SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 4, 1997
MAPICS, Inc.
(Exact Name of Registrant as Specified in Charter)
MASSACHUSETTS 0-18674 04-2711580
(State of Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
5775-D Glenridge Drive, Atlanta, Georgia 30328
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (404) 705-3000
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Item 5. Other Events.
On August 4, 1997, MAPICS, Inc. (the "Company") entered into a secured
revolving credit and term loan facility in the aggregate amount of $30 million
with BankBoston, N.A., as agent (the "Agent") for certain other participating
lenders (the "Credit Facility"). The Credit Facility provides for a $15 million
term loan and a $15 million revolving line of credit. The Company initially
borrowed $500,000 pursuant to the revolving line of credit and $15 million under
the term loan facility. The Company has used the combined loan proceeds to
refinance a portion of the Company's existing indebtedness. The remaining
availability under the revolving line of credit will be used for working capital
and general corporate purposes. The term loan shall be repaid in eight
consecutive quarterly payments of $1,250,000 commencing September 30, 1998 and
is subject to partial prepayment under certain circumstances, as set forth in
the Credit Facility. The revolving line of credit shall be repaid in full on
June 30, 2000. Both the term loan facility and revolving line of credit shall
bear interest at a base rate or eurodollar rate plus a variable margin based on
certain financial covenants of the Company, as set forth in the Credit Facility.
The Company has granted a security interest in substantially all of its
assets to the Agent and the other participating lenders to secure its
obligations under the Credit Facility.
A copy of the Revolving Credit and Term Loan Agreement dated as of August
4, 1997 by and among the Company, BankBoston, N.A., the other lending
institutions set forth on Schedule I thereto and BankBoston, N.A. as Agent, is
filed as Exhibit 10.1 to this report and is incorporated herein by this
reference.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired. None.
-----------------------------------------
(b) Pro Forma Financial Information. None.
-------------------------------
(c) Exhibits.
--------
Exhibit No. Description
- ----------- -----------
10.1 Revolving Credit and Term Loan Agreement dated as of August 4,
1997 among MAPICS, Inc., BankBoston, N.A. and the other lending
institutions set forth on Schedule 1 thereto, and BankBoston,
N.A. as agent
10.2 Security Agreement dated August 4, 1997 between MAPICS, Inc. and
BankBoston, N.A., as agent
10.3 Revolving Credit Note in the principal amount of $15,000,000
dated August 4, 1997
10.4 Term Note in the principal amount of $15,000,000 dated August 4,
1997
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<PAGE>
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.
MAPICS, INC.
Date: August 12, 1997 By: /s/ William J. Gilmour
----------------------------
William J. Gilmour
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.1 Revolving Credit and Term Loan Agreement dated as of August 4,
1997 among MAPICS, Inc., BankBoston, N.A. and the other lending
institutions set forth on Schedule 1 thereto, and BankBoston,
N.A. as agent
10.2 Security Agreement dated August 4, 1997 between MAPICS, Inc. and
BankBoston, N.A., as agent
10.3 Revolving Credit Note in the principal amount of $15,000,000 dated
August 4, 1997
10.4 Term Note in the principal amount of $15,000,000 dated
August 4, 1997
================================================================================
EXHIBIT 10.1
------------
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
Dated as of August 4, 1997
among
MAPICS, INC.
BANKBOSTON, N.A.
and the other lending institutions
set forth on Schedule 1 hereto
and
BANKBOSTON, N.A. as Agent
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TABLE OF CONTENTS
<TABLE>
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1. DEFINITIONS AND RULES OF INTERPRETATION. ........................................................1
1.1. Definitions. .........................................................................1
1.2. Rules of Interpretation. ............................................................17
2. THE REVOLVING CREDIT FACILITY. .................................................................19
2.1. Commitment to Lend. .................................................................19
2.2. Commitment Fee. .....................................................................19
2.3. Reduction of Total Commitment. ......................................................19
2.4. The Revolving Credit Notes. .........................................................20
2.5. Interest on Revolving Credit Loans. .................................................20
2.6. Requests for Revolving Credit Loans. ................................................20
2.7. Conversion Options. .................................................................21
2.7.1. Conversion to Different Type of Revolving Credit Loan. ...................21
2.7.2. Continuation of Type of Revolving Credit Loan. ...........................21
2.7.3. Eurodollar Rate Loans. ...................................................22
2.8. Funds for Revolving Credit Loan. ....................................................22
2.8.1. Funding Procedures. ......................................................22
2.8.2. Advances by Agent. .......................................................22
2.9. Change in Borrowing Base. ...........................................................23
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. .......................................................23
3.1. Maturity. ...........................................................................23
3.2. Mandatory Repayments of Revolving Credit Loans. .....................................23
3.3. Optional Repayments of Revolving Credit Loans. ......................................24
4. THE TERM LOAN. .................................................................................24
4.1. Commitment to Lend. .................................................................24
4.2. The Term Notes. .....................................................................24
4.3. Repayments of the Term Loan. ........................................................25
4.3.1 Schedule of Installment Payments of Principal of Term Loan. ...............25
4.3.2 Proceeds. .................................................................25
4.4. Optional Prepayment of Term Loan. ...................................................25
4.5. Interest on Term Loan. ..............................................................25
4.5.1. Interest Rates. ..........................................................25
4.5.2. Notification by Borrower. ................................................26
4.5.3. Amounts, etc. ............................................................26
5. LETTERS OF CREDIT. .............................................................................26
5.1. Letter of Credit Commitments..........................................................26
5.1.1. Commitment to Issue Letters of Credit. ...................................26
5.1.2. Letter of Credit Applications. ...........................................27
5.1.3. Terms of Letters of Credit. ..............................................27
5.1.4. Reimbursement Obligations of Banks. ......................................27
5.1.5. Participations of Banks. .................................................28
5.2. Reimbursement Obligation of the Borrower. ...........................................28
5.3. Letter of Credit Payments. ..........................................................28
5.4. Obligations Absolute. ...............................................................29
5.5. Reliance by Issuer. .................................................................29
5.6. Letter of Credit Fee. ...............................................................30
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6. CERTAIN GENERAL PROVISIONS. ....................................................................30
6.1. [Reserved]6.2.........................................................................30
6.2. [Reserved]6.3.........................................................................30
6.3. Funds for Payments. .................................................................30
6.3.1. Payments to Agent. .......................................................30
6.3.2. No Offset, etc. ..........................................................30
6.4. Computations. .......................................................................31
6.5. Inability to Determine Eurodollar Rate. .............................................31
6.6. Illegality. .........................................................................32
6.7. Additional Costs, etc. ..............................................................32
6.8. Capital Adequacy. ...................................................................33
6.9. Certificate. ........................................................................34
6.10. Indemnity. .........................................................................34
6.11. Interest After Default. ............................................................34
6.11.1. Overdue Amounts. ........................................................34
6.11.2. Amounts Not Overdue. ....................................................34
7. COLLATERAL SECURITY AND GUARANTIES. ............................................................34
7.1. Security of Borrower. ...............................................................34
7.2. Guaranties and Security of Domestic Subsidiaries. ...................................35
8. REPRESENTATIONS AND WARRANTIES. ................................................................35
8.1. Corporate Authority. ................................................................35
8.1.1. Incorporation; Good Standing. ............................................35
8.1.2. Authorization. ...........................................................35
8.1.3. Enforceability. ..........................................................35
8.2. Governmental Approvals. .............................................................36
8.3. Title to Properties; Leases. ........................................................36
8.4. Financial Statements and Projections. ...............................................36
8.4.1. Fiscal Year. .............................................................36
8.4.2. Financial Statements. ....................................................36
8.4.3. Projections. .............................................................36
8.5. No Material Changes, etc. ...........................................................37
8.6. Franchises, Patents, Copyrights, etc. ...............................................37
8.7. Litigation. .........................................................................37
8.8. No Materially Adverse Contracts, etc. ...............................................37
8.9. Compliance with Other Instruments, Laws, etc. .......................................38
8.10. Tax Status. .........................................................................38
8.11. No Event of Default. ................................................................38
8.12. Holding Company and Investment Company Acts. ........................................38
8.13. Absence of Financing Statements, etc. ...............................................38
8.14. Perfection of Security Interest. ....................................................38
8.15. Certain Transactions. ...............................................................39
8.16. Employee Benefit Plans. .............................................................39
8.16.1. In General. .............................................................39
8.16.2. Terminability of Welfare Plans. .........................................39
8.16.3. Guaranteed Pension Plans. ...............................................39
8.16.4. Multiemployer Plans. ....................................................40
8.17. Use of Proceeds. ....................................................................40
8.17.1. General. ................................................................40
8.17.2. Regulations U and X. ....................................................40
8.17.3. Ineligible Securities. ..................................................40
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8.18. Environmental Compliance. ..........................................................41
8.19. Subsidiaries, etc. .................................................................42
8.20. Bank Accounts. .....................................................................42
8.21. Additional Representations. ........................................................42
8.22. Disclosure. ........................................................................43
9. AFFIRMATIVE COVENANTS OF THE BORROWER. .........................................................43
9.1. Punctual Payment. ...................................................................43
9.2. Maintenance of Office. ..............................................................43
9.3. Records and Accounts. ...............................................................43
9.4. Financial Statements, Certificates and Information. .................................44
9.5. Notices. ............................................................................45
9.5.1. Defaults. ................................................................45
9.5.2. Environmental Events. ....................................................45
9.5.3. Notification of Claim against Collateral. ................................46
9.5.4. Notice of Litigation and Judgments. ......................................46
9.6. Corporate Existence; Maintenance of Properties. .....................................46
9.7. Insurance. ..........................................................................47
9.8. Taxes. ..............................................................................47
9.9. Inspection of Properties and Books, etc. ............................................47
9.9.1. General. .................................................................47
9.9.2. Collateral Reports. ......................................................47
9.9.3. Environmental Assessments. ...............................................48
9.9.4. Communications with Accountants. .........................................48
9.10. Compliance with Laws, Contracts, Licenses, and Permits. ............................48
9.11. Employee Benefit Plans. ............................................................49
9.12. Use of Proceeds. ...................................................................49
9.13. Bank Accounts. .....................................................................49
9.14. New Guarantors. ....................................................................49
9.15. Copyright Registration. ............................................................49
9.16. Further Assurances. ................................................................49
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ...................................................50
10.1. Restrictions on Indebtedness. ......................................................50
10.2. Restrictions on Liens. .............................................................50
10.3. Restrictions on Investments. .......................................................52
10.4. Distributions. .....................................................................53
10.5. Merger, Consolidation and Disposition of Assets. ...................................53
10.5.1. Mergers and Acquisitions. ...............................................53
10.5.2. Disposition of Assets. ..................................................53
10.6. Sale and Leaseback. ................................................................53
10.7. Compliance with Environmental Laws. ................................................53
10.8. Subordinated Debt. .................................................................54
10.9. Employee Benefit Plans. ............................................................54
10.10. Business Activities. ..............................................................54
10.11. Fiscal Year ........................................................................54
10.12. Transactions with Affiliates. .....................................................54
10.13. Upstream Limitations. .............................................................55
11. FINANCIAL COVENANTS OF THE BORROWER. ..........................................................55
11.1. Leverage Ratio. ....................................................................55
11.2. Consolidated Operating Cash Flow to Debt Service. ..................................55
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11.3. Profitable Operations. .............................................................55
11.4. Quick Ratio. .......................................................................55
11.5. Leases. ............................................................................55
12. CLOSING CONDITIONS. ...........................................................................56
12.1. Loan Documents. ....................................................................56
12.2. Certified Copies of Charter Documents. .............................................56
12.3. Corporate, Action. .................................................................56
12.4. Incumbency Certificate. ............................................................56
12.5. Validity of Liens. .................................................................56
12.6. Perfection Certificates and UCC Search Results. ....................................56
12.7. Certificates of Insurance. .........................................................57
12.8. Agency Account Agreements. .........................................................57
12.9. Borrowing Base Report. .............................................................57
12.10. Accounts Receivable Aging Report. .................................................57
12.11. Solvency Certificate. .............................................................57
12.12. Opinion of Counsel. ...............................................................57
12.13. Disbursement Instructions. ........................................................57
13. CONDITIONS TO ALL BORROWINGS. .................................................................57
13.1. Representations True; No Event of Default. .........................................58
13.2. No Legal Impediment. ...............................................................58
13.3. Governmental Regulation. ...........................................................58
13.4. Proceedings and Documents. .........................................................58
13.5. Borrowing Base Report. .............................................................58
13.6. Commercial Finance Exam. ...........................................................58
14. EVENTS OF DEFAULT; ACCELERATION; ETC. .........................................................59
14.1. Events of Default and Acceleration. ................................................59
14.2. Termination of Commitments. ........................................................62
14.3. Remedies. ..........................................................................62
14.4. Distribution of Collateral Proceeds. ...............................................63
15. SETOFF. .......................................................................................64
16. THE AGENT. ....................................................................................64
16.1. Authorization. .....................................................................64
16.2. Employees and Agents. ..............................................................65
16.3. No Liability. ......................................................................65
16.4. No Representations. ................................................................65
16.4.1. General. ................................................................65
16.4.2. Closing Documentation, etc. .............................................66
16.5. Payments. ..........................................................................66
16.5.1. Payments to Agent. ......................................................66
16.5.2. Distribution by Agent. ..................................................66
16.5.3. Delinquent Banks. .......................................................67
16.6. Holders of Notes. ..................................................................67
16.7. Indemnity. .........................................................................67
16.8. Agent as Bank. .....................................................................68
16.9. Resignation. .......................................................................68
16.10. Notification of Defaults and Events of Default. ...................................68
16.11. Duties in the Case of Enforcement. ................................................68
17. EXPENSES AND INDEMNIFICATION. .................................................................69
17.1. Expenses. ..........................................................................69
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17.2. Indemnification. ...................................................................69
17.3. Survival. ..........................................................................70
18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. ................................................70
18.1. Sharing of Information with Section 20 Subsidiary. .................................70
18.2. Confidentiality. ...................................................................70
18.3. Prior Notification. ................................................................71
18.4. Other. .............................................................................71
19. SURVIVAL OF COVENANTS, ETC. ...................................................................71
20. ASSIGNMENT AND PARTICIPATION. .................................................................72
20.1. Conditions to Assignment by Banks. .................................................72
20.2. Certain Representations and Warranties; Limitations; Covenants. ....................72
20.3. Register. ..........................................................................73
20.4. New Notes. .........................................................................74
20.5. Participations. ....................................................................74
20.6. Disclosure. ........................................................................74
20.7. Assignee or Participant Affiliated with the Borrower. ..............................75
20.8. Miscellaneous Assignment Provisions. ...............................................75
20.9. Assignment by Borrower. ............................................................76
21. NOTICES, ETC. .................................................................................76
22. GOVERNING LAW. ................................................................................76
23. HEADINGS. .....................................................................................77
24. COUNTERPARTS. .................................................................................77
25. ENTIRE AGREEMENT, ETC. ........................................................................77
26. WAIVER OF JURY TRIAL. .........................................................................77
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. ...........................................................78
28. SEVERABILITY. .................................................................................78
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REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
-------------------
This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of August 4, 1997,
by and among MAPICS, INC. (the "Borrower"), a Massachusetts corporation having
its principal place of business at 5775-D Glenridge Drive, Atlanta, Georgia
30328 (formerly known as Marcam Corporation), BANKBOSTON, N.A. and the other
lending institutions listed on Schedule 1 hereto and BANKBOSTON, N.A. as agent
for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth in
this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Accounts Receivable. All rights of the Borrower or any of its Subsidiaries
which are party to a Security Agreement to payment for goods sold, leased,
licensed or otherwise marketed in the ordinary course of business or services
rendered in the ordinary course of business and all sums of money or other
proceeds due thereon pursuant to transactions with account debtors, except for
that portion of the sum of money or other proceeds due thereon that relate to
sales, use or property taxes in conjunction with such transactions, recorded on
books of account in accordance with generally accepted accounting principles.
