AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENTSecurity Agreement |
|
|
You are currently viewing: This Security Agreement involves
EPIQ SYSTEMS INC | THE LENDERS NAMED HEREIN | KEYBANK NATIONAL ASSOCIATION. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
|
|
|
|
Exhibit 10.3
AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
among
EPIQ SYSTEMS, INC., as Borrower,
THE LENDERS NAMED HEREIN, as Lenders ,
and
KEYBANK NATIONAL ASSOCIATION, as Lead Arranger, Sole Book Runner and Administrative Agent
dated as of November 15, 2005
TABLE OF CONTENTS
i
ii
iii
iv
This AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this “Agreement”) is made effective as of the 15th day of November, 2005 among:
(a) EPIQ SYSTEMS, INC., a Missouri corporation (“Borrower”);
(b) the lenders listed on Schedule 1 hereto and each other Eligible Transferee, as hereinafter defined, that becomes a party hereto pursuant to Section 2.10(b) or 11.10 hereof (collectively, the “Lenders” and, individually, each a “Lender”); and
(c) KEYBANK NATIONAL ASSOCIATION, as lead arranger, sole book runner and administrative agent for the Lenders under this Agreement (“Agent”).
WITNESSETH:
WHEREAS, Borrower, the lenders named therein and Agent entered into that certain Credit and Security Agreement, dated as of July 20, 2004 (as amended, the “Original Credit Agreement”);
WHEREAS, this Agreement amends and restates in its entirety the Original Credit Agreement and, upon the effectiveness of this Agreement, on the Closing Date, the terms and provisions of the Original Credit Agreement shall be superseded hereby. All references to “Credit Agreement” contained in the Loan Documents, as defined in the Original Credit Agreement, delivered in connection with the Original Credit Agreement shall be deemed to refer to this Agreement. Notwithstanding the amendment and restatement of the Original Credit Agreement by this Agreement, the Obligations outstanding under the Original Credit Agreement as of the Closing Date shall remain outstanding and constitute Obligations hereunder. Such outstanding Obligations and the guaranties of payment thereof shall in all respects be continuing, and this Agreement shall not be deemed to evidence or result in a novation or repayment and re-borrowing of such Obligations. In furtherance of and, without limiting the foregoing, from and after the Closing Date and except as expressly specified herein, the terms, conditions and covenants governing the Indebtedness outstanding under the Original Credit Agreement shall be solely as set forth in this Agreement, which shall supersede the Original Credit Agreement in its entirety; and
WHEREAS, Borrower, Agent and the Lenders desire to contract for the establishment of credits in the aggregate principal amounts hereinafter set forth, to be made available to Borrower upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
Section 1.1. Definitions . As used in this Agreement, the following terms shall have the following meanings:
“Accelerated Maturity Date” shall mean the date that is sixty (60) days prior to the stated maturity (or date when scheduled principal payments are due), as in effect from time to time, of the Convertible Subordinated Notes or any replacement notes.
“Acceptable Non-Acceleration Event” shall mean any of the following events: (a) if Borrower refinances all of the outstanding Convertible Subordinated Indebtedness with new Subordinated Indebtedness that, by its terms, has a stated maturity (or has scheduled principal payments due) no earlier than sixty (60) days after the Facility Maturity Date; (b) all of the Convertible Subordinated Notes are converted into equity; (c) for the period commencing sixty (60) days prior to the Facility Maturity Date through the Facility Maturity Date (or, if earlier, until the repayment or conversion of all of the outstanding Convertible Subordinated Notes), the Available Liquidity is, at all times, no less than an amount equal to one hundred percent (100%) of the outstanding principal amount of the Convertible Subordinated Notes; or (d) the Convertible Subordinated Noteholders agree in writing (in form and substance reasonably acceptable to Agent) to extend the stated maturity (or date when scheduled principal payments are due) of the Convertible Subordinated Notes to a date that is no earlier than sixty (60) days after the Facility Maturity Date.
“Account” shall mean all accounts, as defined in the U.C.C.
“Account Debtor” shall mean any Person obligated to pay all or any part of any Account in any manner and includes (without limitation) any Guarantor thereof.
“Acquisition” shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person (other than a Company), or any business or division of any Person (other than a Company), (b) the acquisition of in excess of fifty percent (50%) of the stock (or other equity interest) of any Person (other than a Company), or (c) the acquisition of another Person (other than a Company) by a merger, amalgamation or consolidation or any other combination with such Person.
“Additional Commitment” shall mean that term as defined in Section 2.10(b) hereof.
“Additional Lender” shall mean an Eligible Transferee that shall become a Revolving Lender during the Commitment Increase Period pursuant to Section 2.10(b) hereof.
“Additional Lender Assumption Agreement” shall mean an additional lender assumption agreement, in form and substance satisfactory to Agent, wherein an Additional Lender shall become a Revolving Lender.
2
“Additional Lender Assumption Effective Date” shall mean that term as defined in Section 2.10(b) hereof.
“Advantage” shall mean any payment (whether made voluntarily or involuntarily, by offset of any deposit or other indebtedness or otherwise) received by any Lender in respect of the Applicable Debt, if such payment results in that Lender having less than its pro rata share (based upon its Applicable Commitment Percentage and, in the case of an Equalization Event, based upon its Equalization Percentage of the Obligations) of the Applicable Debt then outstanding.
“Affiliate” shall mean any Person, directly or indirectly, controlling, controlled by or under common control with a Company and “control” (including the correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) shall mean the power, directly or indirectly, to direct or cause the direction of the management and policies of a Company, whether through the ownership of voting securities, by contract or otherwise.
“Agent” shall mean that term as defined in the first paragraph hereof.
“Agent Fee Letter” shall mean the Agent Fee Letter between Borrower and Agent, dated as of the Closing Date, as the same may from time to time be amended, restated or otherwise modified.
“Agreement” shall mean that term as defined in the first paragraph hereof.
“Applicable Commitment Fee Rate” shall mean:
(a) for the period from the Closing Date through March 31, 2006, fifty (50.00) basis points; and
(b) commencing with the Consolidated financial statements of Borrower for the fiscal quarter ending December 31, 2005, the number of basis points set forth in the following matrix, based upon the result of the computation of the Leverage Ratio, shall be used to establish the number of basis points that will go into effect on April 1, 2006 and thereafter:
After April 1, 2006, changes to the Applicable Commitment Fee Rate shall be effective on the first day of each month following the date upon which Agent should have received, pursuant to Section 5.3(a) and (b) hereof, the Consolidated financial statements of Borrower. The above matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of Agent and the Lenders to charge the Default Rate, or the rights and remedies of Agent and the Lenders pursuant to Articles VIII and IX hereof. Notwithstanding anything herein to the
3
contrary, during any period when Borrower shall have failed to timely deliver the Consolidated financial statements pursuant to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant to Section 5.3(c) hereof, and such failure has continued for five Business Days, until such time as the appropriate Consolidated financial statements and Compliance Certificate are delivered, the Applicable Commitment Fee Rate shall be the highest rate per annum indicated in the above pricing grid regardless of the Leverage Ratio at such time.
“Applicable Commitment Percentage” shall mean, for each Lender:
(a) with respect to the Revolving Credit Commitment, the percentage, if any, set forth opposite such Lender’s name under the column headed “Revolving Credit Commitment Percentage”, as listed in Schedule 1 hereto; and
(b) with respect to the Term Loan Commitment, the percentage, if any, set forth opposite such Lender’s name under the column headed “Term Loan Commitment Percentage”, as listed in Schedule 1 hereto.
“Applicable Debt” shall mean:
(a) with respect to the Revolving Credit Commitment, collectively, (i) all Indebtedness incurred by Borrower to the Revolving Lenders pursuant to this Agreement and the other Loan Documents, and includes, without limitation, the principal of and interest on all Revolving Credit Notes and the Swing Line Note and all obligations with respect to Letters of Credit, (ii) each extension, renewal or refinancing of the foregoing, in whole or in part, (iii) the commitment, prepayment and other fees and amounts payable hereunder in connection with the Revolving Credit Commitment, and (iv) all Related Expenses incurred in connection with the foregoing; and
(b) with respect to the Term Loan Commitment, collectively, (i) all Indebtedness incurred by Borrower to the Term Lenders pursuant to this Agreement and the other Loan Documents, and includes, without limitation, the principal of and interest on all Term Notes, (ii) each extension, renewal or refinancing of the foregoing in whole or in part, (iii) all prepayment and other fees and amounts payable hereunder in connection with the Term Loan Commitment, and (iv) all Related Expenses incurred in connection with the foregoing.
