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CREDIT AGREEMENT
BETWEEN
FLEET NATIONAL BANK
AND
ASPEN TECHNOLOGY, INC.
Dated: October 27, 2000
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of October 27, 2000, by and between
Aspen Technology, Inc., a Delaware corporation, having its chief executive
office at Ten Canal Park, Cambridge, MA 02141-2201 (the "BORROWER"), and FLEET
NATIONAL BANK, a national bank having its head office at 100 Federal Street,
Boston, Massachusetts 02110 ("FLEET" or the "LENDER").
WHEREAS, the Borrower has requested the Lender to extend credit in the
form of loans and letters of credit, and the Lender is willing to make loans to
the Borrower and the Issuing Bank is willing to issue Letters of Credit, in each
case on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION I.
DEFINITIONS
1.1. DEFINITIONS.
All capitalized terms used in this Agreement or in the Notes or in any
certificate, report or other document made or delivered pursuant to this
Agreement (unless otherwise defined therein) shall have the meanings assigned to
them below:
ACCOUNTS RECEIVABLE AND ACCOUNTS. All of the accounts, accounts
receivable, notes, bills, drafts, acceptances, instruments, documents and
chattel paper of the Borrower and all other debts, obligations and liabilities
in whatever form owing to the Borrower from any Person for goods sold or for
services rendered, or however otherwise established or created, all guarantees
and security therefor, all right, title and interest of the Borrower in the
goods or services which gave rise thereto, including rights to reclamation and
stoppage in transit and all rights of an unpaid seller of goods or services;
whether any of the foregoing be now existing or hereafter arising, now or
hereafter received by or owing or belonging to the Borrower.
AFFECTED LOANS. See Section 2.10.
AFFILIATE. With reference to any Person, (i) any director, officer or
employee of that Person, (ii) any other Person controlling, controlled by or
under direct or indirect common control of that Person, (iii) any other Person
directly or indirectly holding 5% or more of any class of the capital stock or
other equity interests (including options, warrants, convertible securities and
similar rights) of that Person and (iv) any other Person 5% or more of any class
of whose capital stock or other equity interests (including options, warrants,
convertible securities and similar rights) is held directly or indirectly by
that Person.
AGREEMENT. This Credit Agreement, including the Exhibits and Schedules
hereto, as the same may be supplemented, amended or restated from time to time.
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ALTERNATE PRIME RATE. The greater of (i) the rate of interest announced
from time to time by Fleet at its head office as its "Prime Rate", and (ii) the
Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards, if
necessary, to the next 1/8 of 1%). The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate being charged to any customer.
Any change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change without notice or
demand of any kind.
APPLICABLE MARGIN. As of any date, with respect to Prime Rate Loans,
LIBOR Loans, Commitment Fees or Letter of Credit Fees, the applicable percentage
set forth below opposite the applicable Leverage Ratio in effect at such date,
PROVIDED, HOWEVER that during the period from the Closing Date through and
including the date upon which Fleet receives the unaudited financial statements
required pursuant to Section 5.1(b) for the fiscal quarter ending September 30,
2000, the Leverage Ratio shall be deemed to be less than 1.25:1.00, but greater
than or equal to 0.75:1.00 for purposes of determining the Applicable Margin:
Applicable Margin
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Leverage Prime Rate LIBOR Commitment
Ratio Loans Loans Fee
-------- ---------- ----- ----------
Greater than or equal to
1.25:1.00 0.50% 2.25% 0.40%
Less than 1.25:1.00, but
greater than or equal to
0.75:1.00 0.25% 1.50% 0.30%
Less than 0.75:1.00 0% 1.00% 0.25%
ASSIGNEE. See Section 9.1.
BORROWER. See Preamble.
BORROWER'S ACCOUNTANTS. Arthur Andersen LLP, or such other independent
certified public accountants as are selected by the Borrower and reasonably
acceptable to the Lender.
BORROWING BASE. An amount equal to the sum of (a) 85% of the unpaid
face amount of all Eligible Accounts, plus (b) 50% of the unpaid face amount of
all Eligible Foreign Accounts, plus (c) 50% of the net present value of Eligible
QMLA Amounts due under Qualified Multiyear License Agreements.
BORROWING BASE REPORT. A report signed by any Responsible Officer and
in substantially the form of EXHIBIT E hereto.
BUSINESS DAY. (i) For all purposes other than as covered by clause (ii)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Boston, Massachusetts are open for the conduct of a substantial part of their
commercial banking business; and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
LIBOR Loans, any day that is a Business Day described in clause (i) and that is
also
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a day on which dealings in U.S. dollar deposits are also carried on in the
London interbank market and banks are open for business in London.
CAPITAL EXPENDITURES. Without duplication, any expenditure for fixed or
capital assets, leasehold improvements, capital leases, installment purchases of
machinery and equipment, acquisitions of real estate and other similar
expenditures including (i) in the case of a purchase, the entire purchase price,
whether or not paid during the fiscal period in question, (ii) in the case of a
capital lease, the capitalized amount (as determined under GAAP) of the
obligations under such lease to pay rent and other amounts, and (iii)
expenditures in any construction in progress account of the Borrower.
CLOSING DATE. The first date on which the conditions set forth in
Sections 3.1 and 3.2 have been satisfied and any Loans are to be made hereunder.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as the same may from time to time be supplemented or
amended and remain in effect.
COMMITMENT. The Revolving Credit Commitment.
COMMITMENT FEE. See Section 2.5(a).
CONSOLIDATED CURRENT LIABILITIES. The aggregate amount of Indebtedness
of the Borrower and its Subsidiaries that may properly be classified as current
liabilities in accordance with GAAP and in any event including, without
limitation, (i) the Obligations and (ii) any other direct or indirect
Indebtedness and other liabilities of the Borrower and its Subsidiaries that are
payable on demand or within one year from the creation thereof.
CONSOLIDATED NET INCOME. For any fiscal period, the consolidated net
income of the Borrower and its Subsidiaries for such period, as determined in
accordance with GAAP, except that in no event shall such consolidated net income
include: (i) any gain or loss arising from any write-up of assets, except to the
extent inclusion thereof shall be approved in writing by the Lender; (ii) except
in acquisitions treated accounted for under the pooling of interests method,
earnings of any Subsidiary accrued prior to the date it became a Subsidiary;
(iii) any extraordinary or nonrecurring gains or losses; (iv) any deferred or
other credit representing any excess of the equity of any Subsidiary at the date
of acquisition thereof over the amount invested in such Subsidiary; and (v) the
proceeds of any life insurance policy.
CONSOLIDATED NET WORTH. At any date as of which the amount thereof
shall be determined, the consolidated total assets of the Borrower and its
Subsidiaries, MINUS (a) Consolidated Total Liabilities, MINUS (b) the sum of any
amounts attributable to (i) all reserves not already deducted from assets or
included in Consolidated Total Liabilities, (ii) any write-up in the book value
of assets resulting from any revaluation thereof subsequent to the date of the
Initial Financial Statement, (iii) the value of any minority interests in
Subsidiaries, and (iv) intercompany accounts with Subsidiaries and Affiliates
other than a Qualified Affiliate (including receivables due from Subsidiaries
and Affiliates).
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CONSOLIDATED TOTAL LIABILITIES. At any date as of which the amount
thereof shall be determined, all obligations that should, in accordance with
GAAP, be classified as liabilities on the consolidated balance sheet of the
Borrower and its Subsidiaries, including in any event all Indebtedness.
CONTRA CUSTOMER. Any customer or other Person with whom the Borrower
has a contract or agreement of any kind (including an account payable) and in
respect of whom there is an Account included in Eligible Accounts.
DEFAULT. An Event of Default or event or condition that, but for the
requirement that time elapse or notice be given, or both, would constitute an
Event of Default.
DRAWDOWN DATE. The Business Day on which any Loan is made or is to be
made.
EBITDA. For any fiscal period, an amount equal to Consolidated Net
Income for such period, PLUS the following (without duplication), to the extent
excluded or deducted in computing such Consolidated Net Income: (i) Interest
Expense, (ii) income taxes, (iii) depreciation and (iv) amortization of good
will and other intangibles, MINUS any capitalized software development costs;
PROVIDED, HOWEVER, that the calculation of EBITDA shall not include
non-recurring non-cash charges relating to Permitted Acquisitions.
ELIGIBLE ACCOUNTS. An Account Receivable which:
(a) is not unpaid more than 120 days after invoice date and is
not more than 90 days past due under the original terms of sale;
(b) arose in the ordinary course of business of the Borrower
as a result of services which have been performed for the account debtor or the
sale of goods which have been shipped to the account debtor (provided that
portion of the Borrower's deferred revenue relating to services provided under
agreements relating to support, maintenance and consulting services and to
services provided under Qualified Multiyear License Agreements shall be deemed
to have actually been provided);
(c) is the legal, valid and binding obligation of the account
debtor thereunder, is assignable, is owned by the Borrower free and clear of all
Encumbrances and is not evidenced by a promissory note or other instrument;
(d) is not subject to material reduction, as against the
Borrower, its agents or the Lender, by any offset, counterclaim, adjustment,
credit, allowance or other defense, and as to which there is no (and no basis
for any) return, rejection, loss or damage of or to the goods giving rise
thereto, or any request for credit or adjustments known to the Borrower;
(e) is not uncollectible or reasonably likely to become
uncollectible for any reason, including, without limitation, return, rejection,
repossession, loss of or damage to the merchandise giving rise thereto, a
merchandise or other dispute, any bankruptcy, insolvency, adverse credit rating
or other financial difficulty of the account debtor, or any impediment to the
assertion of a claim or commencement of an action against the account debtor
(including as a consequence of the failure of the Borrower to be qualified or
licensed in any jurisdiction where
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such qualification or licensing is required), all as reasonably determined by
the Lender in its sole discretion;
(f) is not owing from any Affiliate of the Borrower other than
a Qualified Affiliate;
(g) is owing from an account debtor located in the United
States;
(h) if owing from any Contra Customer, will be eligible only
to the extent that the amount of the Borrower's accounts payable to such Contra
Customer does not exceed the amount of such Contra Customer's accounts payable
to the Borrower by more than One Million Dollars ($1,000,000); and
(i) has not been designated by the Lender in its sole
discretion by notice to the Borrower as unacceptable for any reason.
ELIGIBLE FOREIGN ACCOUNTS. An Eligible Account (notwithstanding section
(g) of the definition of Eligible Account) owing from an account debtor located
outside the United States.
ELIGIBLE INTEREST RATE CONTRACTS. Interest rate swap agreements,
interest rate collar agreements, options on any of the foregoing and any other
agreements or arrangements designed to provide protection against fluctuations
in interest rates, in each case purchased by the Borrower from the Lender.
ELIGIBLE QMLA AMOUNTS. Amounts due within one year under Qualified
Multiyear License Agreements that meet the requirements for Eligible Accounts.
ENCUMBRANCES. See Section 7.3.
ENVIRONMENTAL LAWS. Any and all applicable federal, state and local
environmental, health or safety statutes, laws, regulations, rules and
ordinances (whether now existing or hereafter enacted or promulgated), and all
applicable judicial, administrative and regulatory decrees, judgments and
orders, including common law rulings and determinations, relating to injury to,
or the protection of, real or personal property or human health or the
environment, including, without limitation, all requirements pertaining to
reporting, licensing, permitting, investigation, remediation and removal of
emissions, discharges, releases or threatened releases of Hazardous Materials
into the environment or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of such Hazardous
Materials.
ERISA. The Employee Retirement Income Security Act of 1974 and the
rules and regulations thereunder, collectively, as the same may from time to
time be supplemented or amended and remain in effect.
ERISA AFFILIATE. Any trade or business, whether or not incorporated,
that is treated as a single employer with the Borrower under Section 414(b),
(c), (m) or (o) of the Code and Section 4001(a)(14) of ERISA.
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ERISA EVENT. (a) Any "reportable event," as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrower or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (f) the receipt by the Borrower of any ERISA
Affiliate from the PBGC or a plan administrator or any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (g) the receipt by the Borrower or any ERISA Affiliate of any notice
concerning the imposition of Withdrawal Liability (as defined in Part I of
Subtitle E of Title IV of ERISA) with respect to any Multiemployer Plan or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA; (h) the occurrence
of a "prohibited transaction" with respect to which the Borrower or any of the
Subsidiaries is a "disqualified person" (within the meaning of Section 4975 of
the Code) or with respect to which the Borrower or any such Subsidiary could
otherwise be liable; and (i) any other event or condition with respect to a Plan
or Multiemployer Plan that could reasonably be expected to result in liability
of the Borrower.
EVENT OF DEFAULT. Any event described in Section 8.1.
FEDERAL FUNDS EFFECTIVE RATE. For any day, a fluctuating interest 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
Lender from three Federal funds brokers of recognized standing selected by the
Lender.
FLEET. See Preamble.
GAAP. Generally accepted accounting principles, consistently applied.
GUARANTEES. As applied to the Borrower and its Subsidiaries, all
guarantees, endorsements or other contingent or surety obligations with respect
to obligations of others whether or not reflected on the consolidated balance
sheet of the Borrower and its Subsidiaries, including any obligation to furnish
funds, directly or indirectly (whether by virtue of partnership arrangements, by
agreement to keep-well or otherwise), through the purchase of goods, supplies or
services, or by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose of payment of
obligations of any other Person.
GUARANTORS. Aspentech, Inc., a Texas corporation, Aspentech Securities
Corp., a Massachusetts corporation, and Industrial Systems, Inc., a Washington
corporation, and any current or future domestic Subsidiary of the Borrower whose
revenues exceeded ten percent
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(10%) of the aggregate revenues of the Borrower and its Subsidiaries taken on a
consolidated basis for any period of four (4) consecutive fiscal quarters.
HAZARDOUS MATERIAL. Any substance (i) the presence of which requires or
may hereafter require notification, investigation, removal or remediation under
any Environmental Law; (ii) which is or becomes defined as a "hazardous waste",
"hazardous material" or "hazardous substance" or "pollutant" or "contaminant"
under any present or future Environmental Law or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 ET SEQ.) and any applicable local statutes
and the regulations promulgated thereunder; (iii) which is toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous and which is or becomes regulated pursuant to any
Environmental Law by any governmental authority, agency, department, commission,
board, agency or instrumentality of the United States, any applicable state of
the United States, or any political subdivision thereof; or (iv) without
limitation, which contains gasoline, diesel fuel or other petroleum products,
asbestos or polychlorinated biphenyls ("PCBs").
INDEBTEDNESS. As applied to the Borrower and its Subsidiaries, without
duplication, (i) all obligations for borrowed money or other extensions of
credit whether secured or unsecured, absolute or contingent, including, without
limitation, unmatured reimbursement obligations with respect to letters of
credit or guarantees issued for the account of or on behalf of the Borrower and
its Subsidiaries and all obligations representing the deferred purchase price of
property, other than accounts payable arising in the ordinary course of
business, (ii) all obligations evidenced by bonds, notes, debentures or other
similar instruments, (iii) all obligations secured by any mortgage, pledge,
security interest or other lien on property owned or acquired by the Borrower or
any of its Subsidiaries whether or not the obligations secured thereby shall
have been assumed, (iv) that portion of all obligations arising under leases
that is required to be capitalized on the consolidated balance sheet of the
Borrower and its Subsidiaries, (v) all Guarantees, (vi) all obligations that are
immediately due and payable out of the proceeds of or production from property
now or hereafter owned or acquired by the Borrower or any of its Subsidiaries,
(vii) obligations in respect of Eligible Interest Rate Contracts, and (viii) all
other obligations which, in accordance with GAAP, would be included as a
liability on the consolidated balance sheet of the Borrower and its
Subsidiaries, but excluding anything in the nature of capital stock, capital
surplus and retained earnings.
INITIAL FINANCIAL STATEMENT. See Section 4.6.
INTELLECTUAL PROPERTY. All (i) patents, patent applications, patent
disclosures and all related continuation, continuation-in-part, divisional,
reissue, reexamination, utility model, certificate of invention and design
patents, patent applications, registrations and applications for registrations,
(ii) trademarks, service marks, trade dress, logos, trade names and corporate
names and registrations and applications for registration thereof, (iii)
copyrights and registrations and applications for registration thereof, (iv)
computer software (in both source code and object form code), data and
documentation, (v) trade secrets and confidential business information, whether
patentable or unpatentable and whether or not reduced to practice, know-how,
manufacturing and production processes and techniques, research and development
information, copyrightable works, financial marketing and business data, pricing
and cost information, business and
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marketing plans and customer and supplier lists and information, and (vi) other
proprietary rights relating to any of the foregoing.
INTEREST EXPENSE. For any fiscal period, the consolidated interest
expense (including imputed interest on capitalized lease obligations) and
amortized debt discount on Indebtedness of the Borrower and its Subsidiaries for
such period.
INTEREST PERIOD. With respect to each LIBOR Loan, the period commencing
on the date of the making or continuation of or conversion to such LIBOR Loan
and ending one (1), two (2), three (3) or six (6) months thereafter, as the
Borrower may elect in the applicable Notice of Borrowing or Conversion; PROVIDED
that:
(i) any Interest Period (other than an Interest Period
determined pursuant to clause (iii) below) that would otherwise end on
a day that is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in the next
calendar month, in which case such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Business
Day of a calendar month;
(iii) any Interest Period that would otherwise end after
the Maturity Date shall end on the Maturity Date; and
(iv) notwithstanding clause (iii) above, no Interest
Period shall have a duration of less than one month, and if any
Interest Period applicable to a Loan would be for a shorter period,
such Interest Period shall not be available hereunder.