Adjustment Date. The first day of the month immediately following the month
in which a Compliance Certificate is to be delivered by the Borrower pursuant to
ss.9.4(d).
Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agency Account Agreement. See ss.9.14.1.
Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
Agent's Special Counsel. Bingham, Dana & Gould LLP or such other counsel as
may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "Rate Adjustment
Period"), the Applicable Margin shall be the applicable margin set forth below
with respect
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to the Borrower's Leverage Ratio, as determined for the fiscal period of the
Borrower and its Subsidiaries ending immediately prior to the applicable Rate
Adjustment Period.
- --------------------------------------------------------------------------------
Base Rate Eurodollar Letter of
Loans Rate Loans Credit Fee
Tier Leverage Ratio (basis pts) (basis pts) (basis pts)
- --------------------------------------------------------------------------------
1 Less than 2.00:1.00 25 175 175
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2 Less than 2.50:1.00 50 200 200
but greater than or
equal to 2.00:1.00
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3 Less than 3.00:1.00 75 225 225
but greater than or
equal to 2.50:1.00
- --------------------------------------------------------------------------------
4 Equal to or greater 150 250 250
than 3.00:1.00
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Notwithstanding the foregoing, (a) Loans outstanding and Letter of Credit
Fees payable during the period commencing on the Closing Date through the date
immediately preceding the first Adjustment Date to occur after the fiscal
quarter ending September 30, 1997, the Applicable Margin shall be a Tier 2, and
(b) if the Borrower fails to deliver any Compliance Certificate pursuant to
ss.9.4(d) hereof then, for the period commencing on the next Adjustment Date to
occur subsequent to such failure through the date immediately following the date
on which such Compliance Certificate is delivered, the Applicable Margin shall
be the highest Applicable Margin set forth above.
Asset Sale. Any one or series of related transactions on which any Person
conveys, sells, transfers or otherwise disposes of, directly or indirectly, any
of its properties, businesses or assets (including the sale or issuance of
capital stock of any Subsidiary other than to the Borrower or any Subsidiary)
whether owned on the Closing Date or thereafter acquired.
Assignment and Acceptance. See ss.20.1.
Balance Sheet Date. March 31, 1997.
Banks. BKB and the other lending institutions listed on Schedule 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to ss.20.
Base Rate. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
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Base Rate Loans. Revolving Credit Loans and all or any portion of the Term
Loan bearing interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A. a national banking association, in its individual
capacity.
BKB Concentration Account. See ss.9.14.1.
Borrower. As defined in the preamble hereto.
Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.9.4(h), as adjusted pursuant
to the provisions below, which is equal to eighty percent (80%) of Eligible
Accounts Receivable for which invoices have been issued and are payable.
The Agent may, in accordance with its standard commercial practices, from time
to time, upon five (5) days' prior notice to the Borrower, reduce the lending
formula with respect to Eligible Accounts Receivable to the extent that the
Agent determines that: (i) the dilution with respect of the Accounts Receivable
for any period has increased in any material respect or may be reasonably
anticipated to increase in any material respect above historical levels, or (ii)
the general creditworthiness of account debtors or other obligors of the
Borrower has declined in any material respect. In determining whether to reduce
the lending formula, the Agent may consider events, conditions, contingencies or
risks which are also considered in determining Eligible Accounts Receivable.
Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in substantially the form of Exhibit A
hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the Borrower
or any of its Subsidiaries in connection with (i) the purchase or lease by the
Borrower or any of its Subsidiaries of Capital Assets that would be required to
be capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles or (ii) the lease of any assets by the
Borrower or any of its Subsidiaries as lessee under any synthetic lease referred
to in clause (vi) of the definition of the term "Indebtedness" to the extent
that such assets would have been Capital Assets had the synthetic lease been
treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are
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required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
CERCLA. See ss.8.18(a).
Closing Date. The first date on which the conditions set forth in ss.12
have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower and
its Subsidiaries that are or are intended to be subject to the security
interests created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
Compliance Certificate. A certificate delivered pursuant to ss.9.4(d).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles; provided, however, that such terms shall mean and refer to the
accounts of MAPICS, Inc., combined in accordance with generally accepted
accounting principles on a basis consistent with the audited financial
statements of MAPICS, Inc. contained in the Borrower's Registration Statement on
Form S-3 (No. 333-26203) for all periods that include periods prior to July 30,
1997, unless and until the audited financial statements of the Borrower and its
Subsidiaries are subsequently presented as consolidated in accordance with
generally accepted accounting principles.
Consolidated Financial Obligations. With respect to any fiscal quarter, an
amount equal to the sum of all payments on Indebtedness that become due and
payable or that are to become due and payable during the such fiscal quarter
pursuant to any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party relating to the borrowing of money or the obtaining of
credit or in respect of any Capitalized Lease, or of any synthetic lease
referred to in clause (vi) of the definition of the term "Indebtedness." Demand
obligations shall be deemed to be due and payable during any fiscal quarter
during which such obligations are outstanding.
Consolidated Current Liabilities. All liabilities and other Indebtedness of
the Borrower and its Subsidiaries, excluding deferred revenue, on a consolidated
basis maturing on demand or within one (1) year from the date as of which
Consolidated Current Liabilities
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are to be determined, and such other liabilities as may properly be classified
as current liabilities in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
Consolidated Net Worth. The excess of (a) all assets of a Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles over (b) all liabilities of such Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, and all Indebtedness of such Person and its
Subsidiaries, whether or not so classified, less, to the extent otherwise
includable in the computations of Consolidated Net Worth, any subscriptions
receivable.
Consolidated Operating Cash Flow. For any period, an amount equal to (i)
EBITDA for such period, less (ii) the sum of (A) cash payments for all taxes
paid during such period, plus (B) Capital Expenditures made during such period
to the extent permitted by ss.11.6, plus (C) the portion of the costs of
software development required to be capitalized pursuant to FASB Statement No.
86.
Consolidated Quick Assets. All cash and Accounts Receivable of the Borrower
and its Subsidiaries on a consolidated basis that, in accordance with generally
accepted accounting principles, are properly classified as current assets,
provided that accounts receivable shall be included only if good and collectible
as determined by the Borrower in accordance with established practice
consistently applied and, with respect to such accounts receivable, only if
payable and outstanding not more than ninety (90) days after the date of the
shipment of goods or other transaction out of which any such account receivable
arose; and such notes and accounts receivable shall be taken at their face value
less reserves determined to be sufficient in accordance with generally accepted
accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of any Capitalized Lease, or any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness," and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with ss.2.7.
Copyright Mortgages. The several Copyright Mortgage and Security
Agreements, dated or to be dated on or prior to the Closing Date, made by the
Borrower and its domestic Subsidiaries, if any, in favor of the Agent and in
form and substance satisfactory to the Banks and the Agent.
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Credit Agreement. This Revolving Credit and Term Loan Agreement, including
the Schedules and Exhibits hereto.
Default. See ss.14.1.
Delinquent Bank. See ss.16.5.3.
DeMinimis Subsidiary. See ss.14.1 hereof.
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Distribution Agreement. The Distribution Agreement dated as of July 17,
1997 between the Borrower and Marcam Solutions, Inc.
Dollars or $. Dollars in lawful currency of the United States of America.
Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan or the Term Loan
is made or is to be made, and the date on which any Revolving Credit Loan is
converted or continued in accordance with ss.2.7 or all or any portion of the
Term Loan is converted or continued in accordance with ss.4.5(b).
Earnings Before Interest and Taxes. The consolidated earnings (or loss)
from the operations of the Borrower and its Subsidiaries for any period, after
all expenses and other proper charges but before payment or provision for any
income taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles.
EBITDA. With respect to any fiscal period, an amount equal to the sum of
(a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal
period, plus (b) in each case to the extent deducted in the calculation of such
Person's Consolidated Net Income and without duplication (i) amortization and
depreciation for such period, plus (ii) tax expense for such period, plus (iii)
Consolidated Total Interest Expense paid or accrued during such period, all as
determined in accordance with generally accepted accounting principles.
Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that the Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors or other
obligors that (A) are not Affiliates of the Borrower, (B)
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purchased or licensed the goods or services giving rise to the relevant Account
Receivable in an arm's length transaction, (C) are not insolvent or involved in
any case or proceeding, whether voluntary or involuntary, under any bankruptcy,
reorganization, arrangement, insolvency, adjustment of debt, dissolution,
liquidation or similar law of any jurisdiction and (D) are, in the Agent's
reasonable judgment in accordance with standard commercial practices,
creditworthy; (iii) that are in payment of obligations that have been fully
performed, do not consist of progress billings or bill and hold invoices and are
not subject to dispute or any other similar claims that would reduce the cash
amount payable therefor; (iv) that are not subject to any pledge, restriction,
security interest or other lien or encumbrance other than those created by the
Loan Documents; (v) in which the Agent has a valid and perfected first priority
security interest; (vi) that are not outstanding for more than ninety (90) days
past the earlier to occur of (A) the date of the respective invoices therefor
and (B) the date of shipment thereof in the case of goods or the end of the
calendar month following the provision thereof in the case of services; (vii)
that are not due from an account debtor or other obligor located in Minnesota or
New Jersey unless the Borrower (A) has received a certificate of authority to do
business and is in good standing in such state or (B) has filed a notice of
business activities report with the appropriate office or agency of such state
for the current year; (viii) that are not due from any single account debtor or
other obligor if more than fifteen percent (15%) of the aggregate amount of all
Accounts Receivable owing from such account debtor or other obligor would
otherwise not be Eligible Accounts Receivable; (ix) that are payable in Dollars;
(x) that are not payable from an office outside of the United States unless the
Agent in its discretion approves the inclusion of such foreign receivables; and
(xi) that are not secured by a letter of credit unless the Agent has a prior,
perfected security interest in such letter of credit. General criteria for
Eligible Accounts Receivable may be established and revised from time to time by
the Agent.
Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.8.18(a).
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EPA. See ss.8.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the arithmetic average of the rates per
annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of such Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Eurodollar Rate.
Event of Default. See ss.14.1.
Fee Letter. The fee letter agreement between the Borrower and the Agent
dated on or prior to the Closing Date.
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Generally Accepted Accounting Principles. (i) When used in ss.11, whether
directly or indirectly through reference to a capitalized term used therein,
means (A) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal periods ended on the Balance Sheet Date, and (B) to the
extent consistent with such principles, the accounting practice of the Borrower
reflected in its financial statements for the fiscal period ended on the Balance
Sheet Date, and (ii) when used in general, other than as provided above, means
principles that are (A) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (B) consistently applied with past financial statements of the
Borrower adopting the same principles, provided that in each case referred to in
this definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied, provided,
however, that all references to accounting practices of the Borrower or
financial statements of the Borrower that include periods prior to July 30, 1997
shall refer only to those, and be consistent with those, as set forth in the
audited financial statements of MAPICS, Inc. contained in the Borrower's
Registration Statement on Form S-3 (No. 333-26203).
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See ss.8.18(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(v) every obligation of such Person under any Capitalized Lease,
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(vi) every obligation of such Person under any lease (a "synthetic
lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general intangibles
for money due or to become due, (B) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (C) other receivables
(collectively "receivables"), whether pursuant to a purchase facility or
otherwise, other than in connection with the disposition of the business
operations of such Person relating thereto or a disposition of defaulted
receivables for collection and not as a financing arrangement, and together
with any obligation of such Person to pay any discount, interest, fees,
indemnities, penalties, recourse, expenses or other amounts in connection
therewith,
(viii) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights,
(ix) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices,
(x) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(i) through (x) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (A) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (B) to purchase property, securities or
services for the purpose of assuring the payment of such primary
obligation, or (C) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any
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Capitalized Lease shall be the principal component of the aggregate of the
rentals obligation under such Capitalized Lease payable over the term thereof
that is not subject to termination by the lessee, (x) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than the Borrower or any of its wholly-owned Subsidiaries)
thereof, excluding amounts representative of yield or interest earned on such
investment, (y) any synthetic lease shall be the stipulated loss value,
termination value or other equivalent amount and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.
Interest Payment Date. (i) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter which includes the Drawdown
Date of such Base Rate Loan; and (ii) as to any Eurodollar Rate Loan in respect
of which the Interest Period is (A) 3 months or less, the last day of such
Interest Period and (B) more than 3 months, the date that is 3 months from the
first day of such Interest Period and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Revolving Credit Loan or all or any
relevant portion of the Term Loan, (i) initially, the period commencing on the
Drawdown Date of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrower in a Loan Request or as otherwise
required by the terms of this Credit Agreement (A) for any Base Rate Loan, the
last day of the calendar quarter; and (B) for any Eurodollar Rate Loan, 1, 2, 3,
or 6 months; and (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Revolving Credit Loan or all
or such portion of the Term Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in ss.2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
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(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar 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 Eurodollar
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date (if comprising a Revolving Credit Loan)
or the Term Loan Maturity Date (if comprising the Term Loan or a portion
thereof) shall end on the Revolving Credit Loan Maturity Date or (as the
case may be) the Term Loan Maturity Date.
Interim Concentration Account. See ss.9.14.1.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See ss.5.1.1.
Letter of Credit Application. See ss.5.6.
Letter of Credit Fee. See ss.5.1.1.
Letter of Credit Participation. See ss.5.1.4.
Leverage Ratio. For any fiscal quarter, the ratio of (a) Total Funded
Indebtedness of the Borrower and its Subsidiaries outstanding on the last day of
such quarter to (b) the EBITDA of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters (treated as a single accounting
period) ended on such date.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.
Loan Request. See ss.2.6.
Loans. The Revolving Credit Loans and the Term Loan.
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Local Account. See ss.9.14.1.
Majority Banks. As of any date, the Banks holding at least sixty-six and
two-thirds percent (66 2/3%) of the outstanding principal amount of the Notes on
such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least sixty-six and two-thirds percent (66 2/3%) of
the Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale of stock, partnership interests
or other equity issuances, the excess of the gross cash proceeds received by
such Person for such issuance after deduction of all reasonable and customary
transaction expenses (including without limitation, underwriting discounts and
commissions) actually incurred in connection with such a sale or other issuance.
Net Cash Sale Proceeds. The net cash proceeds received by a Person in
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other reasonably and customary expenses actually incurred
in connection with such Asset Sale, including the amount of income, franchise,
sales and other applicable taxes required to be paid by such Person in
connection with such Asset Sale, and (b) the aggregate amount of cash so
received by such Person which is required to be used to retire (in whole or in
part) any Indebtedness (other than under the Loan Documents) of such Person
permitted by this Credit Agreement that was secured by a lien or security
interest permitted by this Credit Agreement having priority over the liens and
security interests (if any) of the Agent (for the benefit of the Agent and the
Banks) with respect to such assets transferred and which is required to be
repaid in whole or in part (which repayment, in the case of any other revolving
credit arrangement or multiple advance arrangement, reduces the commitment
thereunder) in connection with such Asset Sale.
Non-Material Subsidiary. At the relevant time of determination, any
Subsidiary with a Consolidated Net Worth of less than $500,000
Notes. The Term Notes and the Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof or under any interest rate swap, cap or other hedging agreements
between the Borrower and any of the Banks.
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Operating Account. See ss.2.6.2.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances permitted
by ss.10.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Rate Adjustment Period. See the definition of Applicable Margin.
RCRA. See ss.8.18(a).
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
Reference Bank. BKB
Register. See ss.20.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in ss.5.2.