“Applicable Margin” shall mean:
(a) for the period from the Closing Date through March 31, 2006, (i) three hundred (300.00) basis points for Eurodollar Loans, and (ii) one hundred twenty-five (125.00) basis points for Base Rate Loans; and
(b) commencing with the Consolidated financial statements of Borrower for the fiscal quarter ending December 31, 2005, the number of basis points (depending upon whether Loans are Eurodollar Loans or Base Rate Loans) set forth in the following matrix, based upon the result of the computation of the Leverage Ratio, shall be used to
4
establish the number of basis points that will go into effect on April 1, 2006 and thereafter:
After April 1, 2006, changes to the Applicable Margin shall be effective on the first day of each month following the date upon which Agent should have received, pursuant to Section 5.3(a) and (b) hereof, the Consolidated financial statements of Borrower. The above matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of Agent and the Lenders to charge the Default Rate, or the rights and remedies of Agent and the Lenders pursuant to Articles VIII and IX hereof. Notwithstanding anything herein to the contrary, during any period when Borrower shall have failed to timely deliver the Consolidated financial statements pursuant to Section 5.3(a) or (b) hereof, or the Compliance Certificate pursuant to Section 5.3(c) hereof, and such failure has continued for five Business Days, until such time as the appropriate Consolidated financial statements and Compliance Certificate are delivered, the Applicable Margin shall be the highest rate per annum indicated in the above pricing grid regardless of the Leverage Ratio at such time.
“Assignment Agreement” shall mean an Assignment and Acceptance Agreement in the form of the attached Exhibit F .
“Authorized Officer” shall mean a Financial Officer or other individual authorized by a Financial Officer in writing (with a copy to Agent) to handle certain administrative matters in connection with this Agreement.
“Available Liquidity” shall mean, at any date, the sum of (a) cash on hand of Borrower held at financial institutions located in the United States plus Cash Equivalents in excess of Ten Million Dollars ($10,000,000), plus (b) Revolving Credit Availability, plus (c) Unexercised Availability.
“Base Rate” shall mean a rate per annum equal to the greater of (a) the Prime Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds Effective Rate. Any change in the Base Rate shall be effective immediately from and after such change in the Base Rate.
5
“Base Rate Loan” shall mean a Revolving Loan or a portion of the Term Loan, described in Section 2.2(a) or 2.3 hereof, that shall be denominated in Dollars and on which Borrower shall pay interest at a rate based on the Derived Base Rate.
“Borrower” shall mean that term as defined in the first paragraph hereof.
“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which national banks are authorized or required to close in Cleveland, Ohio, and, if the applicable Business Day relates to a Eurodollar Loan, a day of the year on which dealings in deposits are carried on in the London interbank Eurodollar market.
“Capital Distribution” shall mean a payment made, liability incurred or other consideration given by a Company to any Person that is not a Company, for the purchase, acquisition, redemption, repurchase, payment or retirement of any capital stock or other equity interest of such Company or as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of such Company) in respect of such Company’s capital stock or other equity interest.
“Capitalized Lease Obligations” shall mean obligations of the Companies for the payment of rent for any real or personal property under leases or agreements to lease that, in accordance with GAAP, have been or should be capitalized on the books of the lessee and, for purposes hereof, the amount of any such obligation shall be the capitalized amount thereof determined in accordance with GAAP.
“Cash Collateral Account” shall mean a commercial Deposit Account designated “cash collateral account” and maintained by Borrower with Agent, without liability by Agent or the Lenders to pay interest thereon, from which account Agent, on behalf of the Lenders, subject to the provisions of Section 7.2 hereof, shall have the exclusive right to withdraw funds until all of the Secured Obligations are paid in full.
“Cash Equivalents” shall mean, as to any Person, (a) securities issued by, or directly, unconditionally and fully guaranteed or insured by, the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such Person; (b) securities issued by, or directly, unconditionally and fully guaranteed or insured by, any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s or Moody’s; (c) time deposits, certificates of deposit or bankers’ acceptances of any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia or any United States branch of a foreign bank having, capital and surplus aggregating in excess of Five Hundred Million Dollars ($500,000,000) and a rating of “A” (or such other similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act) with maturities of not more than one year from the date of acquisition by such Person; (d) repurchase obligations with a term of
6
not more than thirty (30) days for underlying securities of the types described in subpart (a) above entered into with any bank meeting the qualifications specified in subpart (c) above, which repurchase obligations are secured by a valid perfected security interest in the underlying securities; (e) commercial paper issued by any Person incorporated in the United States rated at least A-2 or the equivalent thereof by Standard & Poor’s or at least P-2 or the equivalent thereof by Moody’s, and in each case maturing not more than one year after the date of acquisition by such Person; (f) investments in money market funds substantially all of whose assets are comprised of securities of the types described in subparts (a) through (e) above; and (g) demand deposit accounts maintained in the ordinary course of business.
“Cash Security” shall mean all cash, instruments, Deposit Accounts and other cash equivalents, whether matured or unmatured, whether collected or in the process of collection, upon which a Company presently has or may hereafter have any claim, wherever located, including but not limited to any of the foregoing that are presently or may hereafter be existing or maintained with, issued by, drawn upon, or in the possession of Agent or any Lender.
“Change in Control” shall mean (a) the acquisition of, or, if earlier, the shareholder or director approval of the acquisition of, ownership or voting control, directly or indirectly, beneficially (within the meaning of Rules 13d-3 and 13d-5 of the Securities Exchange Act of 1934, as then in effect) or of record, on or after the Closing Date, by any Person (other than Tom Olofson or Christopher Olofson) or group (within the meaning of Sections 13d and 14d of the Securities Exchange Act of 1934, as then in effect), of shares representing more than thirty percent (30%) of the aggregate ordinary Voting Power represented by the issued and outstanding capital stock of Borrower; (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors or other governing body of Borrower by Persons who were neither (i) nominated by the board of directors or other governing body of Borrower nor (ii) appointed or approved by directors so nominated; or (c) the occurrence of a change in control, or other similar provision, as defined in any Material Indebtedness Agreement.
“Closing Commitment Amount” shall mean One Hundred Twenty-Five Million Dollars ($125,000,000).
“Closing Date” shall mean the effective date of this Agreement as set forth in the first paragraph of this Agreement.
“Closing Revolving Amount” shall mean One Hundred Million Dollars ($100,000,000).
“Code” shall mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.
“Collateral” shall mean all of Borrower’s existing and future (a) personal property; (b) Accounts, Investment Property, instruments, contract rights, chattel paper, documents, supporting obligations, letter-of-credit rights, commercial tort claims, General Intangibles, Inventory and Equipment (other than the following, but exclusive of proceeds of any of the following, (i) computer equipment provided to bankruptcy trustees and located on their premises in the ordinary course of Borrower’s business, (ii) fractional interests in aircraft where a pledge
7
is prohibited by the agreement among the holders of such interests, (iii) equity interests in (A) any direct Foreign Subsidiary in excess of sixty-five percent (65%) of the total outstanding equity interest of such direct Foreign Subsidiary, and (B) any indirect Foreign Subsidiary, (iv) licenses and contracts which by the terms of such licenses and contracts prohibit the assignment of such agreements (to the extent such prohibition is enforceable at law), and (v) fixed assets subject to a purchase money lien with an underlying contract or agreement that prohibits the granting of a second lien on such fixed assets, but only to the extent such prohibition is enforceable at law and only as long as such liens attach to such fixed assets); (c) funds now or hereafter on deposit in the Cash Collateral Account, if any; (d) Cash Security (other than trust and payroll bank accounts); (e) the Real Property; and (f) Proceeds of any of the foregoing.
“Commitment” shall mean the obligation hereunder of the Lenders, during the Commitment Period, to make Loans and to participate in the issuance of Letters of Credit pursuant to the Revolving Credit Commitment and the Term Loan Commitment, up to the Total Commitment Amount.
“Commitment Increase Period” shall mean the period from the Closing Date to the date that is thirty (30) days prior to the last day of the Commitment Period.
“Commitment Period” shall mean the period from the Closing Date to the earlier of the Accelerated Maturity Date or November 14, 2008 (or such earlier date on which the Commitment shall have been terminated pursuant to Article IX hereof); provided that there shall be no Accelerated Maturity Date if an Acceptable Non-Acceleration Event shall occur prior to the Accelerated Maturity Date.
“Companies” shall mean Borrower and all Subsidiaries.
“Company” shall mean Borrower or a Subsidiary.
“Compliance Certificate” shall mean a certificate, substantially in the form of the attached Exhibit E .
