ADDRESS MORTGAGEE ADDITIONAL INSURED
LOSS PAYEE (OTHER)
PNC BANK
SIGNATURE OF AUTHORIZED AGENT OR COMPANY
/S/ ____________________ 000550
<PAGE>
NAMED INSURED
Right Management Consultants, Inc.
Right Associates, Inc.
Right Associates Government Services, Inc.
Right Associates Acquisition Co.
Right Associates & Co., SNC
Right Human Resources, Inc.
Right Associates, Ltd.
Right Associates License, Inc.
R.M.C. & Co., SNC
People Tech, Ltd.
People Tech Consulting, Inc.
ProTransitions
<PAGE>
CERTIFICATE OF INSURANCE DATE (MM/DD/YY)
12/18/96
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER
THE COVERAGE AFFORDED BY THE POLICIES BELOW.
PRODUCER COMPANIES AFFORDING COVERAGE
CLAIR ODELL GROUP Company
120 WEST GERMANTOWN PIKE A Vigilant Insurance Co.
PLYMOUTH MEETING, Company
PA 19462 B Federal Insurance Company
610-825-5555 Company
C National Union Fire Ins. Co.
Company
D
INSURED
Right Management Consultants,
Inc., etal. (see attached)
1818 Market Street, 33rd Floor
Philadelphia, PA 19103-3514
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOT WITHSTANDING ANY
REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY
THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
<TABLE>
<CAPTION>
POLICY POLICY
CO EFFECTIVE EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE DATE LIMITS
<S> <C> <C> <C> <C> <C> <C>
GENERAL LIABILITY GENERAL AGGREGATE $2000000
A X COMMERCIAL GENERAL LIABILITY 35286924 1/07/96 1/07/97 PRODUCTS-COMP/OP AGG $1000000
CLAIMS MADE X OCCUR PERSONAL & ADV INJURY $1000000
OWNERS & CONTRACTORS PROT EACH OCCURRENCE $1000000
FIRE DAMAGE (Any one fire) $ 400000
MED EXP (Any one person) $ 10000
AUTOMOBILE LIABILITY
B X ANY AUTO 73170387 1/07/96 1/07/97 COMBINED SINGLE LIMIT $1000000
ALL OWNED AUTOS BODILY INJURY $
(Per person)
SCHEDULED AUTOS BODILY INJURY $
(Per accident)
X HIRED AUTOS
X NON-OWNED AUTOS PROPERTY DAMAGE $
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
ANY AUTO OTHER THAN AUTO ONLY
EACH ACCIDENT $
AGGREGATE $
EXCESS LIABILITY
B X UMBRELLA FORM 79660234 1/07/96 1/07/97 EACH OCCURRENCE $15000000
OTHER THAN UMBRELLA FORM AGGREGATE $15000000
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY
A THE PROPRIETOR/
PARTNERS/EXECUTIVE __ INCL 71617136 1/07/96 1/07/97 STATUTORY LIMITS
OFFICERS ARE: __ EXCL EACH ACCIDENT $500000
DISEASE - POLICY LIMIT $500000
DISEASE - EACH EMPLOYEE $500000
OTHER
B DIRECTORS AND 81389432 1/07/96 1/07/97 $5,000,000
OFFICERS
</TABLE>
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
CERTIFICATE HOLDER CANCELLATION
PNC Bank SHOULD ANY OF THE ABOVE DESCRIBED
POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING
COMPANY WILL ENDEAVOR TO MAIL 60 DAYS
WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION
OR LIABILITY OF ANY KIND UPON THE
COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE 000550000
/S/_________________________
<PAGE>
NAMED INSURED
Right Management Consultants, Inc.
Right Associates, Inc.
Right Associates Government Services, Inc.
Right Associates Acquisition Co.
Right Associates & Co., SNC
Right Human Resources, Inc.
Right Associates, Ltd.
Right Associates License, Inc.
R.M.C. & Co., SNC
People Tech, Ltd.
People Tech Consulting, Inc.
ProTransitions
<PAGE>
CERTIFICATE OF INSURANCE DATE (MM/DD/YY)
12/18/96
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER
THE COVERAGE AFFORDED BY THE POLICIES BELOW.