Rental Obligations. All present or future obligations of the Borrower or
any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (i) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due as of the date on which such notice is given and
under which no penalty or premium is paid as a result of any such termination,
and (ii) obligations in respect of any Capitalized Leases or any synthetic
leases referred to in clause (vi) of the definition of the term "Indebtedness".
Reserves. As determined by the Agent, such amounts as the Agent may from
time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do or may (i) adversely affect either (A) any
Collateral, the rights of the Agent or any of the Banks in any Collateral or its
value or (B) the security interest and other rights of the Agent or any of the
Banks in the Collateral (including the enforceability, perfection and priority
thereof) or (ii) adversely affect in any material respect the assets (other than
any Collateral)
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or business or financial condition of the Borrower or any of its
Subsidiaries or (b) to reflect the belief of the Agent that any Borrowing Base
Report or other collateral report or financial information furnished by or on
behalf of the Borrower to the Agent or any of the Banks is or may have been
incomplete, inaccurate or misleading in any material respect.
Revolving Credit Loan Maturity Date. June 30, 2000.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to ss.2.
Revolving Credit Note Record. A Record with respect to a Revolving Credit
Note.
Revolving Credit Notes. See ss.2.4.
SARA. See ss.8.18(a).
Section 20 Subsidiary. A Subsidiary of the bank holding company controlling
any Bank, which Subsidiary has been granted authority by the Federal Reserve
Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements, dated or to be dated
on or prior to the Closing Date, between the Borrower and its domestic
Subsidiaries and the Agent and in form and substance satisfactory to the Banks
and the Agent.
Security Documents. The Security Agreements, the Trademark Assignments, the
Copyright Mortgages and all other instruments and documents, including without
limitation Uniform Commercial Code financing statements, required to be executed
or delivered pursuant to any Security Document.
Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by a written
instrument containing subordination provisions in form and substance approved by
the Agent and the Majority Banks in writing.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Term Loan. The term loan made or to be made by the Banks to the Borrower on
the Closing Date in the aggregate principal amount of $15,000,000 pursuant to
ss.4.1.
Term Loan Maturity Date. September 30, 2000.
Term Notes. See ss.4.2.
Term Note Record. A Record with respect to a Term Note.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
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Total Funded Indebtedness. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases, determined on a consolidated basis in accordance with
generally accepted accounting principles.
Trademark Assignments. The several Trademark Assignments, dated or to be
dated on or prior to the Closing Date, made by the Borrower and its domestic
Subsidiaries, if any, in favor of the Agent and in form and substance
satisfactory to the Banks and the Agent.
Type. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which the
Borrower does not reimburse the Agent and the Banks on the date specified in,
and in accordance with, ss.5.2.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer; provided,
however, that, in the case of the Borrower and its Subsidiaries, applied on
a basis consistent with that set forth in the audited financial statements
of MAPICS, Inc. contained in the Borrower's Registration Statement on Form
S-3 (No. 333-26203). Accounting terms referring to the Borrower and its
Subsidiaries (i) shall give retroactive effect to the
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transactions contemplated by the Distribution Agreement for all fiscal
periods, and (ii) shall not include any payments with respect to or
Indebtedness under the Promissory Note dated as of July 25, 1997 made by
the Borrower to BankBoston, N.A.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein, with the term "instrument" being that defined
under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including," the words "to" and "until" each mean "to
but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are, however,
cumulative and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others,
the Agent and the Borrower and are the product of discussions and
negotiations among all parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Agent or
any of the Banks merely on account of the Agent's or any Bank's involvement
in the preparation of such documents.
(m) Notwithstanding any other provision of this Credit Agreement, the
other Loan Documents and the Security Documents, the Borrower shall not be
prohibited from completing the transactions contemplated by the
Distribution Agreement.
2. THE REVOLVING CREDIT FACILITY.
---------------------------------
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at
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any one time equal to such Bank's Commitment minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, provided that the sum of the outstanding amount of the Revolving
Credit Loans (after giving effect to all amounts requested) plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not at any time
exceed the lesser of (i) the Total Commitment and (ii) the Borrowing Base. The
Revolving Credit Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in ss.12 and ss.13, in the case of the initial Revolving Credit Loans to
be made on the Closing Date, and ss.13, in the case of all other Revolving
Credit Loans, have been satisfied on the date of such request.
2.2. Commitment Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of three-eighths of one percent (.375%)
per annum on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Revolving Credit Loan Maturity Date by
which the Total Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written notice
to the Agent to reduce by $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing
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and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Revolving Credit Note Record shall not
limit or otherwise affect the obligations of the Borrower hereunder or under any
Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided in
ss.6.11,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate per annum equal to the Base Rate
plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable
Margin.
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6. Requests for Revolving Credit Loans. The Borrower shall give to the
Agent written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no less than (i) one (1) Business
Day prior to the proposed Drawdown Date of any Base Rate Loan and (ii) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (A) the principal amount of the
Revolving Credit Loan requested, (B) the proposed Drawdown Date of such
Revolving Credit Loan, (C) the Interest Period for such Revolving Credit Loan
and (D) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$1,000,000 or an integral multiple thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (i)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business Day
prior written notice of such election; (ii) with respect to any such
conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower
shall give the Agent at least three (3) Eurodollar Business Days prior
written notice of such election; (iii) with respect to any such conversion
of a Eurodollar Rate Loan into a Revolving Credit Loan of another Type,
such conversion shall only be made on the last day of the Interest Period
with respect thereto and (iv) no Loan may be converted into a Eurodollar
Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank
shall take such action as
<PAGE>
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is necessary to transfer its Commitment Percentage of such Revolving Credit
Loans to its Domestic Lending Office or its Eurodollar Lending Office, as
the case may be. All or any part of outstanding Revolving Credit Loans of
any Type may be converted into a Revolving Credit Loan of another Type as
provided herein, provided that any partial conversion shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Revolving Credit Loan to
a Eurodollar Rate Loan shall be irrevocable by the Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
ss.2.7.1; provided that no Eurodollar Rate Loan may be continued as such
when any Default or Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of any
Default or Event of Default of which officers of the Agent active upon the
Borrower's account have actual knowledge. In the event that the Borrower
fails to provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks promptly
when any such automatic conversion contemplated by this ss.2.7 is scheduled
to occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Rate Loans having the same Interest Period shall not be less
than $5,000,000 or a whole multiple of $1,000,000 in excess thereof. In
addition, there shall not be more than ten (10) Eurodollar Rate Loans
outstanding at any one time.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than 11:00 a.m. (Boston time) on
the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by ss.ss.12 and 13 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank to
make available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Revolving Credit Loans.
<PAGE>
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2.8.2. Advances by Agent. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the average computed for the
period referred to in clause (iii) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (ii) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable
to the Revolving Credit Loans made on such Drawdown Date.
2.9. Change in Borrowing Base. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to ss.9.4(f)) by
the Agent by reference to the Borrowing Base Report delivered to the Banks and
the Agent pursuant to ss.9.4(f). The Agent shall give to the Borrower written
notice of any change in the Borrowing Base determined by the Agent. In the case
of a reduction in the lending formula with respect to Eligible Accounts
Receivable, such notice shall be effective 5 Business Days after its receipt by
the Borrower, and in the case of any change in the general criteria for Eligible
Accounts Receivable, such notice shall be effective upon its receipt by the
Borrower. Prior to the time that such notice becomes effective the Borrowing
Base shall be computed as it would have been computed in the absence of such
notice.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
-------------------------------------------
3.1. Maturity. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the sum
of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (i) the
Total Commitment and (ii) the Borrowing Base, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to provide to the
Agent cash collateral for Reimbursement Obligations as contemplated by
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ss.5.2(b) and (c). Each payment of any Unpaid Reimbursement Obligations or
prepayment of Revolving Credit Loans shall be allocated among the Banks, in
proportion, as nearly as practicable, to each Reimbursement Obligation or (as
the case may be) the respective unpaid principal amount of each Bank's Revolving
Credit Note, with adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall have
the right, at its election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium,
provided that any full or partial prepayment of the outstanding amount of any
Eurodollar Rate Loans pursuant to this ss.3.3 may be made only on the last day
of the Interest Period relating thereto. The Borrower shall give the Agent, no
later than 10:00 a.m., Boston time, at least one (1) Business Day prior written
notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate Loans,
and three (3) Eurodollar Business Days notice of any proposed prepayment
pursuant to this ss.3.3 of Eurodollar Rate Loans, in each case specifying the
proposed date of prepayment of Revolving Credit Loans and the principal amount
to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall
be in an integral multiple of $1,000,000, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrower, first to the principal
of Base Rate Loans and then to the principal of Eurodollar Rate Loans, at the
Agent's option. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Bank's Revolving Credit Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.
4. THE TERM LOAN.
-----------------
4.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Credit Agreement, each Bank agrees to lend to the Borrower on the Closing
Date the amount of its Commitment Percentage of the principal amount of
$15,000,000.
4.2. The Term Notes. The Term Loan shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit D hereto
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Commitment Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made a notation
on such Bank's Term Note Record reflecting the original principal amount of such
Bank's Commitment Percentage of the Term Loan and, at or about the time of such
Bank's receipt of any principal payment on such Bank's Term Note, an appropriate
notation on such Bank's Term Note Record reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Term Note Record shall not affect the obligations of the Borrower hereunder or
under any Term Note to make payments of principal of and interest on any Term
Note when due.
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4.3. Repayments of the Term Loan.
4.3.1 Schedule of Installment Payments of Principal of Term Loan. The
Borrower promises to pay to the Agent for the account of the Banks the
principal amount of the Term Loan in eight (8) consecutive quarterly
payments of $1,250,000, such installments to be due and payable on the last
day of each calendar quarter of each calendar year, commencing on September
30, 1998, with a final payment on the Term Loan Maturity Date in an amount
equal to the unpaid balance of the Term Loan.
4.3.2 Proceeds. Concurrently with the receipt by the Borrower or any
of its Subsidiaries of (a) Net Cash Sale Proceeds from Assets Sales or
other dispositions of assets (other than the sale or disposition of assets
in the ordinary course of business consistent with past practices), (b) Net
Cash Proceeds from the sale of stock, partnership interests or other equity
issuances of the Borrower or any of its Subsidiaries or (c) cash proceeds
received from insurance claims received by the Borrower or any of its
Subsidiaries which have not been applied by the Borrower or such Subsidiary
within 180 days of receipt by such Person of such proceeds (provided,
however, if a Default or Event of Default has occurred and is continuing,
such proceeds shall be immediately paid to the Agent), the Borrower shall
pay to the Agent for the respective accounts of the Banks an amount equal
to 100% of such proceeds, to be applied against the scheduled installments
of principal on the Term Loan in the inverse order of maturity.
4.4. Optional Prepayment of Term Loan. The Borrower shall have the right at
any time to prepay the Term Notes on or before the Term Loan Maturity Date, as a
whole, or in part, upon not less than five (5) Business Days prior written
notice to the Agent, without premium or penalty, provided that (i) each partial
prepayment shall be in the principal amount of $1,000,000.00 or an integral
multiple thereof, (ii) any portion of the Term Loan bearing interest at the
Eurodollar Rate prepaid pursuant to this ss.4.4 except on the last day of the
Interest Period relating thereto shall be subject to the indemnity requirement
in ss.6.10, and (iii) each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective outstanding
amount of each Bank's Term Note, with adjustments to the extent practicable to
equalize any prior prepayments not exactly in proportion. Any prepayment of
principal of the Term Loan shall include all interest accrued to the date of
prepayment and shall be applied against the scheduled installments of principal
due on the Term Loan in the inverse order of maturity. No amount repaid with
respect to the Term Loan may be reborrowed as a Term Loan.
4.5. Interest on Term Loan.
4.5.1. Interest Rates. Except as otherwise provided in ss.6.11, the
Term Loan shall bear interest during each Interest Period relating to all
or any portion of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan bears
interest during such Interest Period at the Base Rate, the Term Loan
or such portion shall bear interest during such Interest Period at the
rate of per annum equal to the Base Rate plus the Applicable Margin.
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(b) To the extent that all or any portion of the Term Loan bears
interest during such Interest Period at the Eurodollar Rate, the Term
Loan or such portion shall bear interest during such Interest Period
at the rate of per annum equal to the Eurodollar Rate plus the
Applicable Margin.
The Borrower promises to pay interest on the Term Loan or any portion
thereof outstanding during each Interest Period in arrears on each Interest
Payment Date applicable to such Interest Period.
4.5.2. Notification by Borrower. The Borrower shall notify the Agent,
such notice to be irrevocable, at least three (3) Eurodollar Business Days
prior to the Drawdown Date of the Term Loan if all or any portion of the
Term Loan is to bear interest at the Eurodollar Rate. After the Term Loan
has been made, the provisions of ss.2.7 shall apply mutatis mutandis with
respect to all or any portion of the Term Loan so that the Borrower may
have the same interest rate options with respect to all or any portion of
the Term Loan as it would be entitled to with respect to the Revolving
Credit Loans.
4.5.3. Amounts, etc. Any portion of the Term Loan bearing interest at
the Eurodollar Rate relating to any Interest Period shall be in the amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof. No
Interest Period relating to the Term Loan or any portion thereof bearing
interest at the Eurodollar Rate shall extend beyond the date on which a
regularly scheduled installment payment of the principal of the Term Loan
is to be made unless a portion of the Term Loan at least equal to such
installment payment has an Interest Period ending on such date or is then
bearing interest at the Base Rate.
5. LETTERS OF CREDIT.
---------------------
5.1. Letter of Credit Commitments.
5.1.1. Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon
the agreement of the Banks set forth in ss.5.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees, in
its individual capacity, to issue, extend and renew for the account of the
Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested from
time to time by the Borrower and agreed to by the Agent; provided, however,
that, after giving effect to such request, (a) the sum of the aggregate
Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $5,000,000 at any one time and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations, and (iii) the amount of all Revolving Credit Loans outstanding
shall not exceed the lesser of (A) the Total Commitment and (B) the
Borrowing Base. Notwithstanding the foregoing, the Agent shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent that
such Indebtedness was incurred prior to the proposed issuance date of such
Letter of
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Credit, unless in any such case the Borrower demonstrates to the
satisfaction of the Agent that (x) such prior incurred Indebtedness were
then fully secured by a prior perfected and unavoidable security interest
in collateral provided by the Borrower or such Subsidiary to the proposed
beneficiary of such Letter of Credit or (y) such prior incurred
Indebtedness were then secured or supported by a letter of credit issued
for the account of the Borrower or such Subsidiary and the reimbursement
obligation with respect to such letter of credit was fully secured by a
prior perfected and unavoidable security interest in collateral provided to
the issuer of such letter of credit by the Borrower or such Subsidiary.
5.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
5.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (ii) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
5.1.4. Reimbursement Obligations of Banks. Each Bank severally agrees
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to ss.5.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
5.1.5. Participations of Banks. Each such payment made by a Bank shall
be treated as the purchase by such Bank of a participating interest in the
Borrower's Reimbursement Obligation under ss.5.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to ss.5.2.
5.2. Reimbursement Obligation of the Borrower. In order to induce the Agent
to issue, extend and renew each Letter of Credit and the Banks to participate
therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the
account of the Agent or (as the case may be) the Banks, with respect to each
Letter of Credit issued, extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in ss.5.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to such Letter of
Credit, and (ii) the amount of any
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taxes, fees, charges or other costs and expenses whatsoever incurred by the
Agent or any Bank in connection with any payment made by the Agent or any
Bank under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with ss.14, an amount equal to the then Maximum Drawing Amount
on all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.5.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.5.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.6.11 for overdue principal on the
Revolving Credit Loans.