INVESTMENT. As applied to the Borrower and its Subsidiaries, the
purchase or acquisition of any share of capital stock, partnership interest,
evidence of indebtedness or other equity security of any other Person (including
any Subsidiary), any loan, advance or extension of credit (excluding Accounts
Receivable arising in the ordinary course of business) to, or contribution to
the capital of, any other Person (including any Subsidiary), any real estate
held for sale or investment, any securities or commodities futures contracts
held, any other investment in any other Person (including any Subsidiary), and
the making of any commitment or acquisition of any option to make an Investment.
ISSUING BANK. Fleet.
LENDER. See Preamble.
LETTER OF CREDIT APPLICATIONS. Applications for Letters of Credit in
such form as may be required by the Issuing Bank from time to time which are
executed and delivered by the Borrower to the Issuing Bank pursuant to Section
IIA, as the same may be amended or supplemented from time to time.
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LETTER OF CREDIT FEE. See Section 2.5(b).
LETTERS OF CREDIT. See Section 2A.l(a).
LEVERAGE RATIO. As of the end of any fiscal quarter, the ratio of (i)
Consolidated Total Liabilities as of the end of such fiscal quarter, to (ii)
Consolidated Net Worth as of the end of such fiscal quarter.
LIBOR LOAN. Any Loan bearing interest at a rate determined with
reference to the LIBOR Rate.
LIBOR RATE. With respect to any LIBOR Loan for any Interest Period, the
rate of interest determined by the Lender to be the prevailing rate per annum at
which deposits in U.S. Dollars are offered to the Lender by first-class banks in
the interbank Eurodollar market in which it regularly participates on or about
10:00 a.m. (Boston time) two Business Days before the first day of such Interest
Period in an amount approximately equal to the principal amount of the LIBOR
Loan to which such Interest Period is to apply for a period of time
approximately equal to such Interest Period.
LOAN DOCUMENTS. This Agreement, the Notes, the Letter of Credit
Applications and the Subsidiary Guaranty, together with any agreements,
instruments or documents executed and delivered pursuant to or in connection
with any of the foregoing.
LOANS. The Loans made or to be made by the Lender to the Borrower
pursuant to Section II of this Agreement, including Revolving Credit Loans and
unpaid Reimbursement Obligations.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount from time to time
that beneficiaries may draw under outstanding Letters of Credit.
MULTIEMPLOYER PLAN. Any plan which is a Multiemployer Plan as defined
in Section 4001(a)(3) of ERISA.
NOTE RECORD. Any internal record, including a computer record,
maintained by the Lender with respect to any Loan.
NOTES. The Revolving Credit Note and any other notes issued to
Assignees or Participants pursuant to Section IX.
NOTICE OF BORROWING OR CONVERSION. The notice, substantially in the
form of EXHIBIT B hereto, to be given by the Borrower to the Lender to request a
Loan or to convert an outstanding Loan of one Type into a Loan of another Type,
in accordance with Section 2.3.
OBLIGATIONS. Any and all obligations of the Borrower to the Lender and
the Issuing Bank of every kind and description pursuant to or in connection with
the Loan Documents and Eligible Interest Rate Contracts, direct or indirect,
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising, regardless of how they arise or by what agreement
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or instrument, if any, and including obligations to perform acts and refrain
from taking action as well as obligations to pay money.
PARTICIPANT. See Section 9.2.
PENSION PLAN. Any Plan which is an "employee pension benefit plan" (as
defined in ERISA).
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
PERMITTED ACQUISITION. See Section 7.4(a)
PERMITTED ENCUMBRANCES. See Section 7.3.
PERSON. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business or other legal entity, and
any government or governmental agency or political subdivision thereof.
PLAN. Any "employee pension benefit plan" or "employee welfare benefit
plan" (each as defined in Section 3 of ERISA) maintained by the Borrower or any
Subsidiary.
PRIME RATE LOAN. Any Loan bearing interest at a rate determined with
reference to the Alternate Prime Rate.
PROHIBITED TRANSACTION. Any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code.
QUALIFIED AFFILIATE. A large customer of Borrower whose debt securities
are rated investment grade (BBB- or higher) and that is an Affiliate by reason
of its having made an investment, and holding a minority equity interest in, a
Subsidiary or Affiliate of the Borrower.
QUALIFIED INVESTMENTS. As applied to the Borrower and its Subsidiaries,
investments in accordance with the Borrower's "Short Term Investment Portfolio
Investment Policy," effective as of June 6, 1997, a true and complete copy of
which is attached hereto as EXHIBIT F.
QUALIFIED MULTIYEAR LICENSE AGREEMENTS. All agreements pursuant to
which a third party licenses or otherwise obtains the right to use any computer
software products and services of Borrower for a period longer than one year and
is not required to pay for such license in full within the first year thereof,
such licenses to be on terms and conditions customarily negotiated by Borrower
in the operation of its business.
QUICK RATIO. As of the end of any fiscal quarter, the ratio of (i) cash
and cash equivalents of the Borrower and its Subsidiaries plus Eligible Accounts
net of reserves, including the current portion (due within twelve months) of
Borrower's long-term Accounts Receivable, to (ii) Consolidated Current
Liabilities as of the end of such fiscal quarter.
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REIMBURSEMENT OBLIGATION. The Obligation of the Borrower to reimburse
the Issuing Bank and the Lender on account of any drawing under any Letter of
Credit as provided in Section 2A.2.
RESERVE PERCENTAGE. For any Interest Period, the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority,
domestic or foreign, to which the Lender is subject with respect to
"Eurocurrency Liabilities" (as defined in regulations issued from time to time
by such Board of Governors). The Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in any such reserve
percentage without notice or demand of any kind.
RESPONSIBLE OFFICER. The chief financial officer of the Borrower and
any other officer of the Borrower designated by the chief financial officer to
sign Borrowing Base Reports and Notices of Borrowing or Conversion.
RESTRICTED PAYMENT. Any dividend, distribution, loan, advance,
guaranty, extension of credit or other payment, whether in cash or property to
or for the benefit of any Person who holds an equity interest in the Borrower or
any of its Subsidiaries, whether or not such interest is evidenced by a
security, and any purchase, redemption, retirement or other acquisition for
value of any capital stock of the Borrower or any of its Subsidiaries, whether
now or hereafter outstanding, or of any options, warrants or similar rights to
purchase such capital stock or any security convertible into or exchangeable for
such capital stock.
REVOLVING CREDIT COMMITMENT. The maximum dollar amount of credit which
the Lender has agreed to loan to the Borrower as Revolving Credit Loans or make
available to the Borrower pursuant to Letters of Credit upon the terms and
subject to the conditions of this Agreement, initially as set forth on SCHEDULE
1 attached hereto, as the Lender's Revolving Credit Commitment may be modified
pursuant hereto and in effect from time to time.
REVOLVING CREDIT LOANS. See Section 2.1(a).
REVOLVING CREDIT MATURITY DATE. October 26, 2003.
REVOLVING CREDIT NOTE. See Section 2.2(a).
SUBSIDIARY. With respect to any Person, any corporation, association,
joint stock company, business trust, partnership, limited liability company or
other similar organization of which more than 50% of the ordinary voting power
for the election of a majority of the members of the board of directors or other
governing body of such entity is held or controlled by such Person or a
Subsidiary of such Person; or any other such organization the management of
which is directly or indirectly controlled by such Person or a Subsidiary of
such Person through the exercise of voting power or otherwise; or any joint
venture, whether incorporated or not, in which such Person has more than a 50%
ownership interest.
SUBSIDIARY GUARANTY. That certain Subsidiary Guaranty, dated as of the
Closing Date from the Guarantors in favor of the Lender.
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TOTAL REVOLVING CREDIT OUTSTANDINGS. At any time, the sum of (i) the
aggregate outstanding principal balance of Revolving Credit Loans at the time,
and (ii) the Maximum Drawing Amount at the time.
TYPE. A LIBOR Loan or a Prime Rate Loan.
1.2. RULES OF INTERPRETATION.
(a) all terms of an accounting character used herein but
not defined herein shall have the meanings assigned thereto by GAAP applied on a
consistent basis. All calculations for the purposes of Section VI hereof shall
be made in accordance with GAAP.
(b) A reference to any document or agreement shall
include such document or agreement as amended, modified or supplemented and in
effect from time to time in accordance with its terms and the terms of this
Agreement.
(c) The singular includes the plural and the plural
includes the singular. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) The words "include", "includes" and "including" are
not limiting.
(f) The words "herein", "hereof", "hereunder" and words
of like import shall refer to this Agreement as a whole and not to any
particular section or subdivision of this Agreement.
(g) All terms not specifically defined herein or by GAAP
that are defined in the Uniform Commercial Code as in effect in The Commonwealth
of Massachusetts, shall have the meanings assigned to them in such Uniform
Commercial Code.
SECTION II.
DESCRIPTION OF CREDIT
2.1. LOANS.
(a) REVOLVING CREDIT LOANS. Upon the terms and subject to
the conditions of this Agreement, and in reliance upon the representations,
warranties and covenants of the Borrower herein, the Lender agrees to make
revolving credit loans (the "REVOLVING CREDIT LOANS") to the Borrower at the
Borrower's request from time to time from and after the Closing Date and prior
to the Revolving Credit Maturity Date, PROVIDED that the Total Revolving Credit
Outstandings (after giving effect to all requested Revolving Credit Loans and
Letters of Credit) shall not at any time exceed the lesser of (i) the Borrowing
Base and (ii) the Revolving Credit Commitment. Subject to the terms and
conditions of this Agreement, the Borrower may borrow,
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repay, prepay and reborrow amounts, up to the limits imposed by this Section
2.1(a), from time to time between the Closing Date and the Revolving Credit
Maturity Date upon request given to the Lender pursuant to Section 2.3. Each
request for a Revolving Credit Loan or Letter of Credit hereunder shall
constitute a representation and warranty by the Borrower that the conditions set
forth in Sections 3.1 and 3.2 have been satisfied as of the date of such
request.
(b) LIBOR LOAN LIMITATIONS. Each LIBOR Loan shall be in a
minimum principal amount of $1,000,000 or in integral multiples of $100,000 in
excess of such minimum amount. No more than three (3) LIBOR Loans may be
outstanding at any time.
(c) CONVERSIONS. Upon the terms and subject to the
conditions and limitations of this Agreement, the Borrower may convert all or a
part of any outstanding Loan into a Loan of another Type on any Business Day
(which, in the case of a conversion of an outstanding LIBOR Loan shall be the
last day of the Interest Period applicable to such LIBOR Loan). The Borrower
shall give the Lender prior notice of each such conversion (which notice shall
be effective upon receipt) in accordance with Section 2.3.
(d) TERMINATION OR REDUCTION OF COMMITMENTS.
(i) The Revolving Credit Commitment shall terminate at
5:00 p.m. Boston time on the Revolving Credit Maturity Date.
(ii) Subject to the provisions of Section 2.6 regarding
mandatory payments, the Borrower shall have the right at any time and
from time to time upon five (5) Business Days' prior written notice to
the Lender to reduce by $1,000,000, and in integral multiples of
$500,000 if in excess thereof, the Revolving Credit Commitment or to
terminate entirely the Revolving Credit Commitment, whereupon the
Revolving Credit Commitment shall be reduced by the amount specified in
such notice or shall, as the case may be, be terminated entirely.
(iii) If, as a result of any reduction of the Revolving
Credit Commitment, the Maximum Drawing Amount at the time would exceed
the Revolving Credit Commitment or the amount of Letters of Credit
permitted to be outstanding under Sections 2.1(a) and 2A.1(a) hereof,
the Borrower shall, as a condition precedent to any such reduction,
deposit with and pledge to the Lender for the benefit of the Lender and
the Issuing Bank cash in an amount equal to 110% of such excess. If any
Letters of Credit would remain outstanding after the effective date of
termination of the Revolving Credit Commitment, in addition to
satisfaction of all other applicable terms and conditions of this
Agreement, the Borrower shall deposit with and pledge to the Lender
cash in an amount equal to 110% of the Maximum Drawing Amount at the
effective date of such termination.
(iv) No reduction or termination of any Commitment may be
reinstated.
2.2. THE NOTE.
(a) The Revolving Credit Loans shall be evidenced by a
promissory note in substantially the form of EXHIBIT A hereto, dated as of the
Closing Date (the "REVOLVING CREDIT NOTE").
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(b) The Borrower irrevocably authorizes the Lender to
make or cause to be made, at or about the time of the Drawdown Date of any Loan
or at the time of receipt of any payment of principal on any Note, an
appropriate notation on its Note Record reflecting (as the case may be) the
making of such Loan or the receipt of such payment. The outstanding amount of
the Loans set forth on the Note Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to the Lender, but the failure to
record, or any error in so recording, any such amount on the Lender's Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of or interest on any
Note when due.
2.3. NOTICE AND MANNER OF BORROWING OR CONVERSION OF LOANS.
(a) Except as otherwise provided in this Agreement,
whenever the Borrower desires to obtain or continue a Loan hereunder or convert
an outstanding Loan into a Loan of another Type, the Borrower shall give the
Lender a telephonic notice promptly confirmed by a written Notice of Borrowing
or Conversion, which telephonic notice shall be irrevocable and which must be
received no later than 2:00 p.m. Boston time on the date (i) one Business Day
before the day on which the requested Loan is to be made as or converted to a
Prime Rate Loan, and (ii) three Business Days before the day on which the
requested Loan is to be made or continued as or converted to a LIBOR Loan. Such
Notice of Borrowing or Conversion shall specify (i) the effective date and
amount of each Loan or portion thereof requested to be made, continued or
converted, subject to the limitations set forth in Section 2.1, (ii) the
interest rate option requested to be applicable thereto, and (iii) the duration
of the applicable Interest Period, if any (subject to the provisions of the
definition of the term "Interest Period"). If such Notice fails to specify the
interest rate option to be applicable to the requested Loan, then the Borrower
shall be deemed to have requested a Prime Rate Loan. If the written confirmation
of any telephonic notification differs in any material respect from the action
taken by the Lender, the records of the Lender shall control absent manifest
error.
(b) Subject to the provisions of the definition of the
term "Interest Period" herein, the duration of each Interest Period for a LIBOR
Loan shall be as specified in the applicable Notice of Borrowing or Conversion.
If no Interest Period is specified in a Notice of Borrowing or Conversion with
respect to a requested LIBOR Loan, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. If the Lender receives a
Notice of Borrowing or Conversion after the time specified in subsection (a)
above, such Notice shall not be effective. If the Lender does not receive an
effective Notice of Borrowing or Conversion with respect to an outstanding LIBOR
Loan, or if, when such Notice must be given prior to the end of the Interest
Period applicable to such outstanding Loan, the Borrower shall have failed to
satisfy any of the conditions hereof, the Borrower shall be deemed to have
elected to convert such outstanding Loan in whole into a Prime Rate Loan on the
last day of the then current Interest Period with respect thereto.
2.4. INTEREST RATES AND PAYMENTS OF INTEREST.
(a) Each Loan which is a Prime Rate Loan shall bear
interest on the outstanding principal amount thereof at a rate per annum equal
to the Alternate Prime Rate plus the Applicable Margin, which rate shall change
contemporaneously with any change in the
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Alternate Prime Rate or the Applicable Margin, as provided below. Such interest
shall be payable quarterly in arrears on the first Business Day of each quarter.
(b) Each Loan which is a LIBOR Loan shall bear interest
on the outstanding principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the LIBOR Rate plus the Applicable Margin,
which rate shall change with any change in the Applicable Margin, as provided
below. Such interest shall be payable for such Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
(c) The Applicable Margin and the Leverage Ratio shall be
determined as of the end of each fiscal quarter based upon the quarterly
financial statements to be delivered pursuant to Section 5.1(b), and any change
in the Applicable Margin shall be effective upon the delivery of such financial
statements, PROVIDED, HOWEVER that during any period when the Borrower has
failed to deliver such quarterly financial statements as required by Section
5.1(b), the Leverage Ratio shall be deemed to be greater than 1.25 to 1.00 for
purposes of determining the Applicable Margin.
(d) If an Event of Default shall occur, then at the
option of the Lender (i) Borrower's right to select pricing options shall cease
and the unpaid balance of Loans shall bear interest, to the extent permitted by
law, compounded daily at an interest rate equal to the Prime Rate plus 2% per
annum, until such Event of Default is cured or waived, and (ii) the Borrower
shall pay to the Lender a fee (in addition to the Letter of Credit Fee) equal to
1% per annum of the Maximum Drawing Amount of all Letters of Credit outstanding
during the period from the occurrence of such Event of Default until such Event
of Default is cured or waived.
(e) So long as the Lender shall be required under
regulations of the Board of Governors of the Federal Reserve System (or any
other banking authority, domestic or foreign, to which the Lender is subject) to
maintain reserves with respect to liabilities or assets consisting of or
including "Eurocurrency Liabilities" (as defined in regulations issued from time
to time by such Board of Governors), the Borrower shall pay to the Lender
additional interest on the unpaid principal amount of each LIBOR Loan made by
the Lender from the date of such Loan until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder (rounded
upwards, if necessary, to the next higher 1/100 of 1%) obtained by subtracting
(i) the LIBOR Rate for the Interest Period for such LIBOR Loan from (ii) the
rate obtained by dividing such LIBOR Rate by a percentage equal to 100% minus
the Reserve Percentage of the Lender for such Interest Period. Such additional
interest shall be determined by the Lender and notified to the Borrower, and
shall be payable on each date on which interest is payable on such LIBOR Loan.