PRODUCER COMPANIES AFFORDING COVERAGE
CLAIR ODELL GROUP Company
120 WEST GERMANTOWN PIKE A Natl Union Fire Ins Co of Pit
PLYMOUTH MEETING, Company
PA 19462 B
610-825-5555 Company
C
Company
D
INSURED
Right Management Consultants,
Inc., etal. (see attached)
1818 Market Street, 33rd Floor
Philadelphia, PA 19103-3614
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOT WITHSTANDING ANY
REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY
THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
<TABLE>
<CAPTION>
POLICY POLICY
CO EFFECTIVE EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE DATE LIMITS
<S> <C> <C> <C> <C> <C> <C>
GENERAL LIABILITY GENERAL AGGREGATE $
COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP/OP AGG $
CLAIMS MADE OCCUR PERSONAL & ADV INJURY $
OWNERS & CONTRACTORS PROT EACH OCCURRENCE $
FIRE DAMAGE (Any one fire) $
MED EXP (Any one person) $
AUTOMOBILE LIABILITY
ANY AUTO COMBINED SINGLE LIMIT $
ALL OWNED AUTOS BODILY INJURY $
(Per person)
SCHEDULED AUTOS BODILY INJURY $
(Per accident)
HIRED AUTOS
NON-OWNED AUTOS PROPERTY DAMAGE $
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
ANY AUTO OTHER THAN AUTO ONLY
EACH ACCIDENT $
AGGREGATE $
EXCESS LIABILITY
UMBRELLA FORM EACH OCCURRENCE $
OTHER THAN UMBRELLA FORM AGGREGATE $
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY
THE PROPRIETOR/
PARTNERS/EXECUTIVE __ INCL STATUTORY LIMITS
OFFICERS ARE: __ EXCL EACH ACCIDENT $
OTHER THAN UMBRELLA FORM DISEASE - POLICY LIMIT $
DISEASE - EACH EMPLOYEE $
OTHER
A PROFESSIONAL MCPL5826377 1/07/96 1/07/97 $2,000,000
LIABILITY
</TABLE>
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
CERTIFICATE HOLDER CANCELLATION
PNC Bank SHOULD ANY OF THE ABOVE DESCRIBED
POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING
COMPANY WILL ENDEAVOR TO MAIL 60 DAYS
WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION
OR LIABILITY OF ANY KIND UPON THE
COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE 000550000
/S/_________________________
<PAGE>
NAMED INSURED
Right Management Consultants, Inc.
Right Associates
Any past or present subsidiary, affiliate, or associate
company
<PAGE>
CERTIFICATE OF INSURANCE DATE (MM/DD/YY)
12/18/96
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER
THE COVERAGE AFFORDED BY THE POLICIES BELOW.
PRODUCER COMPANIES AFFORDING COVERAGE
CLAIR ODELL GROUP Company
120 WEST GERMANTOWN PIKE A Great Northern Insurance Co.
PLYMOUTH MEETING, Company
PA 19462 B Federal Insurance Company
610-825-5555 Company
C
Company
D
INSURED
Right Management Consultants,
Inc., etal. (see attached)
1818 Market Street, 33rd Floor
Philadelphia, PA 19103-3614
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOT WITHSTANDING ANY
REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY
THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND
CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
<TABLE>
<CAPTION>
POLICY POLICY
CO EFFECTIVE EXPIRATION
LTR TYPE OF INSURANCE POLICY NUMBER DATE DATE LIMITS
<S> <C> <C> <C> <C> <C> <C>
GENERAL LIABILITY GENERAL AGGREGATE $1000000
A X COMMERCIAL GENERAL LIABILITY 35306455 1/07/96 1/07/97 PRODUCTS-COMP/OP AGG $1000000
CLAIMS MADE X OCCUR PERSONAL & ADV INJURY $1000000
OWNERS & CONTRACTORS PROT EACH OCCURRENCE $1000000
FIRE DAMAGE (Any one fire) $ 400000
MED EXP (Any one person) $ 10000
AUTOMOBILE LIABILITY
A ANY AUTO 35306455 1/07/96 1/07/97 COMBINED SINGLE LIMIT $1000000
ALL OWNED AUTOS BODILY INJURY $
(Per person)
SCHEDULED AUTOS BODILY INJURY $
(Per accident)
HIRED AUTOS
NON-OWNED AUTOS PROPERTY DAMAGE $
GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $
ANY AUTO OTHER THAN AUTO ONLY
EACH ACCIDENT $
AGGREGATE $
EXCESS LIABILITY
B X UMBRELLA FORM 9679660234 1/07/96 1/07/97 EACH OCCURRENCE $15000000
OTHER THAN UMBRELLA FORM AGGREGATE $15000000
WORKERS COMPENSATION AND
EMPLOYERS' LIABILITY
A THE PROPRIETOR/
PARTNERS/EXECUTIVE __ INCL 35305455 1/07/96 1/07/97 STATUTORY LIMITS
OFFICERS ARE: __ EXCL EACH ACCIDENT $ 500000
OTHER THAN UMBRELLA FORM DISEASE - POLICY LIMIT $ 500000
DISEASE - EACH EMPLOYEE $ 500000
OTHER
B DIRECTORS AND 81389432 1/07/96 1/07/97 $5,000,000
OFFICERS
</TABLE>
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
CERTIFICATE HOLDER CANCELLATION
PNC Bank SHOULD ANY OF THE ABOVE DESCRIBED
POLICIES BE CANCELLED BEFORE THE
EXPIRATION DATE THEREOF, THE ISSUING
COMPANY WILL ENDEAVOR TO MAIL 60 DAYS
WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO MAIL
SUCH NOTICE SHALL IMPOSE NO OBLIGATION
OR LIABILITY OF ANY KIND UPON THE
COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE 000550000
/S/_________________________
<PAGE>
NAMED INSURED
Right Management Consultants, Inc.