5.3. Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. If the Borrower fails to reimburse the Agent as provided in
ss.5.2 on or before the date that such draft is paid or other payment is made by
the Agent, the Agent may at any time thereafter notify the Banks of the amount
of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (ii) the amount equal to such
Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, times
(iii) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
5.4. Obligations Absolute. The Borrower's obligations under this ss.5 shall
be absolute and unconditional under any and all circumstances and irrespective
of the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrower
may have or have had
<PAGE>
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against the Agent, any Bank or any beneficiary of a Letter of Credit. The
Borrower further agrees with the Agent and the Banks that the Agent and the
Banks shall not be responsible for, and the Borrower's Reimbursement Obligations
under ss.5.2 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among the Borrower, the beneficiary of any Letter of
Credit or any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower against
the beneficiary of any Letter of Credit or any such transferee. The Agent and
the Banks shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except if such error was
the direct result of the Agent or any Bank's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Agent or
any Bank under or in connection with each Letter of Credit and the related
drafts and documents, if done in good faith and absent the Agent's or such
Bank's gross negligence and willful misconduct, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
5.5. Reliance by Issuer. To the extent not inconsistent with ss.5.4, the
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed in good faith 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, independent accountants
and other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Credit Agreement in accordance with a request of the Majority
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Revolving Credit
Notes or of a Letter of Credit Participation.
5.6. Letter of Credit Fee. The Borrower shall, on the date of issuance or
any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (i) in respect of each standby Letter of
Credit calculated at the Applicable Margin per annum of the face amount of such
standby Letter of Credit, plus a fee equal to one-quarter of one percent (1/4%)
per annum of the face amount of such standby Letter of Credit for the account of
the Agent, as a fronting fee, and the balance of which Letter of Credit Fee
shall be for the accounts of the Banks in accordance with their respective
Commitment Percentages and (ii) in respect of each documentary Letter of Credit
calculated at the rate of the Applicable Margin per annum on the face amount of
such documentary Letter of Credit, plus a fee equal to one-quarter of one
percent (1/4%) per annum of the face amount of such documentary Letter of Credit
for the account of the Agent, as a fronting fee, and the balance of which Letter
of Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages. In respect of each Letter of Credit, the
Borrower shall also pay to the Agent for the Agent's
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own account, at such other time or times as such charges are customarily made by
the Agent, the Agent's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.
6. CERTAIN GENERAL PROVISIONS.
------------------------------
6.1. [Reserved]
6.2. [Reserved]
6.3. Funds for Payments.
6.3.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in each
case in immediately available funds.
6.3.2. No Offset, etc. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is compelled by
law to make such deduction or withholding. If any such obligation is
imposed upon the Borrower with respect to any amount payable by it
hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.
6.4. Computations. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, be based on a
360-day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records and the Term Note Records from
time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Borrower of
such outstanding amount, the Borrower shall notify the Agent or any Bank to the
contrary.
6.5. Inability to Determine Eurodollar Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine in accordance with its standard commerical practice that
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine
<PAGE>
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the rate of interest to be applicable to any Eurodollar Rate Loan during any
Interest Period, the Agent shall forthwith give notice of such determination
(which shall be conclusive and binding on the Borrower and the Banks) to the
Borrower and the Banks. In such event (i) any Loan Request or Conversion Request
with respect to Eurodollar Rate Loans shall be automatically withdrawn and shall
be deemed a request for Base Rate Loans, (ii) each Eurodollar Rate Loan will
automatically, on the last day of the then current Interest Period relating
thereto, become a Base Rate Loan, and (iii) the obligations of the Banks to make
Eurodollar Rate Loans shall be suspended until the Agent determines in
accordance with its standard commercial practice that the circumstances giving
rise to such suspension no longer exist, whereupon the Agent shall so notify the
Borrower and the Banks.
6.6. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this ss.6.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.
6.7. Additional Costs, etc. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Loans (other than taxes based upon or measured by
the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for
<PAGE>
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the account of, or loans by, or letters of credit issued by, or commitments
of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or any
class of loans, letters of credit or commitments of which any of the Loans
or such Bank's Commitment forms a part, and the result of any of the
foregoing is
(i) to materially increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of the Loans
or such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent hereunder
on account of such Bank's Commitment, any Letter of Credit or any of
the Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or Reimbursement Obligation or other sum payable
hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time within one hundred eighty (180) days
of the event giving rise thereto and from time to time and as often as the
occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.
6.8. Capital Adequacy. If after the date hereof any Bank or the Agent
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount reasonably deemed by such Bank or (as the case may be) the Agent in
accordance with its standard commercial practices to be material, then such Bank
or the Agent may notify the Borrower of such fact within one hundred eighty
(180) days of the event giving rise thereto. To the extent that the amount of
such reduction in the return on capital is not reflected in the Base Rate, the
Borrower agrees to pay such Bank or (as the
<PAGE>
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case may be) the Agent for the amount of such reduction in the return on capital
as and when such reduction is determined upon presentation by such Bank or (as
the case may be) the Agent of a certificate in accordance with ss.6.9 hereof.
Each Bank shall allocate such cost increases among its customers in good faith
and on an equitable basis.
6.9. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.ss.6.7 or 6.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
6.10. Indemnity. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request, notice (in the case of
all or any portion of the Term Loans pursuant to ss.4.5.2) or a Conversion
Request relating thereto in accordance with ss.2.6 or ss.2.7 or ss.4.5 or (iii)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.
6.11. Interest After Default.
6.11.1. Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall
bear interest compounded monthly and payable on demand at a rate per annum
equal to three percent (3%) above the Base Rate until such amount shall be
paid in full (after as well as before judgment).
6.11.2. Amounts Not Overdue. During the continuance of a Default or an
Event of Default the principal of the Revolving Credit Loans and the Term
Loan not overdue shall, until such Default or Event of Default has been
cured or remedied or such Default or Event of Default has been waived by
the Majority Banks pursuant to ss.27, bear interest at a rate per annum
equal to the greater of (i) three percent (3%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to ss.2.5 and
the Term Loan pursuant to ss.4.5 and (ii) the rate of interest applicable
to overdue principal pursuant to ss.6.11.1.
7. COLLATERAL SECURITY AND GUARANTIES.
--------------------------------------
7.1. Security of Borrower. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
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7.2. Guaranties and Security of Domestic Subsidiaries. If the Borrower
shall have in the future any Subsidiaries which operate in the United States,
the Obligations shall also be guaranteed by such domestic Subsidiary pursuant to
the terms of a guaranty in a form satisfactory to the Agent. The obligations of
the Borrower's domestic Subsidiaries under the Guaranty shall be in turn secured
by a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each such
Subsidiary, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which such Subsidiary is a party.
8. REPRESENTATIONS AND WARRANTIES.
----------------------------------
The Borrower represents and warrants to the Banks and the Agent as follows:
8.1. Corporate Authority.
8.1.1. Incorporation; Good Standing. Except as set forth on Schedule
8.1.1 hereto, each of the Borrower and its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, (ii) has all requisite corporate power
to own its property and conduct its business as now conducted and as
presently contemplated, and (iii) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so
qualified would not have a materially adverse effect on the business,
assets or financial condition of the Borrower or such Subsidiary.
8.1.2. Authorization. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (i) are within the corporate authority of
such Person, (ii) have been duly authorized by all necessary corporate
proceedings, (iii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
the Borrower or any of its Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrower or any of
its Subsidiaries and (iv) do not conflict with any provision of the
corporate charter or bylaws of, or any agreement or other instrument
binding upon, the Borrower or any of its Subsidiaries.
8.1.3. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement
of creditors' rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
8.2. Governmental Approvals. The execution, delivery and performance by the
Borrower and any of its Subsidiaries of this Credit Agreement and the other Loan
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Documents to which the Borrower or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.
8.3 Title to Properties; Leases. The Borrower and its Subsidiaries own all
of the assets reflected in the combined balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
8.4. Financial Statements and Projections.
8.4.1. Fiscal Year. The Borrower and each of its Subsidiaries has a
fiscal year which is the twelve months ending on September 30 of each
calendar year.
8.4.2. Financial Statements. There has been furnished to each of the
Banks a combined balance sheet of the Borrower and its Subsidiaries as at
the Balance Sheet Date, and a combined statement of income of the Borrower
and its Subsidiaries for the fiscal period then ended, certified by Coopers
& Lybrand LLP. Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of the Borrower as at the close of
business on the date thereof and the results of operations for the fiscal
period then ended. There are no contingent liabilities of the Borrower or
any of its Subsidiaries as of such date involving material amounts, known
to the officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.
8.4.3. Projections. The projections of the annual operating budgets of
the Borrower and its Subsidiaries on a combined basis, balance sheets and
cash flow statements for the 1997 to 2000 fiscal years, copies of which
have been delivered to each Bank, disclose all assumptions made with
respect to general economic, financial and market conditions used in
formulating such projections. To the knowledge of the Borrower or any of
its Subsidiaries, no facts exist that (individually or in the aggregate)
would result in any material change in any of such projections. The
projections are based upon reasonable estimates and assumptions, have been
prepared on the basis of the assumptions stated therein and reflect the
reasonable estimates of the Borrower and its Subsidiaries (as of the date
thereof) of the results of operations and other information projected
therein.
8.5. No Material Changes, etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the combined statement of income for the fiscal period then ended, other than
changes contemplated by the Distribution Agreement or in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of the Borrower or any
of its Subsidiaries. Since the Balance Sheet Date, the Borrower has not made any
Distribution, except as contemplated by the Distribution Agreement.
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8.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
8.7. Litigation. Except as set forth in Schedule 8.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrower and its Subsidiaries,
considered as a whole, or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower and its Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
8.8. No Materially Adverse Contracts, etc. Neither the Borrower nor any of
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries. Except
as previously disclosed to the Agent in writing, neither the Borrower nor any of
its Subsidiaries is a party to any contract or agreement that has or is
expected, in the judgment of the Borrower's officers, to have any materially
adverse effect on the business of the Borrower or any of its Subsidiaries.
8.9. Compliance with Other Instruments, Laws, etc. Except as previously
disclosed to the Agent in writing, neither the Borrower nor any of its
Subsidiaries is in violation of any provision of its charter documents, bylaws,
or any agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Borrower or any of its
Subsidiaries.
8.10. Tax Status. The Borrower and its Subsidiaries (i) have made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (ii) have paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (iii) have set aside on their
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.
8.11. No Event of Default. No Event of Default has occurred and is
continuing.
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8.12. Holding Company and Investment Company Acts. Neither the Borrower nor
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
8.13. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
8.14. Perfection of Security Interest. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken, or arrangements satisfactory to the Agent have been made for
taking, that are necessary or advisable, under applicable law, to establish and
perfect the Agent's security interest in the Collateral. The Collateral and the
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. The Borrower or a Subsidiary of the
Borrower party to one of the Security Agreements is the owner of the Collateral
free from any lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
8.15. Certain Transactions. None of the officers, directors, or employees
of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
8.16. Employee Benefit Plans.
8.16.1. In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent applicable, the
Code, including but not limited to the provisions thereunder respecting
prohibited transactions and the bonding of fiduciaries and other persons
handling plan funds as required by ss.412 of ERISA. The Borrower has
heretofore delivered to the Agent the most recently completed annual
report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
8.16.2. Terminability of Welfare Plans. No Employee Benefit Plan,
which is an employee welfare benefit plan within the meaning of ss.3(1) or
ss.3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment,
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except as required by Title I, Part 6 of ERISA or the applicable state
insurance laws. The Borrower may terminate each such Plan at any time (or
at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower without liability to any
Person other than for claims arising prior to termination.
8.16.3. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to ss.307 of ERISA or ss.401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event (other than an ERISA Reportable Event as to which the requirement of
30 days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of ss.4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
8.16.4. Multiemployer Plans. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
ss.4241 or ss.4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under ss.4041A of ERISA.
8.17. Use of Proceeds.
8.17.1. General. The proceeds of the Loans, together with the proceeds
of the Borrower's public offering shall be used on the Closing Date to pay
in full any Indebtedness which remains outstanding under a $64,000,000 note
payable to BankBoston, N.A. and thereafter for working capital and general
corporate purposes. The Borrower will obtain Letters of Credit solely for
general corporate purposes.
8.17.2. Regulations U and X. No portion of any Loan is to be used, and
no portion of any Letter of Credit is to be obtained, for the purpose of
purchasing or
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carrying any "margin security" or "margin stock" as such terms are used in
Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
8.17.3. Ineligible Securities. No portion of the proceeds of any Loans
is to be used, and no portion of any Letter of Credit is to be obtained,
for the purpose of (a) knowingly purchasing, or providing credit support
for the purchase of, Ineligible Securities from a Section 20 Subsidiary
during any period in which such Section 20 Subsidiary makes a market in
such Ineligible Securities, (b) knowingly purchasing, or providing credit
support for the purchase of, during the underwriting or placement period,
any Ineligible Securities being underwritten or privately placed by a
Section 20 Subsidiary, or (c) making, or providing credit support for the
making of, payments of principal or interest on Ineligible Securities
underwritten or privately placed by a Section 20 Subsidiary and issued by
or for the benefit of the Borrower or any Subsidiary or other Affiliate of
the Borrower.
8.18. Environmental Compliance. To the Borrower's knowledge, and except as
set forth on Schedule 8.18 attached hereto:
(a) none of the Borrower, its Subsidiaries or any of their operations
at the Real Estate is in violation, or alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal
Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control
Act, or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter "Environmental
Laws"), which violation would have a material adverse effect on the
environment or the business, assets or financial condition of the Borrower
or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that
any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that any Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any
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third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrower or its Subsidiaries, no Hazardous Substances have
been generated or are being used on the Real Estate except in accordance
with applicable Environmental Laws; (iii) there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping)
or threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would have a
material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would
have a material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrower's knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the Real
Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby or to the
effectiveness of any other transactions contemplated hereby.
8.19. Subsidiaries, etc. The only Subsidiaries of the Borrower are listed
on Schedule 8.19. Neither the Borrower nor any Subsidiary of the Borrower is
engaged in any joint venture or partnership with any other Person.
8.20. Bank Accounts. Schedule 8.20 sets forth the account numbers and
location of all Local Accounts, Interim Concentration Accounts and other bank
accounts of the Borrower or any of its Subsidiaries.
8.21. Additional Representations. (a) The Borrower has in all material
respects transferred the business, assets and liabilities relating to its PRISM,
Protean and Avantis product lines to Marcam Solutions, Inc. and has contributed
$39,000,000 in cash to Marcam Solutions, Inc. pursuant to the Distribution
Agreement.
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(b) The shares of Marcam Solutions, Inc. have been distributed to
stockholders of the Borrower in a tax-free distribution under Section 355 of the
Code.
(c) The Borrower and Marcam Solutions, Inc. are party to a Distribution
Agreement, a General Services Agreement, an International Facilities Sharing
Agreement, and a Tax Sharing Agreement, copies of which have been delivered to
the Agent on or prior to the Closing Date.
(d) The Borrower's Earnings Before Interest and Taxes for the four fiscal
quarters ended prior to the Closing Date exceeded $19,000,000.
(e) The Borrower has completed a public offering and received Net Cash
Proceeds therefrom in excess of $34,000,000.
8.22. Disclosure. None of this Credit Agreement or any of the other Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower or any of its Subsidiaries in the case of
any document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made not misleading. Except as otherwise
disclosed to the Agent on or prior to the Closing Date, there is no fact known
to the Borrower or any of its Subsidiaries which materially adversely affects,
or which is reasonably likely in the future to materially adversely affect, the
business, assets, financial condition or prospects of the Borrower or any of its
Subsidiaries, exclusive of effects resulting from changes in general economic
conditions, legal standards or regulatory conditions.