“Confirmation of Security Documents” shall mean each Amendment and Confirmation of Security Documents, relating to Security Documents delivered by the Credit Parties prior to the Closing Date, executed and delivered by a Credit Party as of the Closing Date, as the same may from time to time be amended, restated or otherwise modified.
“Consideration” shall mean, in connection with an Acquisition, the aggregate consideration paid, including borrowed funds, cash, the issuance of securities or notes, the assumption or incurring of liabilities (direct or contingent), the payment of consulting fees or fees for a covenant not to compete and any other consideration paid for such Acquisition.
“Consolidated” shall mean the resultant consolidation of the financial statements of Borrower and its Subsidiaries in accordance with GAAP, including principles of consolidation consistent with those applied in preparation of the consolidated financial statements referred to in Section 6.13 hereof.
8
“Consolidated Capital Expenditures” shall mean, for any period, the amount of capital expenditures of Borrower (specifically including software development costs, but excluding capital expenditures directly financed through a capitalized lease (with acceptable documentation available upon request of Agent or any Lender)), as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Current Assets” shall mean, at any date, the current assets of Borrower, as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Current Liabilities” shall mean, at any date, the current liabilities of Borrower, as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Depreciation and Amortization Charges” shall mean, for any period, the aggregate of all depreciation and amortization charges of Borrower for such period, as determined on a Consolidated basis and in accordance with GAAP; provided that, notwithstanding the foregoing, Consolidated Depreciation and Amortization Charges shall include any component of Consolidated Interest Expense resulting from the amortization of any loan fees and Consolidated Interest Expense resulting from imputed interest that is added to the principal balance of the underlying Indebtedness.
“Consolidated EBITDA” shall mean, for any period, as determined on a Consolidated basis and in accordance with GAAP, Consolidated Net Earnings for such period plus the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (a) Consolidated Interest Expense, (b) Consolidated Income Tax Expense, (c) Consolidated Depreciation and Amortization Charges, (d) (i) extraordinary or unusual non-cash losses not incurred in the ordinary course of business but that were counted in the net income calculation for such period, minus (ii) extraordinary or unusual non-cash gains not incurred in the ordinary course of business but that were counted in the net income calculation for such period, (e) unamortized costs, fees and expenses incurred in connection with the transactions contemplated by this Agreement and any Acquisition (occurring prior to, on or subsequent to the Closing Date), up to an aggregate amount for all Companies, with respect to Acquisition related costs, fees and expenses, not to exceed Six Million Dollars ($6,000,000) during any twelve (12) month period, (f) expenses and charges which will be indemnified or reimbursed to the extent such amounts are covered by funds in a valid escrow account or similar arrangement, and (g) any other component of net income (or net loss) which is non-cash and will not convert to cash within one year, including without exception any charges related to the granting of share-based payments to employees or directors; provided, however, that any time an Acquisition on an on-going business is made pursuant to Section 5.13 hereof, Consolidated EBITDA shall be recalculated to include the EBITDA of the acquired company as if such Acquisition had been completed on the first day of the relevant measuring period.
“Consolidated Fixed Charges” shall mean, for any period, as determined on a Consolidated basis and in accordance with GAAP, without duplication, the aggregate of (a) Consolidated Interest Expense (including, without limitation, the “imputed interest” portion of Capitalized Lease Obligations, synthetic leases and asset securitizations, if any, and excluding (i)
9
any fees (including underwriting fees) and expenses paid in connection with the consummation of Acquisitions (occurring prior to, on or subsequent to the Closing Date), (ii) any payments made to obtain a Hedge Agreement, and (iii) any agent or collateral monitoring fees paid or required to be paid pursuant to this Agreement (paid in cash), (b) Consolidated Income Tax Expense paid in cash, (c) scheduled principal payments on Consolidated Funded Indebtedness (other than (A) optional prepayments of the Revolving Credit Loans, (B) scheduled payments on the Convertible Subordinated Indebtedness, and (C) scheduled payments on the Term Loan), and (d) Capital Distributions.
“Consolidated Funded Indebtedness” shall mean, at any date, all Indebtedness (including, but not limited to, current, long-term and Subordinated Indebtedness, if any) of Borrower, as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Income Tax Expense” shall mean, for any period, all provisions for taxes based on the net income of Borrower (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), and all franchise taxes of Borrower to the extent such taxes have been imposed in lieu of income taxes, as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Interest Expense” shall mean, for any period, the interest expense of Borrower for such period, as determined on a Consolidated basis and in accordance with GAAP; provided that, notwithstanding the foregoing, Consolidated Interest Expense shall exclude any interest expense resulting from the amortization of any loan fees, and interest expense resulting from imputed interest that is added to the principal balance of the underlying Indebtedness.
“Consolidated Net Earnings” shall mean, for any period, the net income (loss) of Borrower for such period, as determined on a Consolidated basis and in accordance with GAAP.
“Consolidated Net Worth” shall mean, at any date, the stockholders’ equity of Borrower, determined as of such date on a Consolidated basis and in accordance with GAAP.
“Consolidated Senior Funded Indebtedness” shall mean, at any date, Consolidated Funded Indebtedness less Subordinated Indebtedness of the Companies.
“Control Agreement” shall mean each Control Agreement among a Credit Party, Agent and a depository institution, dated on or after the Closing Date, as the same may from time to time be amended, restated or otherwise modified.
“Controlled Group” shall mean a Company and each Person required to be aggregated with a Company under Code Section 414(b), (c), (m) or (o).
“Convertible Subordinated Documents” shall mean the Note Agreement, the Convertible Subordinated Notes, and any other agreement entered into or delivered in connection therewith.
10
“Convertible Subordinated Indebtedness” shall mean the Subordinated Indebtedness under or in respect of the Convertible Subordinated Notes, in the original principal amount of up to Fifty Million Dollars ($50,000,000).
“Convertible Subordinated Noteholders” shall mean any Buyer, as defined in the Note Agreement, and any holder of the Convertible Subordinated Notes.
“Convertible Subordinated Notes” shall mean those certain $50,000,000 4% Contingent Convertible Subordinated Notes due June 15, 2007, issued pursuant to the Note Agreement, as the same may from time to time be amended, restated or otherwise modified with the prior written consent of the Required Lenders.
“Credit Event” shall mean the making by the Lenders of a Loan, the conversion by the Lenders of a Base Rate Loan to a Eurodollar Loan, the continuation by the Lenders of a Eurodollar Loan after the end of the applicable Interest Period, the making by the Swing Line Lender of a Swing Loan, or the issuance by the Fronting Lender of a Letter of Credit.
“Credit Party” shall mean Borrower and any Subsidiary or other Affiliate that is a Guarantor of Payment.
“Current Ratio” shall mean, at any time, as determined on a Consolidated basis and in accordance with GAAP, the ratio of (a) Consolidated Current Assets (for the most recently completed fiscal quarter of Borrower) to (b) Consolidated Current Liabilities (for the most recently completed fiscal quarter of Borrower); provided, however, that, for purposes of calculating the Current Ratio, Consolidated Current Liabilities shall exclude the current portion of Subordinated Indebtedness and the Revolving Credit Exposure.
“Default” shall mean an event or condition that constitutes, or with the lapse of any applicable grace period or the giving of notice or both would constitute, an Event of Default, and that has not been waived by the Required Lenders (or, if applicable, all of the Lenders) in writing.
“Default Rate” shall mean (a) with respect to any Loan, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto, and (b) with respect to any other amount, if no rate is specified or available, a rate per annum equal to two percent (2%) in excess of the Derived Base Rate from time to time in effect.
“Deposit Account” shall mean (a) a deposit account, as defined in the U.C.C., (b) any other deposit account, and (c) any demand, time, savings, checking, passbook or similar account maintained with a bank, savings and loan association, credit union, or similar organization.
“Derived Base Rate” shall mean a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Base Rate Loans plus the Base Rate.
“Derived Eurodollar Rate” shall mean a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) for Eurodollar Loans plus the Eurodollar Rate.
11
“Disposition” shall mean the lease, transfer or other disposition of assets (whether in one or more transaction) by a Company, other than a sale, lease, transfer or other disposition made by a Company in the ordinary course of business.
“Dollar” or the sign $ shall mean lawful money of the United States of America.
“Domestic Subsidiary” shall mean a Subsidiary that is not a Foreign Subsidiary.
“Dormant Subsidiary” shall mean a Company that (a) is not a Credit Party, (b) has aggregate assets of less than Two Hundred Fifty Thousand Dollars ($250,000), and (c) has no direct or indirect Subsidiaries with aggregate assets for all such Subsidiaries of more than Two Hundred Fifty Thousand Dollars ($250,000).