Right Associates (Belgium), Inc.
Right Associates (France), Inc.
Conviction Right France, SA
The THinc Consulting Group International (UK), Ltd.
<PAGE>
EVIDENCE OF PROPERTY INSURANCE DATE(MM/DD/YY)
12/18/96
THIS IS EVIDENCE THAT INSURANCE AS IDENTIFIED BELOW HAS BEEN ISSUED, IS IN
FORCE, AND CONVEYS ALL THE RIGHTS AND PRIVILEGES AFFORDED UNDER THE POLICY.
PRODUCER COMPANY
CLAIR ODELL GROUP Great Northern Insurance Co.
120 WEST GERMANTOWN PIKE
PLYMOUTH MEETING,
PA 19462
610-825-5555
CODE SUB-CODE
INSURED LOAN NUMBER POLICY NUMBER
Right Management Consultants 3536455
Inc., etal (see attached) EFFECTIVE DATE EXPIRATION DATE
1818 Market Street, 33rd Floor 1/07/96 1/07/97
Philadelphia
PA 19103-3614
THIS REPLACES PRIOR EVIDENCE DATED:
PROPERTY INFORMATION
LOCATION/DESCRIPTION
COVERAGE INFORMATION
COVERAGE/PERILS/FORMS AMOUNT OF INSURANCE DEDUCTIBLE
Bldg/P.Prop/Bus.Inc/Ex.Exp. 3,000,000 1,000
Special Causes of Loss
REMARKS (including Special Conditions)
CANCELLATION
THE POLICY IS SUBJECT TO THE PREMIUMS, FORMS, AND RULES IN EFFECT FOR EACH
POLICY PERIOD. SHOULD THE POLICY BE TERMINATED, THE COMPANY WILL GIVE THE
ADDITIONAL INTEREST IDENTIFIED BELOW 60 Days WRITTEN NOTICE, AND WILL SEND
NOTIFICATION OF ANY CHANGES TO THE POLICY THAT WOULD AFFECT THAT INTEREST, IN
ACCORDANCE WITH THE POLICY PROVISIONS OR AS REQUIRED BY LAW.
ADDITIONAL INTEREST NATURE OF INTEREST
NAME AND ADDRESS MORTGAGEE ADDITIONAL INSURED
LOSS PAYEE (OTHER)
PNC BANK
SIGNATURE OF AUTHORIZED AGENT OR COMPANY
/S/ ____________________ 000550
<PAGE>
NAMED INSURED
Right Management Consultants, Inc.
Right Associates (Belgium), Inc.
Right Associates (France), Inc.
Conviction Right France, SA
The THinc Consulting Group International (UK), Ltd.
<PAGE>
SCHEDULE 3.20
MATERIAL CONTRACTS
<PAGE>
Right Management Consultants, Inc.
Articles, Contracts, Agreements or Compensatory Plans
As of December 19, 1996
1. Company's Articles of Incorporation, together with all amendments thereto,
(incorporated by reference to the Company's Form S-1 (File No. 33-9034),
filed November 12, 1986).
2. Company's By-Laws (incorporated by reference to the Company's report on
Form 10-K for the fiscal year ended December 31, 1988, filed March 30,
1989).
3. Agreement among Right Management Consultants, Inc. and Right Human
Resources Consultants, Inc., dated December 26, 1984 (incorporated by
reference to the Company's Form S-1 (File No. 33-9034), filed September 25,
1986).
4. Agreement among Right Management Consultants, Inc. and Midwest Reemployment
Consultants, Inc. dated February 15, 1985 (incorporated by reference the
Company's Form S-1 (File No. 33-9034), filed September 25, 1986).
5. Agreement among Right Management Consultants, Inc. and Human Resources,
Inc., dated December 26, 1984 (incorporated by reference to the Company's
Form S-1 (File No. 33-9034), filed September 25, 1986).
6. Form of Incentive Stock Option Plan, adopted by the Company's shareholders
on November 24, 1986, to be effective as of September 8, 1986 (incorporated
by reference to the Company's Form S-1 (File No. 33-9034), filed November
12, 1986).
7. Non-Qualified Stock Option Plan, adopted, as of April 30, 1984
(incorporated by reference to the Company's Form S-1 (File No. 33-9034),
filed September 25, 1986).
8. Shareholders' Agreement (incorporated by reference to the Company's Form
S-1 (File No. 33-9034), filed November 12, 1986).
9. Savings Plan (incorporated by reference to the Company's Form S-1 (File No.
33-9034), filed September 25, 1986).
10. Amendment to Employment Agreement between Right Management Consultants,
Inc. and Frank P. Louchheim, dated January 1, 1992 (incorporated by
reference to the Company's report on Form 10-K for the fiscal year ended
December 31, 1991, filed March 30, 1992).
