AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

Exhibit 10.1

 

EXECUTED COPY

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

Dated as of August 31, 2005

 

among

 

DIGITAS LLC,

 

as the Borrower

 

and

 

DIGITAS INC.

 

and

 

BRONNER SLOSBERG HUMPHREY, INC.

 

as Guarantors

 

and

 

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO FLEET NATIONAL BANK

 

and the other lending institutions set forth

on Schedule 1 hereto

 

and

 

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO FLEET NATIONAL BANK,

as Agent

 

- ii -

 

- iii -

 

- iv -

 

- v -

 

- vi -

List of Schedules and Exhibits

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of August 31, 2005, by and among DIGITAS LLC , a Delaware limited liability company (the “ Borrower ”), DIGITAS INC ., a Delaware corporation, and BRONNER SLOSBERG HUMPHREY INC . , a Massachusetts corporation (collectively, the “ Parent Companies ”), and BANK OF AMERICA, N.A., successor by merger to FLEET NATIONAL BANK, a national banking association (“ Bank of America ”), and the other lending institutions listed on Schedule 1 hereto and BANK OF AMERICA, N.A., successor by merger to FLEET NATIONAL BANK, as agent for itself and such other lending institutions (the “ Agent ”).

 

WHEREAS, pursuant to that certain Revolving Credit Agreement, dated as of July 25, 2000, (as amended and in effect from time to time, the “ Existing Credit Agreement ”), by and among the Borrower, the Parent Companies, Fleet National Bank, as Agent for itself and the Banks (as hereinafter defined), the Banks provided certain financial accommodations to the Borrower;

 

WHEREAS, the Borrower and the Parent Companies have requested, among other things, to amend and restate the Existing Credit Agreement, and the Agent and the Banks are willing to amend and restate the Existing Credit Agreement on the terms and conditions set forth herein.

 

NOW THEREFORE, the Borrower, the Parent Companies, the Agent and the Banks agree that, as of the Closing Date, the Existing Credit Agreement is hereby amended and restated in its entirety as set forth herein:

 

1. DEFINITIONS AND RULES OF INTERPRETATION .

 

1.1. Definitions . The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:

 

Accounts Receivable . All rights of the Borrower or any of its Subsidiaries to payment for goods sold, leased or otherwise marketed in the ordinary course of business and all rights of the Borrower or any of its Subsidiaries to payment for services rendered in the ordinary course of business and all sums of money or other proceeds due thereon pursuant to transactions with account debtors, except for that portion of the sum of money or other proceeds due thereon that relate to sales, use or property taxes in conjunction with such transactions, recorded on books of account in accordance with generally accepted accounting principles.

 

Adjustment Date . The first Business Day which is five (5) Business Days after receipt by the Agent of the most recent Compliance Certificate required to be delivered by the Borrower pursuant to §9.4(c).

 

Affiliate . With respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

Agent . As defined in the preamble hereto.

Agent’s Head Office . The Agent’s office located at 100 Federal Street, Boston, Massachusetts 02110, or at such other location as the Agent may designate from time to time.

 

Agent’s Special Counsel . Bingham McCutchen LLP or such other counsel as may be approved by the Agent.

 

Applicable Margin . The Applicable Margin shall be the applicable margin set forth below:

 

 

Assignment and Assumption . See §20.1.

 

Balance Sheet Date . December 31, 2004.

 

Bank of America . As defined in the preamble hereto.

 

Banks . Bank of America and the other lending institutions listed on Schedule 1 hereto and any other Person who becomes an assignee of any rights and obligations of a Bank pursuant to §20.

 

Borrower . As defined in the preamble hereto.

 

BSHI . Bronner Slosberg Humphrey, Inc., a Massachusetts corporation.

 

Business Day . Any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, the state where the Agent’s Head Office with respect to Obligations denominated in Dollars is located and:

 

(a) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Dollars, any fundings, disbursements, settlements and payments in Dollars in respect of any such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day on which dealings in deposits in Dollars are conducted by and between banks in the London interbank eurodollar market;

 

(b) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements, settlements and payments in Euro in respect of any such Eurocurrency Rate Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET Day;

 

(c) if such day relates to any interest rate settings as to a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, means any such day on which dealings in deposits in the relevant currency are conducted by and between banks in the London or other applicable offshore interbank market for such currency; and

 

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(d) if such day relates to any fundings, disbursements, settlements and payments in a currency other than Dollars or Euro in respect of a Eurocurrency Rate Loan denominated in a currency other than Dollars or Euro, or any other dealings in any currency other than Dollars or Euro to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country of such currency.

 

Capital Assets . Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly to expense, depreciated or amortized over a useful life of twelve (12) months or less in accordance with generally accepted accounting principles.

 

Capital Expenditures . Amounts paid or Indebtedness incurred by any of the Parent Companies, the Borrower or any of their Subsidiaries in connection with (a) the lease of any assets by any of the Parent Companies, the Borrower or any of their Subsidiaries as lessee under any Synthetic Lease to the extent that such assets would have been Capital Assets had the Synthetic Lease been treated for accounting purposes as a Capitalized Lease, or (b) the purchase or lease by any of the Parent Companies, the Borrower or any of its Subsidiaries of Capital Assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with generally accepted accounting principles, minus cash payments paid to the Parent Companies, the Borrower or any of their Subsidiaries by any landlord under such lease for tenant improvements to the extent expenditures for such improvements were shown on the balance sheet of such Person for the Reference Period in which such payments were made, provided , however , in the event that the Person accounting for the expenditures made for such tenant improvements has not been reimbursed in full by the landlord for such expenditures within the Reference Period in which such expenditures were made, (i) such expenditures made shall be deducted in the fiscal quarter in which they were made so long as the reimbursement for the full amount thereof has been received in the immediately succeeding fiscal quarter (the “Next Fiscal Quarter”) or (ii) if such expenditures are not reimbursed in the Next Fiscal Quarter, the deduction taken in the prior fiscal quarter shall be added back for purposes of the Next Fiscal Quarter and no deduction will be allowed for such expenditures until the fiscal quarter in which reimbursement in full is actually received.

 

Capitalization Documents . Collectively, the formation documents (including, without limitation, any certificate of incorporation and by-laws) of the Borrower and its Subsidiaries.

 

Capitalized Leases . Leases under which any of the Parent Companies, the Borrower or any of their Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

 

Capital Stock . Any and all shares, interests, participation or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), any and all warrants, options or rights to purchase or any other securities convertible into any of the foregoing.

 

Cash Collateralize . See §4.8.

 

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Cash Equivalents . As to the Parent Companies, the Borrower and their Subsidiaries, (a) securities issued or directly and fully guaranteed or insured by the United States of America and having a maturity of not more than six (6) months from the date of acquisition; (b) certificates of deposit, time deposits and eurodollar time deposits with maturities of six (6) months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding six (6) months and overnight bank deposits, in each case, (i) with any Banks or (ii) with any domestic commercial bank organized under the laws of the United States of America or any state thereof, in each case having a rating of not less than A or its equivalent by S&P or any successor and having capital and surplus in excess of $1,000,000,000; (c) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (a) and (b) above; (d) any commercial paper or finance company paper issued by (i) any Bank or any holding company controlling any Bank or (ii) any other Person that is rated not less than “P-1” or “A-1” or their equivalents by Moody’s or S&P or their successors; and (e) auction rate securities with interest rate or dividend reset date intervals not greater than thirty-five (35) days duration, and whose underlying securities are rated not less than “P-1” or “A-1” or their equivalents by Moody’s or S & P or their successors.

 

CERCLA . See §8.18(a).

 

Charge . The restructuring charge of approximately $47,000,000, whether in cash and/or on a non-cash basis, taken by the Borrower in the third fiscal quarter of fiscal year 2002 related to the future lease payments for unoccupied real estate of the Borrower.

 

Closing Date . The first date on which the conditions set forth in §13 have been satisfied and any Revolving Credit Loans are to be made or any Letter of Credit is to be issued hereunder.

 

Code . The Internal Revenue Code of 1986.

 

Collateral . All of the property, rights and interests of the Borrower and its Subsidiaries that are or are intended to be subject to the security interests and mortgages created by the Security Documents.

 

Commitment . With respect to each Bank, the amount set forth on Schedule 1 hereto as the amount of such Bank’s commitment to make Revolving Credit Loans to, and to participate in the issuance, extension and renewal of Letters of Credit for the account of, the Borrower, as the same may be reduced from time to time; or if such commitment is terminated pursuant to the provisions hereof, zero.

 

Commitment Fee . See §2.2.

 

Commitment Fee Rate . The applicable rate per annum set forth in the chart contained in the definition of Applicable Margin under the heading “Commitment Fee Rate”.

 

Commitment Percentage . With respect to each Bank, the percentage set forth on Schedule 1 hereto as such Bank’s percentage of the aggregate Commitments of all of the Banks.

 

Compliance Certificate . See §9.4(c).

 

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Consolidated or consolidated . With reference to any term defined herein, shall mean that term as applied to the accounts of the Parent Companies, the Borrower and their Subsidiaries, consolidated in accordance with generally accepted accounting principles.

 

Consolidated Net Income (or Deficit) . The consolidated net income (or deficit) of the Parent Companies, the Borrower and their Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with generally accepted accounting principles, after eliminating therefrom all extraordinary nonrecurring items of income and nonrecurring extraordinary non-cash losses.