(f) All agreements between the Borrower and Guarantors
and the Lender are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the Loans or
otherwise, shall the amount paid or agreed to be paid to the Lender for the use
or the forbearance of the Loans exceed the maximum permissible under applicable
law. As used in this Section 2.4(f), the term "applicable law" shall mean the
law in effect as of the date hereof; PROVIDED, HOWEVER, that in the event there
is a change in the law which results in a higher permissible rate of interest,
then this Agreement shall be governed by
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such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of the Borrower and the Lender in the execution, delivery
and acceptance of this Agreement to contract in strict compliance with the laws
of the Commonwealth of Massachusetts from time to time in effect. If, under or
from any circumstances whatsoever, fulfillment of any provision hereof or of any
of the Loan Documents at the time of performance of such provision shall be due,
shall involve transcending the limit of such validity prescribed by applicable
law, then the obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from any circumstances whatsoever the
Lender should ever receive as interest an amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the principal balance of the Loans and not to the payment of
interest. This provision shall control every other provision of all agreements
between the Borrower, the Guarantors and the Lender.
2.5. FEES.
(a) The Borrower shall pay to the Lender a commitment fee
(the "COMMITMENT FEE"), computed on a daily basis and payable quarterly in
arrears on the first Business Day of each quarter, equal to (i) the excess of
(x) the Revolving Credit Commitment at the time over (y) the Total Revolving
Outstandings from time to time, MULTIPLIED BY (ii) the Applicable Margin (as
determined in accordance with Section 2.4(c)).
(b) The Borrower shall pay to the Lender for the benefit
of the Issuing Bank and the Lender a fee (the "LETTER OF CREDIT FEE") at a rate
per annum equal to (i) the Maximum Drawing Amount of each Letter of Credit
multiplied by (ii) the Applicable Margin (as determined in accordance with
Section 2.4(c)) above the LIBOR Rate. The Letter of Credit Fee shall be paid
quarterly in arrears on the first Business Day of each quarter. In addition, the
Borrower shall pay to the Lender its standard service and setup fees in respect
of Letters of Credit.
(c) Without limiting any of the Lender's other rights
hereunder or by law, if any Loan or any portion thereof or any interest thereon
or any other amount payable hereunder or under any other Loan Document is not
paid within ten days after its due date, the Borrower shall pay to the Lender on
demand a late payment charge equal to 5% of the amount of the payment due.
(d) The Borrower shall pay to the Lender, solely for the
account of the Lender, such other fees as the Borrower and the Lender shall
agree, including, without limitation, the closing fee pursuant to the letter
agreement dated September 16, 2000, between the Borrower and the Lender with
respect to fees payable to the Lender.
(e) The Borrower authorizes the Issuing Bank and the
Lender to charge to its Note Record or to any deposit account which the Borrower
may maintain with it the interest, fees, charges, taxes and expenses provided
for in this Agreement, the other Loan Documents or any other document executed
or delivered in connection herewith or therewith.
2.6. PAYMENTS AND PREPAYMENTS OF THE LOANS.
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(a) On the Revolving Credit Maturity Date, the Borrower
shall pay in full the unpaid principal balance of all outstanding Revolving
Credit Loans, together with all unpaid interest thereon and all fees and other
amounts due with respect thereto.
(b) If at any time the Total Revolving Credit
Outstandings exceed the lesser of (i) the Borrowing Base and (ii) the Revolving
Credit Commitment, the Borrower shall immediately pay the amount of any such
excess to the Lender for application to the Revolving Credit Loans.
(c) The LIBOR Loans may be prepaid at any time, subject
to the provisions of Section 2.8, upon three (3) Business Days' notice. Prime
Rate Loans may be prepaid at any time, without premium or penalty, upon one (1)
Business Day's notice. Any such notice of prepayment shall be irrevocable.
Prepayments of Revolving Credit Loans may be reborrowed to the extent provided
in Section 2.1(a).
2.7. METHOD OF PAYMENTS.
(a) All payments by the Borrower hereunder and under any
of the other Loan Documents shall be made at the Lender's head office or at such
other location that the Lender may from time to time designate, in each case in
lawful currency of the United States of America in immediately available funds.
All such payments shall be made without set-off 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
Lender such additional amount in U.S. Dollars as shall be necessary to enable
the Lender to receive the same net amount which the Lender would have received
on such due date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Lender certificates or other valid
vouchers or other evidence of payment reasonably satisfactory to the Lender 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. The Lender may, and
the Borrower hereby authorizes the Lender to, debit the amount of any payment
not made by such time to the demand deposit accounts of the Borrower with the
Lender or to its Note Record.
(b) All funds received from or on behalf of the Borrower
by the Lender or the Issuing Bank in respect of Obligations, shall be applied by
the Lender in the following manner and order: (i) first, to reimburse the Lender
and the Issuing Bank for any amounts payable pursuant to Sections 10.2 and 10.3
hereof; (ii) second, to the payment of Commitment Fees, Letter of Credit Fees
and any other fees payable hereunder; (iii) third, to the payment of interest
due on the Loans and the Reimbursement Obligations; (iv) fourth, to the payment
of the outstanding principal balance of the Loans and the Reimbursement
Obligations, PRO RATA to the outstanding principal balance of each; (v) fifth,
to the payment of any other Obligations payable by the Borrower, PRO RATA to the
outstanding principal balance of each; and (vi) any remaining funds shall be
paid to whoever shall be entitled thereto or as a court of competent
jurisdiction
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shall direct, provided, however, if the Commitment shall have been terminated or
the Obligations shall have been declared immediately due and payable pursuant to
Section 8.2, payments will be applied to the Obligations as the Lender
determines in its sole discretion.
2.8. INDEMNITY. If the Borrower for any reason (including, without
limitation, pursuant to Sections 2.6(b), 2.10, 2.11 and 8.2 hereof) makes any
payment of principal with respect to any LIBOR Loan on any day other than the
last day of an Interest Period applicable to such LIBOR Loan, or fails to borrow
or continue or convert to a LIBOR Loan after giving a Notice of Borrowing or
Conversion thereof pursuant to Section 2.3, or fails to prepay a LIBOR Loan
after having given notice thereof, the Borrower shall pay to the Lender any
amount required to compensate the Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or failure,
including, without limitation, any loss (including loss of anticipated profits),
costs or expense incurred by reason of the liquidation or re-employment of
deposits or other funds required by the Lender to fund or maintain such Loan.
The Borrower shall pay such amount upon presentation by the Lender of a
statement setting forth the amount and the Lender's calculation thereof pursuant
hereto, which statement shall be deemed true and correct absent manifest error.
Without limiting the foregoing, the Borrower shall pay to the Lender a "yield
maintenance fee" in an amount computed as follows: The current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the term of the then applicable
Interest Period as to which the prepayment is made, shall be subtracted from the
LIBOR Rate in effect at the time of prepayment. If the result is zero or a
negative number, there shall be no yield maintenance fee. If the result is a
positive number, then the resulting percentage shall be multiplied by the amount
of the principal balance being prepaid. The resulting amount shall be divided by
360 and multiplied by the number of days remaining in the term of the then
applicable Interest Period as to which the prepayment is made. Said amount shall
be reduced to present value calculated by using the above referenced United
States Treasury securities rate and the number of days remaining in the term of
the then applicable Interest Period as to which prepayment is made. The
resulting amount shall be the yield maintenance fee due to the Lender upon
payment of a LIBOR Loan. If by reason of an Event of Default, the Lender elects
to declare the Notes to be immediately due and payable, then any yield
maintenance fee with respect to a LIBOR Loan shall become due and payable in the
same manner as though the Borrower had exercised such right of prepayment.
2.9. COMPUTATION OF INTEREST AND FEES. Interest and all fees
payable hereunder shall be computed daily on the basis of a year of 360 days and
paid for the actual number of days for which due. If the due date for any
payment of principal is extended by operation of law, interest and fees shall be
payable for such extended time. If any payment required by this Agreement
becomes due on a day that is not a Business Day such payment may be made on the
next succeeding Business Day (subject to the definition of the term "Interest
Period"), and such extension shall be included in computing interest and fees in
connection with such payment.
2.10. CHANGED CIRCUMSTANCES; ILLEGALITY.
(a) Notwithstanding any other provision of this
Agreement, in the event that:
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(i) on any date on which the LIBOR Rate would otherwise
be set the Lender shall have determined in good faith (which
determination shall be final and conclusive) that adequate and fair
means do not exist for ascertaining the LIBOR Rate, or
(ii) at any time the Lender shall have determined in good
faith (which determination shall be final and conclusive) that:
(A) the making or continuation of or conversion of any
Loan to a LIBOR Loan has been made impracticable or unlawful by (1) the
occurrence of a contingency that materially and adversely affects the
interbank LIBOR market or (2) compliance by the Lender in good faith
with any applicable law or governmental regulation, guideline or order
or interpretation or change thereof by any governmental authority
charged with the interpretation or administration thereof or with any
request or directive of any such governmental authority (whether or not
having the force of law); or
(B) the LIBOR Rate shall no longer represent the
effective cost to the Lender for U.S. dollar deposits in the interbank
market for deposits in which it regularly participates;
then, and in any such event, the Lender shall forthwith so notify the Borrower
thereof. Until the Lender notifies the Borrower that the circumstances giving
rise to such notice no longer apply, the obligation of the Lender to allow
selection by the Borrower of the Type of Loan affected by the contingencies
described in this Section (herein called "AFFECTED LOANS") shall be suspended.
If, at the time the Lender so notifies the Borrower, the Borrower has previously
given the Lender a Notice of Borrowing or Conversion with respect to one or more
Affected Loans but such Loans have not yet gone into effect, such notification
shall be deemed to be a request for Prime Rate Loans.
(b) In the event of a determination of illegality
pursuant to subsection (a)(ii)(A) above, the Borrower shall, with respect to the
outstanding Affected Loans, prepay the same, together with interest thereon and
any amounts required to be paid pursuant to Section 2.9, on such date as shall
be specified in such notice (which shall not be earlier than the date such
notice is given) and may, subject to the conditions of this Agreement, borrow a
Loan of another Type in accordance with Section 2.1 hereof by giving a Notice of
Borrowing or Conversion pursuant to Section 2.3 hereof.
2.11. INCREASED COSTS. In case any change made after the Closing
Date in any law, regulation, treaty or official directive or the interpretation
or application thereof by any court or by any governmental authority charged
with the administration thereof or the compliance with any guideline or request
of any central bank or other governmental authority (whether or not having the
force of law):
(i) subjects the Lender to any tax with respect to
payments of principal or interest or any other amounts payable
hereunder by the Borrower or otherwise with respect to the transactions
contemplated hereby (except for taxes on the overall net income of the
Lender imposed by the United States of America or any political
subdivision thereof), or
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(ii) imposes, modifies or deems applicable any deposit
insurance, reserve, special deposit or similar requirement against
assets held by, or deposits in or for the account of, or loans by, the
Lender (other than such requirements as are already included in the
determination of the LIBOR Rate), or
(iii) imposes upon the Lender any other condition with
respect to its obligations or performance under this Agreement or in
respect of any Letter of Credit,
and the result of any of the foregoing is to increase the cost to the Lender,
reduce the income receivable by the Lender or impose any expense upon the Lender
with respect to any Loans or its obligations under this Agreement or in respect
of any Letter of Credit, the Lender shall notify the Borrower thereof. The
Borrower agrees to pay to the Lender the amount of such increase in cost,
reduction in income or additional expense as and when such cost, reduction or
expense is incurred or determined, upon presentation by the Lender of a
statement in the amount and setting forth in reasonable detail the Lender's
calculation thereof and the assumptions upon which such calculation was based,
which statement shall be deemed true and correct absent manifest error.
2.12. CAPITAL REQUIREMENTS. If after the date hereof the Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any governmental
authority charged with the administration thereof, or (ii) compliance by the
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on the Lender's or such
holding company's capital as a consequence of the Lender's Commitment to make
Loans hereunder or its obligations in respect of any Letter of Credit to a level
below that which the Lender or such holding company could have achieved but for
such adoption, change or compliance (taking into consideration the Lender's or
such holding company's then existing policies with respect to capital adequacy
and assuming the full utilization of such entity's capital) by any amount deemed
by the Lender to be material, then the Lender shall notify the Borrower thereof.
The Borrower agrees to pay to the Lender the amount of such reduction of return
on capital as and when such reduction is determined, payable within 90 days
after presentation by the Lender of a statement in the amount and setting forth
in reasonable detail the Lender's calculation thereof and the assumptions upon
which such calculation was based (which statement shall be deemed true and
correct absent manifest error) unless within such 90 day period the Borrower
shall have prepaid in full all Obligations to the Lender, in which event no
amount shall be payable to the Lender under this Section. In determining such
amount, the Lender may use any reasonable averaging and attribution methods.
SECTION IIA
LETTERS OF CREDIT
2A.1 ISSUANCE. Upon the terms and subject to the conditions hereof,
the Issuing Bank, in reliance upon the representations and warranties of the
Borrower contained herein, agrees to issue letters of credit (the "LETTERS OF
CREDIT") for the account of the Borrower in such form as may be requested from
time to time by the Borrower and agreed to by the Issuing Bank, PROVIDED
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that the Maximum Drawing Amount (after giving effect to all requested Revolving
Credit Loans and Letters of Credit) shall not at any time exceed the lesser of
(x) the Borrowing Base and (y) the Revolving Credit Commitment, and PROVIDED
FURTHER that no Letter of Credit shall have an expiration date later than the
Revolving Credit Maturity Date. At least three (3) Business Days prior to the
proposed issuance date of any Letter of Credit, the Borrower shall deliver to
the Issuing Bank a Letter of Credit Application setting forth the Maximum
Drawing Amount of all Letters of Credit (including the requested Letter of
Credit), the requested language of the requested Letter of Credit and such other
information as the Issuing Bank shall require. Each request for the issuance of
a Letter of Credit hereunder shall constitute a representation and warranty by
the Borrower that the conditions set forth in Sections 3.1 and 3.2 have been
satisfied as of the date of such request.
2A.2 REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce
the Issuing Bank to issue, extend and renew each Letter of Credit, the Borrower
hereby agrees to reimburse or pay to the Lender, for the account of the Issuing
Bank or, as the case may be, the Lender, with respect to each Letter of Credit
issued, extended or renewed by the Issuing Bank hereunder as follows:
(a) on each date that any draft presented under any
Letter of Credit is honored by the Issuing Bank or the Issuing Bank otherwise
makes payment with respect thereto, (i) the amount paid by the Issuing Bank
under or with respect to such Letter of Credit, and (ii) the amount of any
taxes, fees, charges or other costs and expenses whatsoever incurred by the
Issuing Bank or the Lender in connection with any payment made by the Issuing
Bank under, or with respect to, such Letter of Credit; and
(b) upon the Revolving Credit Maturity Date or the
acceleration of the Reimbursement Obligations pursuant to Section 8, an amount
equal to 110% of the then Maximum Drawing Amount of all Letters of Credit, which
amount shall be held by the Issuing Bank as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Lender at its head office in immediately
available funds. Interest on any and all amounts remaining unpaid by the
Borrower under this Section 2A.2 at any time from the date such amounts become
due and payable (whether as stated in this Section 2A.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Lender, for the account of Issuing Bank or (as the case may be)
the Lender, on demand at a rate per annum equal to 2% above the Interest Rate
applicable to Prime Rate Loans at the time in the absence of an Event of
Default.
2A.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 Issuing
Bank 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. The responsibility of the Issuing Bank to the
Borrower 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. On the
date that such draft is paid or other payment is made by the Issuing Bank, the
Issuing Bank shall promptly notify the Lender of the
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amount of any unpaid Reimbursement Obligation. All such unpaid Reimbursement
Obligations with respect to Letters of Credit shall be deemed to be Revolving
Credit Loans.
2A.4 OBLIGATIONS ABSOLUTE.
(a) The Borrower's Reimbursement Obligations 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 set off, counterclaim or defense to payment which the Borrower
may have or have had against the Issuing Bank, the Lender or any beneficiary of
a Letter of Credit. The Borrower further agrees that the Issuing Bank and the
Lender shall not be responsible for, and the Borrower's Reimbursement
Obligations 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.
(b) The Issuing Bank and the Lender 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. The Borrower agrees that any action taken or omitted by the
Issuing Bank or the Lender under or in connection with each Letter of Credit and
the related drafts and documents, if done in good faith, shall be binding upon
the Borrower and shall not result in any liability on the part of the Issuing
Bank or the Lender to the Borrower.
2A.5 RELIANCE BY THE ISSUING BANK AND THE LENDER. To the extent not
inconsistent with Section 2A.4, the Issuing Bank and the Lender 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 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 Issuing Bank or the Lender.
SECTION III.