9. AFFIRMATIVE COVENANTS OF THE BORROWER.
-----------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
9.1. Punctual Payment. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
9.2. Maintenance of Office. The Borrower will maintain its chief executive
office in Atlanta, Georgia, or at such other place in the United States of
America as the Borrower shall designate upon written notice to the Agent, where
notices, presentations and demands to or upon the Borrower in respect of the
Loan Documents to which the Borrower is a party may be given or made.
9.3. Records and Accounts. The Borrower will (i) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles,
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(ii) maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of
its properties and the properties of its Subsidiaries, contingencies, and
other reserves, and (iii) at all times engage Coopers & Lybrand LLP or
other independent certified public accountants satisfactory to the Agent as
the independent certified public accountants of the Borrower and its
Subsidiaries and will not permit more than thirty (30) days to elapse
between the cessation of such firm's (or any successor firm's) engagement
as the independent certified public accountants of the Borrower and its
Subsidiaries and the appointment in such capacity of a successor firm as
shall be satisfactory to the Agent.
9.4. Financial Statements, Certificates and Information. The Borrower will
deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries, each as at
the end of such year, and the related consolidated statement of income and
consolidated statement of cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal year and all such
consolidated and consolidating statements to be in reasonable detail,
prepared in accordance with generally accepted accounting principles, and
certified without qualification by Coopers & Lybrand LLP or by other
independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to the effect that
they have read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such accountants shall
have obtained knowledge of any then existing Default or Event of Default
they shall disclose in such statement any such Default or Event of Default;
provided that such accountants shall not be liable to the Banks for failure
to obtain knowledge of any Default or Event of Default; and, provided
further that the information required by this paragraph may be satisfied by
delivery by the Borrower within such ninety (90) day period of the
Borrower's Form 10-K for such fiscal year;
(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower,
copies of the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow
for the portion of the Borrower's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the principal
financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial
position of the Borrower and its Subsidiaries on the date thereof (subject
to year-end adjustments); provided that the information required by this
paragraph may be satisfied by the Borrower within such forty-five (45) day
period of the Borrower's Form 10-Q for such fiscal quarter;
(c) [Reserved]
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or
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accounting officer of the Borrower in substantially the form of Exhibit E
hereto and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in ss.11 and (if applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all publicly available material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Borrower;
(f) if any Revolving Credit Loans are outstanding or requested, within
twenty (20) days after the end of each calendar month or at such earlier
time as the Agent may reasonably request, a Borrowing Base Report setting
forth the Borrowing Base as at the end of such calendar month or other date
so requested by the Agent;
(g) if any Revolving Credit Loans are outstanding or requested, within
twenty (20) days after the end of each calendar month, an Accounts
Receivable aging report; and
(h) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
9.5. Notices.
9.5.1. Defaults. The Borrower will promptly notify the Agent and each
of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or obligor,
whether as principal, guarantor, surety or otherwise, the Borrower shall
forthwith give written notice thereof to the Agent and each of the Banks,
describing the notice or action and the nature of the claimed default.
9.5.2. Environmental Events. The Borrower will promptly give notice to
the Agent and each of the Banks (i) of any violation of any Environmental
Law that the Borrower or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (ii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to materially
adversely affect the assets, liabilities, financial conditions or
operations of the Borrower or any of its Subsidiaries.
9.5.3. Notification of Claim against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the
Banks in writing of any setoff, claims (including, with respect to the Real
Estate, environmental claims), withholdings or other defenses to which any
of the Collateral, or the Agent's rights with respect to the Collateral,
are subject.
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9.5.4. Notice of Litigation and Judgments. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a materially adverse
effect on the Borrower or any of its Subsidiaries and stating the nature
and status of such litigation or proceedings. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks, in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess of
$1,000,000.
9.6. Corporate Existence; Maintenance of Properties. The Borrower will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (i) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(ii) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will, and will
cause each of its Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses; provided that
nothing in this ss.9.6 shall prevent the Borrower from discontinuing the
operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
9.7. Insurance. The Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent and
in accordance with the terms of the Security Agreements.
9.8. Taxes. The Borrower will, and will cause each of its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges,
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levies or claims forthwith upon the commencement of proceedings to foreclose any
lien that may have attached as security therefor.
9.9. Inspection of Properties and Books, etc.
9.9.1. General. The Borrower shall permit the Banks, through the Agent
or any of the Banks' other designated representatives, to visit and inspect
any of the properties of the Borrower or any of its Subsidiaries, to
examine the books of account of the Borrower and its Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with, and to be
advised as to the same by, its and their officers, all at such reasonable
times during regular business hours and intervals as the Agent or any Bank
may reasonably request and, so long as no Event of Default has occurred and
is continuing, upon reasonable prior notice.
9.9.2. Collateral Reports. No more frequently than once during each
calendar year, or more frequently as determined by the Agent if an Event of
Default shall have occurred and be continuing, upon the request of the
Agent, the Borrower will obtain and deliver to the Agent, or, if the Agent
so elects, will cooperate with the Agent in the Agent's obtaining, a report
of an independent collateral auditor satisfactory to the Agent (which may
be affiliated with one of the Banks) with respect to the Accounts
Receivable and inventory components included in the Borrowing Base, which
report shall indicate whether or not the information set forth in the
Borrowing Base Report most recently delivered is accurate and complete in
all material respects based upon a review by such auditors of the Accounts
Receivable (including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing
practices of the Borrower or its applicable Subsidiary). All such
collateral value reports shall be conducted and made at the expense of the
Borrower.
9.9.3. Environmental Assessments. Whether or not an Event of Default
shall have occurred, the Agent may, from time to time, obtain one or more
environmental assessments or audits of the Real Estate prepared by a
hydrogeologist, an independent engineer or other qualified consultant or
expert approved by the Agent to evaluate or confirm (i) whether any
Hazardous Materials are present in the soil or water at such property and
(ii) whether the use and operation of such property complies with all
Environmental Laws; provided, however, notwithstanding anything to the
contrary contained in this ss.9.9.3, the Agent shall not obtain any
assessment or audit on any leased Real Estate if the Lease pertaining to
such Real Estate prohibits the Borrower from permitting the Agent to obtain
such assessments or audits. Environmental assessments may include without
limitation detailed visual inspections of such property including any and
all storage areas, storage tanks, drains, dry wells and leaching areas, and
the taking of soil samples, surface water samples and ground water samples,
as well as such other investigations or analyses as the Agent deems
appropriate. All such environmental assessments shall be conducted and made
at the expense of the Borrower.
9.9.4. Communications with Accountants. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly
with
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the Borrower's independent certified public accountants and authorizes such
accountants to disclose to the Agent and the Banks any and all financial
statements and other supporting financial documents and schedules including
copies of any management letter with respect to the business, financial
condition and other affairs of the Borrower or any of its Subsidiaries. At
the request of the Agent, the Borrower shall deliver a letter addressed to
such accountants instructing them to comply with the provisions of this
ss.9.9.4.
9.10. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
will, and will cause each of its Subsidiaries to, comply with (i) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its charter documents and by-laws,
(iii) all agreements and instruments by which it or any of its properties may be
bound and (iv) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
9.11. Employee Benefit Plans. The Borrower will (i) promptly upon filing
the same with the Department of Labor or Internal Revenue Service upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under ss.103(d) of ERISA and Annual Report, Form 5500,
with all required attachments, in respect of each Guaranteed Pension Plan and
(ii) promptly upon receipt or dispatch, furnish to the Agent any notice, report
or demand sent or received in respect of a Guaranteed Pension Plan under
ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect
of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
9.12. Use of Proceeds. The Borrower will use the proceeds of the Loans
solely for the purposes specified in ss.8.17.1. The Borrower will obtain Letters
of Credit solely for general corporate purposes.
9.13. Bank Accounts. The Borrower will, and will cause each of its
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form received,
with any appropriate endorsements, in one of the accounts designated as a
central depositary account on Schedule 8.20.
9.14. New Guarantors. In the event any Subsidiary organized under the laws
of the United States of America or any State thereof is formed or acquired after
the date hereof, such Subsidiary shall, on the date of its formation or
acquisition, guarantee the Obligations and shall execute and deliver to the
Agent a joinder to the Guaranty in form and substance satisfactory to the Agent.
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9.15. Copyright Registration. The Borrower hereby agrees to, and to cause
each of its Subsidiaries to, register copyrights for all software products with
the United States Copyright Office not later than sixty (60) days after the
Closing Date with respect to products existing on the date hereof and within
sixty (60) days of marketing any new product and the Borrower shall, and shall
cause each of its Subsidiaries to, simultaneously with such registration,
execute and deliver to the Bank for recordation with the United States Copyright
Office an amendment to the Copyright Memorandum covering such registered
copyrights in form and substance satisfactory to the Agent.
9.16. Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
-----------------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
10.1. Restrictions on Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
(b) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(c) Subordinated Debt in an amount and on terms and conditions
approved by the Majority Banks in writing;
(d) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by the Borrower or such
Subsidiary or under any Capitalized Lease, provided that the aggregate
principal amount of such Indebtedness of the Borrower and its Subsidiaries
shall not exceed the aggregate amount of $1,000,000 at any one time;
(e) Indebtedness existing on the date hereof and listed and described
on Schedule 10.1 hereto; and
(f) Indebtedness of a Subsidiary of the Borrower existing on the date
hereof to the Borrower.
10.2. Restrictions on Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, (i) create or incur or suffer to be created or incurred
or to exist any lien,
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encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom; (ii) transfer
any of such property or assets or the income or profits therefrom for the
purpose of subjecting the same to the payment of Indebtedness or performance of
any other obligation in priority to payment of its general creditors; (iii)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; (iv) suffer to exist for a period of more than thirty
(30) days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; or
(v) sell, assign, pledge or otherwise transfer any "receivables" as defined in
clause (vii) of the definition of the term "Indebtedness," with or without
recourse; or (vi) enter into or permit to exist any arrangement or agreement,
enforceable under applicable law, which directly or indirectly prohibits the
Borrower or any of its Subsidiaries from creating or incurring any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest
other than in favor of the Agent for the benefit of the Banks and the Agent
under the Loan Documents and other than customary anti-assignment provisions in
leases and licensing agreements entered into by the Borrower or such Subsidiary
in the ordinary course of its business, provided that the Borrower or any of its
Subsidiaries may create or incur or suffer to be created or incurred or to
exist:
(a) liens in favor of the Borrower on all or part of the assets of
Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries of
the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims
for labor, material or supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations or deposits made in connection with
performance bonds obtained in the ordinary course of business;
(d) liens on properties in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens, in existence less than 120 days from the date of creation
thereof in respect of obligations not overdue;
(f) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower is
a party, and other minor liens or
<PAGE>
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encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary conduct of
the business of the Borrower and its Subsidiaries, which defects do not
individually or in the aggregate have a materially adverse effect on the
business of the Borrower individually or of the Borrower and its
Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule 10.2
hereto;
(h) purchase money security interests in or purchase money mortgages
on real or personal property acquired after the date hereof to secure
purchase money Indebtedness of the type and amount permitted by ss.10.1(d),
incurred in connection with the acquisition of such property, which
security interests or mortgages cover only the real or personal property so
acquired and liens in favor of lessors under Capitalized Leases on assets
subject to Capitalized Leases permitted by ss.10.1(d) hereof;
(i) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents.
10.3. Restrictions on Investments. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by the
Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Moody's
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on Schedule
10.3 hereto;
(e) Investments with respect to Indebtedness permitted by ss.10.1(f)
so long as such entities remain Subsidiaries of the Borrower;
(f) Investments consisting of the Guaranty or Investments by the
Borrower in Subsidiaries of the Borrower existing on the Closing Date or
Investments by the Borrower in domestic Subsidiaries of the Borrower
existing after the Closing Date, so long as the Borrower and such
Subsidiary shall have complied with the provisions of ss.7.2 hereof;
(g) Investments consisting of promissory notes received as proceeds of
asset dispositions permitted by ss.10.5.2; and
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(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $1,000,000 in the aggregate at any time
outstanding;
provided, however, that, with the exception of demand deposits referred to in
ss.10.3(b) and loans and advances referred to in ss.10.3(h), such Investments
will be considered Investments permitted by this ss.10.3 only if all actions
have been taken to the satisfaction of the Agent to provide to the Agent, for
the benefit of the Banks and the Agent, a first priority perfected security
interest in all of such Investments free of all encumbrances other than
Permitted Liens.
10.4. Distributions. The Borrower will not make any Distributions except as
provided in the Distribution Agreement.
10.5. Merger, Consolidation and Disposition of Assets.
10.5.1. Mergers and Acquisitions. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices) except the merger or consolidation
of one or more of the Subsidiaries of the Borrower with and into the
Borrower, or the merger or consolidation of two or more Subsidiaries of the
Borrower.
10.5.2. Disposition of Assets. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than the sale of inventory, the licensing
of intellectual property and the disposition of obsolete assets, in each
case in the ordinary course of business consistent with past practices,
except as contemplated by the Distribution Agreement.
10.6. Sale and Leaseback. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the Borrower or any Subsidiary of the Borrower shall sell or transfer any
property owned by it in order then or thereafter to lease such property or lease
other property that the Borrower or any Subsidiary of the Borrower intends to
use for substantially the same purpose as the property being sold or
transferred.
10.7. Compliance with Environmental Laws. The Borrower will not, and will
not permit any of its Subsidiaries to, (i) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (ii) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (iii) generate any Hazardous Substances on any of the Real Estate,
(iv) conduct any activity at any Real Estate or use any Real Estate in any
manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.
<PAGE>
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10.8. Subordinated Debt. The Borrower will not, and will not permit any of
its Subsidiaries to, amend, supplement or otherwise modify the terms of any of
the Subordinated Debt or prepay, redeem or repurchase any of the Subordinated
Debt.
10.9. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
will
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in ss.302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.401(a)(29) of the
Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of ss.4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
10.10. Business Activities. The Borrower will not, and will not permit any
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
10.11. Fiscal Year. The Borrower will not, and will not permit any of it
Subsidiaries to, without the written consent of the Agent, change the date of
the end of its fiscal year from that set forth in ss.8.4.1.
10.12. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any such Affiliate has a substantial interest or is an officer,
director, trustee or partner, on terms more favorable to such Person than would
have been obtainable on an arm's-length basis in the ordinary course of
business.
10.13. Upstream Limitations. Neither the Borrower nor any of its
Subsidiaries will enter into any agreement, contract or arrangement (other than
the Credit Agreement and
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the other Loan Documents) restricting the ability of any Subsidiary to pay or
make dividends or distributions in cash or kind to the Borrower, to make loans,
advances or other payments of whatsoever nature to the Borrower, or to make
transfer or distributions of all or any part of its assets to the Borrower.
11. FINANCIAL COVENANTS OF THE BORROWER.
----------------------------------------
The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
11.1. Leverage Ratio. The Borrower will not permit the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on the last
day of any fiscal quarter to (b) EBITDA for the four fiscal quarter period
ending on the last day of such quarter less the sum of (A) Capital Expenditures
made during such period plus (B) the portion of the costs of software
development required to be capitalized pursuant to FASB Statement No. 86 during
such period to exceed 2:1.
11.2. Consolidated Operating Cash Flow to Debt Service. The Borrower will
not permit the ratio of Consolidated Operating Cash Flow to the sum of
Consolidated Financial Obligations plus Consolidated Total Interest Expense for
any fiscal quarter ending on or prior to December 31, 1997 to exceed 2:1 and for
any fiscal quarter ending thereafter to exceed 2.50:1.
11.3. Profitable Operations. The Borrower will not permit Consolidated Net
Income for any fiscal quarter to be less than $1,000,000.
11.4. Quick Ratio. The Borrower will not permit the ratio of Consolidated
Quick Assets to Consolidated Current Liabilities to be less than 1.25 to 1 at
any time.