11. Supplemental Deferred Compensation Plan for Richard J. Pinola, dated July
1, 1992 (incorporated by reference to the Company's report on Form 10-K for
the fiscal year ended December 31, 1991, filed March 30, 1992).
12. Further Amendment to Amended and Restated Employment Agreement between
Right Management Consultants, Inc. and Frank P. Louchheim dated February
16, 1993.
13. Stock Option Plan (incorporated by reference as Exhibit 4 filed in the
Company's report on Form S-8 (File No. 33-58698), filed February 23, 1993).
14. Purchase Agreement dated September 1, 1994 by and between Registrant and
Jannotta, Bray and Right Associates, Inc. (Schedules omitted) (incorporated
by reference to the Company's Form 8-K, dated September 1, 1994).
15. Employment Agreement dated September 1, 1994 by and between Registrant and
Joseph E. Jannotta, Jr. (incorporated by reference to the Company's Form
8-K, dated September 1, 1994).
16. Employment Agreement dated September 1, 1994 by and between Registrant and
Harold B. Bray, Jr. (incorporated by reference to the Company's Form 8-K,
dated September 1, 1994).
17. Employment Agreement dated September 1, 1994 by and between Registrant and
David Maguire (incorporated by reference to the Company's Form 8-K, dated
September 1, 1994).
18. Restrictive Covenant dated September 1,1994 by and between Registrant and
Joseph E. Jannotta, Jr. (incorporated by reference to the Company's Form
8-K, dated September 1, 1994).
19. Restrictive Covenant dated September 1,1994 by and between Registrant and
Harold B. Bray, Jr. (incorporated by reference to the Company's Form 8-K,
dated September 1, 1994).
20. Amended and Restated Revolving Credit and Term Loan Agreement between Right
Management Consultants, Inc., et al and PNC Bank, National Association,
dated June 30, 1994, with modifications dated August 26, 1994 and November
16, 1994.
<PAGE>
21. $5,000,000 Term Note between Right Management Consultants, Inc. and its
wholly-owned subsidiaries and PNC Bank, National Association, dated August
26, 1994.
22. Lease Agreement between Metropolitan Life Insurance Company and Right
Management Consultants, Inc., dated October 18, 1983 and amended on August
12, 1986; November 6, 1987; and July 15, 1991.
23. Purchase Agreement dated February 15, 1995 by and between Registrant and
Worth Associates, Inc. and Robert A. Fish (incorporated by reference to the
Company's report on Form 10-Q for the quarter ended March 15, 1595, filed
May 15, 1995).
24. 1993 Stock Incentive Plan, as amended (incorporated by reference to the
Company's Proxy Statement for Annual Meeting of Shareholders held on May 4,
1995).
25. Director's Stock Option Plan of the Company (incorporated by reference to
the Company's Proxy Statement for Annual Meeting of Shareholders held on
May 4, 1995).
26. Fifth Modification Agreement to the June 30, 1994 Amended and Restated
Revolving Credit and Term Loan Agreement between Right Management
Consultants, Inc., et al and PNC Bank, National Association, dated August
31, 1995 (incorporated by reference to the Company's report on Form 10-Q
for the quarter ended September 30, 1995, filed November 14, 1995).
27. Employment Agreement dated December 12, 1995 by and between Right
Management Consultants, Inc. and Richard J. Pinola.
28. Employment Agreement and Supplemental Deferred Compensation Plan dated
December 12, 1995 by and between Right Management Consultants, Inc. and
Joseph T. Smith.
29. Purchase Agreement between PTR Right Acquisition Co. Inc. and Marti Smye,
Margaret Smith, Richard Zuliani, Margaret Smith Family Trust, Richard
Zuliani Family Trust and People Tech Consulting, Inc. dated April 10, 1996
(incorporated by reference to the Company's report on Form 10-Q for the
quarter ended March 31, 1996, filed May 14, 1996).
30. Employee Stock Purchase Plan of the Company (incorporated by reference as
Exhibit 4 filed in the Company's report on Form S-8, filed June 18, 1996).
31. Amendment to 1993 Stock Incentive Plan to increase the number of available
shares by 600,000 (incorporated by reference to the Company's report on
Form S-8, filed July 11, 1996).
<PAGE>
SCHEDULE 6.3
EXISTING INDEBTEDNESS
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
EXISTING INDEBTEDNESS AS OF 12/19/96
(US DOLLARS)
<TABLE>
<CAPTION>
9/30/96 11/30/96 12/19/96
<S> <C> <C> <C>
PNC Bank
Bank term loan, payable in 60 equal monthly
principal installments of $83,333 through August 31, 1999,
bearing interest at 7.30% per annum (Janotta Bray) $2,916,667 $2,750,000 $2,750,000
Bank term loan, payable in 48 equal monthly
principal installments of $18,750 through December 8, 1996,
bearing interest at 6.96% per annum (Boston) 56,250 18,750 --
Bank term loan, payable in 48 equal monthly
principal installments of $12,500 through March 31, 1997,
bearing interest at 5.97% per annum (Atlanta) 75,000 50,000 --
First Union Bank
Commercial loan, with interest based on 30 day LIBOR
plus 75 basis points (People Tech Acquisition) 2,960,266 2,960,266 2,960,266
---------- ---------- ----------
Total Indebtedness $6,008,183 $5,799,016 $5,710,266
========== ========== ==========
</TABLE>
<PAGE>
SCHEDULE 6.9
CONTINGENT OBLIGATIONS
<PAGE>
RIGHT MANAGEMENT CONSULTANTS, INC.