CONDITIONS OF LOANS AND LETTERS OF CREDIT
3.1. CONDITIONS PRECEDENT TO INITIAL LOANS. The obligation of the
Lender to make the initial Loans and of the Issuing Bank to issue the initial
Letter of Credit is subject to the satisfaction of the following conditions
precedent on or prior to the Closing Date:
(a) The Lender shall have received the following
agreements, documents, certificates and opinions in form and substance
satisfactory to the Lender and duly executed and delivered by the parties
thereto:
(i) This Agreement;
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(ii) The Revolving Credit Note, substantially in the form
of EXHIBIT A hereto;
(iii) Certificates of insurance or insurance binders
evidencing compliance with Section 5.3 hereof and the applicable
provisions of the Security Documents;
(iv) Borrowing Base Report as of the Closing Date;
(v) Notice of Borrowing or Conversion as of the Closing
Date;
(vi) A certificate of the Secretary or an Assistant
Secretary of the Borrower with respect to resolutions of its Board of
Directors authorizing the execution and delivery of the Loan Documents
and identifying the officer(s) authorized to execute, deliver and take
all other actions required under this Agreement, and providing specimen
signatures of such officer(s);
(vii) The Certificate of Incorporation of the Borrower and
all amendments and supplements thereto, as filed in the office of the
Secretary of State of its jurisdiction of formation, certified by said
Secretary of State as being a true and correct copy thereof;
(viii) The By-laws of the Borrower and all amendments and
supplements thereto, certified by the Secretary or an Assistant
Secretary of the Borrower as being a true and correct copy thereof;
(ix) A certificate of the Secretary of State of Delaware
as to legal existence and good standing of the Borrower in such state;
(x) A certificate of the Secretaries of State of each
state in which the Borrower is doing business as to the due
qualification and good standing of the Borrower as a foreign
corporation in such states;
(xi) An opinion addressed to the Lender from Hale and Dorr
LLP, special counsel to the Borrower and the Subsidiaries;
(xii) A certificate of the chief financial officer of the
Borrower as to the solvency of the Borrower, the accuracy of the
Borrower's representations and warranties, compliance with financial
covenants on a pro forma basis (giving effect to this Agreement) as of
June 30, 2000, the value of all stock and cash consideration paid in
connection with Permitted Acquisitions for the fiscal quarter ending
September 30, 2000, and such other matters as the Lender may request;
(xiii) Receipt of unaudited consolidated and consolidating
financial statements of the Borrower for the twelve months ended June
30, 2000;
(xiv) Receipt of evidence satisfactory to the Lender of the
termination of all UCC-1 financing statements relating to liens granted
to a secured party other than the Lender on all or substantially all of
the assets of the Borrower or any Guarantor; and
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(xv) Such other documents, instruments, opinions and
certificates and completion of such other matters, as the Lender may
reasonably deem necessary or appropriate.
(b) No litigation, arbitration, proceeding or
investigation shall be pending or threatened which questions the validity or
legality of the transactions contemplated by any Loan Document or seeks a
restraining order, injunction or damages in connection therewith, or which, in
the judgment of the Lender, might adversely affect the transactions contemplated
hereby or might have a materially adverse affect on the assets, business,
financial condition or prospects of the Borrower.
(c) The Borrower shall have paid to the Lender all fees
to be paid hereunder (including pursuant to Section 2.5(d) hereof) on or prior
to the Closing Date.
3.2. CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT. The
obligation of the Lender to make any Loan, including the initial Loans, or to
continue LIBOR Loans or to convert Prime Rate Loans to LIBOR Loans, and of the
Issuing Bank to issue any Letter of Credit is further subject to the following
conditions:
(a) timely receipt by the Lender of the most recent
Borrowing Base Report required by Section 5.1(c), with respect to each Revolving
Credit Loan, and the Notice of Borrowing or Conversion with respect to any Loan,
or by the Issuing Bank of the Letter of Credit Application with respect to any
Letter of Credit;
(b) the outstanding Loans and Letters of Credit do not
and, after giving effect to any requested Loan or Letter of Credit, will not
exceed the limitations set forth in Sections 2.1 and 2A.1 hereof;
(c) the representations and warranties contained in
Section IV shall be true and accurate in all material respects on and as of the
date of such Notice of Borrowing or Conversion or Letter of Credit Application
and on the effective date of the making, continuation or conversion of each Loan
or issuance of each Letter of Credit as though made at and as of each such date
(except to the extent that such representations and warranties expressly relate
to an earlier date);
(d) no Default or Event of Default shall have occurred
and be continuing at the time of and immediately after the making of such
requested Loan or the issuance of such requested Letter of Credit;
(e) the resolutions referred to in Section 3.1(a)(vii)
shall remain in full force and effect; and
(f) no change shall have occurred in any law or
regulation or interpretation thereof that, in the opinion of counsel for the
Lender, would make it illegal or against the policy of any governmental agency
or authority for the Lender to make Loans hereunder or, in the opinion of
counsel for the Issuing Bank, for the Issuing Bank to issue Letters of Credit
hereunder (as the case may be).
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The making, continuation or conversion of each Loan and the issuance of
each Letter of Credit shall be deemed to be a representation and warranty by the
Borrower on the date of the making, continuation or conversion of such Loan or
the issuance of such Letter of Credit as to the accuracy of the facts referred
to in subsection (c) of this Section 3.2 and of the satisfaction of all of the
conditions set forth in this Section 3.2.
SECTION IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender and the Issuing Bank to enter into this
Agreement and to make Loans and to issue Letters of Credit hereunder, the
Borrower represents and warrants to the Lender and the Issuing Bank that except
as set forth on EXHIBIT C attached hereto:
4.1. ORGANIZATION; QUALIFICATION; BUSINESS.
(a) Each of the Borrower and each of the Guarantors (i)
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of formation, (ii) has all requisite power to own its
property and conduct its business as now conducted and as presently contemplated
and (iii) is duly qualified and in good standing as a foreign corporation and is
duly authorized to do business in each jurisdiction (all of which are listed on
EXHIBIT C attached hereto) where the nature of its properties or business
requires such qualification, except where the failure to be so qualified would
not have a material adverse effect on the business, financial condition, assets
or properties of the Borrower or of the Borrower and the Guarantors taken as a
whole.
(b) Since the date of the Initial Financial Statement,
the Borrower has continued to engage in substantially the same business as that
in which it was then engaged and is engaged in no unrelated business.
4.2. CORPORATE AUTHORITY. The execution, delivery and
performance of the Loan Documents and the transactions contemplated thereby are
within the power and authority of the Borrower and have been authorized by all
necessary corporate proceedings, and do not and will not (a) contravene any
provision of the Certificate of Incorporation or By-laws of the Borrower or any
law, rule or regulation applicable to the Borrower, (b) contravene any provision
of, or constitute an event of default or event that, but for the requirement
that time elapse or notice be given, or both, would constitute an event of
default under, any other agreement, instrument, order or undertaking binding on
the Borrower, or (c) result in or require the imposition of any Encumbrance on
any of the properties, assets or rights of the Borrower, except in favor of the
Lender and the Issuing Bank.
4.3. VALID OBLIGATIONS. The Loan Documents and all of
their respective terms and provisions are the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms except as limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting the enforcement of creditors' rights generally, and except
as the remedy of specific performance or of injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
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4.4. CONSENTS OR APPROVALS. The execution, delivery and
performance of the Loan Documents and the transactions contemplated herein do
not require any approval or consent of, or filing or registration with, any
governmental or other agency or authority, or any other Person (including
without limitation any lessor or lessee of Borrower's properties).
4.5. TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of
the Borrower and its Subsidiaries has good and marketable title to all of the
properties, assets and rights of every name and nature now purported to be owned
by it, and good and valid leasehold title to all of the properties, assets and
rights of every name and nature now purported to be leased by it, including,
without limitation, such properties, assets and rights as are reflected in the
Initial Financial Statement (except such properties, assets or rights as have
been disposed of in the ordinary course of business since the date thereof),
free from all Encumbrances except Permitted Encumbrances, and, except as so
disclosed, free from all defects of title that might materially adversely affect
such properties, assets or rights, or Borrower's or its Subsidiaries' operations
conducted with respect thereto, taken as a whole. All leases under which
Borrower or its Subsidiaries is the lessor or lessee are in full force and
effect and there are no existing defaults or events that with the giving of
notice or passage of time or both could ripen into defaults by either party
thereunder. No third parties possess any rights with respect to any of
Borrower's or its Subsidiaries owned or leased properties, the exercise of which
would have a material adverse effect on the Borrower or its Subsidiaries or
their respective operations, taken as a whole. All real property owned or leased
by the Borrower is described in EXHIBIT C hereto.
4.6. FINANCIAL STATEMENTS. The Borrower has furnished to
the Lender its consolidated and consolidating balance sheet as of June 30, 2000
and its consolidated and consolidating statements of income, and consolidated
changes in stockholders' equity and cash flow for the fiscal year then ended,
and related footnotes, which, in the case of the consolidated financial
statements so listed, have been audited and certified by the Borrower's
Accountants (the "INITIAL FINANCIAL STATEMENT"). All such financial statements
were prepared in accordance with GAAP applied on a consistent basis throughout
the periods specified and present fairly the financial position of the Borrower
and its Subsidiaries as of such dates and the results of the operations of the
Borrower and its Subsidiaries for such periods. At the date hereof, the Borrower
has no Indebtedness or other material liabilities, debts or obligations, whether
accrued, absolute, contingent or otherwise, and whether due or to become due,
including, but not limited to, liabilities or obligations on account of taxes or
other governmental charges, that are not set forth on the Initial Financial
Statement or on EXHIBIT C hereto.
4.7. CHANGES. Since the date of the Initial Financial
Statement, there have been no changes in the assets, liabilities, financial
condition, business or prospects of the Borrower or any of its Subsidiaries
other than changes in the ordinary course of business, the effect of which has
not, in the aggregate, been materially adverse to the Borrower and its
Subsidiaries taken as a whole.
4.8. SOLVENCY. The Borrower has and, after giving effect
to the Loans, will have, assets (both tangible and intangible) having a fair
saleable value in excess of the amount required to pay the probable liability on
its then-existing debts (whether matured or unmatured, liquidated or
unliquidated, fixed or contingent); the Borrower has and will have access to
adequate capital for the conduct of its business and the discharge of its debts
incurred in connection therewith as
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such debts mature; the Borrower was not insolvent immediately prior to the
making of the Loans and immediately after giving effect thereto, the Borrower
will not be insolvent.
4.9. DEFAULTS. As of the date of this Agreement, no Default exists.
4.10. TAXES. The Borrower and its Subsidiaries have filed all
federal, state and other tax returns required to be filed, and all taxes,
assessments and other governmental charges due from any of them have been fully
paid, except for such taxes, assessments or charges that are being contested in
good faith by appropriate proceedings and with respect to which (a) adequate
reserves have been established and are being maintained in accordance with GAAP
and (b) no lien has been filed to secure such taxes, assessments or charges. All
such contests at the date hereof are described on EXHIBIT C hereto. The Borrower
and its Subsidiaries have not executed any waiver that would have the effect of
extending the applicable statute of limitations in respect of tax liabilities.
The federal and state income tax returns of the Borrower and its Subsidiaries
have not been audited or otherwise examined by any federal or state taxing
authority. The Borrower and its Subsidiaries have established on their books
reserves adequate for the payment of all federal, state and other tax
liabilities.
4.11. LITIGATION. Except as set forth on EXHIBIT C, there is no
litigation, arbitration, proceeding or investigation pending, or, to the
knowledge of the Borrower's or any Subsidiary's officers, threatened, against
the Borrower or any Subsidiary that, if adversely determined, may reasonably be
expected to result in a material judgment not fully covered by insurance, may
reasonably be expected to result in a forfeiture of all or any substantial part
of the property of the Borrower or its Subsidiaries, or may reasonably be
expected to have a material adverse effect on the assets, business or prospects
of the Borrower and its Subsidiaries taken as a whole.
4.12. SUBSIDIARIES. All the Subsidiaries of the Borrower are listed
on EXHIBIT C hereto. The Borrower or a Subsidiary of the Borrower is the owner,
free and clear of all Encumbrances, of all of the issued and outstanding stock
or other equity interest of each Subsidiary. All shares of such stock or other
equity interest have been validly issued and are fully paid and nonassessable,
and no rights to subscribe to any additional shares have been granted, and no
options, warrants or similar rights are outstanding.
4.13. INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of 1940,
as amended.
4.14. COMPLIANCE. The Borrower and each of its Subsidiaries have all
necessary permits, approvals, authorizations, consents, variances, licenses,
franchises, registrations and other rights and privileges (including patents,
trademarks, trade names and copyrights) to allow them to own and operate their
respective businesses and properties without any violation of laws, regulations,
authorizations and orders of public authorities (including without limitation
Environmental Laws) or the rights of others except to the extent that any such
violation would not have a material adverse effect on the business, financial
condition or operation of the Borrower and its Subsidiaries taken as a whole;
and the Borrower and each Subsidiary are duly authorized, qualified and licensed
under, and Borrower, its Subsidiaries and all real properties owned or leased by
them are in compliance with, all applicable laws, regulations, authorizations
and orders of public authorities, including, without limitation, Environmental
Laws, except to the
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extent that any such failure to be so authorized, qualified, licensed or in
compliance would not have a material adverse effect on the business, financial
condition or operation of the Borrower and its Subsidiaries taken as a whole.
The Borrower and each Subsidiary have performed all obligations required to be
performed by it under, and is not in default under or in violation of, its
Certificate of Incorporation or By-laws or any other agreement, lease, mortgage,
note, bond, indenture, license or other instrument or undertaking to which it is
a party or by which any of it or any of its properties are bound, except for
violations none of which, either individually or in the aggregate, would have
any material adverse effect on the business, condition (financial or otherwise)
or assets of the Borrower and its Subsidiaries taken as a whole.
4.15. ERISA. The Borrower and its ERISA Affiliates are in compliance
in all material respects with ERISA and the provisions of the Code and the
regulations and published interpretations thereunder applicable to the Plans. No
ERISA Event has occurred or is reasonably expected to occur, including by reason
of the consummation of the transactions contemplated by this Agreement that,
when taken together with all other such ERISA Events, could reasonably be
expected to result in material liability to the Borrower or any of its ERISA
Affiliates. None of the Plans had any "unfunded benefit liabilities" (within the
meaning of Section 4001(a)(18) of ERISA) as of the last annual valuation dates
applicable thereto.
4.16. ENVIRONMENTAL MATTERS.
(a) The Borrower and each of its Subsidiaries have
obtained all permits, licenses and other authorizations which are required under
all Environmental Laws, except to the extent failure to have any such permit,
license or authorization would not have a material adverse effect on the
business, financial condition or operations of the Borrower or any of its
Subsidiaries taken as a whole. The Borrower and each of its Subsidiaries are in
compliance with the terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all applicable orders, decrees,
judgments and injunctions, issued, entered, promulgated or approved under any
Environmental Law, except to the extent failure to comply would not have a
material adverse effect on the business, financial condition or operations of
the Borrower and its Subsidiaries.
(b) No written notice, notification, demand, request for
information, citation, summons or order has been issued and is outstanding, no
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or, to the best of the Borrower's knowledge, threatened by any
governmental or other entity (i) with respect to any alleged failure by the
Borrower or any of its Subsidiaries to have any permit, license or authorization
required in connection with the conduct of its business or to comply with any
Environmental Laws, or (ii) regarding the presence of any Hazardous Material at,
on or under any property now or previously owned, leased or used by the Borrower
or any of its Subsidiaries or any other location to which Hazardous Materials
from such property had been transported or which they have been disposed of.
(c) No material oral or written notification of a release
of a Hazardous Material has been filed by or on behalf of the Borrower or any of
its Subsidiaries and no property now or previously owned, leased or used by the
Borrower or any of its Subsidiaries is listed or, to the best of the Borrower's
knowledge, proposed for listing on the National Priorities List
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under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, or on any similar state list of sites requiring
investigation or clean-up.
(d) There are no Encumbrances arising under or pursuant
to any Environmental Law on any of the real property or properties owned, leased
or used by the Borrower or any of its Subsidiaries and no governmental actions
have been taken or, to the best of the Borrower's knowledge, are in process
which could subject any of such properties to such liens or Encumbrances or, as
a result of which the Borrower or any of its Subsidiaries would be required to
place any notice or restriction relating to the presence of Hazardous Materials
at any property owned by it in any deed to such property.
(e) Neither the Borrower nor any of its Subsidiaries nor,
to the best knowledge of the Borrower, any previous owner, tenant, occupant or
user of any property owned, leased or used by the Borrower or any of its
Subsidiaries has (i) engaged in or permitted any operations or activities upon
or any use or occupancy of such property, or any portion thereof, for the
handling, manufacture, treatment, storage, use, generation, release, discharge,
refining, dumping or disposal of any Hazardous Materials on, under, in or about
such property, except to the extent commonly used in day-to-day operations of
such property and in such case only in compliance in all material respects with
all Environmental Laws, or (ii) transported any Hazardous Materials to, from or
across such property except to the extent commonly used in day-to-day operations
of such property and, in such case, in compliance in all material respects with,
all Environmental Laws; nor to the best knowledge of the Borrower have any
Hazardous Materials migrated from other properties upon, about or beneath such
property, nor, to the best knowledge of the Borrower, are any Hazardous
Materials presently constructed, deposited, stored or otherwise located on,
under, in or about such property except to the extent commonly used in
day-to-day operations of such property and, in such case, in compliance in all
material respects with all Environmental Laws.
4.17. RESTRICTIONS ON THE BORROWER. Neither the Borrower nor any of
its Subsidiaries is party to or bound by any contract, agreement or instrument,
nor subject to any charter or other corporate restriction which will, under
current or foreseeable conditions, materially and adversely affect the business,
property, assets, operations or conditions, financial or otherwise of the
Borrower or any of its Subsidiaries taken as a whole.
4.18. LABOR RELATIONS. There is (i) no unfair labor practice
complaint pending against the Borrower or any of its Subsidiaries or, to the
best knowledge of the Borrower, threatened, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower, threatened, except for
such complaints, grievances and arbitration proceedings which, if adversely
decided, would not have a material and adverse effect on the condition
(financial or otherwise), properties, business or results of operations of the
Borrower or any of its Subsidiaries, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries, except for any such labor action as would not have a material and
adverse effect on the condition (financial or otherwise), properties, business
or results of operations of the Borrower or any of its Subsidiaries and (iii) to
the best knowledge of the Borrower, no union representation question
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exists with respect to the employees of the Borrower or any of its Subsidiaries
and, to the best knowledge of the Borrower, no union organizing activities are
taking place, except for any such question or activities as would not have a
material and adverse effect on the condition (financial or otherwise),
properties, business or results of operations of the Borrower or any of its
Subsidiaries taken as a whole.