11.5. Leases. The Borrower will not, and will not permit any of its
Subsidiaries to, as lessee, enter into, permit to exist, or renew any agreements
to rent or lease any real or personal property if the aggregate amount of Rental
Obligations accrued and to accrue under all such agreements will exceed
$2,000,000 in any fiscal year.
12. CLOSING CONDITIONS.
-----------------------
The obligations of the Banks to make the initial Revolving Credit Loans and
the Term Loan and of the Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent on or prior to
August 4, 1997:
12.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.
12.2. Certified Copies of Charter Documents. Each of the Banks shall have
received from the Borrower and each of its Subsidiaries party to and Loan
Document, unless
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otherwise agreed by the Agent, a copy, certified by a duly authorized officer of
such Person to be true and complete on the Closing Date, of each of (i) its
charter or other incorporation documents as in effect on such date of
certification, and (ii) its by-laws as in effect on such date.
12.3. Corporate, Action. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
12.4. Incumbency Certificate. Each of the Banks shall have received from
the Borrower and each of its Subsidiaries party to any Loan Document an
incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower or such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of the Borrower of such Subsidiary, each
of the Loan Documents to which the Borrower or such Subsidiary is or is to
become a party; (ii) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (iii) to give
notices and to take other action on its behalf under the Loan Documents.
12.5. Validity of Liens. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
12.6. Perfection Certificates and UCC Search Results. The Agent shall have
received from each of the Borrower and its Subsidiaries a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agent.
12.7. Certificates of Insurance. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained and naming the
Agent as loss payee and additional insured in accordance with the provisions of
the Security Agreements and (ii) certified copies of all policies evidencing
such insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).
12.8. Agency Account Agreements. The Borrower shall have established the
BKB Concentration Account, and the Agent shall have received an Agency Account
Agreement executed by each depository institution with a Local Account or an
Interim Concentration Account.
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12.9. Borrowing Base Report. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Closing Date.
12.10. Accounts Receivable Aging Report. The Agent shall have received from
the Borrower the most recent Accounts Receivable aging report of the Borrower
and its Subsidiaries dated as of a date which shall be no more than fifteen (15)
days prior to the Closing Date and the Borrower shall have notified the Agent in
writing on the Closing Date of any material deviation from the Accounts
Receivable values reflected in such Accounts Receivable aging report and shall
have provided the Agent with such supplementary documentation as the Agent may
reasonably request.
12.11. Solvency Certificate. Each of the Banks shall have received a
certificate of an officer of the Borrower dated not less than one (1) day prior
to the Closing Date, describing in detail the solvency of the Borrower and its
Subsidiaries after the consummation of the transactions contemplated herein and
in form and substance satisfactory to the Banks.
12.12. Opinion of Counsel. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Testa, Hurwitz & Thibeault, LLP, counsel to the Borrower and its
Subsidiaries.
12.13. Disbursement Instructions. The Agent shall have received
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Loans are paid to satisfy the obligations described in
ss.8.17.1.
13. CONDITIONS TO ALL BORROWINGS.
---------------------------------
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
13.1. Representations True; No Event of Default. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
13.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance,
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extension or renewal of such Letter of Credit or in the reasonable opinion of
the Agent would make it illegal for the Agent to issue, extend or renew such
Letter of Credit.
13.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
13.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
13.5. Borrowing Base Report. Prior to the making of any Revolving Credit
Loan, Agent shall have received the most recent Borrowing Base Report required
to be delivered to the Agent in accordance with ss.9.4(f) and, if requested by
the Agent, a Borrowing Base Report dated within three (3) days of the Drawdown
Date of such Loan or of the date of issuance, extension or renewal of such
Letter of Credit.
13.6. Commercial Finance Exam. The Agent shall have completed a commercial
finance exam of the Borrower and the results thereof shall be satisfactory to
the Agent.
14. EVENTS OF DEFAULT; ACCELERATION; ETC.
-----------------------------------------
14.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans or any
Reimbursement Obligation when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment;
(b) the Borrower or any of its Subsidiaries shall fail to pay any
interest on the Loans, the commitment fee, any Letter of Credit Fee, the
Agent's fee, or other sums due hereunder or under any of the other Loan
Documents, when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in ss.9, 10 or 11;
(d) the Borrower or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this ss.14.1) for
fifteen (15) days after written notice of such failure has been given to
the Borrower by the Agent;
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(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or
in any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases,
or fail to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
borrowed money or credit received or in respect of any Capitalized Leases
for such period of time as would permit (assuming the giving of appropriate
notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries (other than a Non-Material
Subsidiary unless the Borrower or any other Subsidiary has been adversely
effected by the occurrence of such event (a "Deminimis Subsidiary")) shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of the Borrower or any of its
Subsidiaries (other than a Deminimis Subsidiary) or of any substantial part
of the assets of the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) or shall commence any case or other proceeding
relating to the Borrower or any of its Subsidiaries (other than a Deminimis
Subsidiary) under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries (other
than a Deminimis Subsidiary) and the Borrower or any of its Subsidiaries
(other than a Deminimis Subsidiary) shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within forty-five (45) days following the
filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries (other than a Deminimis Subsidiary) bankrupt or insolvent,
or approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of the Borrower or any Subsidiary
(other than a Deminimis Subsidiary) of the Borrower in an involuntary case
under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) that, with other outstanding final judgments,
undischarged, against the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) exceeds in the aggregate $1,000,000;
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(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be prepaid, redeemed or repurchased in whole or in
part;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or any of its Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA, or the
Borrower or any ERISA Affiliate is assessed withdrawal liability pursuant
to Title IV of ERISA by a Multiemployer Plan, or any of the following
occurs with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable
Event, or a failure to make a required installment or other payment (within
the meaning of ss.302(f)(1) of ERISA), provided that the Agent determines
in its reasonable discretion that such event (A) could be expected to
result in liability of the Borrower or any of its Subsidiaries to the PBGC
or such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000
and (B) could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed Pension
Plan or for the imposition of a lien in favor of such Guaranteed Pension
Plan; or (ii) the appointment by a United States District Court of a
trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan;
(m) the Borrower or any of its Subsidiaries (other than a Deminimis
Subsidiary) shall be enjoined, restrained or in any way prevented by the
order of any court or any administrative or regulatory agency from
conducting any material part of its business and such order shall continue
in effect for more than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
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(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a material adverse effect on the
business or financial condition of the Borrower and its Subsidiaries, taken
as a whole;
(p) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise
have been brought or threatened against the Borrower or any of its
Subsidiaries, a punishment for which in any such case could include the
forfeiture of any assets of the Borrower or such Subsidiary included in the
Borrowing Base or any assets of the Borrower or such Subsidiary not
included in the Borrowing Base but having a fair market value in excess of
$1,000,000; or
(q) any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of 30% or more of
the outstanding shares of common stock of the Borrower; or, during any
period of twelve consecutive calendar months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in ss.ss.14.1(g), 14.1(h) or 14.1(j), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
14.2. Termination of Commitments. If any one or more of the Events of
Default specified in ss.14.1(g), ss.14.1(h) or ss.14.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. If any other Event of Default shall have occurred and
be continuing, the Agent may and, upon the request of the Majority Banks, shall,
by notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.
14.3. Remedies. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to ss.14.1, each Bank, if owed any amount
with respect to the Loans or the Reimbursement Obligations, may, with the
consent of the Majority Banks but
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not otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
14.4. Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that (i) distributions
shall be made (A) pari passu among Obligations with respect to the Agent's
fee payable pursuant to ss.6.2 and all other Obligations and (B) with
respect to each type of Obligation owing to the Banks, such as interest,
principal, fees and expenses, among the Banks pro rata, and (ii) the Agent
may in its discretion make proper allowance to take into account any
Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to ss.9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
15. SETOFF.
-----------
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such
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Bank may be applied to or set off by such Bank against the payment of
Obligations and any and all other liabilities then due, direct, or indirect,
absolute or contingent, now existing or hereafter arising, of the Borrower to
such Bank. Each of the Banks agrees with each other Bank that (i) if an amount
to be set off is to be applied to Indebtedness of the Borrower to such Bank,
other than Indebtedness evidenced by the Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Bank or constituting Reimbursement Obligations owed to such
Bank, and (ii) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes held by
it or Reimbursement obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
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16. THE AGENT.
--------------
16.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of
the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
16.2. Employees and Agents. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
16.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
16.4. No Representations.
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16.4.1. General. The Agent shall not be responsible for the execution
or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any
time constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of the
Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants
or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect any
of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any notice,
consent, waiver or request delivered to it by the Borrower or any holder of
any of the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any representations
or warranties, express or implied, nor does it assume any liability to the
Banks, with respect to the credit worthiness or financial conditions of the
Borrower or any of its Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
16.4.2. Closing Documentation, etc. For purposes of determining
compliance with the conditions set forth in ss.12, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or BancBoston Securities,
Inc., as arranger to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be to be consent to or approved by
or acceptable or satisfactory to such Bank, unless an officer of the Agent
or BancBoston Securities, Inc. active upon the Borrower's account shall
have received notice from such Bank not less than two days prior to the
Closing Date specifying such Bank's objection thereto and such objection
shall not have been withdrawn by notice to the Agent or BancBoston
Securities, Inc. to such effect on or prior to the Closing Date.
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16.5. Payments.
16.5.1. Payments to Agent. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
16.5.2. Distribution by Agent. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under
the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as shall be
determined by such court.
16.5.3. Delinquent Banks. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (i) to make available to the Agent its pro rata share of
any Loan or to purchase any Letter of Credit Participation or (ii) to
comply with the provisions of ss.15 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata
share of such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied.
A Delinquent Bank shall be deemed to have assigned any and all payments due
to it from the Borrower, whether on account of outstanding Loans, Unpaid
Reimbursement Obligations, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective
pro rata shares of all outstanding Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and Unpaid Reimbursement Obligations of
the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations have returned to
those in effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
16.6. Holders of Notes. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or
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purchaser thereof for all purposes hereof until it shall have been
furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
16.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
16.8. Agent as Bank. In its individual capacity, BKB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.
16.9. Resignation. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
16.10. Notification of Defaults and Events of Default. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.16.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
16.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (i) so requested by
the Majority Banks and (ii) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the
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Banks hereby agreeing to indemnify and hold the Agent, harmless from all
liabilities incurred in respect of all actions taken or omitted in accordance
with such directions, provided that the Agent need not comply with any such
direction to the extent that the Agent reasonably believes the Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
17. EXPENSES AND INDEMNIFICATION.
---------------------------------
17.1. Expenses. The Borrower agrees to pay (i) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (ii) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (iii) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent reasonably incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon payment in full in
cash of all of the Obligations or pursuant to any terms of such Loan Document
for providing for such cancellation, (iv) the fees, expenses and disbursements
of the Agent or any of its affiliates reasonably incurred by the Agent or such
affiliate in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (v) any fees, costs, expenses and bank charges, including bank charges
for returned checks reasonably incurred by the Agent in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any of the Collateral; (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Bank or the Agent, and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) reasonably incurred by any Bank or the Agent in connection
with (A) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries and (vii) all reasonable fees, expenses and disbursements of
any Bank or the Agent reasonably incurred in connection with UCC searches, UCC
filings or mortgage recordings.
17.2. Indemnification. The Borrower agrees to indemnify and hold harmless
the Agent, its affiliates and the Banks from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (i) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Loans or Letters of Credit, (ii) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from lock
box, bank agency or concentration accounts or in connection with the provisional
honoring of checks
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or other items, (iii) any actual or alleged infringement of any patent,
copyright, trademark, service mark or similar right of the Borrower or any of
its Subsidiaries comprised in the Collateral, (iv) the Borrower or any of its
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (v) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrower
agrees to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrower under this ss.17.2 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
17.3. Survival. The covenants contained in this ss.17 shall survive payment
or satisfaction in full of all other Obligations.
18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
--------------------------------------------------
18.1. Sharing of Information with Section 20 Subsidiary. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
18.2. Confidentiality. 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 their 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 Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this ss.18, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction
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over any Bank or the Agent, or to auditors or accountants, (e) to the Agent, any
Bank or any Section 20 Subsidiary, (f) in connection with any litigation to
which any one or more of the Banks, the Agent or any Section 20 Subsidiary is a
party, or in connection with the enforcement of rights or remedies hereunder or
under any other Loan Document, (g) to a Subsidiary or affiliate of such Bank as
provided in ss.18.1 or (h) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant agrees to be
bound by the provisions of ss.20.6.
18.3. Prior Notification. Unless specifically prohibited by applicable law
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
18.4. Other. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
ss.18 shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.
19. SURVIVAL OF COVENANTS, ETC.
-------------------------------
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall continue in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
---------------------------------
20.1. Conditions to Assignment by Banks. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i) each
of the Agent and, unless a Default or Event of Default shall have
<PAGE>
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occurred and be continuing, the Borrower shall have given its prior written
consent to such assignment, which consent, in the case of the Borrower, will not
be unreasonably withheld, (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement, (iii) each assignment shall be either such Bank's
entire interest or be in an amount that is $5,000,000 or a multiple of
$1,000,000 in excess thereof, and (iv) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register (as hereinafter
defined), an Assignment and Acceptance, substantially in the form of Exhibit F
hereto (an "Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in ss.20.3, be released from its obligations under this Credit Agreement.
20.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
and its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations
under this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements
referred to in ss.8.4 and ss.9.4 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
<PAGE>
-67-
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Credit Agreement are
required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
20.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.
20.4. New Notes. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained therein in the
Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.20.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such
<PAGE>
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new Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Banks. The surrendered Notes shall be cancelled
and returned to the Borrower.
20.5. Participations. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
20.6. Disclosure. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
20.7. Assignee or Participant Affiliated with the Borrower. If any assignee
Bank is an Affiliate of the Borrower, then any such assignee Bank shall have no
right to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or other modifications to any of the Loan Documents or for purposes
of making requests to the Agent pursuant to ss.14.1 or ss.14.2, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans or Reimbursement Obligations. If any Bank
sells a participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to ss.14.1 or ss.14.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.
20.8. Miscellaneous Assignment Provisions. Any assigning Bank shall retain
its rights to be indemnified pursuant to ss.17 with respect to any claims or
actions arising prior
<PAGE>
-69-
to the date of such assignment. If any assignee Bank is not incorporated under
the laws of the United States of America or any state thereof, it shall, prior
to the date on which any interest or fees are payable hereunder or under any of
the other Loan Documents for its account, deliver to the Borrower and the Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. If any Reference Bank transfers all of its
interest, rights and obligations under this Credit Agreement, the Agent shall,
in consultation with the Borrower and with the consent of the Borrower and the
Majority Banks, appoint another Bank to act as a Reference Bank hereunder.
Anything contained in this ss.20 to the contrary notwithstanding, any Bank may
at any time pledge all or any portion of its interest and rights under this
Credit Agreement (including all or any portion of its Notes) to any of the
twelve Federal Reserve Banks organized under ss.4 of the Federal Reserve Act, 12
U.S.C. ss.341. No such pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
20.9. Assignment by Borrower. The Borrower shall not assign or transfer any
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
21. NOTICES, ETC.
-----------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at 5775-D Glenridge Drive, Atlanta, Georgia
30328, Attention: William J. Gilmour, Chief Financial Officer and Vice
President of Finance, or at such other address for notice as the Borrower
shall last have furnished in writing to the Person giving the notice;
(b) if to the Agent, at 100 Federal Street, Boston, Massachusetts
02110, USA, Attention: Joseph L. Massimo, Vice President, or such other
address for notice as the Agent shall last have furnished in writing to the
Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
<PAGE>
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22. GOVERNING LAW.
------------------
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.21. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
23. HEADINGS.
-------------
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
-----------------
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
--------------------------
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
ss.27.