“EBITDA” shall mean, for any period, in accordance with GAAP, the net earnings of a Person for such period plus the aggregate amounts deducted in determining such net earnings in respect of (a) interest expense of such Person, (b) income taxes of such Person, and (c) the aggregate of all depreciation and amortization charges of such Person, (d) (i) extraordinary or unusual non-cash losses not incurred in the ordinary course of business of such Person but that were counted in the net income calculation for such period, minus (ii) extraordinary or unusual non-cash gains not incurred in the ordinary course of business of such Person but that were counted in the net income calculation for such period, (e) expenses and charges which will be indemnified or reimbursed to the extent such amounts are covered by funds in a valid escrow account or similar arrangement, and (f) any other component of net income (or net loss) which is non-cash and will not convert to cash within one year, including without exception any charges related to the granting of share-based payments to employees or directors.
“Eligible Transferee” shall mean a commercial bank, financial institution or other “accredited investor” (as defined in SEC Regulation D) that is not Borrower, a Subsidiary or an Affiliate.
“Environmental Laws” shall mean all provisions of law (including the common law), statutes, ordinances, codes, rules, guidelines, policies, procedures, orders-in-council, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards which are legally binding and promulgated by a Governmental Authority or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning environmental health or safety and protection of, or regulation of the discharge of substances into, the environment.
“Equalization Event” shall mean the earlier of (a) the occurrence of an Event of Default under Section 8.11 hereof, or (b) the acceleration of the maturity of the Obligations after the occurrence of an Event of Default.
“Equalization Percentage” shall mean that term as defined in Section 9.5 hereof.
“Equipment” shall mean all equipment, as defined in the U.C.C.
12
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.
“ERISA Event” shall mean (a) the existence of a condition or event with respect to an ERISA Plan that would reasonably be expected to result in the imposition of an excise tax or any other liability on a Company or of the imposition of a Lien on the assets of a Company; (b) the engagement by a Controlled Group member in a non-exempt “prohibited transaction” (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that could reasonably be expected to result in liability to a Company; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a “complete withdrawal” or a “partial withdrawal” (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) notice that any Multiemployer Plan is in reorganization under ERISA Section 4241; (g) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (h) the commencement, existence or threatening of a claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (i) any incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan, other than as required by ERISA Section 601, et. seq. or Code Section 4980B.
“ERISA Plan” shall mean an “employee benefit plan” (within the meaning of ERISA Section 3(3)) that a Controlled Group member at any time sponsors, maintains, contributes to, has liability with respect to or has an obligation to contribute to such plan.
“Eurocurrency Liabilities” shall have the meaning assigned to that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time.
“Eurodollar” shall mean a Dollar denominated deposit in a bank or branch outside of the United States.
“Eurodollar Loan” shall mean a Revolving Loan or a portion of the Term Loan described in Section 2.2(a) or 2.3 hereof, that shall be denominated in Dollars and on which Borrower shall pay interest at a rate based upon the Derived Eurodollar Rate.
“Eurodollar Rate” shall mean, with respect to a Eurodollar Loan, for any Interest Period, a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the nearest 1/16 th of 1%) by dividing (a) the rate of interest, determined by Agent in accordance with its usual procedures (which determination shall be conclusive absent manifest error) as of approximately 11:00 A.M. (London time) two Business Days prior to the beginning of such Interest Period pertaining to such Eurodollar Loan, as listed on British Bankers Association Interest Rate LIBOR 01 or 02 as provided by Reuters (or, if for any reason such rate is
13
unavailable from Reuters, from any other similar company or service that provides rate quotations comparable to those currently provided by Reuters) as the rate in the London interbank market for Dollar deposits in immediately available funds with a maturity comparable to such Interest Period, provided that, in the event that such rate quotation is not available for any reason, then the Eurodollar Rate shall be the average (rounded upward to the nearest 1/16th of 1%) of the per annum rates at which deposits in immediately available funds in Dollars for the relevant Interest Period and in the amount of the Eurodollar Loan to be disbursed or to remain outstanding during such Interest Period, as the case may be, are offered to Agent (or an affiliate of Agent, in Agent’s discretion) by prime banks in any Eurodollar market reasonably selected by Agent, determined as of 11:00 A.M. (London time) (or as soon thereafter as practicable), two Business Days prior to the beginning of the relevant Interest Period pertaining to such Eurodollar Loan hereunder; by (b) 1.00 minus the Reserve Percentage.
“Event of Default” shall mean an event or condition that shall constitute an event of default as defined in Article VII hereof.
“Excluded Taxes” shall mean net income taxes (and franchise taxes imposed in lieu of net income taxes) imposed on Agent or a Lender by the Governmental Authority located in the jurisdiction where Agent or such Lender is organized or conducts business (other than any such connection arising solely from Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document).
“Facility Maturity Date” shall mean the last day of the Commitment Period.
“Federal Funds Effective Rate” shall mean, for any day, the rate per annum (rounded upward to the nearest one one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the Closing Date.
“Financial Officer” shall mean any of the following officers: chief executive officer, president, chief financial officer or treasurer. Unless otherwise qualified, all references to a Financial Officer in this Agreement shall refer to a Financial Officer of Borrower.
“Fixed Charge Coverage Ratio” shall mean, as determined for the most recently completed four fiscal quarters of Borrower, on a Consolidated basis and in accordance with GAAP, the ratio of (a) (i) Consolidated EBITDA minus (ii) Consolidated Capital Expenditures (excluding Consolidated Capital Expenditures that are made (A) in connection with an Acquisition permitted pursuant to Section 5.13 hereof, (B) in connection with leasehold improvements (but only to the extent such improvements are reimbursable by the landlord), or (C) with the net proceeds of Dispositions of capital assets (excluding real estate), to (b) Consolidated Fixed Charges.
14
“Foreign Subsidiary” shall mean a Subsidiary that is organized outside of the United States.
“Fronting Lender” shall mean, as to any Letter of Credit transaction hereunder, Agent as issuer of the Letter of Credit, or, in the event that Agent either shall be unable to issue or shall agree that another Revolving Lender may issue, a Letter of Credit, such other Revolving Lender as shall agree to issue the Letter of Credit in its own name, but on behalf of the Revolving Lenders hereunder.
“GAAP” shall mean generally accepted accounting principles in the United States as then in effect, which shall include the official interpretations thereof by the Financial Accounting Standards Board (or agencies within the United States. accounting profession with similar or delegated functions and recognized by the Financial Accounting Standards Board as having authority to issue such interpretations), applied on a basis consistent with the past accounting practices and procedures of Borrower and the SEC, which are applicable to the circumstances as of the date of determination.
“General Intangibles” shall mean all (a) general intangibles, as defined in the U.C.C.; and (b) choses in action, causes of action, intellectual property, customer lists, corporate or other business records, inventions, designs, patents, patent applications, service marks, registrations, trade names, trademarks, copyrights, licenses, goodwill, computer software, rights to indemnification and tax refunds.
“Governmental Authority” shall mean any nation or government, any state, province or territory or other political subdivision thereof, any governmental agency, department, authority, instrumentality, regulatory body, court, central bank or other governmental entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
“Guarantor” shall mean a Person that shall have pledged its credit or property in any manner for the payment or other performance of the indebtedness, contract or other obligation of another and includes (without limitation) any guarantor (whether of payment or of collection), surety, co-maker, endorser or Person that shall have agreed conditionally or otherwise to make any purchase, loan or investment in order thereby to enable another to prevent or correct a default of any kind.
“Guarantor of Payment” shall mean each of the Companies set forth on Schedule 2 hereto, that are each executing and delivering a Guaranty of Payment, or any other Person that shall deliver a Guaranty of Payment to Agent subsequent to the Closing Date.
“Guaranty of Payment” shall mean each Guaranty of Payment and each Amended and Restated Guaranty of Payment executed and delivered on or after the Closing Date in connection with this Agreement by the Guarantors of Payment, as the same may from time to time be amended, restated or otherwise modified.
15
“Hedge Agreement” shall mean any (a) hedge agreement, interest rate swap, basis swap agreement, cap, collar or floor agreement, or other interest rate management device (including forward rate agreements) entered into by a Company with any Person in connection with any Indebtedness of such Company, or (b) currency swap agreement, forward currency purchase agreement or similar arrangement or agreement designed to protect against fluctuations in currency exchange rates entered into by a Company with any Person.