4.19. MARGIN RULES. The Borrower does not own or have any present
intention of purchasing or carrying, and no portion of any Loan shall be used
for purchasing or carrying, any "margin security" or "margin stock" as such
terms are used in Regulations T, U or X of the Board of Governors of the Federal
Reserve System.
4.20. DISCLOSURE. No representation or warranty made by the Borrower
in any Loan Document and no document or information furnished to the Lender by
or on behalf of or at the request of the Borrower in connection with any of the
transactions contemplated by the Loan Documents contains any untrue statement of
a material fact or omits to state any material fact necessary in order to make
the statements contained therein not misleading in light of the circumstances in
which they are made.
4.21. INTELLECTUAL PROPERTY.
(a) To the best knowledge of the Borrower, none of the
activities or business conducted or proposed to be conducted by the Borrower or
any of its Subsidiaries infringes, violate or constitutes a misappropriation of
(or in the past infringed, violated or constituted a misappropriation of) any
intellectual property rights of any other Person. Except as set forth on EXHIBIT
C, the Borrower has not received any complaint, claim or notice alleging any
such infringement, violation or misappropriation, and to the knowledge of the
Borrower, there is no basis for any such complaint, claim or notice
(b) The Borrower and each of its Subsidiaries own free
and clear of all Encumbrances, or has the valid right to use all Intellectual
Property used by them in their respective business as currently conducted or as
currently proposed to be conducted. Except as set forth on EXHIBIT C, no other
person or entity (other than licensors of software that is generally
commercially available, licensors of Intellectual Property under the agreement
disclosed pursuant to paragraph (d) below and non-exclusive licensees of the
Borrower's or any Subsidiary's Intellectual Property in the ordinary course of
the Borrower's or such Subsidiary's business) has any right to any of the
Intellectual Property owned or used by the Borrower or any of its Subsidiaries,
and, to the Borrower's knowledge, no other person or entity is infringing,
violating or misappropriating any of the Intellectual Property that the Borrower
owns.
(c) EXHIBIT C hereto identifies each (i) patent that has
been issued or assigned to the Borrower or any of its Subsidiaries with respect
to any of their respective Intellectual Property, (ii) pending patent
application that the Borrower or any of its Subsidiaries has made with respect
to any of their respective Intellectual Property, (iii) any copyright or
trademark registration or application with respect to the Borrower's or any
Subsidiary's Intellectual Property, and (iv) any material license or other
agreements pursuant to which the Borrower or any Subsidiary has granted any
rights to any third party with respect to any of their respective Intellectual
Property.
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(d) EXHIBIT C hereto identifies each agreement with a
third party pursuant to which the Borrower or any Subsidiary has obtained rights
to Intellectual Property material to the business of the Borrower or such
Subsidiary (other than software that is generally commercially available) that
is owned by a Person other than the Borrower or any of its Subsidiaries. Other
than license fees for software that is generally commercially available, the
Borrower is not obligated to pay any royalties or other compensation to any
third party in respect of its ownership, use or license of any of its
Intellectual Property.
SECTION V.
AFFIRMATIVE COVENANTS
The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding or the Lender or the Issuing Bank has any
obligation to lend or to issue any Letter of Credit hereunder:
5.1. FINANCIAL STATEMENTS. The Borrower shall furnish to the
Lender:
(a) as soon as available to the Borrower, but in any
event within 90 days after the end of each fiscal year, the Borrower's
consolidated and consolidating balance sheet as of the end of and related
consolidated and consolidating statements of income, and consolidated statements
of retained earnings and cash flow for such year, prepared in accordance with
GAAP and audited and certified by the Borrower's Accountants in the case of such
consolidated statements, and certified by the chief financial officer of the
Borrower in the case of such consolidating statements; and, concurrently with
such financial statements, a written statement by the Borrower's Accountants
that, in the making of the audit necessary for their report and opinion upon
such financial statements they have obtained no knowledge of any Default or, if
in the opinion of such accountants any such Default exists, they shall disclose
in such written statement the nature and status thereof;
(b) as soon as available to the Borrower, but in any
event within 45 days after the end of each quarter, the Borrower's consolidated
and consolidating balance sheet as of the end of, and related consolidated and
consolidating statements of income, and consolidated statement of cash flow for,
the quarter then ended and the portion of the year then ended, prepared in
accordance with GAAP and certified by the chief financial officer of the
Borrower, except for lack of footnotes and subject to normal, recurring year-end
adjustments that shall not in the aggregate be material in amount;
(c) concurrently with the delivery of each financial
statement pursuant to subsections (a) and (b) of this Section 5.1, a report in
substantially the form of EXHIBIT D hereto signed on behalf of the Borrower by
its chief financial officer;
(d) as soon as available, but in any event within 30 days
after (i) the end of each month if there are any Loans outstanding or (ii) the
end of each quarter otherwise, a Borrowing Base Report, together with such other
information regarding Accounts Receivable as the Lender may require;
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(e) within 30 days after the commencement of each fiscal
year of the Borrower, a copy of the consolidated operating budget, including,
without limitation, projections of the anticipated cash flow of the Borrower and
any Subsidiaries for such fiscal year and a statement of the assumptions on
which such budget was prepared;
(f) promptly after the receipt thereof by the Borrower,
copies of any reports (including any so-called management letters) submitted to
the Borrower by independent public accountants in connection with any annual or
interim review of the accounts of the Borrower made by such accountants;
(g) promptly after the same are delivered to its
stockholders or the Securities and Exchange Commission, copies of all proxy
statements, financial statements and reports as the Borrower shall send to its
stockholders or as the Borrower may file with the Securities and Exchange
Commission or any governmental authority at any time having jurisdiction over
the Borrower or its Subsidiaries;
(h) within 30 days after the end of each quarter, an
Accounts Receivable aging report in form and substance satisfactory to the
Lender; and
(i) from time to time, such other financial data and
information about the Borrower or its Subsidiaries as the Lender may reasonably
request.
5.2. CONDUCT OF BUSINESS. The Borrower and each of its Subsidiaries
shall:
(a) duly observe and comply in all material respects with
all laws, regulations, decrees, orders, judgments and valid requirements of any
governmental authorities applicable to its corporate existence, rights and
franchises, to the conduct of its business and to its property and assets
(including without limitation all Environmental Laws and ERISA), and shall
maintain and keep in full force and effect and comply in all material respects
with all licenses and permits necessary to the proper conduct of its business,
except to the extent that non-compliance shall not have a material adverse
affect upon the financial condition or business of the Borrower and its
Subsidiaries taken as a whole;
(b) maintain its existence and remain or engage
substantially in the same business as that in which it is now engaged and in no
unrelated business.
5.3. MAINTENANCE AND INSURANCE.
(a) The Borrower and each of its Subsidiaries shall
maintain their properties in good repair, working order and condition as
required for the normal conduct of their business.
(b) The Borrower and each of its Subsidiaries shall at
all times maintain liability and casualty insurance on its properties with
financially sound and reputable insurers in such amounts and with such
coverages, endorsements, deductibles and expiration dates as the managers of the
Borrower in the exercise of their reasonable judgment deem to be adequate, as
are customary in the industry for companies of established reputation engaged in
the same or similar business and owning or operating similar properties and as
shall be reasonably satisfactory to the Lender. The Lender shall be named as
loss payee, additional insured and/or
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mortgagee under such insurance as the Lender shall require from time to time,
and the Borrower shall provide to the Lender loss payable endorsements in form
and substance reasonably satisfactory to the Lender. In addition, the Lender
shall be given thirty (30) days advance notice of any cancellation of insurance.
In the event of failure to provide and maintain insurance as herein provided,
the Lender may, at its option, provide such insurance and charge the amount
thereof to the Borrower as a Revolving Credit Loan. The Borrower shall furnish
to the Lender certificates or other evidence satisfactory to the Lender of
compliance with the foregoing insurance provisions. The Lender shall not, by the
fact of approving, disapproving or accepting any such insurance, incur any
liability for the form or legal sufficiency of insurance contracts, solvency of
insurance companies or payment of law suits, and the Borrower hereby expressly
assumes full responsibility therefor and liability, if any, thereunder.
5.4. TAXES. The Borrower shall pay or cause to be paid all taxes,
assessments or governmental charges on or against it or any of its Subsidiaries
or its or their properties on or prior to the time when they become due; except
for any tax, assessment or charge that is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
established and are being maintained in accordance with GAAP if no Encumbrance
shall have been filed to secure such tax, assessment or charge.
5.5. INSPECTION. The Borrower shall permit the Lender and its
designees, at any reasonable time and on an annual basis, and upon reasonable
notice (or if a Default shall have occurred and is continuing, at any time and
without prior notice), to (i) visit and inspect the properties of the Borrower
and its Subsidiaries, (ii) examine and make copies of and take abstracts from
the books and records of the Borrower and its Subsidiaries, and (iii) discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with
their appropriate officers, employees and accountants, all at the expense of the
Borrower. Without limiting the generality of the foregoing, the Borrower will
permit periodic reviews (as determined by the Lender) of the books and records
of the Borrower and its Subsidiaries to be carried out by the Lender's
commercial finance examiners.
5.6. MAINTENANCE OF BOOKS AND RECORDS. The Borrower and each of its
Subsidiaries shall keep adequate books and records of account, in which true and
complete entries will be made reflecting all of its business and financial
transactions in accordance with GAAP and applicable law.
5.7. USE OF PROCEEDS.
(a) The Borrower will use the proceeds of Loans solely
for the working capital needs of the Borrower, including payment of the costs
and expenses of the transactions contemplated hereby.
(b) No portion of any Loan shall be used for the "purpose
of purchasing or carrying" any "margin stock" or "margin security" as such terms
are used in Regulations T, U and X of the Board of Governors of the Federal
Reserve System, or otherwise in violation of such regulations.
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5.8. FURTHER ASSURANCES. At any time and from time to time the
Borrower shall, and shall cause each of its Subsidiaries to, execute and deliver
such further documents and take such further action as may reasonably be
requested by the Lender to effect the purposes of the Loan Documents.
5.9. NOTIFICATION REQUIREMENTS. The Borrower shall furnish to the
Lender:
(a) promptly upon becoming aware of the existence of any
condition or event that constitutes a Default, written notice thereof specifying
the nature and duration thereof and the action being or proposed to be taken
with respect thereto;
(b) promptly upon becoming aware of any litigation or of
any investigative proceedings by a governmental agency or authority commenced or
threatened against the Borrower or any of its Subsidiaries of which they have
notice, the outcome of which would or might have a materially adverse effect on
the assets, business or prospects of the Borrower alone or the Borrower and its
Subsidiaries on a consolidated basis, written notice thereof and the action
being or proposed to be taken with respect thereto; and
(c) promptly after any occurrence or after becoming aware
of any condition affecting the Borrower or any Subsidiary which might constitute
a material adverse change in or which might have a material adverse effect on
the business, properties or condition (financial or otherwise) of the Borrower
alone or the Borrower and its Subsidiaries, taken as a whole, written notice
thereof.
5.10. ERISA REPORTS; COMPLIANCE.
(a) Each Plan shall comply in all material respects with
ERISA and the Code, except to the extent failure to comply in any instance would
not have a material adverse effect on the business, financial condition or
operations of the Borrower and its Subsidiaries taken as a whole.
(b) With respect to any Plan, the Borrower shall, or
shall cause its ERISA Affiliates to, furnish to the Lender promptly (i) as soon
as possible and in any event within 10 days after the Borrower or any of its
ERISA Affiliates knows that any ERISA Event has occurred or is expected to
occur, a statement of the chief financial officer of the Borrower describing
such ERISA Event, including copies of any notice concerning such ERISA Event
received from the PBGC, a plan administrator, or from a Multiemployer Plan
sponsor, and the action, if any, the Borrower or such ERISA Affiliate proposes
to take with respect thereto; and (ii) promptly after filing thereof, a copy of
the annual report of each Pension Plan (Form 5500 or comparable form) required
to be filed with the IRS and/or the Department of Labor. Promptly after the
adoption of any Pension Plan, the Borrower shall notify the Lender of such
adoption.
5.11. ENVIRONMENTAL COMPLIANCE.
(a) The Borrower and its Subsidiaries will comply in all
material respects with all applicable Environmental Laws in all jurisdictions in
which any of them operates now or in the future, and the Borrower and its
Subsidiaries will comply in all material respects with all
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such Environmental Laws that may in the future be applicable to the Borrower's
or any Subsidiary's business, properties and assets.
(b) If the Borrower or any Subsidiary shall (i) receive
notice that any material violation of any Environmental Law may have been
committed or is about to be committed by the Borrower or any Subsidiary, (ii)
receive notice that any administrative or judicial complaint or order has been
filed or is about to be filed against the Borrower or any Subsidiary alleging a
material violation of any Environmental Law requiring the Borrower or any
Subsidiary to take any action in connection with the release of Hazardous
Materials into the environment, (iii) receive any notice from a federal, state
or local government agency or private party alleging that the Borrower or any
Subsidiary may be liable or responsible for any material amount of costs
associated with a response to or cleanup of a release of Hazardous Materials
into the environment or any damages caused thereby, (iv) become aware of any
investigative action or proceedings by a governmental agency or authority
commenced or threatened against the Borrower or any of its Subsidiaries
regarding any potential violation of Environmental Laws or any spill, release,
discharge or disposal of any Hazardous Material or (v) notify any governmental
agency or authority regarding any potential violation of Environmental Laws or
any spill, release, discharge or disposal of any Hazardous Material by the
Borrower or any Subsidiary, the Borrower shall promptly notify the Lender
thereof (together with a copy of any such notice) and of any action being or
proposed to be taken with respect thereto and thereafter shall continue to
furnish to the Lender all further notices, demands, reports and other
information regarding the foregoing.
(c) Within fifteen (15) days after the Borrower or any
Subsidiary has learned of the enactment or promulgation of any Environmental Law
which may result in any material adverse change in the condition, financial or
otherwise, of the Borrower or any Subsidiary, the Borrower or such Subsidiary
shall provide the Lender with notice thereof.
5.12. ADDITIONAL GUARANTORS. In the event that any domestic
Subsidiary shall at any time have revenues for any period of four consecutive
fiscal quarters exceeding ten percent (10%) of the aggregate revenues of the
Borrower and its Subsidiaries taken on a consolidated basis, the Borrower shall
immediately so notify the Lender and shall cause such Subsidiary to become a
Guarantor hereunder and to execute and deliver to the Lender an Instrument of
Adherence to the Subsidiary Guaranty and such further documents and take such
further action as may reasonably be requested by the Lender.
5.13. TERMINATION STATEMENTS. The Borrower shall deliver within
thirty (30) days after the Closing Date evidence satisfactory to the Lender of
the termination of all UCC-1 financing statements relating to liens granted to a
secured party other than the Lender on all or substantially all of the assets of
Petrolsoft Corporation and/or ICARUS Corporation.
5.14. ADDITIONAL DELIVERIES. The Borrower shall deliver within
thirty (30) days after the Closing Date (i) a certificate of the Secretary of
State of the State of California as to the due qualification and good standing
of the Borrower as a foreign corporation in such state and (ii) the current
Articles of Incorporation of Industrial Systems, Inc. and all amendments and
supplements thereto, as filed in the office of the Secretary of State of
Washington, certified by said Secretary of State as being a true and correct
copy thereof.
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SECTION VI.
FINANCIAL COVENANTS
The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding or the Lender or the Issuing Bank have any
obligation to make any Loan or issue any Letter of Credit hereunder:
6.1. CONSOLIDATED NET WORTH. The Borrower shall at all times
maintain Consolidated Net Worth of not less than $150,000,000, PLUS (a) 100% of
the net proceeds of any additional paid-in capital or other equity investments
or the proceeds of the issuance and sale of any common or preferred stock of the
Borrower, in each case received from and after the date hereof, PLUS (b) 80% of
Consolidated Net Income for the fiscal quarter ended September 30, 2000, and for
each fiscal quarter thereafter (for purposes of this clause (b), only positive
Consolidated Net Income shall be included and any net losses shall be
disregarded).
6.2. LEVERAGE RATIO. The Borrower shall not permit at any time the
Leverage Ratio to exceed 1.75 to 1.00 (as determined at the end of each fiscal
quarter)
6.3. INTEREST COVERAGE. The Borrower shall not permit the ratio of
EBITDA to Interest Expense for any four consecutive fiscal quarters ending in
the following fiscal quarters (as determined at the end of each fiscal quarter
for the four quarters then ended, taken as a single fiscal period) to be less
than (i) 3.00 to 1.00 for the fiscal quarter ending September 30, 2000 through
the fiscal quarter ending June 30, 2001 provided, however, that for the fiscal
quarters ending September 30, 2000, December 31, 2000 and March 31, 2001, the
above described ratio shall be calculated on an annualized basis based upon the
period commencing with the fiscal quarter ending September 30, 2000 and (ii)
4.00 to 1.00 for the fiscal quarter ending September 30, 2001 and all fiscal
quarters thereafter,
6.4. QUICK RATIO. The Borrower shall at all times maintain a Quick
Ratio of not less than 1.50 to 1.00 (as determined at the end of each fiscal
quarter).