 

Consolidated Operating Cash Flow . For any period, an amount equal to (a) Consolidated EBITDA for such period, less (b) the sum of (i) cash payments for all taxes paid during such period, plus (ii) to the extent not already deducted in the determination of Consolidated EBITDA, Capital Expenditures made during such period plus (iii) all cash lease payments made during such period under the leases for the unoccupied real estate contemplated by the Charge.

 

Consolidated Total Interest Expense . For any period, the aggregate amount of interest required to be paid or accrued by the Parent Companies, the Borrower and their Subsidiaries during such period on all Indebtedness of the Parent Companies, the Borrower and their Subsidiaries outstanding during all or any part of such period on a consolidated basis, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease, or any Synthetic Lease and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

 

Control . The possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

 

Conversion Request . A notice given by the Borrower to the Agent of the Borrower’s election to convert or continue a Loan in accordance with §2.7.

 

Copyright Memorandum . The Memorandum of Grant of Security Interest in Copyrights, dated or to be dated on or prior to the Closing Date, between the Modem Media, Inc. and the Agent and in form and substance satisfactory to the Banks and the Agent.

 

Credit Agreement . This Amended and Restated Revolving Credit Agreement, including the Schedules and Exhibits hereto.

 

Default . See §14.1.

 

Delinquent Bank . See §16.5.3.

 

Digitas . Digitas Inc., a Delaware corporation and the sole stockholder of BSHI.

 

Distribution . The declaration or payment of any dividend on or in respect of any shares of any class of Capital Stock of any Person, other than dividends payable solely in shares of common stock of such Person; the purchase, redemption, or other retirement of any shares of any class of Capital Stock of such Person, directly or indirectly through a Subsidiary of such Person or otherwise; the return of capital by such Person to its shareholders as such; or any other distribution on or in respect of any shares of any class of Capital Stock of such Person.

 

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Dollar Equivalent . On any particular date, with respect to any amount denominated in Dollars, such amount in Dollars, and with respect to any amount denominated in a currency other than Dollars, the amount (as conclusively ascertained by the Agent absent manifest error) of Dollars which could be purchased by the Agent (in accordance with its normal banking practices) in the London foreign currency deposit market with such amount of such currency at the spot rate of exchange prevailing at or about 11:00 a.m. (London time) on such date.

 

Dollars or $ . Dollars in lawful currency of the United States of America.

 

Domestic Lending Office . Initially, the office of each Bank designated as such in Schedule 1 hereto; thereafter, such other office of such Bank, if any, located within the United States that will be making or maintaining Prime Rate Loans.

 

Drawdown Date . The date on which any Revolving Credit Loan is made or is to be made, and the date on which any Revolving Credit Loan is converted or continued in accordance with §2.7.

 

EBITDA. With respect to any fiscal period, an amount equal to the sum of (a) Consolidated Net Income of the Parent Companies, the Borrower and their Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of such Person’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus (iv) other noncash charges for such period, and minus , to the extent added in computing Consolidated Net Income, and without duplication, all noncash gains, in each case, for such period, all as determined in accordance with generally accepted accounting principles.

 

Eligible Assignee . Any of (a) a commercial bank or finance company organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (b) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with generally accepted accounting principles; (c) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having total assets in excess of $1,000,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (d) the central bank of any country which is a member of the OECD; and (e) if, but only if, any Event of Default has occurred and is continuing, any other bank, insurance company, commercial finance company or other financial institution or other Person approved by the Agent and each Issuing Bank, such approval not to be unreasonably withheld; and provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries.

 

Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

 

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EMU . The economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.

 

EMU Legislation . The legislative measure of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

 

Environmental Laws . See §8.18(a).

 

EPA . See §8.18(b).

 

ERISA . The Employee Retirement Income Security Act of 1974.

 

ERISA Affiliate . Any Person which is treated as a single employer with the Borrower under §414 of the Code.

 

ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder.

 

Euro or € . The lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

 

Eurocurrency Base Rate . For any Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Agent from time to time) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurocurrency Base Rate” for such Interest Period shall be the rate per annum determined by the Agent to be the rate at which deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the Eurocurrency Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch (or other Bank of America branch or Affiliate) to major banks in the London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two (2) Business Days prior to the commencement of such Interest Period.

 

Eurocurrency Lending Office . Initially, the office of each Bank designated as such in Schedule 1 hereto; thereafter, such other office of such Bank, if any, that shall be making or maintaining Eurocurrency Rate Loans.

 

Eurocurrency Rate . For any Interest Period with respect to a Eurocurrency Rate Loan, a rate per annum determined by the Agent pursuant to the following formula:

 

 

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Eurocurrency Rate Loans . Revolving Credit Loans bearing interest calculated by reference to the Eurocurrency Rate. Eurocurrency Rate Loans may be denominated in Dollars or in an Optional Currency.

 

Eurocurrency Reserve Percentage . For any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Bank, under regulations issued from time to time by the Federal Reserve Board for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”). The Eurocurrency Rate for each outstanding Eurocurrency Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurocurrency Reserve Percentage.

 

Euro Interbank Rate . With respect to any Revolving Credit Loan denominated or to be denominated in Euros, the annual rate of interest at which the Agent is able to obtain deposits for comparable amounts in Euros for the relevant Interest Period in the London interbank market for a period comparable to the duration of such Interest Period, as determined by the Agent.

 

Event of Default . See §14.1.

 

Existing Credit Agreement . See the first WHEREAS clause.

 

Fee Letter . The fee letter by and between the Borrower and the Agent dated as of the Closing Date.

 

generally accepted accounting principles . (a) When used in §10, whether directly or indirectly through reference to a capitalized term used therein, means (i) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of the Borrower reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (ii) consistently applied with past financial statements of the Borrower adopting the same principles, provided that in each case referred to in this definition of “generally accepted accounting principles” a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in generally accepted accounting principles) as to financial statements in which such principles have been properly applied.

 

Governmental Authority . The government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

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Guarantors . Collectively, each Parent Company and each domestic Subsidiary of the Borrower or any Parent Company existing on the Closing Date and each other Person which is required to be or become a guarantor from time to time pursuant to §9.14 hereof. Each such Person shall be a party to a Guaranty.

 

Guaranty . The Guaranty, set forth in §6 of this Credit Agreement, made by each Parent Company in favor the Banks and the Agent pursuant to which each Parent Company guaranties to the Banks and the Agent the payment and performance of the Obligations. The Guaranty shall include any Guaranty made by a Subsidiary of any Parent Company or the Borrower in favor of the Banks and the Agent entered into on or prior to the Closing Date (or such later date as is required by §9.14 hereof) substantially in the form of Exhibit C attached hereto.

 

Hazardous Substances. See §8.18(b).

 

Hedging Agreement . Any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate futures contract, interest rate option agreement, interest rate exchange agreement, forward currency exchange agreement, forward rate currency agreement or other similar agreement or arrangement to which the Borrower or any of its Subsidiaries and any Bank or its Affiliates is a party, designed to protect the Borrower or any of its Subsidiaries against fluctuations in interest rates, exchange rates or forward rates.

 

Indebtedness . As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

 

(a) every obligation of such Person for money borrowed,

 

(b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

 

(c) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

 

(d) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),

 

(e) every obligation of such Person under any Capitalized Lease,

 

(f) every obligation of such Person under any lease (a “Synthetic Lease”) treated as an operating lease under generally accepted accounting principles and as a loan or financing for U.S. income tax purposes,

 

(g) all sales by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing

 

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a right to payment of money or (iii) other receivables (collectively “receivables”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

 

(h) every obligation of such Person (an “equity related purchase obligation”) to purchase, redeem, retire or otherwise acquire for value Capital Stock of any class issued by such Person, any warrants, options or other rights to acquire any such shares, or any rights measured by the value of such shares, warrants, options or other rights,

 

(i) every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “derivative contract”),

 

(j) every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law, and

 

(k) every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (j) (the “primary obligation”) of another Person (the “primary obligor”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation.

 

The “amount” or “principal amount” of any Indebtedness at any time of determination represented by (u) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with generally accepted accounting principles, (v) any Capitalized Lease shall be the principal component of the aggregate of the rentals obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (w) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrower or any of its wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or interest earned on such investment, (x) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount, (y) any derivative contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred and (z) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price.

 

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Ineligible Securities . Securities which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. §24, Seventh), as amended.

 

Interest Payment Date . (a) As to any Prime Rate Loan, the last day of the calendar month with respect to interest accrued during such calendar month, including, without limitation, the calendar month which includes the Drawdown Date of such Prime Rate Loan; and (b) as to any Eurocurrency Rate Loan in respect of which the Interest Period is (i) three (3) months or less, the last day of such Interest Period and (ii) more than three (3) months, the date that is three (3) months from the first day of such Interest Period and, in addition, the last day of such Interest Period.

 

Interest Period . With respect to each Revolving Credit Loan, (a) initially, the period commencing on the Drawdown Date of such Loan and ending on the last day of one of the periods set forth below, as selected by the Borrower in a Loan Request or as otherwise required by the terms of this Credit Agreement (i) for any Prime Rate Loan, the last day of the calendar month; and (ii) for any Eurocurrency Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Revolving Credit Loan and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Conversion Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

 

(i) if any Interest Period with respect to a Eurocurrency Rate Loan would otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Business Day;

 

(ii) if any Interest Period with respect to a Prime Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day;

 

(iii) if the Borrower shall fail to give notice as provided in §2.7, (A) for Revolving Credit Loans denominated in Dollars, the Borrower shall be deemed to have requested a conversion of the affected Eurocurrency Rate Loan to a Prime Rate Loan and the continuance of all Prime Rate Loans as Prime Rate Loans on the last day of the then current Interest Period with respect thereto and (B) for any Revolving Credit Loan denominated in any Optional Currency, the Borrower shall repay such Revolving Credit Loan on the last day of the then current Interest Period with respect thereto;

 

(iv) any Interest Period relating to any Eurocurrency Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month; and

 

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(v) any Interest Period that would otherwise extend beyond the Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan Maturity Date.