“Indebtedness” shall mean, for any Company (excluding in all cases trade payables payable in the ordinary course of business by such Company and accrued expenses), without duplication, (a) all obligations to repay borrowed money, direct or indirect, incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase price of capital assets, (c) all obligations under conditional sales or other title retention agreements, (d) all obligations (contingent or otherwise) under any letter of credit or banker’s acceptance, (e) all net obligations under any currency swap agreement, interest rate swap, cap, collar or floor agreement or other interest rate management device or any Hedge Agreement, (f) all synthetic leases, (g) all lease obligations that have been or should be capitalized on the books of such Company in accordance with GAAP, (h) all obligations of such Company with respect to asset securitization financing programs, (i) all obligations to advance funds to, or to purchase assets, property or services from, any other Person in order to maintain the financial condition of such Person, (j) all indebtedness secured by a Lien on the property of a Company, whether or not such indebtedness shall have been assumed by such Company, provided that if such Company has not assumed or otherwise become liable for such indebtedness, such indebtedness shall be measured at the fair market value of such property securing such indebtedness at the time of determination, (k) all indebtedness of any partnership of which any Company is a general partner, (l) any other transaction (including forward sale or purchase agreements) having the commercial effect of a borrowing of money entered into by such Company to finance its operations or capital requirements, and (m) any guaranty of any obligation described in subparts (a) through (l) hereof.
“Intellectual Property Collateral Assignment Agreement” shall mean an Intellectual Property Collateral Assignment Agreement executed and delivered on or after the Closing Date by Borrower or a Guarantor of Payment, wherein Borrower or such Guarantor of Payment, as the case may be, has granted to Agent, for the benefit of the Lenders, a security interest in and a collateral assignment of all intellectual property owned by Borrower or such Guarantor of Payment, as the same may from time to time be amended, restated or otherwise modified.
“Interest Adjustment Date” shall mean the last day of each Interest Period.
“Interest Period” shall mean, with respect to a Eurodollar Loan, the period commencing on the date such Eurodollar Loan is made and ending on the last day of such period, as selected by Borrower pursuant to the provisions hereof, and, thereafter (unless such Eurodollar Loan is converted to a Base Rate Loan), each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of such period, as selected by Borrower pursuant to the provisions hereof. The duration of each Interest Period for a Eurodollar Loan shall be one month, two months, three months or six months, in each case as Borrower may select upon notice, as set forth in Section 2.6 hereof; provided that if Borrower
16
shall fail to so select the duration of any Interest Period for a Eurodollar Loan at least three Business Days prior to the Interest Adjustment Date applicable to such Eurodollar Loan, Borrower shall be deemed to have converted such Eurodollar Loan to a Base Rate Loan at the end of the then current Interest Period.
“Inventory” shall mean all inventory, as defined in the U.C.C.
“Investment Property” shall mean all investment property, as defined in the U.C.C., unless the Uniform Commercial Code as in effect in another jurisdiction would govern the perfection and/or priority of a security interest in investment property, and, in such case, “investment property” shall be defined in accordance with the law of that jurisdiction as in effect from time to time.
“Lender Credit Exposure” shall mean, for any Lender, at any time, the aggregate of such Lender’s respective pro rata shares of the Revolving Credit Exposure and the Term Loan Exposure.
“Letter of Credit” shall mean a standby letter of credit that shall be issued by the Fronting Lender for the account of Borrower or a Guarantor of Payment, including amendments thereto, if any, and shall have an expiration date no later than the earlier of (a) one year after its date of issuance, or (b) fifteen (15) days prior to the last day of the Commitment Period.
“Letter of Credit Commitment” shall mean the commitment of the Fronting Lender, on behalf of the Revolving Lenders, to issue Letters of Credit in an aggregate face amount of up to Ten Million Dollars ($10,000,000).
“Letter of Credit Exposure” shall mean, at any time, the sum of (a) the aggregate undrawn amount of all issued and outstanding Letters of Credit, and (b) the aggregate of the draws made on Letters of Credit that have not been reimbursed by Borrower or converted to a Revolving Loan pursuant to Section 2.2(b)(iv) hereof.
“Leverage Ratio” shall mean, as determined on a Consolidated basis and in accordance with GAAP, the ratio of (a) Consolidated Funded Indebtedness (for the most recently completed fiscal quarter of Borrower) to (b) Consolidated EBITDA (for the most recently completed four fiscal quarters of Borrower).
“Lien” shall mean any mortgage, deed of trust, security interest, lien (statutory or other), charge, assignment, hypothecation, encumbrance on, pledge or deposit of, or conditional sale, leasing (other than operating leases), sale with a right of redemption or other title retention agreement and any capitalized lease with respect to any property (real or personal) or asset.
“Liquidity” shall mean, at any date, an amount equal to the sum of (a) cash, (b) Cash Equivalents having maturities of not more than one year from the date of acquisition; and (c) the Revolving Credit Availability.
17
“Loan” shall mean a Revolving Loan, a Swing Loan or the Term Loan granted to Borrower by the Lenders in accordance with Section 2.2 or 2.3 hereof.
“Loan Documents” shall mean, collectively, this Agreement, each Note, each Guaranty of Payment, all documentation relating to each Letter of Credit, each Security Document and the Agent Fee Letter, as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced, and any other document delivered pursuant thereto.
“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of Borrower, (b) the business, operations, property, condition (financial or otherwise) or prospects of the Companies taken as a whole, (c) the ability of Borrower or the Companies to perform its or their obligations under this Agreement or any of the other Loan Documents, or (d) the validity or enforceability of the Loan Documents or the rights and remedies of Agent or the Lenders hereunder or thereunder.
“Material Indebtedness Agreement” shall mean any debt instrument, lease (capital, operating or otherwise), guaranty, contract, commitment, agreement or other arrangement evidencing or entered into in connection with any Indebtedness of any Company or the Companies in excess of the amount of Three Million Dollars ($3,000,000).
“Maximum Amount” shall mean, for each Lender, the amount set forth opposite such Lender’s name under the column headed “Maximum Amount” as set forth on Schedule 1 hereto, subject to decreases determined pursuant to Section 2.10(a) hereof, increases pursuant to Section 2.10(b) hereof and assignments of interests pursuant to Section 11.10 hereof; provided, however, that the Maximum Amount for the Swing Line Lender shall exclude the Swing Line Commitment (other than its pro rata share), and the Maximum Amount of the Fronting Lender shall exclude the Letter of Credit Commitment (other than its pro rata share).
“Maximum Commitment Amount” shall mean Two Hundred Million Dollars ($200,000,000).
“Maximum Rate” shall mean that term as defined in Section 2.4(e) hereof.
“Maximum Revolving Amount” shall mean One Hundred Seventy-Five Million Dollars ($175,000,000).
“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor to such company.
“Mortgage” shall mean each Open-End Mortgage, Assignment of Leases and Rents and Security Agreement (or comparable document), relating to the Real Property, executed and delivered by a Credit Party, on or as of the closing date of the Original Credit Agreement or on or as of the Closing Date, to further secure the obligations under the Loan Documents, as the same may from time to time be amended, restated or otherwise modified.
18
“Mortgage Amendment” shall mean each Open-End Mortgage Modification Agreement, relating to each Mortgage delivered prior to the Closing Date, executed and delivered by a Company as of the Closing Date.
“Multiemployer Plan” shall mean a Pension Plan that is subject to the requirements of Subtitle E of Title IV of ERISA.
“Non-Credit Party” shall mean a Company that is not a Credit Party.
“Non-Credit Party Exposure” shall mean the aggregate amount, after the Closing Date, of loans by a Credit Party to, investments by a Credit Party in, guaranties by a Credit Party of Indebtedness of, and Letters of Credit issued to or for the benefit of, a Foreign Subsidiary that is a Non-Credit Party.
“Note” shall mean a Revolving Credit Note, the Swing Line Note or a Term Note, or any other promissory note delivered pursuant to this Agreement.
“Note Agreement” shall mean the Security Purchase Agreement, dated as of June 10, 2004, by and among Borrower and the Buyers, as defined therein, as the same may from time to time be amended, restated or otherwise modified with the prior written consent of the Required Lenders.
“Notice of Loan” shall mean a Notice of Loan in the form of the attached Exhibit D .
“Obligations” shall mean, collectively, (a) all Indebtedness and other obligations incurred by Borrower to Agent, the Fronting Lender, the Swing Line Lender, or any Lender pursuant to this Agreement and the other Loan Documents, and includes the principal of and interest on all Loans and all obligations pursuant to Letters of Credit, (b) each extension, renewal or refinancing of the foregoing, in whole or in part, (c) the commitment and other fees and any prepayment fees payable hereunder, (d) all fees and charges in connection with Letters of Credit, and (e) all Related Expenses.
“Original Credit Agreement” shall mean that term as defined in the second Whereas clause on the first page of this Agreement.