6.5. NET LOSS. The Borrower shall not permit its Consolidated Net
Income to be less than $0 for any two consecutive fiscal quarters commencing
with the fiscal quarters ending June 30, 2000; PROVIDED, HOWEVER, that for
purposes of this Section 6.5, the calculation of Consolidated Net Income shall
not include non-recurring non-cash charges relating to Permitted Acquisitions.
SECTION VII.
NEGATIVE COVENANTS
The Borrower covenants that so long as any Loan, Letter of Credit or
other Obligation remains outstanding or the Lender or the Issuing Bank have any
obligation to make any Loan or to issue any Letter of Credit hereunder:
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7.1. INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries
shall create, incur, assume, guarantee or be or remain liable with respect to
any Indebtedness other than the following:
(a) Obligations;
(b) Indebtedness existing as of the date of this
Agreement and disclosed on EXHIBIT C hereto and renewals and refinancings
thereof, but not any increase in the principal amounts thereof;
(c) Indebtedness for taxes, assessments or governmental
charges to the extent that payment therefor shall at the time not be required to
be made in accordance with Section 5.4;
(d) current liabilities on open account for the purchase
price of services, materials and supplies incurred by the Borrower in the
ordinary course of business (not as a result of borrowing), so long as all of
such open account Indebtedness shall be promptly paid and discharged when due or
in conformity with customary trade terms and practices, except for any such open
account Indebtedness which is being contested in good faith by the Borrower, as
to which adequate reserves required by GAAP have been established and are being
maintained and as to which no Encumbrance has been placed on any property of the
Borrower or any of its Subsidiaries;
(e) Indebtedness directly relating to Capital
Expenditures incurred in the ordinary course of business and renewals and
refinancings thereof, PROVIDED that the amount of such Indebtedness does not
exceed twenty million dollars ($20,000,000) in the aggregate during any twelve
(12) month period; and
(f) Guarantees permitted under Section 7.2 hereof.
7.2. CONTINGENT LIABILITIES. Neither the Borrower nor any of its
Subsidiaries shall create, incur, assume, guarantee or be or remain liable with
respect to any Guarantees other than (i) Guarantees existing on the date of this
Agreement and disclosed on EXHIBIT C hereto, and (ii) Guarantees resulting from
the endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.
7.3. ENCUMBRANCES. Neither the Borrower nor any of its Subsidiaries
shall create, incur, assume or suffer to exist any mortgage, pledge, security
interest, lien or other charge or encumbrance of any kind, including the lien or
retained security title of a conditional vendor upon or with respect to any of
its property or assets ("ENCUMBRANCES"), including without limitation any
Accounts Receivable, Intellectual Property or contracts, or assign or otherwise
convey any right to receive income, including the sale or discount of Accounts
Receivable with or without recourse, except the following ("PERMITTED
ENCUMBRANCES"):
(a) Encumbrances in favor of the Lender or the Issuing
Bank to secure Obligations;
(b) Encumbrances existing as of the date of this
Agreement and disclosed in EXHIBIT C hereto;
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(c) Encumbrances securing Indebtedness permitted by
Section 7.1(e), PROVIDED that (i) each such Encumbrance is given solely to
secure the purchase price of the property acquired, does not extend to any other
property and is given at the time of acquisition of the property, and (ii) the
Indebtedness secured thereby does not exceed the lesser of the cost of such
property or its fair market value at the time of acquisition;
(d) liens for taxes, fees, assessments and other
governmental charges to the extent that payment of the same may be postponed or
is not required in accordance with the provisions of Section 5.4;
(e) landlords' and lessors' liens in respect of rent not
in default or liens in respect of pledges or deposits under workmen's
compensation, unemployment insurance, social security laws, or similar
legislation (other than ERISA) or in connection with appeal and similar bonds
incidental to litigation; mechanics', warehouseman's, laborers' and
materialmen's and similar liens, if the obligations secured by such liens are
not then delinquent; liens securing the performance of bids, tenders, contracts
(other than for the payment of money); and liens securing statutory obligations
or surety, indemnity, performance, or other similar bonds incidental to the
conduct of the Borrower's or a Subsidiary's business in the ordinary course and
that do not in the aggregate materially detract from the value of its property
or materially impair the use thereof in the operation of its business;
(f) judgment liens securing judgments that (i) are not
fully covered by insurance, and (ii) shall not have been in existence for a
period longer than 10 days after the creation thereof or, if a stay of execution
shall have been obtained, for a period longer than 10 days after the expiration
of such stay;
(g) rights of lessors under capital leases to the extent
such capital leases are permitted under Section 7.1(e);
(h) easements, rights of way, restrictions and other
similar charges or Encumbrances relating to real property and not interfering in
a material way with the ordinary conduct of the Borrower's business;
(i) liens constituting a renewal, extension or
replacement of any Permitted Encumbrance; and
(j) Encumbrances in favor of reputable financial
institutions in connection with the Borrower's factoring of Accounts Receivable
and Qualified Multiyear License Agreements in the ordinary course, but only to
the extent that the Borrower at all times maintains a Borrowing Base sufficient
in amount to cover the full amount of the Commitment.
7.4. CONSOLIDATION, MERGER OR ACQUISITION.
(a) Neither the Borrower nor any of its Subsidiaries
shall merge or consolidate with or into any other Person, or make any
acquisition of the business or assets of any other Person except: (i) any
Subsidiary of the Borrower which is a Guarantor may merge into the Borrower or
any wholly-owned Subsidiary of the Borrower which is a Guarantor; (ii)
Investments to the extent permitted by Section 7.7 hereof; and (iii) Permitted
Acquisitions. For
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purposes hereof a "PERMITTED ACQUISITION" is an acquisition which satisfies the
following requirements: (A) if it involves an asset purchase, stock purchase or
a merger or consolidation, upon the consummation of which the surviving or
acquired party shall be the Borrower or a Subsidiary of the Borrower which is a
Guarantor; (B) at the time of such acquisition and after giving effect thereto
on a pro forma basis no Event of Default shall have occurred and be continuing
and the Borrower shall be in compliance for the four quarters then ended with
each of the covenants set forth in Section VI; (C) is not hostile or contested
and (D) the conditions set forth in Section 7.4(b) hereof shall have been
satisfied with respect to the proposed acquisition.
(b) In addition to the requirements set forth in Section
7.4(a), the following additional conditions must be satisfied with respect to
each Permitted Acquisition:
(i) Each business or Person to be acquired shall be
engaged in the same or a related line of business to the then current
businesses conducted by the Borrower and its Subsidiaries;
(ii) The acquisition shall be financed entirely with cash
and/or common stock of the Borrower and the amount of (i) cash
consideration in connection with all acquisitions shall not exceed
thirty million dollars ($30,000,000) in the aggregate and (ii) common
stock consideration in connection with all acquisitions shall not
exceed forty million dollars ($40,000,000) in the aggregate;
(iii) All necessary consents, approvals, licenses,
permissions, registrations or validations of any governmental authority
or any other Person required for the consummation of the proposed
acquisition shall have been obtained and shall be in full force and
effect;
(iv) With respect to any individual proposed acquisition
involving an aggregate acquisition price in excess of ten million
dollars ($10,000,000), such acquisition shall be subject to the review
(but not the approval) of the Lender which review shall be completed
within five (5) Business Days after the Lender shall have received
copies of the following: (A) a pro forma report in the form of EXHIBIT
D hereto to the Lender which shall demonstrate that on a pro forma
basis and after giving effect to the proposed acquisition that the
Borrower will be in compliance with the financial covenants set forth
in Section VI hereof; (B) the draft acquisition agreement for such
proposed acquisition; (C) the financial statements of the target entity
(audited or reviewed to the extent available); (D) financial
projections for the target entity (if available); and (E) due diligence
summaries (if available); PROVIDED, HOWEVER, that the Borrower shall
deliver to the Lender such additional information or documents as the
Lender shall reasonably request, provided that any such additional
request shall not extend or delay the running of the aforementioned
five (5) Business Day period;
(v) The Borrower or its Subsidiaries shall report the
value of all stock and cash consideration paid in connection with
Permitted Acquisitions for the fiscal quarter ending September 30, 2000
and for each fiscal quarter thereafter and cumulatively for the period
from the Closing Date through the date of such report as part of the
report required by Section 5.1(c); and
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(vi) Each new domestic Subsidiary of the Borrower formed
to make such acquisition and each Person to be acquired which becomes a
domestic Subsidiary of the Borrower that had revenues, giving effect to
such acquisition, exceeding ten percent (10%) of the aggregate revenues
of the Borrower and its Subsidiaries taken on a consolidated basis for
any period of four (4) consecutive fiscal quarters shall agree to
become a Guarantor of the Obligations and shall have executed such
instruments in connection therewith as the Lender and its counsel shall
reasonably request, including without limitation an Instrument of
Adherence to the Subsidiary Guaranty.
(c) In the event a proposed acquisition meets the
requirements for a Permitted Acquisition except for the requirements set forth
in Section 7.4(b)(ii), the Borrower may request the consent thereto of the
Lender in the exercise of its sole discretion, which consent shall be granted or
denied as soon as reasonably possible (but in no event later than two weeks
after the date on which the Lender shall have received copies of the items
listed in Section 7.4(b)(iv)).
(d) The Borrower shall not, and shall not permit any
Subsidiary to, sell, lease (as lessor) or otherwise dispose of any assets or
properties, other than sales of Qualified Investments and obsolete or worn out
equipment, in each case in the ordinary course of business and consistent with
past practices.
7.5. SUBSIDIARIES. The Borrower shall not permit any of its
Subsidiaries to issue any additional shares of its capital stock or other equity
securities, any options therefor or any securities convertible thereto, other
than to the Borrower. Neither the Borrower nor any of its Subsidiaries shall
sell, transfer or otherwise dispose of any of the capital stock or other equity
securities of a Subsidiary, except to the Borrower or any of its wholly-owned
Subsidiaries. The Borrower shall not, and shall not permit any of its
Subsidiaries to, create or other suffer to exist any consensual Encumbrances or
restrictions on the ability of any Subsidiary to pay dividends or make any other
distributions on its equity interests held by the Borrower or pay any
Indebtedness owed to the Borrower or any Subsidiary or to make loans or advances
or transfer any of its assets to the Borrower or any other Subsidiary.
7.6. RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Subsidiaries shall pay, make, declare or authorize any Restricted Payment other
than:
(i) compensation paid or advances made to employees,
officers and directors in the ordinary course of business and
consistent with prudent business practices;
(ii) dividends payable solely in common stock; or
(iii) dividends paid by any Subsidiary to the Borrower.
7.7. INVESTMENTS; PURCHASES OF ASSETS. Neither the Borrower nor any
of its Subsidiaries shall make or maintain any Investments or purchase or
otherwise acquire any material amount of assets other than:
(i) Investments existing on the date hereof in
Subsidiaries;
(ii) Qualified Investments;
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(iii) Capital Expenditures, PROVIDED that the amount of
such Capital Expenditures does not exceed twenty million dollars
($20,000,000) in the aggregate during any twelve (12) month period;
(iv) purchases of inventory in the ordinary course of
business;
(v) normal trade credit extended in the ordinary course
of business and consistent with prudent business practice;
(vi) investments in companies in similar lines of business
as the Borrower as long as no Event of Default has occurred and is
continuing or could reasonably be expected to arise therefrom, PROVIDED
that the aggregate amount of such investments do not exceed the greater
of thirty million dollars ($30,000,000) in cash and forty million
dollars ($40,000,000) in common stock;
(vii) Permitted Acquisitions; and
(viii) advances by the Borrower or any Subsidiary to any
Subsidiary; PROVIDED that (i) the amount of such advances to domestic
Subsidiaries that are not Guarantors does not exceed five million
dollars ($5,000,000) in the aggregate during any twelve (12) month
period and (ii) the amount of such advances to non-U.S. Subsidiaries
does not exceed fifteen million dollars ($15,000,000) in the aggregate
during any twelve (12) month period.
7.8. ERISA COMPLIANCE. Neither the Borrower nor any of its ERISA
Affiliates nor any Plan shall (i) engage in any Prohibited Transaction which
would have a material adverse effect on the business, financial condition or
operations of the Borrower and its Subsidiaries taken as a whole, (ii) incur any
"accumulated funding deficiency" (within the meaning of Section 412(a) of the
Code and Section 302 of ERISA), whether or not waived, (iii) permit to exist any
material amount of "unfunded benefit liabilities" (within the meaning of Section
4001(a)(18) of ERISA), (iv) terminate any Pension Plan in a manner which could
result in the imposition of a lien on any property of the Borrower or any of its
Subsidiaries, (v) fail to make any required contribution to any Multiemployer
Plan or (vi) completely or partially withdraw from a Multiemployer Plan if such
complete or partial withdrawal will result in any material withdrawal liability
under Title IV of ERISA.
7.9. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into any
purchase, sale, lease, loan or other transaction with any Affiliate except (i)
transactions in the ordinary course of business on terms that are no less
favorable to the Borrower than those which might be obtained at the time in a
comparable arm's-length transaction with any Person who is not an Affiliate, but
only to the extent consented to in advance by the Lender and (ii) employment
contracts with senior management of the Borrower entered into in the ordinary
course of business and consistent with prudent business practices.
Notwithstanding the foregoing, the Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, pay any management, consulting, overhead,
indemnity, guarantee or other similar fee or charge to any Affiliate.
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<PAGE> 43
7.10. FISCAL YEAR. The Borrower and its Subsidiaries shall not
change their fiscal years without the prior written consent of the Lender.
SECTION VIII.
DEFAULTS
8.1. EVENTS OF DEFAULT. There shall be an Event of Default
hereunder if any of the following events occurs:
(a) the Borrower or any Subsidiary shall fail to pay any
principal of any Loan, any Reimbursement Obligation or any interest, fees or
other amounts owing by it under any Loan Document or in respect of any
Obligation when the same shall become due and payable, whether at maturity or at
any accelerated date of maturity or at any other date fixed for payment; or
(b) the Borrower or any Subsidiary shall fail to perform
or comply with any term, covenant or agreement applicable to it contained in
Sections 5.1, 5.2(b), 5.5, 5.6, 5.7, 5.9, 5.11, 6 and 7 of this Agreement; or
(c) the Borrower or any Subsidiary shall fail to perform
or comply with any term, covenant or agreement applicable to it (other than as
specified in subsections 8.1(a) or (b) hereof) contained in this Agreement or
any other Loan Document and such default shall continue for ten (10) days;
(d) any representation or warranty of the Borrower made
in this Agreement or any other Loan Document or in any certificate, notice or
other writing delivered hereunder or thereunder shall prove to have been false
in any material respect upon the date when made or deemed to have been made; or
(e) the Borrower or any of its Subsidiaries shall fail to
pay when due (after any applicable period of grace) any amount payable (i) under
any Indebtedness exceeding $1,000,000 in principal amount or (ii) under any
agreement for the use of real or personal property requiring aggregate payments
in excess of $1,000,000 in any twelve month period, or fail to observe or
perform any term, covenant or agreement evidencing or securing such Indebtedness
or relating to such agreement for the use of real or personal property; or
(f) the Borrower or any of its Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar official of itself or of all
or a substantial part of its property, (ii) be generally not paying its debts as
such debts become due, (iii) make a general assignment for the benefit of its
creditors, (iv) commence a voluntary case under the United States Bankruptcy
Code (as now or hereafter in effect), (v) take any action or commence any case
or proceeding under any law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts, or any other law providing for
the relief of debtors, (vi) fail to contest in a timely or appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the United States Bankruptcy Code or other law, (vii) take any action
under the laws of its
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<PAGE> 44
jurisdiction of incorporation or organization similar to any of the foregoing,
or (viii) take any corporate action for the purpose of effecting any of the
foregoing; or
(g) a proceeding or case shall be commenced against the
Borrower or any of its Subsidiaries, without the application or consent of such
Borrower or such Subsidiary in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets, or (iii) similar relief in respect of it, under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts or any other law providing for the relief of debtors, and such
proceeding or case shall continue undismissed, or unstayed and in effect, for a
period of 60 days; or an order for relief shall be entered in an involuntary
case under the Federal Bankruptcy Code, against the Borrower or such Subsidiary;
or action under the laws of the jurisdiction of incorporation or organization of
the Borrower or any of its Subsidiaries similar to any of the foregoing shall be
taken with respect to the Borrower or such Subsidiary and shall continue
unstayed and in effect for a period of 60 days; or
(h) a judgment or order for the payment of money shall be
entered against the Borrower or any of its Subsidiaries by any court, or a
warrant of attachment or execution or similar process shall be issued or levied
against property of the Borrower or such Subsidiary, that in the aggregate
exceeds $1,000,000 in value, the payment of which is not fully covered by
insurance in excess of any deductibles not exceeding $250,000 in the aggregate,
and such judgment, order, warrant or process shall continue undischarged or
unstayed for 60 days; or
(i) the Borrower or any ERISA Affiliate shall fail to pay
when due any material amount that they shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA, unless such liability is being
contested in good faith by appropriate proceedings, the Borrower or the ERISA
Affiliate, as the case may be, has established and is maintaining adequate
reserves in accordance with GAAP and no lien shall have been filed to secure
such liability; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any such Plan
or Plans; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; or
(j) any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance with the express
terms thereof or with the express prior written agreement, consent or approval
of the Lender, or any action at law or in equity or other legal proceeding to
cancel, revoke or rescind any Loan Document shall be commenced by or on behalf
of the Borrower, or any court or other governmental or regulatory authority or
agency of competent jurisdiction shall make a determination that, or shall 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; or
(k) the Borrower shall fail at any time to own more than
a majority of the equity interests of each of its Subsidiaries and to have the
unrestricted ability to exercise voting and management control of each of its
Subsidiaries; or
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<PAGE> 45
(l) the occurrence of any material adverse change in the
condition or affairs (financial or otherwise) of the Borrower or any of the
Guarantors or of any endorser, guarantor or surety for any Obligation which
causes the Lender in good faith to believe that the prospect of payment
hereunder is impaired.