 

International Standby Practices . With respect to any standby Letter of Credit, International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, or any successor code of standby letter of credit practices among banks adopted by the Agent in the ordinary course of its business as a standby letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

 

Investments . All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property (without consideration for such transfers) to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

 

Issuing Bank . Bank of America, in its capacity as issuer of Letters of Credit pursuant to §4, or, in the event that Bank of America is unable to issue a Letter of Credit, any other Bank selected by the Agent and the Borrower to issue such Letter of Credit with the consent of such Bank.

 

L/C Obligations . As of any date, the sum of the Maximum Drawing Amount as of such date and all Unpaid Reimbursement Obligations as of such date. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with §4.7. For all purposes of this Credit Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the International Standby Practices, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

Letter Agreement . The Letter Agreement dated on the Closing Date, between the Borrower and the Agent, in form and substance satisfactory to the Banks and the Agent.

 

Letter of Credit . See §4.1.1.

 

Letter of Credit Application . See §4.1.1.

 

Letter of Credit Expiration Date . The day that is no later than two hundred seventy (270) days after the Revolving Credit Loan Maturity Date then in effect so long as the Borrower is in compliance with §4.1.3, or (b) in the event that the Borrower is not in compliance with §4.1.3, the Revolving Credit Loan Maturity Date then in effect, in either case, if such day is not a Business Day, the next preceding Business Day.

 

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Letter of Credit Fee . See §4.6.

 

Letter of Credit Participation . See §4.1.4.

 

Loan Documents . This Credit Agreement, the Revolving Credit Notes, the Letter of Credit Applications, the Letters of Credit, the Fee Letter, the Letter Agreement and the Security Documents.

 

Loan Request . See §2.6.

 

Majority Banks . As of any date, if as of such date there are three or more Banks, Banks holding at least fifty-one percent (51%) of the outstanding principal amount of the Revolving Credit Notes on such date; and if no such principal is outstanding, the Banks whose aggregate Commitments constitute at least fifty-one percent (51%) of the Total Commitment. If as of such date there are less than three Banks, Majority Banks shall mean the Banks holding at least sixty-six and two thirds percent (66  ² / 3 %) of the outstanding principal amount of the Revolving Credit Notes on such date; and if no such principal is outstanding, the Banks whose aggregate Commitments constitute at least sixty-six and two thirds percent (66  ² / 3 %) of the Total Commitment.

 

Maximum Drawing Amount . The maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit, as such aggregate amount may be reduced from time to time pursuant to the terms of the Letters of Credit.

 

Moody’s . Moody’s Investors Services, Inc. and any successor thereto.

 

Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

 

Net Cash Proceeds . The net cash proceeds received by any Person in respect of any asset sale, equity issuance or debt issuance less (i) all reasonable out-of-pocket fees, commissions and other expenses incurred in connection with such sale or issuance, including the amount (estimated in good faith by such Person) of income, franchise, sales and other applicable taxes required to be paid by such Person in connection with such sale or issuance, (ii) repayment of Indebtedness that is required to be repaid in connection with such asset sale to the extent permitted under this Credit Agreement; (iii) required amounts to be provided by the Parent Companies, the Borrower or any Subsidiary, as the case may be, as a reserve, in accordance with generally accepted accounting principles, against any liabilities associated with such asset sale including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with any such asset sale and consented to by the Banks or otherwise permitted hereunder.

 

Obligations . All indebtedness, obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Banks and the Agent, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred (a) under this Credit Agreement or any

 

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of the other Loan Documents or pursuant to any Hedging Agreements or any cash management services provided by any Bank or its Affiliates, and (b) in respect of any of the Revolving Credit Loans made or Reimbursement Obligations incurred or any of the Revolving Credit Notes, Letter of Credit Applications, Letters of Credit or such cash management arrangements or Hedging Agreements or other instruments at any time evidencing any thereof.

 

Optional Currency . Any currency other than Dollars which is freely convertible into Dollars and which is traded on the London interbank market or any other offshore interbank market selected by the Agent in good faith; provided , however , in the event the Borrower requests an Optional Currency other than the Euro, such request for such other Optional Currency shall be subject to the consent of the Banks.

 

outstanding . With respect to the Revolving Credit Loans, the aggregate unpaid principal thereof as of any date of determination.

 

Overnight Rate . For any day, (a) as to Revolving Credit Loans denominated in Dollars, the weighted average interest rate paid by the Agent for federal funds acquired by the Agent, and (b) as to Revolving Credit Loans denominated in an Optional Currency, the rate of interest per annum at which overnight deposits in the applicable Optional Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by the Agent to major banks in the London interbank market.

 

Participating Member State . Each state so described in any EMU Legislation.

 

Parent Companies . As defined in the Preamble hereto.

 

PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

 

Perfection Certificates . The Perfection Certificates as defined in the Security Agreements.

 

Permitted Acquisitions . Any acquisition by any of the Parent Companies, the Borrower or any of their domestic Subsidiaries of assets or Capital Stock of a Person, provided (a) such assets or Capital Stock are related to the business of such Parent Company, the Borrower or such Subsidiary, as the case may be, (b) no Default or Event of Default exists prior to or immediately after such acquisition, (c) the Agent is granted a valid first priority perfected security interest in the assets or Capital Stock so acquired, pursuant to the Security Documents (subject to any Permitted Liens), (d) the seller of such assets or Capital Stock is not an Affiliate of any Parent Company, the Borrower or any of their Subsidiaries, (e) the terms of such acquisition are on an arms length basis, (f) §9.15 is complied with at the time of consummation of such acquisition (or concurrently therewith), (g) the Borrower has demonstrated to the reasonable satisfaction of the Agent, set forth in a pro forma Compliance Certificate, compliance with §11 on a Pro Forma Basis immediately prior to and after giving effect to any such acquisition, the calculation of which shall be based upon the financial statements most recently required to be delivered pursuant to §9.4(a) or (b) and such other financial statements requested by the Agent for the twelve (12) full calendar month period immediately preceding such acquisition, (h) the board of directors and (if required by applicable law) the shareholders, or the equivalent thereof, of the business to be acquired has approved such acquisition, and (i) if such acquisition is made by a merger, the Borrower or any wholly-owned domestic Subsidiary of a Parent Company or the

 

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Borrower, as the case may be, shall be the surviving entity (provided that the Borrower shall not be merged into another entity). Notwithstanding the foregoing, (i) in the event that the total purchase price of the assets or Capital Stock of a Person so acquired in a single transaction does not exceed $5,000,000, or the aggregate total purchase price of all such acquisitions does not exceed $20,000,000, Borrower will not be required to deliver a pro forma Compliance Certificate pursuant to clause (g) above or a legal opinion pursuant to §9.14; and (ii) in the event that the total purchase price of the assets or Capital Stock of a Person so acquired is greater than $5,000,000, but does not exceed $20,000,000, the Borrower will not be required to deliver a pro forma Compliance Certificate pursuant to clause (g) above. In addition, Permitted Acquisitions may include the acquisition by any of the Parent Companies, the Borrower or their Subsidiaries of the Capital Stock of a foreign Person so long as such Parent Company, the Borrower or such Subsidiary has complied with provisions set forth in clauses (a), (b), (d), (e) and (g) through (i) above and, if such acquired foreign Person becomes a direct Subsidiary of such Parent Company, the Borrower or one of their domestic Subsidiaries, sixty-five percent (65%) of the Capital Stock of or other equity interests in such Person so acquired shall have been pledged to the Agent for the benefit of the Banks and the Agent.

 

Permitted Liens . Liens, security interests and other encumbrances permitted by §10.2.

 

Person . Any individual, corporation, partnership, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof.

 

Pledge Agreement . The Pledge Agreement, dated or to be dated on or prior to the Closing Date among BSHI and the Agent and in form and substance satisfactory to the Banks and the Agent.

 

Prime Rate . The higher of (i) the annual rate of interest announced from time to time by Bank of America at its head office in Boston, MA, as its “prime rate” or “base rate” and (ii) one-half of one percent (1/2 %) above the Federal Funds Effective Rate. “ Federal Funds Effective Rate ” shall mean for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Effective Rate for such day shall be such rate on such transactions on the next preceding Business Day, as so published on the next succeeding Business Day , and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Effective Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Agent. Changes in the rate of interest resulting from any changes in the “Prime Rate” shall take place immediately without notice or demand of any kind.

 

Prime Rate Loans . Revolving Credit Loans bearing interest calculated by reference to the Prime Rate.