“Organizational Documents” shall mean, with respect to any Person (other than an individual), such Person’s Articles (Certificate) of Incorporation, operating agreement or equivalent formation documents, and Regulations (Bylaws), or equivalent governing documents, and any amendments to any of the foregoing.
“Other Taxes” shall mean any and all present or future stamp or documentary taxes or any other excise, ad valorem or property taxes, goods and services taxes, harmonized sales taxes and other sales taxes, use taxes, value added taxes, charges or similar taxes or levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
19
“Overall Commitment Percentage” shall mean a Lender’s percentage of the Total Commitment Amount based upon such Lender’s Maximum Amount of the Total Commitment Amount.
“Participant” shall mean that term as defined in Section 11.11 hereof.
“Patriot Act” shall mean Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001, as amended from time to time.
“PBGC” shall mean the Pension Benefit Guaranty Corporation, or its successor.
“Pension Plan” shall mean an ERISA Plan that is a “pension plan” (within the meaning of ERISA Section 3(2)).
“Permitted Foreign Subsidiary Loans and Investments” shall mean:
(a) the investments by Borrower or a Domestic Subsidiary in a Foreign Subsidiary, existing as of the Closing Date and set forth on Schedule 5.11 hereto;
(b) the loans by Borrower or a Domestic Subsidiary to a Foreign Subsidiary, in such amounts existing as of the Closing Date and set forth on Schedule 5.11 hereto;
(c) any investment by a Foreign Subsidiary in, or loan from a Foreign Subsidiary to, or guaranty from a Foreign Subsidiary of Indebtedness of, a Company; and
(d) any Non-Credit Party Exposure, not otherwise permitted under this definition, up to the aggregate amount for all Foreign Subsidiaries, when combined with all Permitted Investments, not to exceed Five Million Dollars ($5,000,000) at any time outstanding.
“Permitted Investment” shall mean an investment of a Company in the stock (or other debt or equity instruments) of a Person (other than a Company), so long as the aggregate amount of all such investments of all Companies does not exceed, at any time, an aggregate amount of One Million Dollars ($1,000,000).
“Person” shall mean any individual, sole proprietorship, partnership, joint venture, unincorporated organization, corporation, limited liability company, unlimited liability company, institution, trust, estate, government or other agency or political subdivision thereof or any other entity.
“Pledge Agreement” shall mean each Pledge Agreement and each Amended and Restated Pledge Agreement, relating to the Pledged Securities, executed and delivered by Borrower and each Domestic Subsidiary, as applicable, in favor of Agent, for the benefit of the Lenders, dated as of the Closing Date, and any other Pledge Agreement executed by any other Domestic
20
Subsidiary on or after the Closing Date, as any of the foregoing may from time to time be amended, restated or otherwise modified.
“Pledged Securities” shall mean all of the shares of capital stock or other equity interest of a Subsidiary of Borrower, whether now owned or hereafter acquired or created, and all proceeds thereof; provided, however, that Pledged Securities shall only include up to sixty-five percent (65%) of the shares of capital stock or other equity interest of any first-tier Foreign Subsidiary ( Schedule 3 hereto lists, as of the Closing Date, all of the Pledged Securities).
“Prime Rate” shall mean the interest rate established from time to time by Agent as Agent’s prime rate, whether or not such rate shall be publicly announced; the Prime Rate may not be the lowest interest rate charged by Agent for commercial or other extensions of credit. Each change in the Prime Rate shall be effective immediately from and after such change.
“Proceeds” shall mean (a) proceeds as defined in the U.C.C., and any other proceeds, and (b) whatever is received upon the sale, exchange, collection or other disposition of Collateral or proceeds, whether cash or non-cash. Cash proceeds includes, without limitation, moneys, checks and Deposit Accounts. Proceeds includes, without limitation, any Account arising when the right to payment is earned under a contract right, any insurance payable by reason of loss or damage to the Collateral, and any return or unearned premium upon any cancellation of insurance. Except as expressly authorized in this Agreement, the right of Agent and the Lenders to Proceeds specifically set forth herein or indicated in any financing statement shall never constitute an express or implied authorization on the part of Agent or any Lender to a Company’s sale, exchange, collection or other disposition of any or all of the Collateral.
“Project Dundee Acquisition” shall mean the Acquisition of nMatrix Inc. and nMatrix Australia Pty, Ltd.
“Real Property” shall mean each parcel of the real estate owned by a Credit Party as set forth on Schedule 4 hereto, together with all improvements and buildings thereon and all appurtenances, easements or other rights thereto belonging, and being defined collectively as the “Property” in each of the Mortgages.
“Register” shall mean that term as described in Section 11.10(i) hereof.
“Regularly Scheduled Payment Date” shall mean the last day of each March, June, September and December of each year.
“Related Expenses” shall mean any and all reasonable out-of-pocket costs, liabilities and expenses (including, without limitation, losses, damages, penalties, claims, actions, attorneys’ fees, legal expenses, judgments, suits and disbursements) (a) incurred by Agent, or imposed upon or asserted against Agent or any Lender in any attempt by Agent and the Lenders to (i) obtain, preserve, perfect or enforce any Loan Document or any security interest evidenced by any Loan Document; (ii) obtain payment, performance or observance of any and all of the Obligations; or (iii) maintain, insure, audit, collect, preserve, repossess or dispose of any of the collateral securing the Obligations or any part thereof, including, without limitation, costs and
21
expenses for appraisals, assessments and audits of any Company or any such collateral; or (b) incidental or related to (a) above, including, without limitation, interest thereupon from the date incurred, imposed or asserted until paid at the Default Rate.
“Related Writing” shall mean each Loan Document and any other assignment, mortgage, security agreement, guaranty agreement, subordination agreement, financial statement, audit report or other writing furnished by any Credit Party, or any of its officers, to Agent or the Lenders pursuant to or otherwise in connection with this Agreement.
“Reportable Event” shall mean a reportable event as that term is defined in Title IV of ERISA, except actions of general applicability by the Secretary of Labor under Section 110 of such Act.
“Request for Extension” shall mean a notice, substantially in the form of the attached Exhibit G .
“Required Lenders” shall mean the holders of at least fifty-one percent (51%) of the sum of (a) the principal outstanding under the Term Notes, and (b) (i) during the Commitment Period, the Revolving Amount, or (ii) after the Commitment Period, the aggregate amount of the Revolving Credit Exposure (other than the Swing Line Exposure) and the Letter of Credit Exposure and the Swing Line Exposure; provided, however, that, if there shall be two or more Lenders, Required Lenders shall constitute at least two Lenders.
“Requirement of Law” shall mean, as to any Person, any law, treaty, rule or regulation or determination or policy statement or interpretation of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property.
“Reserve Percentage” shall mean for any day that percentage (expressed as a decimal) that is in effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, all basic, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) for a member bank of the Federal Reserve System in Cleveland, Ohio, in respect of Eurocurrency Liabilities. The Eurodollar Rate shall be adjusted automatically on and as of the effective date of any change in the Reserve Percentage.
“Restricted Payment” shall mean, with respect to any Company, (a) any amount paid in redemption (including any mandatory redemption or optional redemption), retirement, repurchase, direct or indirect, of the Convertible Subordinated Notes or any other Subordinated Indebtedness; or (b) the exercise by such Company of any right of defeasance or covenant defeasance or similar right with respect to the Convertible Subordinated Notes or any other Subordinated Indebtedness.
22
“Revolving Amount” shall mean the Closing Revolving Amount, as such amount may be increased up to the Maximum Revolving Amount pursuant to Section 2.10(b) hereof, or decreased pursuant to Section 2.10(a) hereof.
“Revolving Credit Availability” shall mean, at any time, the amount equal to the Revolving Credit Commitment minus the Revolving Credit Exposure.
“Revolving Credit Commitment” shall mean the obligation hereunder, during the Commitment Period, of (a) each Revolving Lender to make Revolving Loans, (b) the Fronting Lender to issue and each Revolving Lender to participate in, Letters of Credit pursuant to the Letter of Credit Commitment, and (c) the Swing Line Lender to make, and each Revolving Lender to participate in, Swing Loans pursuant to the Swing Line Commitment; up to an aggregate principal amount outstanding at any time equal to the Revolving Amount.
“Revolving Credit Exposure” shall mean, at any time, the sum of (a) the aggregate principal amount of all Revolving Loans outstanding, (b) the Swing Line Exposure, and (c) the Letter of Credit Exposure.
“Revolving Credit Note” shall mean a Revolving Credit Note executed and delivered pursuant to Section 2.5(a) hereof.
“Revolving Lender” shall mean a Lender with a percentage of the Revolving Credit Commitment as set forth on Schedule 1 hereto.