8.2. REMEDIES. Upon the occurrence of an Event of Default described
in subsections 8.1(f) and (g), immediately and automatically, and upon the
occurrence of any other Event of Default, at any time thereafter while such
Event of Default is continuing, at the option of the Lender and upon the
Lender's declaration:
(a) the obligation of the Lender to make any further
Loans and of the Issuing Bank to issue any Letters of Credit hereunder shall
terminate;
(b) the unpaid principal amount of the Loans together
with accrued interest, all Reimbursement Obligations and all other Obligations
shall become immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived; and
(c) the Lender and the Issuing Bank may exercise any and
all rights they have under this Agreement, the other Loan Documents or at law or
in equity, and proceed to protect and enforce their respective rights by any
action at law or in equity or by any other appropriate proceeding.
No remedy conferred upon the Lender or the Issuing Bank in the Loan Documents 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 by any other
provision of law.
SECTION IX.
ASSIGNMENT AND PARTICIPATION
9.1. ASSIGNMENT. Fleet shall have the unrestricted right to assign
at any time all or any portion of its Commitment hereunder and its interests in
the risk relating to any Loans in an amount equal to or greater than $1,000,000
to other banks or financial institutions (each an "ASSIGNEE"). Each Assignee
shall execute and deliver to Fleet and the Borrower a joinder agreement. Upon
the execution and delivery of such joinder agreement, (a) such Assignee shall,
on the date and to the extent provided in such joinder agreement, become a
"Lender" party to this Agreement and the other Loan Documents for all purposes
of this Agreement and the other Loan Documents and shall have all rights and
obligations of a "Lender" with a Commitment as set forth in such joinder
agreement, and Fleet shall, on the date and to the extent provided in such
joinder agreement, be released prospectively from its obligations hereunder and
under the other Loan Documents to a corresponding extent (and, in the case of an
assignment covering all of the remaining portion of Fleet's rights and
obligations under this Agreement, Fleet shall cease to be a party hereto but
shall continue to be entitled to the benefits of Section 10.3 and to any fees
accrued for its account hereunder and not yet paid); (b) the assigning Lender,
if it holds any
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<PAGE> 46
Notes, shall promptly surrender such Notes to the Borrower for cancellation,
provided that if Fleet has retained any Commitment, the Borrower shall execute
and deliver to Fleet new Notes in the amount of its retained Commitment; (c) the
Borrower shall issue to such Assignee Notes in the amount of such Assignee's
Commitment, dated the Closing Date or such other date as may be specified by
such Assignee and otherwise completed in substantially the form of EXHIBIT A;
(d) this Agreement shall be deemed appropriately amended to reflect (i) the
status of such Assignee as a party hereto and (ii) the status and rights of the
Lenders hereunder; and (e) the Borrower shall take such action as Fleet may
reasonably request to perfect any security interests or mortgages in favor of
the Lenders.
9.2. PARTICIPATIONS. The Lender shall have the unrestricted right
to grant participations to one or more banks or other financial institutions
(each a "PARTICIPANT") in all or any part of any Loans owing to the Lender and
the Note held by the Lender. The Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents, PROVIDED that the documents evidencing any
such participation may provide that, except with the consent of such
Participant, the Lender will not consent to (a) the reduction in or forgiveness
of the stated principal of or rate of interest on or commitment fee with respect
to the portion of any Loan subject to such participation, (b) the extension or
postponement of any stated date fixed for payment of principal or interest or
commitment fee with respect to the portion of any Loan subject to such
participation, or (c) the waiver or reduction of any right to indemnification of
the Lender hereunder. Notwithstanding the foregoing, no participation shall
operate to increase the total Commitments hereunder or otherwise alter the
substantive terms of this Agreement. In the event of any such sale by the Lender
of participating interests to a Participant, the Lender's obligations under this
Agreement shall remain unchanged, the Lender shall remain solely responsible for
the performance thereof, the Lender shall remain the holder of such Note for all
purposes under this Agreement and the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under this Agreement.
SECTION X.
GENERAL
10.1. NOTICES. Unless otherwise specified herein, all notices hereunder to any
party hereto shall be in writing and shall be deemed to have been given when
delivered by hand, or when sent by electronic facsimile transmission, or on the
first Business Day after delivery to any overnight delivery service, freight
pre-paid, or five (5) days after being sent by certified or registered mail,
return receipt requested, postage pre-paid, and addressed to such party at its
address indicated below:
If to the Borrower, at
Aspen Technology, Inc.
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<PAGE> 47
Ten Canal Park
Cambridge, Massachusetts 02141-2201
Attention: Chief Financial Officer
Facsimile: (617) 949-1722
with copies to (which shall not constitute notice) to:
Aspen Technology, Inc.
Ten Canal Park
Cambridge, Massachusetts 02141-2201
Attention: Michael J. Muscatello, General Counsel
Facsimile: (617) 949-1711
and
Attention: Christine Duffy, Assistant Treasurer
Facsimile: (617) 949-1711
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: Mark L. Johnson, Esq.
Facsimile: (617) 526-5000
If to the Lender, at
100 Federal Street
Mail Stop MA DE 10008H
Boston, Massachusetts 02110
Attention: Daniel G. Head, Jr., Director
Facsimile: (617) 434-0819
with a copy (which shall not constitute notice) to:
Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attention: Dennis J. White, Esq.
Facsimile: (617) 338-2880
or at any other address specified by such party in writing.
10.2. EXPENSES. Whether or not the transactions contemplated herein
shall be consummated, the Borrower promises to reimburse the Lender and the
Issuing Bank for all out-of-pocket fees and disbursements (including all
reasonable attorneys' fees and collateral
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<PAGE> 48
evaluation costs) incurred or expended in connection with the preparation,
filing or recording, or interpretation of this Agreement and the other Loan
Documents, or any amendment, modification, approval, consent or waiver hereof or
thereof, or in connection with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrower hereunder or thereunder, or in
connection with any litigation, proceeding or dispute in any way related to the
credit hereunder, and the amount of all such expenses shall, until paid, bear
interest at the rate applicable to principal hereunder (including any default
rate) and be an Obligation. The Borrower will pay any taxes (including any
interest and penalties in respect thereof), other than the Lender's federal and
state income taxes, payable on or with respect to the transactions contemplated
by the Loan Documents (the Borrower hereby agreeing to indemnify the Lender and
the Issuing Bank with respect thereto).
10.3. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Lender and the Issuing Bank, as well as their respective
shareholders, directors, officers, agents, attorneys, subsidiaries and
affiliates, from and against all damages, losses, settlement payments,
obligations, liabilities, claims, suits, penalties, assessments, citations,
directives, demands, judgments, actions or causes of action, whether statutorily
created or under the common law, all reasonable costs and expenses (including,
without limitation, reasonable fees and disbursements of attorneys, engineers
and consultants) and all other liabilities whatsoever (including, without
limitation, liabilities under Environmental Laws) which shall at any time or
times be incurred, suffered, sustained or required to be paid by any such
indemnified Person (except any of the foregoing which result from the gross
negligence or willful misconduct of the indemnified Person) on account of or in
relation to or any way in connection with any of the arrangements or
transactions contemplated by, associated with or ancillary to this Agreement,
the other Loan Documents or any other documents executed or delivered in
connection herewith or therewith, all as the same may be amended from time to
time, or with respect to any Letters of Credit, whether or not all or part of
the transactions contemplated by, associated with or ancillary to this
Agreement, any of the other Loan Documents or any such other documents are
ultimately consummated. In any investigation, proceeding or litigation, or the
preparation therefor, the Lender shall select its own counsel and, in addition
to the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of such counsel. In the event of the commencement of any such
proceeding or litigation, the Borrower shall be entitled to participate in such
proceeding or litigation with counsel of its choice at its own expense, provided
that such counsel shall be reasonably satisfactory to the Lender. The Borrower
authorizes the Lender and the Issuing Bank to charge any deposit account or Note
Record which it may maintain with any of them for any of the foregoing. The
covenants of this Section 10.3 shall survive payment or satisfaction of payment
of all amounts owing with respect to the Notes, any other Loan Document or any
other Obligation.
10.4. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrower pursuant
hereto shall be deemed to have been relied upon by the Lender and the Issuing
Bank, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Lender of the Loans as herein
contemplated, and shall continue in full force and effect so long as any
Obligation remains outstanding and unpaid or the Lender has any obligation to
make any Loans hereunder or the Issuing Bank has any obligation to issue any
Letter of Credit. All statements contained in any
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<PAGE> 49
certificate or other writing delivered by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.
10.5. SET-OFF. The Borrower hereby grants to the Lender, a lien,
security interest and right of setoff as security for all liabilities and
obligations to the Lender, whether now existing or hereafter arising, upon and
against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of the Lender or any entity under
the control of FleetBoston Financial Corporation and its successors and assigns,
or in transit to any of them. At any time, without demand or notice (any such
notice being expressly waived by the Borrower), the Lender may set off the same
or any part thereof and apply the same to any liability or obligation of the
undersigned even though unmatured and regardless of the adequacy of any other
collateral securing the Loan. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE LOAN, PRIOR TO EXERCISING THE RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY,
VOLUNTARILY AND IRREVOCABLY WAIVED.
10.6. NO WAIVERS. No failure or delay by the Lender or the Issuing
Bank in exercising any right, power or privilege hereunder, under the Notes or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. No waiver shall
extend to or affect any Obligation not expressly waived or impair any right
consequent thereon. No course of dealing or omission on the part of the Lender
or the Issuing 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. The rights and remedies herein and in the Notes and the other
Loan Documents are cumulative and not exclusive of any rights or remedies
otherwise provided by agreement or law.
10.7. AMENDMENTS, WAIVERS, ETC. Neither this Agreement nor the Notes
nor any other Loan Document nor any provision hereof or thereof may be amended,
waived, discharged or terminated except by a written instrument signed by the
Lender and, with respect to Letters of Credit, the Issuing Bank, and also, in
the case of amendments, by the Borrower.
10.8. BINDING EFFECT OF AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Lender, the Issuing Bank and
their respective successors and assigns; PROVIDED that the Borrower may not
assign or transfer its rights or obligations hereunder.
10.9. CAPTIONS; COUNTERPARTS. The captions in this Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof. This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
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<PAGE> 50
10.10. 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 and supersede all prior agreements (including the Commitment Letter dated
September 16, 2000 between Lender and the Borrower) with respect to the subject
matter hereof, except for the letter agreement dated September 16, 2000, between
the Borrower and Lender with respect to fees payable to Lender, which letter
agreement shall continue in full force and effect and shall not be superseded by
any of the Loan Documents.
10.11. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY
IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF
THE LENDER RELATING TO THE ADMINISTRATION OF THE LOAN OR THE ENFORCEMENT OF THE
LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH OF THE BORROWER AND THE LENDER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. THE BORROWER CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
THE LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS. THE WAIVERS AND CERTIFICATIONS CONTAINED HEREIN CONSTITUTE A MATERIAL
INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS TO WHICH EACH IS A PARTY AND TO MAKE THE LOAN.
10.12. GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). THE BORROWER CONSENTS TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE
COURTS LOCATED IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS IN
CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS OF THE LENDER UNDER THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
SUCH ACTION BROUGHT IN THE COURTS REFERRED TO IN THE PRECEDING SENTENCE AND
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH ACTION THAT SUCH
ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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<PAGE> 51
10.13. SEVERABILITY. The provisions of this 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 Agreement in
any jurisdiction.
10.14. REPLACEMENT OF LOST NOTES. Upon receipt of an affidavit of an
officer of the Lender as to the loss, theft, destruction or mutilation of the
Notes, and in the case of any such loss, theft, destruction or mutilation, upon
cancellation of such Notes, the Borrower will issue, in lieu thereof, a
replacement note or other security document in the same principal amount thereof
or otherwise of like tenor.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement under seal as of the date first above written.
ASPEN TECHNOLOGY, INC.
By: /s/ Lisa W. Zappla
----------------------------------------
Name: Lisa W. Zappla
Title: Senior Vice President and
Chief Financial Officer
FLEET NATIONAL BANK
By: /s/ Daniel G. Head, Jr.
----------------------------------------
Name: Daniel G. Head, Jr.
Title: Director
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TABLE OF CONTENTS
Page
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SECTION I. DEFINITIONS................................................2
1.1. Definitions...................................................2
1.2. Rules of Interpretation......................................13
SECTION II. DESCRIPTION OF CREDIT.....................................13
2.1. Loans........................................................13
2.2. The Note.....................................................14
2.3. Notice and Manner of Borrowing or Conversion of Loans........15
2.4. Interest Rates and Payments of Interest......................15
2.5. Fees.........................................................17
2.6. Payments and Prepayments of the Loans........................17
2.7. Method of Payments...........................................18
2.8. Indemnity....................................................19
2.9. Computation of Interest and Fees.............................19
2.10. Changed Circumstances; Illegality............................19
2.11. Increased Costs..............................................20
2.12. Capital Requirements.........................................21
SECTION III. CONDITIONS OF LOANS AND LETTERS OF CREDIT.................23
3.1. Conditions Precedent to Initial Loans........................23
3.2. Conditions Precedent to all Loans and Letters of Credit......25
SECTION IV. REPRESENTATIONS AND WARRANTIES............................26
4.1. Organization; Qualification; Business........................26
4.2. Corporate Authority..........................................26
4.3. Valid Obligations............................................26
4.4. Consents or Approvals........................................27
4.5. Title to Properties; Absence of Encumbrances.................27
4.6. Financial Statements.........................................27
4.7. Changes......................................................27
4.8. Solvency.....................................................27
4.9. Defaults.....................................................28
4.10. Taxes........................................................28
4.11. Litigation...................................................28
4.12. Subsidiaries.................................................28
4.13. Investment Company Act.......................................28
4.14. Compliance...................................................28
4.15. ERISA........................................................29
4.16. Environmental Matters........................................29
4.17. Restrictions on the Borrower.................................30
4.18. Labor Relations..............................................30
4.19. Margin Rules.................................................31
4.20. Disclosure...................................................31
4.21. Intellectual Property........................................31
SECTION V. AFFIRMATIVE COVENANTS.....................................32
5.1. Financial Statements.........................................32
i
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TABLE OF CONTENTS
(continued)
Page
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5.2. Conduct of Business..........................................33
5.3. Maintenance and Insurance....................................33
5.4. Taxes........................................................34
5.5. Inspection...................................................34
5.6. Maintenance of Books and Records.............................34
5.7. Use of Proceeds..............................................34
5.8. Further Assurances...........................................35
5.9. Notification Requirements....................................35
5.10. ERISA Reports; Compliance....................................35
5.11. Environmental Compliance.....................................35
5.12. Additional Guarantors........................................36
5.13. Termination Statements.......................................36
5.14. Additional Deliveries........................................36
SECTION VI. FINANCIAL COVENANTS.......................................37
6.1. Consolidated Net Worth.......................................37
6.2. Leverage Ratio...............................................37
6.3. Interest Coverage............................................37
6.4. Quick Ratio..................................................37
6.5. Net Loss.....................................................37
SECTION VII. NEGATIVE COVENANTS........................................37
7.1. Indebtedness.................................................38
7.2. Contingent Liabilities.......................................38
7.3. Encumbrances.................................................38
7.4. Consolidation, Merger or Acquisition.........................39
7.5. Subsidiaries.................................................41
7.6. Restricted Payments..........................................41
7.7. Investments; Purchases of Assets.............................41
7.8. ERISA Compliance.............................................42
7.9. Transactions with Affiliates.................................42
7.10. Fiscal Year..................................................43
SECTION VIII. DEFAULTS..................................................43
8.1. Events of Default............................................43
8.2. Remedies.....................................................45
SECTION IX. ASSIGNMENT AND PARTICIPATION..............................45
9.1. Assignment...................................................45
9.2. Participations...............................................46
SECTION X. GENERAL...................................................46
10.1. Notices.....................................................46
10.2. Expenses....................................................47
10.3. Indemnification.............................................48
10.4. Survival of Covenants, Etc..................................48
10.5. Set-Off.....................................................49
10.6. No Waivers..................................................49
ii
<PAGE> 55
TABLE OF CONTENTS
(continued)
Page
----
10.7. Amendments, Waivers, etc....................................49
10.8. Binding Effect of Agreement.................................49
10.9. Captions; Counterparts......................................49
10.10. Entire Agreement, Etc.......................................50
10.11. Waiver of Jury Trial........................................50
10.12. Governing Law...............................................50
10.13. Severability................................................51
10.14. Replacement of Lost Notes...................................51
SCHEDULES
SCHEDULE 1 - Commitments of Lender
EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Notice of Borrowing or Conversion
EXHIBIT C - Disclosure EXHIBIT D - Form of Report of Chief Financial Officer
EXHIBIT E - Form of Borrowing Base Report
EXHIBIT F - Borrower's Short Term Investment Portfolio Investment Policy
iii
<PAGE> 56
UNLIMITED GUARANTY
UNLIMITED GUARANTY, dated as of October 27, 2000 by Aspentech, Inc., a
Texas corporation, Aspentech Securities Corp., a Massachusetts corporation,
Industrial Systems, Inc., a Washington corporation, and such other parties as
may from time to time become a party hereto pursuant to SECTION 15 hereof (each
individually a "GUARANTOR" and collectively, the "GUARANTORS"), in favor of
FLEET NATIONAL BANK, as Lender under (and as defined in) that certain Credit
Agreement of even date herewith between the Lender and Aspen Technology, Inc., a
Delaware corporation (together with its successors, the "COMPANY") (as the same
may be amended, modified, supplemented, extended or restated from time to time
the "CREDIT AGREEMENT"). In consideration of the Lender making advances to the
Company and issuing letters of credit for the account of the Company under the
Credit Agreement, the Guarantors agree as follows:
1. DEFINITIONS
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional term, as used herein, shall have the following meaning:
"GUARANTIED OBLIGATIONS" means all obligations of the Company
to the Lender, whether such obligations are now existing or hereafter
incurred or created, joint or several, direct or indirect, absolute or
contingent, due or to become due, matured or unmatured, liquidated or
unliquidated, arising by contract, operation of law or otherwise,
including, without limitation, (a) all Obligations (as defined in the
Credit Agreement); (b) all principal of and interest (including,
without limitation, any interest which accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of the Company) on any advance to the
Company under the Notes or pursuant to the Credit Agreement; (c) all
other amounts (including, without limitation, any fees or expenses)
payable by the Company under the Loan Documents; (d) all amounts
payable to the Issuing Bank in connection with the issuance of any
letter of credit by such Issuing Bank for the account of the Company or
any drawing thereunder, including, without limitation, any
reimbursement obligation and letter of credit fees payable under any
letter of credit application or reimbursement agreement executed by the
Company in connection with any such letter of credit; (e) all other
amounts payable by the Company hereunder; and (f) any renewals,
refinancings or extensions of any of the foregoing.