EXISTING CONTINGENT OBLIGATIONS AS OF 12/19/96
(US DOLLARS)
Obligations payable to third parties in
connection with acquisitions,
non-interest-bearing and discounted at
7.5%-10% per annum, due through 1999,
estimated and contingent on future
operating results of regions where
acquired businesses are operating $2,183,826
==========
<TABLE>
<CAPTION>
Detail:
Contingent Payment
Acquisition Date Debt Date
<S> <C> <C> <C>
Brussels Jan-94 $45,848 2/97
Vancouver Jan-94 90,708 3/97
Carolina Jun-94 324,513 7/97
Cupertino Jan-95 1,180,977 1/97 & 1/98
LM&P Apr-95 541,780 2/97, 2/98 & 4/98
-----------
Total $2,183,826
==========
</TABLE>
<PAGE>
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$ Philadelphia, Pennsylvania
December 20, 1996
FOR VALUE RECEIVED, the undersigned, RIGHT MANAGEMENT CONSULTANTS,
INC., RIGHT ASSOCIATES-GOVERNMENT SERVICES, INC., RIGHT ACQUISITION CO.,
CONVICTION RIGHT FRANCE, S.A., RIGHT ASSOCIATES BELGIUM, INC., RIGHT ASSOCIATES
FRANCE, INC., RIGHT ASSOCIATES & CO., SNC, RIGHT ASSOCIATES, LTD., RIGHT
ASSOCIATES, INC., RIGHT ASSOCIATES LICENSE, INC., R.M.C. & CO., SNC and THE
THinc CONSULTING GROUP INTERNATIONAL (U.K.), LTD. (collectively, the
"Borrowers") hereby jointly and severally unconditionally promise to pay to the
order of __________________________________ (the "Bank") at the office of PNC
BANK, NATIONAL ASSOCIATION (the "Agent") located at 1600 Market Street,
Philadelphia, Pennsylvania 19103, on the Termination Date, the principal sum of
(a) Dollars ($__________), or, if less (b) the aggregate unpaid principal amount
of all Revolving Credit Loans made by the Bank to the Borrowers pursuant to the
Credit Agreement. The Borrowers further agree to pay interest accrued on the
unpaid principal amount outstanding hereunder from time to time from the date
hereof at such office at the rates and on the dates specified in the Credit
Agreement together with all other costs, fees and expenses as provided in the
Credit Agreement. All such payments of principal and interest shall be made in
the currency in which the respective Revolving Credit Loans were made and (i) if
in Dollars, in lawful money of the United States of America in immediately
available funds, or (ii) if in any other currency, in such funds as may then be
customary for the settlement of international transactions in such other
currency.
All borrowings evidenced by this Revolving Credit Note, the length of
each Interest Period with respect thereto and all payments and prepayments of
the principal hereof and the respective dates thereof shall be endorsed by the
holder hereof on the schedule attached hereto and made a part hereof, or on a
continuation thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, however, that the failure of the holder
hereof to make such a notation or any error in such a notation shall not in any
manner affect the obligations of the Borrowers to make payments of principal and
interest or other amounts in accordance with the terms of this Revolving Credit
Note and the Credit Agreement.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Credit Agreement, dated as of December 20, 1996, among the
Borrowers, the banks party thereto and PNC Bank, National Association, as Agent
(as the same may be amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"). The Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for optional prepayment of the principal hereof
prior to the maturity hereof, for a higher rate of interest hereunder on past
due amounts and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified.
A-1
<PAGE>
All parties now and hereafter liable with respect to this Revolving
Credit Note, whether maker, principal, surety, guarantor, endorser or otherwise,
hereby waive presentment, demand, protest and notice of any kind. No failure to
exercise, and no delay in exercising, any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Credit Agreement. This Revolving Credit Note shall be governed
by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania.
RIGHT MANAGEMENT CONSULTANTS, INC.
RIGHT ASSOCIATES-GOVERNMENT
SERVICES, INC.
RIGHT ACQUISITION CO.
CONVICTION RIGHT FRANCE, S.A.
RIGHT ASSOCIATES BELGIUM, INC.
RIGHT ASSOCIATES FRANCE, INC.
RIGHT ASSOCIATES & CO., SNC
RIGHT ASSOCIATES, LTD.
RIGHT ASSOCIATES, INC.
RIGHT ASSOCIATES LICENSE, INC.