“Revolving Loan” shall mean a Loan granted to Borrower by the Revolving Lenders in accordance with Section 2.2(a) hereof.
“SEC” shall mean the United States Securities and Exchange Commission, or any governmental body or agency succeeding to any of its principal functions.
“Secured Obligations” shall mean, collectively, (a) the Obligations, and (b) all obligations and liabilities of the Companies owing to Lenders under Hedge Agreements.
“Security Agreement” shall mean each Security Agreement, executed and delivered by a Guarantor of Payment in favor of Agent, for the benefit of the Lenders, dated as of the Closing Date, and any other Security Agreement executed on or after the Closing Date, as the same may from time to time be amended, restated or otherwise modified.
“Security Documents” shall mean each Security Agreement, each Pledge Agreement, each Intellectual Property Collateral Assignment Agreement, each Mortgage, each Mortgage Amendment, each Control Agreement, each Confirmation of Security Documents, each U.C.C. Financing Statement or similar filing as to a jurisdiction located outside of the United States of America filed in connection herewith or perfecting any interest created in any of the foregoing documents, and any other document pursuant to which any Lien is granted by a Company to Agent, for the benefit of the Lenders, as security for the Secured Obligations, or any part thereof,
23
as any of the foregoing may from time to time be amended, restated or otherwise modified or replaced.
“Senior Leverage Ratio” shall mean, at any time, as determined on a Consolidated basis and in accordance with GAAP, the ratio of (a) Consolidated Senior Funded Indebtedness (for the most recently completed fiscal quarter of Borrower) to (b) Consolidated EBITDA (for the most recently completed four fiscal quarters of Borrower).
“Specific Commitment” shall mean the Revolving Credit Commitment or the Term Loan Commitment.
“Standard & Poor’s” shall mean Standard & Poor’s Ratings Group, a division of McGraw-Hill, Inc., or any successor to such company.
“Subordinated” shall mean, as applied to Indebtedness, Indebtedness that shall have been subordinated (by written terms or written agreement being, in either case, in form and substance reasonably satisfactory to Agent and the Required Lenders) in favor of the prior payment in full of the Obligations (other than contingent indemnity obligations).
“Subsidiary” of a Company shall mean (a) a corporation more than fifty percent (50%) of the Voting Power of which is owned, directly or indirectly, by such Company or by one or more other subsidiaries of such Company or by such Company and one or more subsidiaries of such Company, (b) a partnership, limited liability company or unlimited liability company of which such Company, one or more other subsidiaries of such Company or such Company and one or more subsidiaries of such Company, directly or indirectly, is a general partner or managing member, as the case may be, or otherwise has an ownership interest greater than fifty percent (50%) of all of the ownership interests in such partnership, limited liability company or unlimited liability company, or (c) any other Person (other than a corporation, partnership, limited liability company or unlimited liability company) in which such Company, one or more other subsidiaries of such Company or such Company and one or more subsidiaries of such Company, directly or indirectly, has at least a majority interest in the Voting Power or the power to elect or direct the election of a majority of directors or other governing body of such Person.
“Swing Line Commitment” shall mean the commitment of the Swing Line Lender to make Swing Loans to Borrower up to the aggregate amount at any time outstanding of Five Million Dollars ($5,000,000).
“Swing Line Exposure” shall mean, at any time, the aggregate principal amount of all Swing Loans outstanding.
“Swing Line Lender” shall mean KeyBank National Association, as holder of the Swing Line Commitment.
“Swing Line Note” shall mean the Swing Line Note executed and delivered pursuant to Section 2.5(b) hereof.
24
“Swing Loan” shall mean a loan that shall be denominated in Dollars granted to Borrower by the Swing Line Lender under the Swing Line Commitment, in accordance with Section 2.2(c) hereof.
“Swing Loan Maturity Date” shall mean, with respect to any Swing Loan, the earlier of (a) thirty (30) days after the date such Swing Loan is made, or (b) the last day of the Commitment Period.
“Taxes” shall mean any and all present or future taxes of any kind, including but not limited to, levies, imposts, duties, surtaxes, charges, fees, deductions or withholdings now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority (together with any interest, penalties, fines, additions to taxes or similar liabilities with respect thereto) other than Excluded Taxes.
“Term Lender” shall mean a Lender with a percentage of the Term Loan Commitment as set forth on Schedule 1 hereto.
“Term Loan” shall mean the Loan granted to Borrower by the Term Lenders in accordance with Section 2.3 hereof.
“Term Loan Commitment” shall mean the obligation hereunder of the Term Lenders to make a Term Loan in the original principal amount of Twenty-Five Million Dollars ($25,000,000), with each Term Lender’s obligation to participate therein being in the amount set forth opposite such Term Lender’s name under the column headed “Term Loan Commitment Amount” as set forth on Schedule 1 hereto.
“Term Loan Exposure” shall mean, at any time, the outstanding principal amount of the Term Loan.
“Term Note” shall mean a Term Note executed and delivered pursuant to Section 2.5(c) hereof.
“Total Commitment Amount” shall mean the Closing Commitment Amount, as such amount may be increased up to the Maximum Commitment Amount pursuant to Section 2.10(b) hereof, or decreased pursuant to Section 2.10(a) hereof.
“U.C.C.” shall mean the Uniform Commercial Code, as in effect from time to time in Ohio.
“U.C.C. Financing Statement” shall mean a financing statement filed or to be filed in accordance with the Uniform Commercial Code, as in effect from time to time, in the relevant state or states.
“Unexercised Availability” shall mean the aggregate amount of all written commitments received by Borrower from financial institutions to provide Additional Commitments pursuant to Section 2.10(b) hereof, but only so long as (a) such commitments have not yet been accepted by
25
Borrower, (b) such commitments are in form and substance reasonably satisfactory to Agent, and (c) the aggregate amount of all such commitments does not exceed the increase amount available to Borrower pursuant to Section 2.10(b) hereof.
“Voting Power” shall mean, with respect to any Person, the exclusive ability to control, through the ownership of shares of capital stock, partnership interests, membership interests or otherwise, the election of members of the board of directors or other similar governing body of such Person. The holding of a designated percentage of Voting Power of a Person means the ownership of shares of capital stock, partnership interests, membership interests or other interests of such Person sufficient to control exclusively the election of that percentage of the members of the board of directors or similar governing body of such Person.
“Welfare Plan” shall mean an ERISA Plan that is a “welfare plan” within the meaning of ERISA Section 3(l).
Section 1.2. Accounting Terms . Any accounting term not specifically defined in this Article I shall have the meaning ascribed thereto by GAAP. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then Borrower, Agent and the Required Lenders agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating Borrower’s financial condition shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by Borrower, Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated and construed as if such Accounting Changes had not occurred. “Accounting Changes” refers to changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the SEC (or successors thereto or agencies with similar functions).
Section 1.3. Terms Generally . The foregoing definitions shall be applicable to the singular and plurals of the foregoing defined terms. Unless otherwise defined in this Article I, terms that are defined in the U.C.C. are used herein as so defined.
ARTICLE II. AMOUNT AND TERMS OF CREDIT
Section 2.1. Amount and Nature of Credit .
(a) Subject to the terms and conditions of this Agreement, the Lenders, during the Commitment Period and to the extent hereinafter provided, shall make Loans to Borrower, participate in Swing Loans made by the Swing Line Lender to Borrower, and issue or participate in Letters of Credit at the request of Borrower, in such aggregate amount as Borrower shall request pursuant to the Commitment; provided, however, that in no event shall the aggregate
26
principal amount of all Loans and Letters of Credit outstanding under this Agreement be in excess of the Total Commitment Amount.
(b) Each Lender, for itself and not one for any other, agrees to make Loans, participate in Swing Loans, and issue or participate in Letters of Credit, during the Commitment Period, on such basis that, immediately after the completion of any borrowing by Borrower or the issuance of a Letter of Credit:
(i) the aggregate outstanding principal amount of Loans made by such Lender (other than Swing Loans made by the Swing Line Lender), when combined with such Lender’s pro rata share, if any, of the Letter of Credit Exposure and the Swing Line Exposure, shall not be in excess of the Maximum Amount for such Lender; and
(ii) with respect to each Specific Commitment, the aggregate outstanding principal amount of Loans (other than Swing Loans) made by such Lender with respect to such Specific Commitment shall represent that percentage of the aggregate principal amount then outstanding on all Loans (other than Swing Loans) within such Specific Commitment that shall be such Lender’s Applicable Commitment Percentage.
Within each Specific Commitment, each borrowing (other than Swing Loans which shall be risk participated on a pro rata basis) from the Lenders shall be made pro rata according to the respective Applicable Commitment Percentages of the Lenders.