26. WAIVER OF JURY TRIAL.
-------------------------
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (i)
certifies that no
<PAGE>
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representative, agent or attorney of any Bank or the Agent has represented,
expressly or otherwise, that such Bank or the Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that the
Agent and the Banks have been induced to enter into this Credit Agreement, the
other Loan Documents to which it is a party by, among other things, the waivers
and certifications contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
---------------------------------------
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to
ss.6.11.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default relating thereto), the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank affected thereby; the Revolving Credit Loan
Maturity Date and the Term Loan Maturity Date may not be postponed without the
written consent of each Bank affected thereby; this ss.27 and the definition of
Majority Banks may not be amended, without the written consent of all of the
Banks; all or substantially all of the Collateral may not be released without
the written consent of all of the Banks; and the amount of the Agent's Fee or
any Letter of Credit Fees payable for the Agent's account and ss.16 may not be
amended without the written consent of the Agent. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
28. SEVERABILITY.
-----------------
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
<PAGE>
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
MAPICS, INC.
By: /s/ George A. Chamberlain, 3rd
-------------------------------
Title: Chief Financial Officer
BANKBOSTON, N.A., individually and as Agent
By:
-------------------------------
Name:
Vice President
<PAGE>
SCHEDULE 1
----------
Banks/Commitments
-----------------
Commitment
Revolving Percentage of Revolving
Credit Loan Credit Loans, Term Loan and
Banks Commitment Letters of Credit
- --------------------------------------------------------------------------------
BankBoston, N.A. $15,000,000 100%
Domestic Lending Office:
100 Federal Street, 01-08-06
Boston, Massachusetts 02110
Attn: Joseph L. Massimo, Vice
President,
Eurodollar Lending Office:
Same as above
- --------------------------------------------------------------------------------
Totals: $15,000,000 100%
EXHIBIT 10.2
------------
SECURITY AGREEMENT
------------------
SECURITY AGREEMENT, dated as of August 4, 1997, between MAPICS, INC., a
Massachusetts corporation (the "Company"), and BANKBOSTON, N.A., a national
banking association, as agent (hereinafter, in such capacity, the "Agent") for
itself and other banking institutions (hereinafter, collectively, the "Banks")
which are or may become parties to a Revolving Credit and Term Loan Agreement
dated as of August 4, 1997 (as amended and in effect from time to time, the
"Credit Agreement"), among the Company, the Banks and the Agent.
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending credit to the Company under the Credit Agreement that the
Company execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a security agreement in substantially the form hereof; and
WHEREAS, the Company wishes to grant security interests in favor of the
Agent, for the benefit of the Banks and the Agent, as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
29. Definitions. All capitalized terms used herein without definitions
shall have the respective meanings provided therefor in the Credit Agreement.
All terms defined in the Massachusetts Uniform Commercial Code and used herein
shall have the same definitions herein as specified therein.
30. Grant of Security Interest.
-------------------------------
30.1. Collateral Granted. The Company hereby grants to the Agent, for the
benefit of the Banks and the Agent, to secure the payment and performance in
full of all of the Obligations, a security interest in and so pledges and
assigns to the Agent, for the benefit of the Banks and the Agent, the following
properties, assets and rights of the Company, wherever located, whether now
owned or hereafter acquired or arising, and all proceeds and products thereof
(all of the same being hereinafter called the "Collateral"):
All personal and fixture property of every kind and nature including
without limitation all furniture, fixtures, equipment, raw materials,
inventory, other goods, accounts, contract rights, rights to the payment of
money, insurance refund claims and all other insurance claims and proceeds,
tort claims, chattel paper, documents, instruments, securities and other
investment property (other than the capital stock of any Subsidiary of the
Company which is organized under the laws of a jurisdiction other than the
United States of America), deposit accounts and all general intangibles
including, without limitation, all tax refund claims, license fees,
patents, patent
<PAGE>
applications, trademarks, trademark applications, trade names, copyrights,
copyright applications, rights to sue and recover for past infringement of
patents, trademarks and copyrights, computer programs, computer software,
engineering drawings, service marks, customer lists, goodwill, and all
licenses, permits, agreements of any kind or nature pursuant to which the
Company possesses, uses or has authority to possess or use property
(whether tangible or intangible) of others or others possess, use or have
authority to possess or use property (whether tangible or intangible) of
the Company, and all recorded data of any kind or nature, regardless of the
medium of recording including, without limitation, all software, writings,
plans, specifications and schematics.
30.2. Delivery of Instruments, etc.
(a) Pursuant to the terms hereof, the Company has endorsed,
collaterally assigned and delivered to the Agent all negotiable or
non-negotiable instruments (including certificated securities) and chattel
paper pledged by it hereunder, together with instruments of transfer or
assignment duly executed in blank as the Agent may have specified. In the
event that the Company shall, after the date of this Agreement, acquire any
other negotiable or non-negotiable instruments (including certificated
securities) or chattel paper to be pledged by it hereunder, the Company
shall forthwith endorse, collaterally assign and deliver the same to the
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Agent may from time to time specify.
(b) To the extent that any securities now or hereafter acquired by the
Company are uncertificated and are issued to the Company or its nominee
directly by the issuer thereof, the Company shall cause the issuer to note
on its books the security interest of the Agent in such securities and
shall cause the issuer, pursuant to an agreement in form and substance
satisfactory to the Agent, to agree to comply with instructions from the
Agent as to such securities, without further consent of the Company or such
nominee. To the extent that any securities, whether certificated or
uncertificated, or other financial assets now or hereafter acquired by the
Company are held by the Company or its nominee through a securities
intermediary, the Company shall (i) cause such securities intermediary to
note on its books the security interest of the Agent in such securities or
other financial assets and to confirm such notation promptly to the Agent
and (ii), at the request of the Agent, cause such securities intermediary,
pursuant to an agreement in form and substance satisfactory to the Agent,
to agree to comply with entitlement orders or other instructions from the
Agent as to such securities or other financial assets, without further
consent of the Company or such nominee.
30.3. Excluded Collateral. Notwithstanding the foregoing provisions of this
ss.2, such grant of security interest shall not extend to, and the term
"Collateral" shall not include, any chattel paper and general intangibles which
are now or hereafter held by the Company as licensee, lessee or otherwise, to
the extent that (i) such chattel paper and general
<PAGE>
intangibles are not assignable or capable of being encumbered as a matter of law
or under the terms of the license, lease or other agreement applicable thereto
(but solely to the extent that any such restriction shall be enforceable under
applicable law), without the consent of the licensor or lessor thereof or other
applicable party thereto and (ii) such consent has not been obtained; provided,
however, that the foregoing grant of security interest shall extend to, and the
term "Collateral" shall include, (A) any and all proceeds of such chattel paper
and general intangibles to the extent that the assignment or encumbering of such
proceeds is not so restricted and (B) upon any such licensor, lessor or other
applicable party's consent with respect to any such otherwise excluded chattel
paper or general intangibles being obtained, thereafter such chattel paper or
general intangibles as well as any and all proceeds thereof that might have
theretofore have been excluded from such grant of a security interest and the
term "Collateral".
30.4. Trademark Agreements. Concurrently herewith the Company is also
executing and delivering to the Agent, for the benefit of the Banks and the
Agent, the Trademark Agreement pursuant to which the Company is assigning to the
Agent, for the benefit of the Banks and the Agent, certain Collateral consisting
of trademarks, service marks and trademark and service mark rights, together
with the goodwill appurtenant thereto. The provisions of the Trademark Agreement
are supplemental to the provisions of this Agreement, and nothing contained in
the Trademark Agreement shall derogate from any of the rights or remedies of the
Agent or any of the Banks hereunder. Nor shall anything contained in the
Trademark Agreement be deemed to prevent or extend the time of attachment or
perfection of any security interest in such Collateral created hereby.
30.5. Copyright Memorandum. Concurrently herewith the Company is, in
addition, executing and delivering to the Agent, for the benefit of the Banks
and the Agent, for recording in the United States Copyright Office (the
"Copyright Office") the Copyright Memorandum of Grant of Security Interest in
Copyrights. The Company represents and warrants to the Bank that such Copyright
Memorandum identifies all now existing material copyrights and other rights in
and to all material copyrightable works of the Company, identified, where
applicable, by title, author and/or Copyright Office registration number and
date. The Company represents and warrants to the Bank that it has registered all
material copyrights of the Company with the Copyright Office, as identified in
such Copyright Memorandum. The Company covenants, promptly after the Bank's
request therefor following the Company's acquisition thereof, to provide to the
Bank like identifications of all material copyrights and other rights in and to
all material copyrightable works hereafter acquired by the Company and to
execute and deliver to the Bank a supplemental Memorandum of Grant of Security
Interest in Copyrights modified to reflect such subsequent acquisitions.
31. Title to Collateral, etc. The Company is the owner of the Collateral
free from any adverse lien, security interest or other encumbrance, except for
the security interest created by this Agreement and other liens permitted by the
Credit Agreement. None of the Collateral constitutes, or is the proceeds of,
"farm products" as defined in ss.9-109(3) of the Uniform Commercial Code of the
Commonwealth of Massachusetts. None of the account debtors in respect of any
accounts, chattel paper or general intangibles and none of the obligors in
respect of any instruments included in the Collateral is a governmental
authority subject to the Federal Assignment of Claims Act.
32. Continuous Perfection. The Company's place of business or, if more than
one, chief executive office is indicated on the Perfection Certificate delivered
to the Agent herewith (the "Perfection Certificate"). The Company will not
change the same, or the name, identity or corporate structure of the Company in
any manner, without providing at least 30 days prior written notice to the
Agent. The Collateral, to the extent not delivered to the Agent pursuant to
ss.2.2, will be kept at those locations listed on the Perfection Certificate and
the Company will not remove the Collateral from such locations, without
providing at least 30 days prior written notice to the Agent.
33. No Liens. Except for the security interest herein granted and liens
permitted by the Credit Agreement, the Company shall be the owner of the
Collateral free from any lien, security interest or other encumbrance, and the
Company shall defend the same against all claims and demands of all persons at
any time claiming the same or any interests therein adverse to the Agent or any
of the Banks. The Company shall not pledge, mortgage or create, or suffer to
exist a security interest in the Collateral in favor of any person other than
the Agent, for the benefit of the Banks and the Agent, except for liens
permitted by the Credit Agreement.
34. No Transfers. The Company will not sell or offer to sell or otherwise
transfer the Collateral or any interest therein except for (a) sales and leases
of inventory and licenses of general intangibles in the ordinary course of
business; (b) sales or other dispositions of obsolescent items of equipment in
the ordinary course of business consistent with past practices; and (c) the
disposition of any Collateral which is permitted to be sold or otherwise
disposed of pursuant to the terms of the Distribution Agreement.
<PAGE>
35. Insurance.
--------------
35.1. Maintenance of Insurance. The Company will maintain with financially
sound and reputable insurers insurance with respect to its properties and
business against such casualties and contingencies as shall be in accordance
with general practices of businesses engaged in similar activities in similar
geographic areas. Such insurance shall be in such minimum amounts that the
Company will not be deemed a co-insurer under applicable insurance laws,
regulations and policies and otherwise shall be in such amounts, contain such
terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Agent. In addition, all such insurance shall be payable to
the Agent as loss payee under a "standard" or "New York" loss payee clause for
the benefit of the Banks and the Agent. Without limiting the foregoing, the
Company will (i) keep all of its physical property insured with casualty or
physical hazard insurance on an "all risks" basis, with broad form flood and
earthquake coverages and electronic data processing coverage, with a full
replacement cost endorsement and an "agreed amount" clause in an amount equal to
100% of the full replacement cost of such property, (ii) maintain all such
workers' compensation or similar insurance as may be required by law and (iii)
maintain, in amounts and with deductibles equal to those generally maintained by
businesses engaged in similar activities in similar geographic areas, general
public liability insurance against claims of bodily injury, death or property
damage occurring, on, in or about the properties of the Company; business
interruption insurance; and product liability insurance.
35.2. Insurance Proceeds. The proceeds of any casualty insurance in respect
of any casualty loss of any of the Collateral shall, subject to the rights, if
any, of other parties with a prior interest in the property covered thereby, (i)
so long as no Default or Event of Default has occurred and is continuing and to
the extent that the amount of such proceeds is less than $250,000.00, be
disbursed to the Company for direct application by the Company solely to the
repair or replacement of the Company's property so damaged or destroyed and (ii)
in all other circumstances, be held by the Agent as cash collateral for the
Obligations. The Agent may, at its sole option, disburse from time to time all
or any part of such proceeds so held as cash collateral, upon such terms and
conditions as the Agent may reasonably prescribe, for direct application by the
Company solely to the repair or replacement of the Company's property so damaged
or destroyed, or the Agent may apply all or any part of such proceeds to the
Obligations with the Total Commitment (if not then terminated) being reduced by
the amount so applied to the Obligations.
35.3. Notice of Cancellation, etc. All policies of insurance shall provide
for at least thirty (30) days prior written cancellation notice to the Agent. In
the event of failure by the Company to provide and maintain insurance as herein
provided, the Agent may, at its option, provide such insurance and charge the
amount thereof to the Company. The Company shall furnish the Agent with
certificates of insurance, and upon the Bank's reasonable request therefor, and
policies evidencing compliance with the foregoing insurance provision.
<PAGE>
36. Maintenance of Collateral; Compliance with Law. The Company will keep the
Collateral in good order and repair and will not use the same in violation of
law or any policy of insurance thereon. The Agent, or its designee, may inspect
the Collateral at any reasonable time, wherever located, and so long as no Event
of Default has occurred and is continuing, during regular business hours, upon
reasonable prior notice. The Company will pay promptly when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Company shall
have set aside on its books adequate reserve with respect thereto; and provided
further that the Company shall pay all such taxes, assessments, chargers, levies
or claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor. Except as previously disclosed to
the Bank, the Company has at all times operated, and the Company will continue
to operate, its business in compliance with all applicable provisions of the
federal Fair Labor Standards Act, as amended, and with all applicable provisions
of federal, state and local statutes and ordinances dealing with the control,
shipment, storage or disposal of hazardous materials or substances.
37. Collateral Protection Expenses; Preservation of Collateral.
---------------------------------------------------------------
37.1. Expenses Incurred by Agent. In its discretion, the Agent may
discharge taxes and other encumbrances at any time levied or placed on any of
the Collateral, make repairs thereto and pay any necessary filing fees. The
Company agrees to reimburse the Agent on demand for any and all expenditures so
made. The Agent shall have no obligation to the Company to make any such
expenditures, nor shall the making thereof relieve the Company of any default.
37.2. Agent's Obligations and Duties. Anything herein to the contrary
notwithstanding, the Company shall remain liable under each contract or
agreement comprised in the Collateral to be observed or performed by the Company
thereunder. Neither the Agent nor any Bank shall have any obligation or
liability under any such contract or agreement by reason of or arising out of
this Agreement or the receipt by the Agent or any Bank of any payment relating
to any of the Collateral, nor shall the Agent or any Bank be obligated in any
manner to perform any of the obligations of the Company under or pursuant to any
such contract or agreement, to make inquiry as to the nature or sufficiency of
any payment received by the Agent or any Bank in respect of the Collateral or as
to the sufficiency of any performance by any party under any such contract or
agreement, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to the Agent or to which the Agent or any Bank may be entitled at any
time or times. The Agent's sole duty with respect to the custody, safe keeping
and physical preservation of the Collateral in its possession, under ss.9-207 of
the Massachusetts Uniform Commercial Code or otherwise, shall be to deal with
such Collateral in the same manner as the Agent deals with similar property for
its own account.