R.M.C. & CO., SNC
THE THinc CONSULTING GROUP
INTERNATIONAL (U.K.), LTD.
By:
Name:
Title:
A-2
<PAGE>
SCHEDULE TO
REVOLVING CREDIT NOTE
<TABLE>
<CAPTION>
Loans, Conversions and Payments
====================================================================================================================================
Amount of
Amount of Base Eurodollar
Rate Loans Loans Unpaid
Type of Loan Currency Currency and Converted to Converted to Principal
(Eurodollar or and Amount Amount of Eurodollar Base Rate Balance of Notation
Date Base Rate) of Loans Principal Repaid Loans Loans Loans Made By
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
====================================================================================================================================
</TABLE>
A-3
<PAGE>
EXHIBIT B
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of December 20,
1996 (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Right Management Consultants, Inc.,
Right Associates-Government Services, Inc., Right Acquisition Co., Conviction
Right France, S.A., Right Associates Belgium, Inc., Right Associates France,
Inc., Right Associates & Co., SNC, Right Associates, Ltd., Right Associates,
Inc., Right Associates License, Inc., R.M.C. & Co., SNC, The THinc Consulting
Group International (U.K.), Ltd. and the other borrowers from time to time party
thereto (collectively, the "Borrowers"), the banks from time to time party
thereto (the "Banks") and PNC Bank, National Association, as Agent for the Banks
(in such capacity, the "Agent"). Unless otherwise defined herein, terms defined
in the Credit Agreement are used herein with the same meanings.
_____________________ (the "Assignor") and _________________ (the "Assignee")
hereby agree as follows:
1. The Assignor hereby sells and assigns, without recourse and without
representation or warranty (other than as expressly provided herein), to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth on Schedule A
attached hereto (the "Effective Date"), the interests set forth on Schedule A
(the "Assigned Interest") in the Assignor's rights and obligations under the
Credit Agreement; provided, however, that such assignment shall be in an amount
not less than $10,000,000 (or such lesser amount as the Borrowers and the Agent
shall agree in their sole discretion).
2. From and after the Effective Date hereof, (A) such Assignee shall
be a party to the Credit Agreement and, to the extent of the interest assigned
by this Assignment and Acceptance Agreement, have the rights and obligations of
a Bank under the Credit Agreement and under the other Loan Documents, and (B)
the Assignor shall, to the extent of the interest assigned by this Assignment
and Acceptance Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance Agreement covering all or the remaining
portion of the Assignor's rights and obligations under the Credit Agreement and
the other Loan Documents, such Assignor shall cease to be a party to the Credit
Agreement but shall continue to be entitled to the benefits of Sections 2.16,
2.17, 2.18 and 9.5 (to the extent that such Assignor's entitlement to such
benefits arose out of its position as a Bank prior to this Assignment and
Acceptance Agreement) of the Credit Agreement, as well as to any Commitment Fees
accrued for its account and not yet paid). As provided in Section 9.6 of the
Credit Agreement and notwithstanding any other provision of this Assignment and
Acceptance Agreement, the consent of the Company shall not be required for any
assignment which occurs at any time when an Event of Default shall have occurred
and be continuing.
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3. The Assignor (i) warrants that it is the legal and beneficial owner
of the interest being assigned hereunder, free and clear of any adverse claim,
and (ii) except as set forth in (i) above, makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the other
Loan Documents, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant thereto, or the
financial condition of the Borrowers or any Subsidiary thereof or the
performance or observance by the Borrowers of any of their obligations under the
Credit Agreement or the other Loan Documents or any other instrument or document
furnished pursuant thereto.
4. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance Agreement, (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to subsections 5.1(a) and
(b) of the Credit Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance Agreement, (iii) will independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, make its own
credit decisions in taking or not taking action under the Credit Agreement and
the other Loan Documents, (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto,
and (v) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Credit Agreement and the other Loan
Documents are required to be performed by it as a Bank.
5. Following the execution of this Assignment and Acceptance Agreement
by the Assignor and Assignee, the following will be delivered to the Agent's
offices in Philadelphia, Pennsylvania: (i) an executed original hereof (together
with all attachments), (ii) the Revolving Credit Notes evidencing the Loans
included in the Assigned Interest, (iii) if the Assignee is organized under the
laws of any jurisdiction other than the United States or any state thereof, the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's exemption from withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement or such other
documents as are necessary to indicate that all such payments are subject to
such tax at a rate reduced by an applicable tax treaty, all duly completed and
executed by such Assignee, and (iv) a processing and recordation fee of $3,000.
6. Upon acceptance and recording of this Assignment and Acceptance
Agreement in accordance with the Credit Agreement, the Agent shall, from and
after the Effective Date, make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) (other than
on account of Commitment Fees accrued and not yet paid) to the Assignee whether
such amounts have accrued prior to the Effective Date or accrue subsequent to
the Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
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<PAGE>
7. This Assignment and Acceptance Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania.
The terms set forth above and on Schedule A attached hereto are hereby agreed to
as of the date hereof.