 

Pro Forma Basis. In connection with any proposed Permitted Acquisition after the Closing Date, the calculation of compliance with the financial covenants set forth in §11 hereof as required by the terms of the definition of Permitted Acquisition by the Parent Companies, the Borrower and their Subsidiaries (including the Person to be acquired) with reference to the audited historical financial results of such Person and the Parent Companies, the Borrower and

 

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their Subsidiaries for the applicable Test Period after giving effect on a pro forma basis to such Permitted Acquisition in the manner described in (a), (b) and (c) below; provided , however , that, in each case, in the event that no audited historical financial results are available with respect to the Person or assets to be acquired, such calculations shall be made with reference to reasonable estimates of such past performance made by the Borrower based on existing data and other available information, such estimates to be agreed upon by the Borrower and the Majority Banks:

 

(a) all Indebtedness (whether under this Credit Agreement or otherwise) and any other balance sheet adjustments incurred or made in connection with the Permitted Acquisition shall be deemed to have been incurred or made on the first day of the Test Period, and all Indebtedness of the Person acquired or to be acquired in such Permitted Acquisition which was or will have been repaid in connection with the consummation of the Permitted Acquisition shall be deemed to have been repaid concurrently with the incurrence of the Indebtedness incurred in connection with the Permitted Acquisition;

 

(b) all Indebtedness assumed to have been incurred pursuant to the preceding clause (a) shall be deemed to have borne interest at the sum of (i) the arithmetic mean of (x) the Eurocurrency Rate for Eurocurrency Rate Loans having an Interest Period of one month in effect on the first day of the Test Period and (y) the Eurocurrency Rate for Eurocurrency Rate Loans having an Interest Period of one month in effect on the last day of the Test Period plus (ii) the Applicable Margin then in effect (after giving effect to the Permitted Acquisition on a Pro Forma Basis); and

 

(c) other reasonable cost savings, expenses and other income statement or operating statement adjustments which are attributable to the change in ownership and/or management resulting from such Permitted Acquisition as may be approved by the Agent in writing (which approval shall not be unreasonably withheld) shall be deemed to have been realized on the first day of the Test Period.

 

Rate of Exchange . See §2.9.2.

 

RCRA . See §8.18(a).

 

Real Estate . All real property at any time owned or leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries.

 

Record . The grid attached to a Revolving Credit Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Bank with respect to any Revolving Credit Loan referred to in such Revolving Credit Note.

 

Reference Bank . Bank of America.

 

Reference Period . The period of four (4) consecutive fiscal quarters of the Borrower ending on the relevant date.

 

Register . See §20.3.

 

Reimbursement Obligation . The Borrower’s obligation to reimburse the Agent and the Banks on account of any drawing under any Letter of Credit as provided in §4.2.

 

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Restricted Payment . In relation to the Parent Companies, the Borrower and their Subsidiaries, any (a) Distribution or (b) payment or prepayment by the Parent Companies, the Borrower or their Subsidiaries to any Parent Company’s, the Borrower’s or any Subsidiary’s shareholders (or other equity holders) or to any Affiliate of the Parent Companies, the Borrower or any Subsidiary or any Affiliate of the Parent Companies’, the Borrower’s or such Subsidiary’s shareholders except for payments to such shareholders or Affiliates for services rendered in the ordinary course of such shareholder’s or Affiliate’s business to any Parent Company, the Borrower or any such Subsidiary.

 

Restricted Subsidiaries . Digitas Asia Ltd., Digitas Mexico, Digitas International Inc., Digitas Netherlands Holding Inc., BSH CV, Digitas Europe (Ireland) Limited, Digitas Europe (France) SAS, Digitas Cayman Island, Modem Media UK Ltd., Modem Media Do Brazil Ltda, Modem Holdings, LLC, and Modem Media Canada, Inc.

 

Revolving Credit Loan Maturity Date . August 31, 2008.

 

Revolving Credit Loans . Revolving credit loans made or to be made by the Banks to the Borrower pursuant to §2.

 

Revolving Credit Notes . See §2.4.

 

S & P . Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

 

Same Day Funds . With respect to disbursements and payments in (a) Dollars, immediately available funds, and (b) an Optional Currency, same day or other funds as may be determined by the Agent to be customary in the place of disbursement or payment for the settlement of international banking transactions in the relevant Optional Currency.

 

SARA . See §8.18(a).

 

Section 20 Subsidiary . A Subsidiary of the bank holding company controlling any Bank, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.

 

Security Agreements . The Amended and Restated Security Agreement, dated or to be dated on or prior to the Closing Date, between the Parent Companies, the Borrower and their Subsidiaries and the Agent and in form and substance satisfactory to the Banks and the Agent.

 

Security Documents . The Guaranty, the Global Amendment to Certain Security Documents, the Security Agreements, the Trademark Assignments, the Copyright Memorandum, the Stock Pledge Agreements, the Pledge Agreement and all other instruments and documents, including without limitation Uniform Commercial Code financing statements, required to be executed or delivered pursuant to any Security Document.

 

Settlement . The making or receiving of payments, in Same Day Funds, by the Banks, to the extent necessary to cause each Bank’s actual share of the outstanding amount of Revolving Credit Loans (after giving effect to any Loan Request) to be equal to such Bank’s Commitment Percentage of the outstanding amount of such Revolving Credit Loans (after giving effect to any Loan Request), in any case where, prior to such event or action, the actual share is not so equal.

 

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Settlement Amount . See §2.10.1.

 

Settlement Date . (a) At the option of the Agent, the Drawdown Date relating to any Loan Request, (b) the date which is thirty (30) days after the Drawdown Date relating to any Loan Request, (c) at the option of the Agent, on any Business Day following a day on which the account officers of the Agent active upon the Borrower’s account become aware of the existence of an Event of Default, (d) any Business Day on which the amount of Revolving Credit Loans outstanding from Bank of America plus Bank of America’s Commitment Percentage of the sum of the Maximum Drawing Amount and any Unpaid Reimbursement Obligations is equal to or greater than Bank of America’s Commitment Percentage of the Total Commitment, or (e) any day on which any conversion of a Prime Rate Loan to a Eurocurrency Rate Loan occurs.

 

Settling Bank . See §2.10.1.

 

Stock Pledge Agreements . (a) The Stock Pledge Agreements, dated July 25, 2000, between each of Digitas, the Borrower and the Agent and, (b) the Securities Pledge Agreement, dated or to be dated on or prior to the Closing Date among Modem Media, Inc. (DE), Digitas (Europe) LLC, and the Agent, and each in form and substance satisfactory to the Banks and the Agent.

 

Subordinated Debt . Unsecured Indebtedness of the Parent Companies, the Borrower or any of their Subsidiaries that is expressly subordinated and made junior to the payment and performance in full of the Obligations, and evidenced as such by a written instrument containing subordination provisions in form and substance approved by the Majority Banks in writing.

 

Subsidiary . Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock.

 

Synthetic Lease . As defined in paragraph (f) of the definition of “Indebtedness”.

 

TARGET Day . Any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by the Agent to be a suitable replacement) is open for the settlement of payments in Euro.

 

Test Period . (a) In connection with the calculation of financial covenant compliance on a Pro Forma Basis as required in connection with any proposed Permitted Acquisition, the period of four fiscal quarters most recently ended prior to such Permitted Acquisition, and (b) in connection with the calculation of the financial covenants set forth in §11 hereof following any Permitted Acquisition, the period of all fiscal quarters (and any portion of a fiscal quarter) prior to the date of such Permitted Acquisition included in the calculation of such financial covenant.

 

Total Commitment . The sum of the Commitments of the Banks, as in effect from time to time.

 

Total Funded Indebtedness . At any time of determination, the sum of (a) the aggregate outstanding amount of the Revolving Credit Loans, (b) the Maximum Drawing Amount of all Letters of Credit, (c) the aggregate outstanding amount of all Subordinated Debt and (d) all other Indebtedness for borrowed money, purchase money Indebtedness and with respect to Capitalized Leases and Synthetic Leases, determined on a consolidated basis in accordance with generally accepted accounting principles.

 

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Trademark Assignments . The several Trademark Assignments, dated or to be dated on or prior to the Closing Date, made by the Parent Companies, the Borrower and their Subsidiaries in favor of the Agent and in form and substance satisfactory to the Banks and the Agent.

 

Type . As to any Revolving Credit Loan, its nature as a Prime Rate Loan, or a Eurocurrency Rate Loan.

 

Uniform Customs . See §4.1.3.

 

Unpaid Reimbursement Obligation . Any Reimbursement Obligation for which the Borrower does not reimburse the Agent and the Banks on the date specified in, and in accordance with, §4.2.

 

Voting Stock . Stock or similar interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency.

 

1.2. Rules of Interpretation .

 

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.

 

(b) The singular includes the plural and the plural includes the singular.

 

(c) A reference to any law includes any amendment or modification to such law.

 

(d) A reference to any Person includes its permitted successors and permitted assigns.

 

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by generally accepted accounting principles applied on a consistent basis by the accounting entity to which they refer.

 

(f) The words “include”, “includes” and “including” are not limiting.

 

(g) All terms not specifically defined herein or by generally accepted accounting principles, which terms are defined in the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts, have the meanings assigned to them therein, with the term “instrument” being that defined under Article 9 of the Uniform Commercial Code.

 

(h) Reference to a particular “§” refers to that section of this Credit Agreement unless otherwise indicated.

 

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(i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

 

(j) Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

 

(k) This Credit Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.

 

(l) This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Agent and the Borrower and are the product of discussions and negotiations among all parties. Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Agent or any of the Banks merely on account of the Agent’s or any Bank’s involvement in the preparation of such documents.