2. GUARANTY OF PAYMENT AND PERFORMANCE. Each of the Guarantors
hereby jointly and severally guarantees to the Lender the full and punctual
payment when due (whether at maturity, by acceleration or otherwise), and the
performance, of the Guarantied Obligations. This Guaranty is an absolute,
unconditional and irrevocable guaranty of the full and punctual payment and
performance of the Guarantied Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that the Lender first attempt
to collect any of the Guarantied Obligations from the Company or resort to any
security or other means of obtaining their payment. Should an Event of Default
occur and be continuing, the Guarantied Obligations of the Guarantors hereunder
shall become immediately due and payable to the Lender, for the
<PAGE> 57
benefit of the Lenders, without demand or notice of any nature, all of which are
expressly waived by the Guarantors. Payments by the Guarantors hereunder may be
required by the Lender on any number of occasions.
3. GUARANTORS' AGREEMENT TO PAY. The Guarantors further jointly
and severally agree, each as the principal obligor and not as a guarantor only,
to pay to the Lender, on demand, all costs and expenses (including court costs
and legal expenses) incurred or expended by the Lender in connection with the
Guarantied Obligations, this Guaranty and the enforcement thereof, together with
interest on amounts recoverable under this Guaranty from the time such amounts
become due until payment, at the rate per annum equal to the rate of interest
announced by the Lender from time to time at its head office as its Prime Rate
plus 2%; provided that if such interest exceeds the maximum amount permitted to
be paid under applicable law, then such interest shall be reduced in accordance
with Section 2.4(f) of the Credit Agreement.
4. UNLIMITED GUARANTY. The liability of the Guarantors hereunder
shall be joint and several and shall be unlimited.
5. WAIVERS BY GUARANTOR; LENDER'S FREEDOM TO ACT. Each Guarantor
agrees that the Guarantied Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Lender with respect thereto. Each Guarantor waives
presentment, demand, protest, notice of acceptance, notice of Guarantied
Obligations incurred and all other notices of any kind, all defenses which may
be available by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshalling of assets
of the Company, and all suretyship defenses generally. Without limiting the
generality of the foregoing, each Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the Guarantied Obligations of the Guarantors
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Lender to assert any claim or demand or to
enforce any right or remedy against the Company; (ii) any extensions or renewals
of any Obligation; (iii) any rescissions, waivers, amendments or modifications
of any of the terms or provisions of any agreement evidencing, securing or
otherwise executed in connection with any Obligation; (iv) the substitution or
release of any entity primarily or secondarily liable for any Obligation; (v)
the adequacy of any rights the Lender may have against any collateral or other
means of obtaining repayment of the Guarantied Obligations; (vi) the impairment
of any collateral securing the Guarantied Obligations, if any, including without
limitation the failure to perfect or preserve any rights the Lender might have
in such collateral or the substitution, exchange, surrender, release, loss or
destruction of any such collateral; or (vii) any other act or omission which
might in any manner or to any extent vary the risk of the Guarantors or
otherwise operate as a release or discharge of the Guarantors, all of which may
be done without notice to the Guarantors.
6. UNENFORCEABILITY OF GUARANTIED OBLIGATIONS AGAINST COMPANY. If
for any reason the Company has no legal existence or is under no legal
obligation to discharge any of the Guarantied Obligations, or if any of the
Guarantied Obligations have become irrecoverable from the Company by operation
of law or for any other reason, this Guaranty shall nevertheless be binding on
each of the Guarantors to the same extent as if each Guarantor at all times had
been
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<PAGE> 58
the principal obligor on all such Guarantied Obligations. In the event that
acceleration of the time for payment of the Guarantied Obligations is stayed
upon the insolvency, bankruptcy or reorganization of the Company, or for any
other reason, all such amounts otherwise subject to acceleration under the terms
of any agreement evidencing, securing or otherwise executed in connection with
any Obligation shall be immediately due and payable by the Guarantors.
7. WAIVER OF SUBROGATION. Until the payment and performance in
full of all Guarantied Obligations and any and all Guarantied Obligations of the
Company to any affiliate of the Lender, the Guarantors shall not exercise any
rights against the Company arising as a result of payment by the Guarantors
hereunder, by way of subrogation or otherwise, and will not prove any claim in
competition with the Lender or its affiliates in respect of any payment
hereunder in bankruptcy or insolvency proceedings of any nature; the Guarantors
will not claim any set-off or counterclaim against the Company in respect of any
liability of the Guarantors to the Company; the Guarantors waive any benefit of
and any right to participate in any collateral which may be held by the Lender
or any such affiliate; and notwithstanding any other provision to the contrary
contained herein, the Guarantors hereby irrevocably waive any and all rights
each may have at any time (whether arising directly or indirectly, by operation
of law or by contract) to assert any claim against the Company on account of
payments made under this Guaranty, including, without limitation, any and all
rights of or claims for subrogation, contribution, reimbursement, exoneration
and indemnity unless such rights have been expressly subordinated to any rights
of the Lender with respect to the Company.
8. SUBORDINATION. The payment of any amounts due with respect to
any indebtedness of the Company now or hereafter held by the Guarantors,
including any and all rights of or claims for subrogation, contribution,
reimbursement, exoneration and indemnity, is hereby subordinated to the prior
payment in full of the Guarantied Obligations, provided that so long as no
default in the payment or performance of the Guarantied Obligations has occurred
and is continuing, or no demand for payment of any of the Guarantied Obligations
has been made that remains unsatisfied, the Company may make, and the Guarantors
may demand and accept, any scheduled payments of principal of and interest on
such subordinated indebtedness in the amounts, at the rates and on the dates
specified in such instruments, securities or other writings as shall evidence
such subordinated indebtedness. The Guarantors agree that after the occurrence
of any default in the payment or performance of the Guarantied Obligations, the
Guarantors will not demand, sue for or otherwise attempt to collect any such
indebtedness of the Company to the Guarantors until the Guarantied Obligations
shall have been paid in full. If, notwithstanding the foregoing sentence, the
Guarantors shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by the
Guarantors as trustee for the Lender and be paid over to the Lender on account
of the Guarantied Obligations without affecting in any manner the liability of
the Guarantors under the other provisions of this Guaranty.
9. SECURITY; SET-OFF. Each Guarantor hereby grants to the Lender,
as security for the full and punctual payment and performance of such
Guarantor's Guarantied Obligations hereunder, a lien, security interest and
right of setoff, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of the Lender or any entity under the control of
FleetBoston Financial Corporation and its successors and assigns, or in transit
to any of them. Regardless of
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<PAGE> 59
the adequacy of any collateral or other means of obtaining repayment of the
Guarantied Obligations, the Lender is hereby authorized at any time and from
time to time, without notice to the Guarantors (any such notice being expressly
waived by the Guarantors) and to the fullest extent permitted by law, to set off
and apply such deposits and other sums against the Guarantied Obligations of the
Guarantors under this Guaranty, whether or not the Lender shall have made any
demand under this Guaranty. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE
LOAN, PRIOR TO EXERCISING THE RIGHT OF SET OFF WITH RESPECT TO SUCH DEPOSITS,
CREDIT OR OTHER PROPERTY OF THE COMPANY ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.
10. FURTHER ASSURANCES. Each Guarantor agrees to do all such
things and execute all such documents, including financing statements, as the
Lender may reasonably consider necessary or desirable to give full effect to
this Guaranty and to perfect and preserve the rights and powers of the Lender
hereunder.
11. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full
force and effect until the Lender is given written notice of the Guarantors'
intention to discontinue this Guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Guarantied
Obligations. No such notice shall be effective unless received and acknowledged
by an officer of the Lender at its head office. No such notice shall affect any
rights of the Lender or of any affiliate hereunder including, without
limitation, the rights set forth in Sections 4 and 6, with respect to Guarantied
Obligations incurred prior to the receipt of such notice or Guarantied
Obligations incurred pursuant to any contract or commitment in existence prior
to such receipt, including, without limitation, the Notes and other Loan
Documents, and all checks, drafts, notes, instruments (negotiable or otherwise)
and writings made by or for the account of the Company and drawn on the Lender
or any of its agents purporting to be dated on or before the date of receipt of
such notice, although presented to and paid or accepted by the Lender after that
date, shall form part of the Guarantied Obligations. This Guaranty shall
continue to be effective or be reinstated, notwithstanding any such notice, if
at any time any payment made or value received with respect to an Obligation is
rescinded or must otherwise be returned by the Lender upon the insolvency,
bankruptcy or reorganization of the Company, or otherwise, all as though such
payment had not been made or value received.
12. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon
the Guarantors, their successors and assigns, and shall inure to the benefit of
and be enforceable by the Lender and its successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, the Lender may assign
or otherwise transfer any agreement or any note held by it evidencing, securing
or otherwise executed in connection with the Guarantied Obligations, or sell
participations in any interest therein, to any other person or entity, and such
other person or entity shall thereupon become vested, to the extent set forth in
the agreement evidencing such assignment, transfer or participation, with all
the rights in respect thereof granted to the Lender herein.
13. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantors
therefrom shall be effective unless the
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<PAGE> 60
same shall be in writing and signed by the Lender. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right.
14. NOTICES. Unless otherwise specified herein, all notices
hereunder to any party hereto shall be in writing and shall be deemed to have
been given when delivered by hand, or when sent by electronic facsimile
transmission or by telex, answer back received, or on the first Business Day
after delivery to any overnight delivery service, freight pre-paid, or three
days after being sent by certified or registered mail, return receipt requested,
postage pre-paid, and addressed to such party at its address indicated under its
signature below; or at any other address specified by such party in writing.
15. JOINDER. The Lender and each Guarantor agree that from time to
time in the event that any domestic Subsidiary of the Company shall have
revenues for any period of four (4) consecutive fiscal quarters exceeding ten
percent (10%) of the aggregate revenues of the Company and its Subsidiaries
taken on a consolidated basis, each such Subsidiary shall become a guarantor of
the Guarantied Obligations by executing and delivering an Instrument of
Adherence substantially in the form of EXHIBIT A hereto where upon this
Unlimited Guaranty shall become the binding obligation of such Person.
16. GOVERNING LAW; CONSENT TO JURISDICTION. THIS GUARANTY IS
INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH SAID LAWS OF THE COMMONWEALTH (EXCLUDING THE LAWS
APPLICABLE TO CONFLICTS OR CHOICE OF LAW). EACH GUARANTOR CONSENTS TO THE
JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN SUFFOLK COUNTY IN
THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE
RIGHTS OF THE LENDER UNDER THIS AGREEMENT. EACH GUARANTOR IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
ACTION BROUGHT IN THE COURTS REFERRED TO IN THE PRECEDING SENTENCE AND
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH ACTION THAT SUCH
ACTION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
17. MISCELLANEOUS. This Guaranty constitutes the entire agreement
of the Guarantors with respect to the matters set forth herein. The rights and
remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of the Guarantied Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.
18. JURY WAIVER. THE LENDER (BY ITS ACCEPTANCE HEREOF) AND EACH
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
-5-
<PAGE> 61
WAIVE THE RIGHT TO TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY, OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS OR ACTIONS OF THE LENDER RELATING TO THE ADMINISTRATION OF THE LOAN
OR THE ENFORCEMENT OF THIS GUARANTY OR THE GUARANTIED OBLIGATIONS, AND AGREE
THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY
LAW, EACH OF THE GUARANTORS AND THE LENDER HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. EACH GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS. THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN CONSTITUTE A MATERIAL INDUCEMENT FOR THE
LENDER TO ENTER INTO THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS AND TO
MAKE THE LOAN.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
-6-
<PAGE> 62
IN WITNESS WHEREOF, each Guarantor has executed and delivered this
Guaranty, or caused this Guaranty to be executed and delivered by its duly
authorized officer, as an instrument under seal as of the date appearing on page
one.
ASPENTECH, INC.
By: /s/ Lisa W. Zappala
---------------------------------------
Name: Lisa W. Zappala
Title: Senior Vice President and
Chief Financial Officer
Address: [ ]
[ ]
Attention: [ ]
Telecopy: (___) ___-____
ASPENTECH SECURITIES CORP.
By: /s/ Lisa W. Zappala
---------------------------------------
Name: Lisa W. Zappala
Title: Senior Vice President and
Chief Financial Officer
Address: [ ]
[ ]
Attention: [ ]
Telecopy: (___) ___-____
INDUSTRIAL SYSTEMS, INC.
By: /s/ Lisa W. Zappala
---------------------------------------
Name: Lisa W. Zappala
Title: Senior Vice President and
Chief Financial Officer
Address: [ ]
[ ]
Attention: [ ]
Telecopy: (___) ___-____
-7-
<PAGE> 63
ACCEPTED IN BOSTON, MASSACHUSETTS
AS OF THE DATE FIRST ABOVE WRITTEN.
FLEET NATIONAL BANK
By: /s/ Daniel G. Head, Jr.
---------------------------
Daniel G. Head, Jr.
Director
Address: 100 Federal Street
Mail Stop MA DE 10008H
Boston, Massachusetts 02110
Attention: Daniel G. Head, Jr., Director
Facsimile: (617) 434-0819
-8-
<PAGE> 64
FORM OF REVOLVING CREDIT NOTE
$30,000,000 Boston, Massachusetts
October 27, 2000
FOR VALUE RECEIVED, the undersigned (the "Borrower") absolutely and
unconditionally promises to pay to the order of Fleet National Bank ("Payee") at
100 Federal Street, Boston, Massachusetts 02110:
(a) on the Revolving Credit Maturity Date, the principal
amount of THIRTY MILLION DOLLARS ($30,000,000) or, if less, the aggregate unpaid
principal amount of Revolving Credit Loans advanced by the Payee to the Borrower
pursuant to the Credit Agreement of even date herewith, as amended or
supplemented from time to time (the "Credit Agreement"), by and among the
Borrower and the Payee; and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through and including the date on which such
principal amount is paid in full, at the times and at the rates provided in the
Credit Agreement.
This Note evidences borrowings under, is subject to the terms and
conditions of and has been issued by the Borrower in accordance with the terms
of the Credit Agreement and is the Note referred to therein. The Payee and any
holder hereof is entitled to the benefits and subject to the conditions of the
Credit Agreement 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 has the right in certain circumstances and the obligation
under certain other circumstances to repay or prepay the whole or part of the
principal of this Note on the terms and conditions specified in the Agreement.
The Borrower hereby grants to the Lender, a lien, security interest and
right of setoff as security for all liabilities and obligations to the Lender,
whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of the Lender or any entity under the control of
FleetBoston Financial Corporation and its successors and assigns, or in transit
to any of them. At any time, without demand or notice (any such notice being
expressly waived by the Borrower), the Lender may set off the same or any part
thereof and apply the same to any liability or obligation of the undersigned
even though unmatured and regardless of the adequacy of any other collateral
securing the Loan. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN,
PRIOR TO EXERCISING THE RIGHT OF SETOFF WITH
<PAGE> 65
-2-
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
The Lender may at any time pledge all or any portion of its rights
under the Loan Documents including any portion of this Note to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. Section 341. No such pledge or assignment or enforcement thereof shall
release the Lender from its obligations under any of the Loan Documents.
Upon receipt of an affidavit of an officer of the Lender as to the
loss, theft, destruction or mutilation of this Note, and, in the case of any
such loss, theft, destruction or mutilation, upon cancellation of this Note, the
Borrower will issue, in lieu thereof, a replacement note in the same principal
amount thereof.
If any Event 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.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waive presentment, demand, notice, protest and all
other demands and notice in connection with the delivery, acceptance,
performance, default or enforcement of this Note, assent 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 shall be deemed to take effect as a sealed instrument under
the laws of The Commonwealth of Massachusetts and for all purposes shall be
construed in accordance with such laws (without regard to conflicts of laws
rules).
IN WITNESS WHEREOF, the Borrower has caused this Note to be signed
under seal by its duly authorized officer as of the day and year first above
written.
ASPEN TECHNOLOGY, INC.
By: /s/ Lisa W. Zappala
-------------------------------------
Name: Lisa W. Zappala
Title: Senior Vice President and
Chief Financial Officer