, as Assignor
By: ----------------------------------
Name:
Title:
, as Assignee
By: ----------------------------------
Name:
Title:
Accepted:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By: ----------------------------------
Name:
Title:
Consented to:
RIGHT MANAGEMENT CONSULTANTS, INC.,
as Borrowers' Representative
By: ----------------------------------
Name:
Title:
B-3
<PAGE>
Schedule A
to
Assignment and Acceptance
Agreement
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
____________________________________
____________________________________
Attention: _________________________
Telecopy: _________________________
Effective Date of
Assignment (may not be
fewer than 5 Business
Days after the date that
the Assignment and
Acceptance Agreement is
delivered to the Agent): ____________________
Principal Amount of Percentage of Revolving
Outstanding Revolving Credit Loans and
Credit Loans Assigned Commitment Assigned
%
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<PAGE>
EXHIBIT C
FORM OF
NOTICE OF BORROWING
PNC Bank, National Association,
as Agent for the
Banks referred to below
1600 Market Street, 22nd Floor
Philadelphia, PA 19103
Attention: ____________________
[Date]
Ladies and Gentlemen:
The undersigned, Right Management Consultants, Inc., as the Borrowers'
Representative, on behalf of Right Management Consultants, Inc., Right
Associates-Government Services, Inc., Right Acquisition Co., Conviction Right
France, S.A., Right Associates Belgium, Inc., Right Associates France, Inc.,
Right Associates & Co., SNC, Right Associates, Ltd., Right Associates, Inc.,
Right Associates License, Inc., R.M.C. & Co., SNC and The THinc Consulting Group
International (U.K.), Ltd. (collectively, the "Borrowers"), refers to the Credit
Agreement dated as of December 20, 1996 (as amended, modified, extended or
restated from time to time, the "Agreement"), among the Borrowers, the Banks
party thereto, and PNC Bank, National Association as Agent. Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Agreement. The Borrowers hereby give you notice pursuant to
Section 2.4 of the Agreement that they request a Revolving Credit Loan under the
Agreement, and in that connection set forth below the terms on which such
Revolving Credit Loan is requested to be made:
(A) Borrowing Date _____________________
(which is a Business Day)
(B) Principal Amount of
Revolving Credit Loan(s) (1) _____________________
(C) Interest rate basis (2) _____________________
(D) Currency (3) _____________________
(E) Interest Period and the
last day thereof (4) ____________________
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<PAGE>
Upon acceptance of any or all of the Loans made by the Banks in response to
this notice, the Borrowers shall be deemed to have represented and warranted
that the conditions to lending specified in Section 4.2 of the Agreement have
been satisfied.
Very truly yours,
RIGHT MANAGEMENT CONSULTANTS,
INC., as the Borrowers'
Representative
By: ________________________
Title:
- --------------------
(1) Dollar Equivalent of not less than $500,000 or a whole multiple of
$100,000 in excess thereof, for a Borrowing Tranche to which the
Eurodollar Rate applies.
(2) Eurodollar Loan or Base Rate Loan.
(3) Which shall be Dollars or an Optional Currency.
(4) Which shall be subject to the definition of "Interest Period" and end
not later than the Termination Date.
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<PAGE>
EXHIBIT D
FORM OF
JOINDER AND ASSUMPTION AGREEMENT
This Joinder and Assumption Agreement is made as of __________, 19__ by and
among ____________________, a ____________________ [corporation] [partnership]
(the "New Borrower"), the banks party to the Credit Agreement referred to below
(the "Banks") and PNC Bank, National Association, in its capacity as agent for
the Banks (the "Agent").
Background
Reference is made to (i) the Credit Agreement dated as of December 20,
1996, as the same has been made and may be modified, supplemented or amended
(the "Agreement") among Right Management Consultants, Inc. and certain of its
wholly-owned subsidiaries, as the Borrowers, the Banks and the Agent and (ii)
the Revolving Credit Notes issued by the Borrowers to Bank, as the same may be
modified, supplemented or amended (collectively, the "Notes"). Capitalized terms
defined in the Agreement are used herein as defined therein.
Agreement
For valuable consideration, the undersigned hereby agrees that effective as
of the date hereof it shall become, and shall be deemed to be, a party to and a
Borrower under the Agreement and each of the Notes and agrees that from the date
hereof and so long as the Commitments of the Banks shall remain outstanding and
until the payment in full of the Loans and the Notes and the performance of all
other obligations of the Borrowers thereunder, it shall perform, comply with and
be bound by each of the provisions of the Agreement and the Notes. Without
limiting the generality of the foregoing, the New Borrower hereby represents and
warrants that (i) it has heretofore received a true and correct copy of the
Agreement and the Notes (including any modifications thereof or supplements or
waivers thereto) as in effect on the date hereof, and (ii) each of the
representations and warranties set forth in Section 3 of the Agreement is true
and correct on and as of the date hereof as if made on and as of the date
hereof, and agrees that it will upon the Agent's request execute and deliver
such further documents and do and cause to be done such further acts or things
as the Agent may require to effect the foregoing joinder of the New Borrower.