 

2. THE REVOLVING CREDIT FACILITY .

 

2.1. Commitment to Lend . Subject to the terms and conditions set forth in this Credit Agreement, each of the Banks severally agrees to lend to the Borrower and the Borrower may borrow, repay, and reborrow from time to time from the Closing Date up to but not including the Revolving Credit Loan Maturity Date upon notice by the Borrower to the Agent given in accordance with §2.6, such sums, in Dollars or at the Borrower’s option from time to time, subject to §2.9, in an Optional Currency, as are requested by the Borrower up to a maximum aggregate amount outstanding (after giving effect to all amounts requested) at any one time equal to such Bank’s Commitment minus such Bank’s Commitment Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided that the Dollar Equivalent of the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not at any time exceed the Total Commitment. The Revolving Credit Loans shall be made pro rata in accordance with each Bank’s Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty by the Borrower that the conditions set forth in §12 and §13, in the case of the initial Revolving Credit Loans to be made on the Closing Date, and §13, in the case of all other Revolving Credit Loans, have been satisfied on the date of such request. Each Prime Rate Loan shall be denominated in Dollars, and each Eurocurrency Rate Loan shall be denominated in Dollars, or subject to §2.9, in an Optional Currency.

 

2.2. Commitment Fee . The Borrower agrees to pay to the Agent for the accounts of the Banks in accordance with their respective Commitment Percentages a commitment fee (the “Commitment Fee”) calculated at the rate of Commitment Fee Rate per annum on the average daily amount during each calendar quarter or portion thereof from the date hereof to the Revolving Credit Loan Maturity Date by which the Total Commitment minus the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving Credit Loans during such calendar quarter. The Commitment Fee shall be

 

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payable quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter commencing on the first such date following the date hereof, with a final payment on the Revolving Credit Loan Maturity Date or any earlier date on which the Commitments shall terminate.

 

2.3. Reduction of Total Commitment . The Borrower shall have the right at any time and from time to time upon three (3) Business Days prior written notice to the Agent to reduce by $100,000 or an integral multiple thereof or terminate entirely the Total Commitment, whereupon the Commitments of the Banks shall be reduced pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or, as the case may be, terminated. Promptly after receiving any notice of the Borrower delivered pursuant to this §2.3, the Agent will notify the Banks of the substance thereof. Upon the effective date of any such reduction or termination, the Borrower shall pay to the Agent for the respective accounts of the Banks the full amount of any Commitment Fee then accrued on the amount of the reduction. No reduction or termination of the Commitments may be reinstated.

 

2.4. The Revolving Credit Notes . The Revolving Credit Loans shall be evidenced by separate promissory notes of the Borrower in substantially the form of Exhibit A hereto (each a “Revolving Credit Note”), dated prior to or as of the Closing Date and completed with appropriate insertions. One Revolving Credit Note shall be payable to the order of each Bank in a principal amount equal to such Bank’s Commitment or, if less, the outstanding amount of all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as set forth below. The Borrower irrevocably authorizes each Bank to make or cause to be made, at or about the time of the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal on such Bank’s Revolving Credit Note, an appropriate notation on such Bank’s Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Revolving Credit Loans set forth on such Bank’s Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Bank, but the failure to record, or any error in so recording, any such amount on such Bank’s Record shall not limit or otherwise affect the obligations of the Borrower hereunder or under any Revolving Credit Note to make payments of principal of or interest on any Revolving Credit Note when due.

 

2.5. Interest on Revolving Credit Loans . Except as otherwise provided in §5.11,

 

(a) Each Prime Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Prime Rate plus the Applicable Margin.

 

(b) Each Eurocurrency Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Eurocurrency Rate determined for such Interest Period plus the Applicable Margin.

 

(c) The Borrower promises to pay interest on each Revolving Credit Loan in arrears on each Interest Payment Date with respect thereto. Interest on the Revolving Credit Loans calculated by reference to the Prime Rate shall be payable in Dollars, and interest on the Revolving Credit Loans calculated by reference to the Eurocurrency Rate shall be payable in Dollars or in the applicable Optional Currency in which the underlying Revolving Credit Loan was made, as the case may be.

 

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2.6. Requests for Revolving Credit Loans . The Borrower shall give to the Agent written notice in the form of Exhibit B hereto (or telephonic notice confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a “Loan Request”) (a) no later than 10:00 a.m. on the proposed Drawdown Date of any Prime Rate Loan and (b) three (3) Business Days prior to the proposed Drawdown Date of any Eurocurrency Rate Loan; provided that any notice requesting an Optional Currency must comply with the requirements of this §2.6 and the requirements of an OC Notice pursuant to §2.9.1. Each such notice shall specify (i) the principal amount of the Revolving Credit Loan requested, stated in Dollars, or subject to §2.9, in an Optional Currency, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for any Eurocurrency Rate Loan and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any such notice, the Agent shall notify each of the Banks thereof. Each Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Revolving Credit Loan requested from the Banks on the proposed Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of $500,000 or a whole multiple of $100,000 in excess thereof.

 

2.7. Conversion Options .

 

2.7.1. Conversion to Different Type of Revolving Credit Loan . The Borrower may elect from time to time to convert any outstanding Revolving Credit Loan denominated in Dollars to a Revolving Credit Loan of another Type denominated in Dollars, provided that (a) with respect to any such conversion of a Revolving Credit Loan to a Prime Rate Loan, the Borrower shall give the Agent at least three (3) Business Days prior written notice of such election; (b) with respect to any such conversion of a Prime Rate Loan to a Eurocurrency Rate Loan, the Borrower shall give the Agent at least three (3) Business Days prior written notice of such election; (c) with respect to any such conversion of a Eurocurrency Rate Loan into a Prime Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto; and (d) no Revolving Credit Loan may be converted into a Eurocurrency Rate Loan when any Default or Event of Default has occurred and is continuing. On the date on which such conversion is being made each Bank shall take such action as is necessary to transfer its Commitment Percentage of such Revolving Credit Loans to its Domestic Lending Office or its Eurocurrency Lending Office, as the case may be. All or any part of outstanding Revolving Credit Loans denominated in Dollars of any Type may be converted into a Revolving Credit Loan of another Type as provided herein, provided that any partial conversion shall be in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Conversion Request relating to the conversion of a Revolving Credit Loan to a Eurocurrency Rate Loan shall be irrevocable by the Borrower.

 

2.7.2. Continuation of Type of Revolving Credit Loan . Any Revolving Credit Loan of any Type may be continued as a Revolving Credit Loan of the same Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in §2.7.1; provided that (a) as to Eurocurrency Rate Loans denominated in Dollars, no Eurocurrency Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Prime Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default of which officers of the Agent active upon the Borrower’s account have actual knowledge; and (b) as to Eurocurrency Rate Loans denominated in an Optional Currency,

 

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no such Eurocurrency Rate may be continued as such when any Default or Event of Default has occurred or is continuing or the provisions of §2.9 hereof have not or cannot be met at the time of such continuation but shall be repaid by the Borrower on the last day of the Interest Period relating thereto. In the event that the Borrower fails to provide any such notice with respect to the continuation of any Eurocurrency Rate Loan as such, then (a) as to Eurocurrency Rate Loans denominated in Dollars, such Eurocurrency Rate Loan shall be automatically converted to a Prime Rate Loan on the last day of the first Interest Period relating thereto, and (b) as to Eurocurrency Rate Loans denominated in an Optional Currency, such Eurocurrency Rate Loans shall be repaid on the last day of the Interest Period relating thereto. The Agent shall notify the Banks promptly when any such automatic conversion contemplated by this §2.7 is scheduled to occur.

 

2.7.3. Eurocurrency Rate Loans . Any conversion to or from Eurocurrency Rate Loans shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of all Eurocurrency Rate Loans having the same Interest Period shall not be less than $500,000 or a whole multiple of $100,000 in excess thereof (or, in the case of Eurocurrency Rate Loans denominated in an Optional Currency, the whole number which is nearest the Dollar Equivalent of $500,000 or $100,000, as the case may be rounded to the nearest one thousandth). No more than five (5) Eurocurrency Rate Loans having different Interest Periods may be outstanding at any time.

 

2.8. Funds for Revolving Credit Loan .

 

2.8.1. Funding Procedures . Not later than 11:00 a.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the Banks will make available to the Agent, at the Agent’s Head Office, in immediately available funds, the amount of such Bank’s Commitment Percentage of the amount of the requested Revolving Credit Loans. Upon receipt from each Bank of such amount, and upon receipt of the documents required by §§12 and 13 and the satisfaction of the other conditions set forth therein, to the extent applicable, the Agent will make available to the Borrower the aggregate amount of such Revolving Credit Loans made available to the Agent by the Banks. The failure or refusal of any Bank to make available to the Agent at the aforesaid time and place on any Drawdown Date the amount of its Commitment Percentage of the requested Revolving Credit Loans shall not relieve any other Bank from its several obligation hereunder to make available to the Agent the amount of such other Bank’s Commitment Percentage of any requested Revolving Credit Loans.