<PAGE>
38. Securities and Deposits. The Agent may at any time, at its option, transfer
to itself or any nominee any securities constituting Collateral, receive any
income thereon and hold such income as additional Collateral or apply it to the
Obligations. If an Event of Default shall have occurred and be continuing,
whether or not any Obligations are due, the Agent may demand, sue for, collect,
or make any settlement or compromise which it deems desirable with respect to
the Collateral. Regardless of the adequacy of Collateral or any other security
for the Obligations, any deposits or other sums at any time credited by or due
from the Agent or any Bank to the Company may at any time be applied to or set
off against any of the Obligations then due and payable.
39. Notification to Account Debtors and Other Obligors. If a Default or an Event
of Default shall have occurred and be continuing, the Company shall, at the
request of the Agent, notify account debtors on accounts, chattel paper and
general intangibles of the Company and obligors on instruments for which the
Company is an obligee of the security interest of the Agent in any account,
chattel paper, general intangible or instrument and that payment thereof is to
be made directly to the Agent or to any financial institution designated by the
Agent as the Agent's agent therefor, and the Agent may itself, if a Default or
an Event of Default shall have occurred and be continuing, without notice to or
demand upon the Company, so notify account debtors and obligors. After the
making of such a request or the giving of any such notification, the Company
shall hold any proceeds of collection of accounts, chattel paper, general
intangibles and instruments received by the Company as trustee for the Agent,
for the benefit of the Banks and the Agent, without commingling the same with
other funds of the Company and shall turn the same over to the Agent in the
identical form received, together with any necessary endorsements or
assignments. The Agent shall apply the proceeds of collection of accounts,
chattel paper, general intangibles and instruments received by the Agent to the
Obligations, such proceeds to be immediately entered after final payment in cash
or solvent credits of the items giving rise to them.
40. Further Assurances. The Company, at its own expense, shall do, make, execute
and deliver all such additional and further acts, things, deeds, assurances and
instruments as the Agent may reasonably require more completely to vest in and
assure to the Agent and the Banks their respective rights hereunder or in any of
the Collateral, including, without limitation, (i) executing, delivering and,
where appropriate, filing financing statements and continuation statements under
the Uniform Commercial Code, (ii) obtaining governmental and other third party
consents and approvals, including without limitation any consent of any
licensor, lessor or other applicable party referred to in ss.2.3, (iii)
obtaining waivers from mortgagees and landlords and (iv) taking all actions
required by Sections 8-313 and 8-321 of the Uniform Commercial Code (1990) or
Sections 8-106 and 9-115 of the Uniform Commercial Code (1994), as applicable in
each relevant jurisdiction, with respect to certificated and uncertificated
securities.
41. Power of Attorney.
----------------------
41.1. Appointment and Powers of Agent. The Company hereby irrevocably
constitutes and appoints the Agent and any officer or agent thereof, with full
power of
<PAGE>
substitution, as its true and lawful attorneys-in-fact with full
irrevocable power and authority in the place and stead of the Company or in the
Agent's own name, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
this Agreement and, without limiting the generality of the foregoing, hereby
gives said attorneys the power and right, on behalf of the Company, without
notice to or assent by the Company, to do the following:
(a) upon the occurrence and during the continuance of a Default or an
Event of Default, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral in such manner
as is consistent with the Massachusetts Uniform Commercial Code and as
fully and completely as though the Agent were the absolute owner thereof
for all purposes, and to do at the Company' expense, at any time, or from
time to time, all acts and things which the Agent deems necessary to
protect, preserve or realize upon the Collateral and the Agent's security
interest therein, in order to effect the intent of this Agreement, all as
fully and effectively as the Company might do, including, without
limitation, (i) the filing and prosecuting of registration and transfer
applications with the appropriate federal or local agencies or authorities
with respect to trademarks, copyrights and patentable inventions and
processes, (ii) upon written notice to the Company, the exercise of voting
rights with respect to voting securities, which rights may be exercised, if
the Agent so elects, with a view to causing the liquidation in a
commercially reasonable manner of assets of the issuer of any such
securities and (iii) the execution, delivery and recording, in connection
with any sale or other disposition of any Collateral, of the endorsements,
assignments or other instruments of conveyance or transfer with respect to
such Collateral; and
(b) to the extent permitted by applicable law, to file such financing
statements with respect hereto, with or without the Company's signature, or
a photocopy of this Agreement in substitution for a financing statement, as
the Agent may deem appropriate and to execute in the Company's name such
financing statements and amendments thereto and continuation statements
which may require the Company's signature.
41.2. Ratification by Company. To the extent permitted by law, the Company
hereby ratifies all that said attorneys shall lawfully do or cause to be done by
virtue hereof. This power of attorney is a power coupled with an interest and
shall be irrevocable.
41.3. No Duty on Agent. The powers conferred on the Agent hereunder are
solely to protect the interests of the Agent and the Banks in the Collateral and
shall not impose any duty upon the Agent to exercise any such powers. The Agent
shall be accountable only for the amounts that it actually receives as a result
of the exercise of such powers and neither it nor any of its officers,
directors, employees or agents shall be responsible to the Company for any act
or failure to act, except for the Agent's own gross negligence or willful
misconduct.
<PAGE>
42. Remedies. If an Event of Default shall have occurred and be continuing, the
Agent may, without notice to or demand upon the Company, declare this Agreement
to be in default, and the Agent shall thereafter have in any jurisdiction in
which enforcement hereof is sought, in addition to all other rights and
remedies, the rights and remedies of a secured party under the Uniform
Commercial Code, including, without limitation, the right to take possession of
the Collateral, and for that purpose the Agent may, so far as the Company can
give authority therefor, enter upon any premises on which the Collateral may be
situated and remove the same therefrom. The Agent may in its discretion require
the Company to assemble all or any part of the Collateral at such location or
locations within the state(s) of the Company's principal office(s) or at such
other locations as the Agent may designate which is reasonably convenient to the
Agent and the Company Unless the Collateral is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market, the Agent shall give to the Company at least five Business Days prior
written notice of the time and place of any public sale of Collateral or of the
time after which any private sale or any other intended disposition is to be
made. The Company hereby acknowledges that five Business Days prior written
notice of such sale or sales shall be reasonable notice. In addition, the
Company waives any and all rights that it may have to a judicial hearing in
advance of the enforcement of any of the Agent's rights hereunder, including,
without limitation, its right following an Event of Default to take immediate
possession of the Collateral and to exercise its rights with respect thereto. To
the extent that any of the Obligations are to be paid or performed by a person
other than the Company, the Company waives and agrees not to assert any rights
or privileges which it may have under ss.9-112 of the Massachusetts Uniform
Commercial Code.
43. No Waiver, etc. The Company waives demand, notice, protest, notice of
acceptance of this Agreement, notice of loans made, credit extended, Collateral
received or delivered or other action taken in reliance hereon and all other
demands and notices of any description. With respect to both the Obligations and
the Collateral, the Company assents to any extension or postponement of the time
of payment or any other indulgence, to any substitution, exchange or release of
or failure to perfect any security interest in any Collateral, to the addition
or release of any party or person primarily or secondarily liable, to the
acceptance of partial payment thereon and the settlement, compromising or
adjusting of any thereof, all in such manner and at such time or times as the
Agent may deem advisable. The Agent shall have no duty as to the collection or
protection of the Collateral or any income thereon, nor as to the preservation
of rights against prior parties, nor as to the preservation of any rights
pertaining thereto beyond the safe custody thereof as set forth in ss.9.2. The
Agent shall not be deemed to have waived any of its rights upon or under the
Obligations or the Collateral unless such waiver shall be in writing and signed
by the Agent with the consent of the Majority Banks. No delay or omission on the
part of the Agent in exercising any right shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall not be construed as
a bar to or waiver of any right on any future occasion. All rights and remedies
of the Agent with respect to the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or papers, shall be cumulative and
may be exercised singularly, alternatively, successively or concurrently at such
time or at such times as the Agent deems expedient.
<PAGE>
44. Marshalling. Neither the Agent nor any Bank shall be required to marshal any
present or future collateral security (including but not limited to this
Agreement and the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights of the
Agent hereunder and of the Agent or any Bank in respect of such collateral
security and other assurances of payment shall be cumulative and in addition to
all other rights, however existing or arising. To the extent that it lawfully
may, the Company hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Agent's rights under this Agreement or under any other instrument
creating or evidencing any of the Obligations or under which any of the
Obligations is outstanding or by which any of the Obligations is secured or
payment thereof is otherwise assured, and, to the extent that it lawfully may,
the Company hereby irrevocably waives the benefits of all such laws.
45. Proceeds of Dispositions; Expenses. The Company shall pay to the Agent on
demand any and all expenses, including attorneys' fees and disbursements,
reasonably incurred or paid by the Agent in protecting, preserving or enforcing
the Agent's rights under or in respect of any of the Obligations or any of the
Collateral. After deducting all of said expenses, the residue of any proceeds of
collection or sale of the Obligations or Collateral shall, to the extent
actually received in cash, be applied to the payment of the Obligations in such
order or preference as is provided in the Credit Agreement, proper allowance and
provision being made for any Obligations not then due. Upon the final payment
and satisfaction in full of all of the Obligations and after making any payments
required by Section 9-504(1)(c) of the Massachusetts Uniform Commercial Code,
any excess shall be returned to the Company, and the Company shall remain liable
for any deficiency in the payment of the Obligations.
46. Overdue Amounts. Until paid, all amounts due and payable by the Company
hereunder shall be a debt secured by the Collateral and shall bear, whether
before or after judgment, interest at the rate of interest for overdue principal
set forth in the Credit Agreement.
47. Governing Law; Consent to Jurisdiction. THIS AGREEMENT IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. The Company
agrees that any suit for the enforcement of this Agreement may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the non-exclusive jurisdiction of such court and to service of
process in any such suit being made upon the Company by mail at the address
specified in ss.21 of the Credit Agreement. The Company hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
48. Waiver of Jury Trial. THE COMPANY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
<PAGE>
CONNECTION WITH THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law, the
Company waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. The Company (i) certifies that neither the Agent or any Bank nor any
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that, in
entering into the Credit Agreement and the other Loan Documents to which the
Agent or any Bank is a party, the Agent and the Banks are relying upon, among
other things, the waivers and certifications contained in this ss.20.
49. Miscellaneous. The headings of each section of this Agreement are for
convenience only and shall not define or limit the provisions thereof. This
Agreement and all rights and obligations hereunder shall be binding upon the
Company and its respective successors and assigns, and shall inure to the
benefit of the Agent, the Banks and their respective successors and assigns. If
any term of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity of all other terms hereof shall in no way be
affected thereby, and this Agreement shall be construed and be enforceable as if
such invalid, illegal or unenforceable term had not been included herein. The
Company acknowledges receipt of a copy of this Agreement.
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound, the Company has caused
this Agreement to be duly executed as of the date first above written.
MAPICS, INC.
By: /s/ George A. Chamberlain, 3rd
---------------------------------
Title: Chief Financial Officer
Accepted:
BANKBOSTON, N.A.,
as Agent
By:
-----------------------------------
Title:
CERTIFICATE OF ACKNOWLEDGMENT
COMMONWEALTH OF MASSACHUSETTS__________________________________________)
) ss.
COUNTY OF SUFFOLK _____________________________________________________)
Before me, the undersigned, a Notary Public in and for the county
aforesaid, on this 4th day of August, 1997, personally appeared ____________ to
me known personally, and who, being by me duly sworn, deposes and says that he
is the ___________ of MAPICS, Inc., and that said instrument was signed and
sealed on behalf of said corporation by authority of its Board of Directors, and
said * acknowledged said instrument to be the free act and deed of said
corporation.
------------------------------
Notary Public
My commission expires:
EXHIBIT 10.3
------------
REVOLVING CREDIT NOTE
---------------------
$15,000,000 August 4, 1997
FOR VALUE RECEIVED, the undersigned MAPICS, INC., a Massachusetts
corporation (the "Borrower"), hereby promises to pay to the order of BANKBOSTON,
N.A., a national banking association (the "Bank") at the Agent's Head Office (as
defined in the Credit Agreement referred to below):
(a) prior to or on the Revolving Credit Loan Maturity Date the
principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) or, if less, the
aggregate unpaid principal amount of Revolving Credit Loans advanced by the
Bank to the Borrower pursuant to the Revolving Credit and Term Loan
Agreement dated as of August 4, 1997 (as amended and in effect from time to
time, the "Credit Agreement"), among the Borrower, the Bank and other
parties thereto;
(b) without duplication of paragraph (a) hereof, the principal
outstanding hereunder from time to time at the times provided in the Credit
Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through and
including the maturity date hereof at the times and at the rate provided in
the Credit Agreement.
This Note evidences borrowings under and has been issued by the Borrower in
accordance with the terms of the Credit Agreement. The Bank and any holder
hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Revolving Credit Loan or at the
time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount
<PAGE>
-2-
of the Revolving Credit Loans set forth on the grid attached to this Note, or
the continuation of such grid, or any other similar record, including computer
records, maintained by the Bank with respect to any Revolving Credit Loans shall
be prima facie evidence of the principal amount thereof owing and unpaid to the
Bank, but the failure to record, or any error in so recording, any such amount
on any such grid, continuation or other record shall not limit or otherwise
affect the obligation of the Borrower hereunder or under the Credit Agreement to
make payments of principal of and interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.21 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
<PAGE>
-3-
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has caused this Revolving Credit Note
to be signed in its corporate name and its corporate seal to be impressed
thereon by its duly authorized officer as of the day and year first above
written.
[Corporate Seal]
MAPICS, INC.
By: /s/ George A. Chamberlain, 3rd
---------------------------------
Title: Chief Financial Officer
<PAGE>
-4-
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EXHIBIT 10.4
------------
TERM NOTE
---------
$15,000,000 as of August 4, 1997
FOR VALUE RECEIVED, the undersigned MAPICS, INC., a Massachusetts
corporation, (the "Borrower"), hereby promises to pay to the order of
BANKBOSTON, N.A., a national banking association (the "Bank") at the Agent's
Head Office (as defined in the Credit Agreement referred to below):
(a) prior to or on the Term Loan Maturity Date the principal amount of
FIFTEEN MILLION DOLLARS ($15,000,000), evidencing the Term Loan made by the
Bank to the Borrower pursuant to the Revolving Credit and Term Loan
Agreement dated as of August 4, 1997 (as amended and in effect from time to
time, the "Credit Agreement"), by and among the Borrower, the Bank and
other parties thereto;
(b) without duplication of paragraph (a) above, the principal
outstanding hereunder from time to time at the times provided in the Credit
Agreement; and
(c) interest from the date hereof on the principal amount from time to
time outstanding to and including the maturity hereof at the rates and
terms and in all cases in accordance with the terms of the Credit
Agreement.
This Note evidences borrowings under and has been issued by the Borrower in
accordance with the terms of the Credit Agreement. The Bank and any holder
hereof is entitled to the benefits of the Credit Agreement, the Security
Documents and the other Loan Documents, and may enforce the agreements of the
Borrower contained therein, and any holder hereof may exercise the respective
remedies provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be made,
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the receipt of
such payment. The outstanding amount of the Term Loan set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to the
Term Loan shall be prima facie evidence of the principal amount of the Term Loan
owing and unpaid to the Bank, but the failure to record, or any error in so
recording, any such amount on any such grid, continuation or other record shall
not limit or otherwise affect the obligation of the Borrower hereunder or under
the Credit Agreement to make payments of principal of and interest on this Note
when due.
<PAGE>
-2-
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any future occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.21 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
<PAGE>
-3-
IN WITNESS WHEREOF, the undersigned has caused this Note to be signed in
its corporate name and its corporate seal to be impressed thereon by its duly
authorized officer as of the day and year first above written.
[Corporate Seal]
MAPICS, INC.
By: /s/ George A. Chamberlain, 3rd
------------------------------------
Title: Chief Financial Officer