IN WITNESS WHEREOF, the New Borrower has duly executed and delivered this
Joinder and Assumption Agreement as of the date and year first above written.
[___________________________]
By:___________________________
D-1
<PAGE>
Acknowledged:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:___________________________
Name:
Title:
D-2
<PAGE>
EXHIBIT E
December 20, 1996
TO: The Banks party to the Credit Agreement
referred to below and
PNC Bank, National Association,
as Agent
Ladies and Gentlemen:
We have acted as counsel to Right Management Consultants, Inc., a
Pennsylvania corporation, Right Associates-Government Services, Inc., a Virginia
corporation, Right Acquisition Co., a Delaware corporation, Conviction Right
France, S.A., a French corporation, Right Associates Belgium, Inc., a Delaware
corporation, Right Associates France, Inc., a Delaware corporation, Right
Associates & Co., SNC, a Belgian corporation, Right Associates, Ltd., a United
Kingdom corporation, Right Associates, Inc., a Delaware corporation, Right
Associates License, Inc., a Delaware corporation, R.M.C. & Co., SNC, a Belgian
corporation and The THinc Consulting Group International (U.K.), Ltd., a United
Kingdom corporation (collectively, the Borrowers") in connection with the
execution and delivery of the Credit Agreement, dated as of December 20, 1996
(the "Credit Agreement"), among the Borrower, certain banks (collectively, the
"Banks") and PNC Bank, National Association, as Agent, and the execution and
delivery by the Borrowers pursuant to the Credit Agreement of the Revolving
Credit Notes. This opinion is delivered to you pursuant to Section 4.1(e) of the
Credit Agreement. Terms defined in the Credit Agreement and not otherwise
defined herein shall have the meanings assigned to them in the Credit Agreement.
We have examined executed copies of the Credit Agreement (with its
exhibits) and the Revolving Credit Notes. We have also examined the articles or
certificate of incorporation or other charter documents, as the case may be, and
the by-laws, all as amended to date, of the Borrowers and such other documents
and instruments and have made such further inquiries as we have deemed
appropriate for purposes of this opinion. As to certain issues of fact, we have,
where such facts were not independently known to us, relied with your consent
and without independent investigation upon the representations and warranties
made by the Borrowers in the Credit Agreement and upon certificates of officers
of the Borrowers dated December 20, 1996.
On the basis of the foregoing, we are of the opinion that:
1. Each of the Borrowers is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the business conducted by it
requires such qualification.
2. Each of the Borrowers has the corporate or other power and authority to
own or lease and operate its properties and assets, to conduct the business in
which it is now engaged, and
E-1
<PAGE>
December ___, 1996
Page 2
to execute and deliver and perform its obligations under the Credit Agreement
and the Revolving Credit Notes. The execution, delivery and performance of the
Credit Agreement and the Revolving Credit Notes by the Borrowers have been duly
authorized by all necessary corporate or other action on the part of the
Borrowers.
3. The Credit Agreement and the Revolving Credit Notes delivered on the
Closing Date have each been duly executed and delivered by the Borrowers and are
valid and binding obligations of the Borrowers, enforceable against the
Borrowers in accordance with their respective terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws or equitable principles affecting the
enforcement of creditors' rights generally.
4. No authorization, approval or consent of, or filing or registration
with, any governmental or regulatory body of the United States of America, the
Commonwealth of Pennsylvania or the [States of __________________________] is
required in connection with the execution, delivery and performance by the
Borrowers of the Credit Agreement and the Revolving Credit Notes or for any
borrowings by the Borrowers under the Credit Agreement.
5. Neither the execution and delivery by the Borrowers of the Credit
Agreement or the Revolving Credit Notes nor the performance and observance by
the Borrowers of their obligations thereunder, will conflict with, or result in
any violation or breach by the Borrowers of or constitute a default under (or an
event which, with or without due notice or lapse of time or both, would
constitute a default under), or accelerate the performance required by, or
result in the creation of any Lien upon any of the properties or assets of any
of the Borrowers under any of the terms, conditions or provisions of or require
any filing or consent under (i) its certificate or articles of incorporation or
other charter documents or by-laws, (ii) any existing law, statute or
governmental regulation applicable to the Borrowers, or (iii) to our knowledge,
any judgment, order, decree, writ or injunction of any court, arbitrator or
governmental department, commission, agency or instrumentality or any indenture,
contract, guaranty or other agreement or instrument to which any of the
Borrowers is a party or by which it or its properties may be bound or affected.
6. To our knowledge, there is no action, suit, proceeding or investigation
at law or in equity, before any court, public board or body, pending or
threatened against or affecting any of the Borrowers wherein an unfavorable
decision, ruling or finding would, individually or collectively, have a Material
Adverse Effect.
E-2