 

2.8.2. Advances by Agent . The Agent may, unless notified to the contrary by any Bank prior to a Drawdown Date, assume that such Bank has made available to the Agent on such Drawdown Date the amount of such Bank’s Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown Date, and the Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Bank makes available to the Agent such amount on a date after such Drawdown Date, such Bank shall pay to the Agent on demand an amount equal to the product of (a) the average computed for the period referred to in clause (c) below, of the Overnight Rate for each day included in such period, times (b) the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans, times (c) a fraction, the numerator of which is the number of days that elapse from and including such Drawdown Date to the date on which the amount of such

 

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Bank’s Commitment Percentage of such Revolving Credit Loans shall become immediately available to the Agent, and the denominator of which is 365. A statement of the Agent submitted to such Bank with respect to any amounts owing under this paragraph shall be prima facie evidence of the amount due and owing to the Agent by such Bank. If the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans is not made available to the Agent by such Bank within three (3) Business Days following such Drawdown Date, the Agent shall be entitled to recover such amount from the Borrower on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans made on such Drawdown Date.

 

2.9. Optional Currency .

 

2.9.1. Request for Optional Currency . Subject to the limitations set forth in §2.1, the Borrower may, upon at least three (3) Business Days’ notice to the Agent in substantially the form of Exhibit F hereto (an “OC Notice”), request that one or more Revolving Credit Loans be made as Eurocurrency Rate Loans in an Optional Currency, provided that any Revolving Credit Loan proposed to be made under this §2.9.1 shall be in an amount not less than $500,000, or a greater amount which is an integral multiple of $100,000, or the Dollar Equivalent in an Optional Currency. Each OC Notice requesting a Revolving Credit Loan in an Optional Currency shall be by telephone, telex, telecopy or cable (in each case confirmed in writing by the Borrower), specifying (a) the amount of the Revolving Credit Loan to be made, (b) the requested date of the proposed borrowing, (c) the requested currency in which the Revolving Credit Loan is to be made, (d) the initial Interest Period for the Revolving Credit Loan to be borrowed, and (e) the Borrower’s account with the Agent, or, in the case of an Optional Currency which is the legal tender of a country in which the Agent has no office, with another depository specified by the Borrower in such country, to which payment of the proceeds of such Revolving Credit Loan is to be made. If any Bank, on or prior to the second Business Day preceding the first day of any Interest Period for which an OC Notice has been delivered requesting a Revolving Credit Loan in an Optional Currency or on any funding date, determines (which determination shall be conclusive) that the Optional Currency is not freely transferable and convertible into Dollars or that it will be impracticable for such Bank to fund the Revolving Credit Loan in such Optional Currency, then such Bank shall so notify Agent, which notification shall be given immediately by the Agent to the Borrower, and such Bank’s portion of the requested Revolving Credit Loan shall, notwithstanding any contrary election by the Borrower or any other provisions hereof, be denominated in Dollars as a Prime Rate Loan unless the Borrower, one Business Day prior to the commencement of the Interest Period and pursuant to the terms of §2.6, elects to have such Revolving Credit Loan denominated in Dollars as a Eurocurrency Rate Loan. Subject to the foregoing and to the satisfaction of the terms and conditions of §§12 and 13, each Revolving Credit Loan requested to be made in an Optional Currency will be made on the date specified therefor in the OC Notice, in the currency requested in the OC Notice and, upon being so made, will have the Interest Period requested in the OC Notice. Notwithstanding anything to the contrary contained herein, the aggregate outstanding amount of all Revolving Credit Loans denominated in an Optional Currency shall not exceed the Dollar Equivalent of $15,000,000 at any time.

 

2.9.2. Exchange Rate . For purposes of this Credit Agreement, the amount in one currency which shall be equivalent on any particular date to a specified amount in another currency shall be that amount (as conclusively ascertained by the Agent by its

 

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normal banking practices, absent manifest error) in the first currency which is or could be purchased by the Agent (in accordance with normal banking practices) with such specified amount in the second currency in the London interbank market or any other recognized offshore interbank market selected by the Agent in good faith for delivery on such date at the spot rate of exchange prevailing at 10:00 A.M. (Boston time) (or as soon thereafter as practicable) on such date (such amount described in this §2.9.2, the “Rate of Exchange”).

 

2.9.3. Denominations . In the event that any portion of the funds available under the terms of this Credit Agreement is denominated in an Optional Currency, the Dollar Equivalent of such portion of the funds shall be calculated pursuant to §2.9.2 above. The amount so determined shall then be added to the amount already outstanding in Dollars for the purpose of determining the remaining availability of funds under §2.1 and §2.9.1 hereof and any required repayments under the following §2.9.4.

 

2.9.4. Repayment . If at any time prior to the Revolving Credit Loan Maturity Date, the Dollar Equivalent of the aggregate principal amount outstanding of all Revolving Credit Loans, Unpaid Reimbursement Obligations and the Maximum Drawing Amount hereunder shall exceed the Total Commitment as a result of fluctuations in respective conversion rates, the Borrower shall pay or cause to be paid immediately, upon demand made by the Agent, such amounts as are sufficient to eliminate such excess and to reduce the aggregate principal amount outstanding to the Dollar Equivalent of the Total Commitment. In the event there are any Revolving Credit Loans outstanding which are denominated in an Optional Currency, the Agent shall provide the Banks and the Borrower with calculations on the last day of each calendar month that such Revolving Credit Loans are outstanding as to the Dollar Equivalents of such Revolving Credit Loans.

 

2.9.5. Funding . Each Bank may make any Eurocurrency Rate Loan denominated in an Optional Currency by causing any of its foreign branches or foreign affiliates to make such Eurocurrency Rate Loan (whether or not such branch or affiliate is named as a lending office on the signature pages hereof); provided that in such event the obligation of the Borrower to repay such Eurocurrency Rate Loan shall nevertheless be to such Bank and shall, for all purposes of this Credit Agreement (including without limitation for purposes of the definition of the term “Majority Banks”) be deemed made by such Bank, to the extent of such Eurocurrency Rate Loan, for the account of such branch or affiliate.

 

2.10. Settlements .

 

2.10.1. General . On each Settlement Date, the Agent shall, not later than 11:00 a.m. (Boston time), give telephonic or facsimile notice (a) to the Banks and the Borrower of the respective outstanding amount of Revolving Credit Loans made by the Agent on behalf of the Banks from the immediately preceding Settlement Date through the close of business on the prior day and the amount of any Eurocurrency Rate Loans to be made (following the giving of notice pursuant to §2.6.1(ii)) on such date pursuant to a Loan Request and (b) to the Banks of the amount (a “Settlement Amount”) that each Bank (a “Settling Bank”) shall pay to effect a Settlement of any Revolving Credit Loan. A statement of the Agent submitted to the Banks and the Borrower or to the Banks with respect to any amounts owing under this §2.10 shall be prima facie evidence of the

 

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amount due and owing. Each Settling Bank shall, not later than 3:00 p.m. (Boston time) on such Settlement Date, effect a wire transfer of Same Day Funds to the Agent in the amount of the Settlement Amount for such Settling Bank. All funds advanced by any Bank as a Settling Bank pursuant to this §2.10 shall for all purposes be treated as a Revolving Credit Loan made by such Settling Bank to the Borrower and all funds received by any Bank pursuant to this §2.10 shall for all purposes be treated as repayment of amounts owed with respect to Revolving Credit Loans made by such Bank. In the event that any bankruptcy, reorganization, liquidation, receivership or similar cases or proceedings in which the Borrower is a debtor prevent a Settling Bank from making any Revolving Credit Loan to effect a Settlement as contemplated hereby, such Settling Bank will make such dispositions and arrangements with the other Banks with respect to such Revolving Credit Loans, either by way of purchase of participations, distribution, pro tanto assignment of claims, subrogation or otherwise as shall result in each Bank’s share of the outstanding Revolving Credit Loans being equal, as nearly as may be, to such Bank’s Commitment Percentage of the outstanding amount of the Revolving Credit Loans.

 

2.10.2. Failure to Make Funds Available . The Agent may, unless notified to the contrary by any Settling Bank prior to a Settlement Date, assume that such Settling Bank has made or will make available to the Agent on such Settlement Date the amount of such Settling Bank’s Settlement Amount, and the Agent may (but it shall not be required to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Settling Bank makes available to the Agent such amount on a date after such Settlement Date, such Settling Bank shall pay to the Agent on demand an amount equal to the product of (a) the average computed for the period referred to in clause (c) below, of the Overnight Rate for each day included in such period, times (b) the amount of such Settlement Amount, times (c) a fraction, the numerator of which is the number of days that elapse from and including such Settlement Date to the date on which the amount of such Settlement Amount shall become immediately available to the Agent, and the denominator of which is 360. A statement of the Agent submitted to such Settling Bank with respect to any amounts owing under this §2.10.2 shall be prima facie evidence of the amount due and owing to the Agent by such Settling Bank. If such Settling Bank’s Settlement Amount is not made available to the Agent by such Settling Bank within three (3) Business Days following such Settlement Date, the Agent shall be entitled to recover such amount from the Borrower on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans as of such Settlement Date.

 

2.10.3. No Effect on Other Banks . The failure or refusal of any Settling Bank to make available to the Agent at the aforesaid time and place on any Settlement Date the amount of such Settling Bank’s Settlement Amount shall not (a) relieve any other Settling Bank from its several obligations hereunder to make available to the Agent the amount of such other Settling Bank’s Settlement Amount or (b) impose upon any Bank, other than the Settling Bank so failing or refusing, any liability with respect to such failure or refusal or otherwise increase the Commitment of such other Bank.

 

2.11. Intentionally Omitted .

 

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3. REPAYMENT OF THE REVOLVING CREDIT LOANS .

 

3.1. Maturity . The Borrower promises to pay on the Revolving Credit Loan Maturity Date, and there shall become absolutely due and payable on the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

 

3.2. Mandatory Repayments of Revolving Credit Loans . If at any time the sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the Total Commitment at such time, then the Borrower shall immediately pay the amount of such excess to the Agent for the respective accounts of the Banks for application: first, to any Unpaid Reimbursement Obligations; second, to the Revolving Credit Loans; and third, to provide to the Agent Cash Collateral for Reimbursement Obligations as contemplated by §4.2(b) and (c). In addition, the Borrower promises to the Agent for the respective accounts of the Banks immediately upon receipt thereof, 100% of the Net Cash Proceeds (a) in excess of $5,000,000 from the sale or other disposition of assets permitted by §10.5.2 (other than the sale of inventory or the licensing of intellectual property in the ordinary course of business consistent with past practice), (b) from any equity issuances permitted hereunder by the Parent Companies, the Borrower or their Subsidiaries; or (c) from debt issuances permitted hereunder by the Parent Companies, the Borrower or their Subsidiaries, pursuant to any public offerings or debt offerings under Rule 144(a) of the Rule and Regulations of the Securities and Exchange Commission, all of which amounts shall be applied in accordance with the preceding sentence of this §3.2. Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving Credit Loans shall be allocated among the Banks, in proportion, as nearly as practicable, to each Reimbursement Obligation or (as the case may be) the respective unpaid principal amount of each Bank’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior payments or repayments not exactly in proportion.

 

3.3. Optional Repayments of Revolving Credit Loans . The Borrower shall have the right, at its election, to repay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium, provided that any full or partial prepayment of the outstanding amount of any Eurocurrency Rate Loans pursuant to this §3.3 may be made only on the last day of the Interest Period relating thereto. The Borrower shall give the Agent, no later than 10:00 a.m., Boston time, on the day of the proposed prepayment prior written notice (or telephonic notice conformed in a writing by the end of such day) of such proposed prepayment pursuant to this §3.3 of Prime Rate Loans, and three (3) Business Days notice of any proposed prepayment pursuant to this §3.3 of Eurocurrency Rate Loans, in each case specifying the proposed date of prepayment of Revolving Credit Loans and the principal amount to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall be in the amount of $100,000 or an integral multiple thereof (or the Dollar Equivalent) in excess thereof, and shall be applied, in the absence of instruction by the Borrower, first to the principal of Prime Rate Loans and then to the principal of Eurocurrency Rate Loans. Each partial prepayment shall be allocated among the Banks, in proportion, as nearly as practicable, to the respective unpaid principal amount of each Bank’s Revolving Credit Note, with adjustments to the extent practicable to equalize any prior repayments not exactly in proportion.

 

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4. LETTERS OF CREDIT .

 

4.1. Letter of Credit Commitments .

 

4.1.1. Commitment to Issue Letters of Credit . Subject to the terms and conditions hereof and the execution and delivery by the Borrower of a letter of credit application on the Issuing Bank’s customary form (a “ Letter of Credit Application ”), the Issuing Bank on behalf of the Banks and in reliance upon the agreement of the Banks set forth in §4.1.4 and upon the representations and warranties of the Borrower contained herein, agrees, in its individual capacity, to issue and extend for the account of the Borrower one or more standby or documentary letters of credit (individually, a “ Letter of Credit ”), in such form as may be requested from time to time by the Borrower and agreed to by the Issuing Bank until the Letter of Credit Expiration Date; provided , however , that after giving effect to such request, the sum of the Dollar Equivalent of the aggregate L/C Obligations plus the aggregate amount of all Revolving Credit Loans outstanding shall not exceed the Total Commitment.

 

(a) Notwithstanding anything to the contrary contained in this §4, no Issuing Bank shall be under any obligation to issue any Letter of Credit if:

 

(i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any laws applicable to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such Issuing Bank in good faith deems material to it;

 

(ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank;

 

(iii) except as otherwise agreed by the Agent and the applicable Issuing Bank, such Letter of Credit is in an initial stated amount less than $50,000, in the case of a documentary Letter of Credit, or $100,000, in the case of a standby Letter of Credit;

 

(iv) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

 

(v) a default of any Bank’s obligations to fund under this §4 exists or any Bank is at such time a Delinquent Bank hereunder, unless such Issuing Bank has entered into satisfactory arrangements with the Borrower or such Bank to eliminate such Issuing Bank’s risk with respect to such Bank;

 

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(b) The applicable Issuing Bank shall not amend any Letter of Credit if such Issuing Bank would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof;

 

(c) The applicable Issuing Bank shall be under no obligation to amend any Letter of Credit if (i) such Issuing Bank would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (ii) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

4.1.2. Letter of Credit Applications . (a) Each Letter of Credit Application shall be completed to the satisfaction of the applicable Issuing Bank and signed by a duly authorized officer of the Borrower. In the event that any provision of any Letter of Credit Application shall be inconsistent with any provision of this Credit Agreement, then the provisions of this Credit Agreement shall, to the extent of any such inconsistency, govern. Such Letter of Credit Application must be received by the applicable Issuing Bank and the Agent not later than 11:00 a.m. (Boston time) at least two Business Days prior to the proposed issuance date or date of amendment, as the case may be, of any Letter of Credit, or such later date and time as the Agent and the applicable Issuing Bank may agree in a particular instance in their sole discretion. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Issuing Bank: (i) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (ii) the amount thereof; (iii) the expiry date thereof (which shall be no later than the Letter of Credit Expiration Date); (iv) the name and address of the beneficiary thereof; (v) the documents to be presented by such beneficiary in case of any drawing thereunder; (vi) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (vii) such other matters as the applicable Issuing Bank may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable Issuing Bank (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the applicable Issuing Bank may require. Additionally, the Borrower shall furnish to the applicable Issuing Bank and the Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any documents related thereto, as the applicable Issuing Bank or the Agent may reasonably require.

 

(b) Promptly after receipt of any Letter of Credit Application, the applicable Issuing Bank will confirm with the Agent (by telephone or in writing) that the Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, such Issuing Bank will provide the Agent with a copy thereof. Unless the applicable Issuing Bank has received written notice from any Bank, the Agent or the Borrower or any Guarantor, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in §13 shall not then be satisfied, then, subject to the terms and conditions hereof, the applicable Issuing Bank shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with such Issuing Bank’s usual and customary business practices.

 

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4.1.3. Terms of Letters of Credit . Each Letter of Credit issued or extended hereunder shall, among other things, (a) provide for the payment of sight drafts for honor thereunder when presented in accordance with the terms thereof and when accompanied by the documents described therein, and (b) have an expiry date no later than the Letter of Credit Expiration Date; provided , however , that any Letter of Credit which extends beyond the Revolving Maturity Date shall be subject to §4.2(b) or (c) hereof. Each documentary Letter of Credit so issued or extended shall be subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto in effect at the time of issuance of such Letter of Credit (the “ Uniform Customs ”) or, in the case of a standby Letter of Credit, unless otherwise expressly agreed by the Issuing Bank and the Borrower, the rules of the International Standby Practices.

 

4.1.4. Reimbursement Obligations of Banks . Each Bank severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Bank’s Commitment Percentage, to reimburse the Issuing Bank through the Agent on demand for the amount of each draft paid by the Issuing Bank under each Letter of Credit to the extent that such amount is not reimbursed by the Borrower pursuant to §4.2 (such agreement for a Bank being called herein the “Letter of Credit Participation” of such Bank).

 

4.1.5. Participations of Banks . Each such payment made by a Bank shall be treated as the purchase by such Bank of a participating interest in the Borrower’s Reimbursement Obligation under §4.2 in an amount equal to such payment. Each Bank shall share in accordance with its participating interest in any interest which accrues pursuant to §4.2.

 

4.2. Reimbursement Obligation of the Borrower . In order to induce the any Issuing Bank to issue and extend each Letter of Credit and the Banks to participate therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the account of the applicable Issuing Bank or (as the case may be) the Banks, with respect to each Letter of Credit issued or extended by the any Issuing Bank hereunder,

 

(a) except as otherwise expressly provided in §4.2(b) and (c), on each date that any draft presented under such Letter of Credit is honored by the Issuing Bank, or the Issuing Bank otherwise makes a 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 any Bank in connection with any payment made by the Issuing Bank or any Bank under, or with respect to, such Letter of Credit,

 

(b) upon the reduction (but not termination) of the Total Commitment to an amount less than the Maximum Drawing Amount, an amount equal to such difference, which amount shall be held by the Agent for the benefit of the applicable Issuing Bank and the Banks and the Agent as Cash Collateral for all Reimbursement Obligations, and

 

(c) upon the termination of the Total Commitment, or the acceleration of the Reimbursement Obligations with respect to all Letters of Credit in accordance with §14, an amount equal to the then Maximum Drawing Amount on all Letters of Credit, which amount shall be held by the Agent for the benefit of the applicable Issuing Bank and the Banks and the Agent as Cash Collateral for all Reimbursement Obligations.

 

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Each such payment shall be made to the Agent for the account of the applicable Issuing Bank at the Agent’s Head Office in immediately available funds. Interest on any and all amounts remaining unpaid by the Borrower under this §4.2 at any time from the date such amounts become due and payable (whether as stated in this §4.2, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Agent for the account of the applicable Issuing Bank on demand at the rate specified in §5.11 for overdue principal on the Revolving Credit Loans.

 

4.3. Letter of Credit Payments .

 

(a) 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 Agent and the Borrower of the date and amount of the draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment. If the Borrower fails to reimburse the Agent for the account of the applicable Issuing Bank as provided in §4.2 on or before the date that such draft is paid or other payment is made by the Issuing Bank, the Agent may at any time thereafter notify the Banks of the amount of any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next following the receipt of such notice, each Bank shall make available to the Agent for the account of the applicable Issuing Bank, at the Agent’s Head Office, in immediately available funds, such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation, together with an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Agent for Federal funds acquired by the Agent during each day included in such period, times (ii) the amount equal to such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation, times (iii) a fraction, the numerator of which is the number of days that elapse from and including the date the Issuing Bank paid the draft presented for honor or otherwise made payment to the date on which such Bank’s Commitment Percentage of such Unpaid Reimbursement Obligation shall become immediately available to the Issuing Bank, and the denominator of which is 360. Each Bank, the Borrower and each Guarantor agrees that, in paying any drawing under a Letter of Credit, the applicable Issuing Bank shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document (other than in conformity with the requirements of the Letter of Credit) or the authority of the Person executing or delivering any such document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. In furtherance and not in limitation of the foregoing, the applicable Issuing Bank may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the applicable Issuing Bank shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

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(b) With respect to any Unpaid Reimbursement Obligation that is not fully refinanced by a Revolving Credit Loan because the conditions set forth in §13 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the applicable Issuing Bank an extension of credit resulting from and in the amount of the Unpaid Reimbursement Obligation that is not so refinanced, which extension of credit shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Bank’s payment to the Agent for the account of the applicable Issuing Bank pursuant to this §4.3 shall be deemed payment in respect of its participation in such extension of credit and shall constitute a funding of such Bank’s participation in such extension of credit in satisfaction of its participation obligation under this §4. No such funding of such Bank’s participation in such extension of credit shall relieve or otherwise impair the obligation of the Borrower to reimburse the applicable Issuing Bank for the amount of any payment made by the applicable Issuing Bank under any Letter of Credit, together with interest as provided herein.

 

(c) Until each Bank funds its Commitment Percentage of the Revolving Credit Loans or participations as set forth in this §4.3 to reimburse the applicable Issuing Bank for any amount drawn under any Letter of Credit, interest in respect of such Bank’s Commitment Percentage of such amount shall be solely for the account of the applicable Issuing Bank.

 

(d) If any Bank fails to make available to the Agent for the account of the applicable Issuing Bank any amount required to be paid by such Bank pursuant to the foregoing provisions of this §4.3 by the time specified in §4.3, the applicable Issuing Bank shall be entitled to recover from such Bank (acting through the Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the applicable Issuing Bank at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the Issuing Bank in accordance with banking industry rules on interbank compensation. A certificate of the applicable Issuing Bank submitted to any Bank (through the Agent) with respect to any amounts owing under this clause (d) shall be conclusive absent manifest error.

 

(e) At any time after the applicable Issuing Bank has made a payment under any Letter of Credit and has received from any Bank such Bank’s participation in respect of such payment in accordance with this §4.3, if the Agent receives for the account of the applicable Issuing Bank any payment in respect of the related Unpaid Reimbursement Obligation or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Agent), the Agent will distribute to such Bank its Commitment Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Bank’s participation was outstanding) in the same funds as those received by the Agent. If any payment received by the Agent for the account of the applicable Issuing Bank pursuant to §4.3 is required to be returned in connection with any bankruptcy or insolvency proceeding or otherwise (including pursuant to any settlement entered into by the applicable Issuing Bank in its discretion), each Bank shall pay to the Agent for the account of the applicable Issuing Bank its Commitment Percentage thereof on demand of the Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Bank, at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect. The obligations of the Banks under the immediately preceding sentence shall survive the payment in full of the Obligations and the termination of this Credit Agreement.

 

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4.4. Obligations Absolute . The Borrower’s obligations under this §4 shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrower may have or have had against the Agent, the Issuing Bank, any Bank or any beneficiary of a Letter of Credit. The Borrower further agrees with the Agent, the Issuing Bank and the Banks that the Agent, the Issuing Bank and the Banks shall not be responsible for, and the Borrower’s Reimbursement Obligations under §4.2 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrower, the beneficiary of any Letter of Credit or any financing institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrower against the beneficiary of any Letter of Credit or any such transferee. The Agent, the Issuing Bank and the Banks shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit. The Borrower agrees that any action taken or omitted by the Agent, the Issuing Bank or any Bank under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith and absent gross negligence, shall be binding upon the Borrower and shall not result in any liability on the part of the Agent, the Issuing Bank or any Bank to the Borrower.

 

4.5. Reliance by Issuer . To the extent not inconsistent with §4.4, the Issuing Bank 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. The Issuing Bank shall be fully justified in failing or refusing to take any action under this Credit Agreement unless it shall first have received such advice or concurrence of the Majority Banks as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Issuing Bank shall in all cases be fully protected in acting, or in refraining from acting, under this Credit Agreement in accordance with a request of the Majority Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Banks and all future holders of the Revolving Credit Notes or of a Letter of Credit Participation.

 

4.6. Letter of Credit Fee . The Borrower shall pay a fee (in each case, a “Letter of Credit Fee”) to the Agent quarterly in arrears on the first day of each calendar quarter for the immediately preceding calendar quarter commencing on the first such date following the date hereof (a) in respect of each standby Letter of Credit an amount equal to the Applicable Margin for letter of credit fees per annum of the face amount of such standby Letter of Credit, of which an amount equal to one eighth of one percent (1/8%) per annum of the face amount of such standby Letter of Credit shall be for the account of the Issuing Bank, as a fronting fee, and the balance of which Letter of Credit Fee shall be for the accounts of the Banks in accordance with their respective Commitment Percentages and (b) in respect of each documentary Letter of Credit an amount equal to the Applicable Margin for letter of credit fees per annum of the face amount of such documentary Letter of Credit, of which an amount equal to one eighth of one percent

 

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(1/8%) per annum of the face amount of such documentary Letter of Credit shall be for the account of the Issuing Bank, as a fronting fee, and the balance of which Letter of Credit Fee shall be for the accounts of the Banks in accordance with their respective Commitment Percentages. In respect of each Letter of Credit, the Borrower shall also pay to the Agent for the account of the applicable Issuing Bank for the Issuing Bank‘s own account, on date of issuance or any extension of any Letter of Credit and at such other time or times as such charges are customarily made by the Issuing Bank, the Issuing Bank‘s customary issuance, amendment, negotiation or document examination and other administrative fees as in effect from time to time.

 

4.7. Letter of Credit Amounts . Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount in Dollars of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the documents related thereto, whether or not such maximum face amount is in effect at such time.

 

4.8. Cash Collateral . Upon the request of the Agent, (i) if the applicable Issuing Bank has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an extension of credit resulting from and in the amount of the Unpaid Reimbursement Obligation pursuant to §4.3(a) or (b) if, as of the Revolving Credit Loan Maturity Date, any L/C Obligations for any reason remain outstanding, the Borrower shall, in each case, immediately Cash Collateralize the then outstanding amount of all such L/C Obligations. Section 3.2 sets forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this §4 and §3.2, “ Cash Collateralize ” means to pledge and deposit with or deliver to the Agent, for the benefit of the applicable Issuing Bank and the Banks, as collateral for the L/C Obligations, cash or deposit account balances pursuant to documentation in form and substance reasonably satisfactory to the Agent and the applicable Issuing Bank (which documents are hereby consented to by the Banks) in an amount equal to 105% of the L/C Obligations. Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Agent, for benefit of the Issuing Bank and the Banks, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.

 

5. CERTAIN GENERAL PROVISIONS .

 

5.1. Funds for Payments .

 

5.1.1. Payments to Agent . All payments of principal and interest on Revolving Credit Loans made to the Borrower which are denominated in Dollars, Reimbursement Obligations with respect to Letters of Credit issued in Dollars, Commitment Fees, Letter of Credit Fees and any other amounts due hereunder or under any of the other Loan Documents shall be made on the due date thereof to the Agent in Dollars, for the respective accounts of the Banks and the Agent, at the Agent’s Head Office or at such other place that the Agent may from time to time designate, in each case at or about 11:00 a.m. (Boston, Massachusetts, time or other local time at the place of payment) and in Same Day Funds. All payments of principal and interest on Revolving Credit Loans made to the Borrower which are denominated in an Optional Currency, all Reimbursement Obligations with respect to Letters of Credit issued in an Optional Currency and all other fees hereunder by any local branch or affiliate of any Bank or the Agent located outside of the United States shall be made by the Borrower to the Agent in the currency of such Revolving Credit Loan or Letter of Credit, as the case may be, at or

 

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prior to 11:00 a.m., local time, on any payment date, in Same Day Funds, for the account of the Agent, at a depository designated by the Agent in the country in which such Optional Currency is legal tender. Each payment in respect of any Revolving Credit Loan and any Reimbursement Obligations made by the Borrower shall be made in the same currency in which such Revolving Credit Loan was made unless otherwise agreed by the Banks.

 

5.1.2. No Offset, etc . All payments by the Borrower hereunder and under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees, deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrower is compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrower with respect to any amount payable by it hereunder or under any of the other Loan Documents, the Borrower will pay to the Agent, for the account of the Banks or (as the case may be) the Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Banks or the Agent to receive the same net amount which the Banks or the Agent would have received on such due date had no such obligation been imposed upon the Borrower. The Borrower w