(c) The Loans may be made as Revolving Loans as described in Section 2.2(a) hereof as a Term Loan as described in Section 2.3 hereof, and as Swing Loans as described in Section 2.2(c) hereof, and Letters of Credit may be issued in accordance with Section 2.2(b) hereof.
Section 2.2. Revolving Credit .
(a) Revolving Loans . Subject to the terms and conditions of this Agreement, during the Commitment Period, the Revolving Lenders shall make a Revolving Loan or Revolving Loans to Borrower in such amount or amounts as Borrower may from time to time request, but not exceeding in aggregate principal amount at any time outstanding hereunder the Revolving Credit Commitment, when such Revolving Loans are combined with the Letter of Credit Exposure and the Swing Line Exposure. Borrower shall have the option, subject to the terms and conditions set forth herein, to borrow Revolving Loans, maturing on the last day of the Commitment Period, by means of any combination of Base Rate Loans or Eurodollar Loans. Subject to the provisions of this Agreement, Borrower shall be entitled under this Section 2.2(a) to borrow funds, repay the same in whole or in part and re-borrow hereunder at any time and from time to time during the Commitment Period.
(b) Letters of Credit .
(i) Generally . Subject to the terms and conditions of this Agreement, during the Commitment Period, the Fronting Lender shall, in its own name, on behalf of the Revolving Lenders, issue such Letters of Credit for the account of a Credit Party, as
27
Borrower may from time to time request. Borrower shall not request any Letter of Credit (and the Fronting Lender shall not be obligated to issue any Letter of Credit) if, after giving effect thereto, (A) the Letter of Credit Exposure would exceed the Letter of Credit Commitment or (B) the Revolving Credit Exposure would exceed the Revolving Credit Commitment. The issuance of each Letter of Credit shall confer upon each Revolving Lender the benefits and liabilities of a participation consisting of an undivided pro rata interest in the Letter of Credit to the extent of such Revolving Lender’s Applicable Commitment Percentage.
(ii) Request for Letter of Credit . Each request for a Letter of Credit shall be delivered to Agent (and to the Fronting Lender, if the Fronting Lender is a Lender other than Agent) by an Authorized Officer not later than 11:00 A.M. (Eastern time) three Business Days prior to the day upon which the Letter of Credit is to be issued. Each such request shall be in a form reasonably acceptable to Agent (and to the Fronting Lender, if the Fronting Lender is a Lender other than Agent) and shall specify the face amount thereof, the account party, the beneficiary, the intended date of issuance, the expiry date thereof, and the nature of the transaction to be supported thereby. Concurrently with each such request, Borrower, and any Credit Party for whose account the Letter of Credit is to be issued, shall execute and deliver to the Fronting Lender an appropriate application and agreement, being in the standard form of the Fronting Lender for such letters of credit, as amended to conform to the provisions of this Agreement if required by Agent. Agent shall give the Fronting Lender and each Revolving Lender notice of each such request for a Letter of Credit.
(iii) Letter of Credit Fees . With respect to each Letter of Credit and the drafts thereunder, whether issued for the account of Borrower or any other Credit Party, Borrower agrees to (A) pay to Agent, for the pro rata benefit of the Revolving Lenders, a non-refundable commission based upon the face amount of such Letter of Credit, which shall be paid quarterly in arrears, on each Regularly Scheduled Payment Date, at the rate per annum of the Applicable Margin for Eurodollar Loans (in effect on the date such payment is to be made) multiplied by the face amount of such Letter of Credit; (B) pay to Agent for the sole benefit of the Fronting Lender, an additional Letter of Credit fee, which shall be paid on each date that such Letter of Credit shall be issued, amended or renewed, at the rate of one-eighth percent (1/8%) of the face amount of such Letter of Credit; and (C) pay to Agent, for the sole benefit of the Fronting Lender, such other issuance, amendment, negotiation, draw, acceptance, telex, courier, postage and similar transactional fees as are generally charged by the Fronting Lender under its fee schedule as in effect from time to time.
(iv)
Refunding of Letters of Credit with Revolving Loans .
Whenever a Letter of Credit shall be drawn, Borrower shall promptly
reimburse the Fronting Lender for the amount drawn. In the
event that the amount drawn shall not have been reimbursed by
Borrower on the date of the drawing of such Letter of Credit, at
the sole option of Agent (and the Fronting Lender, if the Fronting
Lender is a Lender other than Agent), Borrower shall be deemed to
have requested a Revolving Loan, subject to the provisions of
Sections 2.2(a) and 2.6 hereof (other than the requirement set
forth in
28
hereof), in the amount drawn. Such Revolving Loan shall be evidenced by the Revolving Credit Notes (or, if a Revolving Lender has not requested a Revolving Credit Note, by the records of Agent and such Revolving Lender). Each Revolving Lender agrees to make a Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever. Each Revolving Lender acknowledges and agrees that its obligation to make a Revolving Loan pursuant to Section 2.2(a) hereof when required by this Section 2.2(b)(iv) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to Agent, for the account of the Fronting Lender, of the proceeds of such Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated. Borrower irrevocably authorizes and instructs Agent to apply the proceeds of any borrowing pursuant to this Section 2.2(b)(iv) to reimburse, in full (other than the Fronting Lender’s pro rata share of such borrowing), the Fronting Lender for the amount drawn on such Letter of Credit. Each such Revolving Loan shall be deemed to be a Base Rate Loan unless otherwise requested by and available to Borrower hereunder. Each Revolving Lender is hereby authorized to record on its records relating to its Revolving Credit Note (or, if such Revolving Lender has not requested a Revolving Credit Note, its records relating to Revolving Loans) such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the Letters of Credit.
(v) Participation in Letters of Credit . If, for any reason, Agent (and the Fronting Lender if the Fronting Lender is a Lender other than Agent) shall be unable to or, in the opinion of Agent, it shall be impracticable to, convert any Letter of Credit to a Revolving Loan pursuant to the preceding subsection, Agent (and the Fronting Lender if the Fronting Lender is a Lender other than Agent) shall have the right to request that each Revolving Lender purchase a participation in the amount due with respect to such Letter of Credit, and Agent shall promptly notify each Revolving Lender thereof (by facsimile or telephone, confirmed in writing). Upon such notice, but without further action, the Fronting Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Fronting Lender, an undivided participation interest in the amount due with respect to such Letter of Credit in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount due with respect to such Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to Agent, for the account of the Fronting Lender, such Revolving Lender’s ratable share of the amount due with respect to such Letter of Credit (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage). Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in the amount due under any Letter of Credit that is drawn but not reimbursed by Borrower pursuant to this subsection (v) shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving
29
Credit Commitment shall have been reduced or terminated. Each Revolving Lender shall comply with its obligation under this subsection (v) by wire transfer of immediately available funds, in the same manner as provided in Section 2.6 hereof with respect to Revolving Loans. Each Revolving Lender is hereby authorized to record on its records such Revolving Lender’s pro rata share of the amounts paid and not reimbursed on the Letters of Credit.
(c) Swing Loans .
(i) Generally . Subject to the terms and conditions of this Agreement, during the Commitment Period, the Swing Line Lender shall make a Swing Loan or Swing Loans to Borrower in such amount or amounts as Borrower, through an Authorized Officer, may from time to time request; provided that Borrower shall not request any Swing Loan if, after giving effect thereto, (A) the Revolving Credit Exposure would exceed the Revolving Credit Commitment, or (B) the Swing Line Exposure would exceed the Swing Line Commitment. Each Swing Loan shall be due and payable on the Swing Loan Maturity Date applicable thereto.
(ii) Refunding of Swing Loans . If the Swing Line Lender so elects, by giving notice to Borrower and the Revolving Lenders, Borrower agrees that the Swing Line Lender shall have the right, in its sole discretion, to require that any Swing Loan be refinanced as a Revolving Loan. Such Revolving Loan shall be a Base Rate Loan unless otherwise requested by and available to Borrower hereunder. Upon receipt of such notice by Borrower and the Revolving Lenders, Borrower shall be deemed, on such day, to have requested a Revolving Loan in the principal amount of the Swing Loan in accordance with Sections 2.2(a) and 2.6 hereof (other than the requirement set forth in Section 2.6(d) hereof). Such Revolving Loan shall be evidenced by the Revolving Credit Notes (or, if a Revolving Lender has not requested a Revolving Credit Note, by the records of Agent and such Revolving Lender). Each Revolving Lender agrees to make a Revolving Loan on the date of such notice, subject to no conditions precedent whatsoever. Each Revolving Lender acknowledges and agrees that such Revolving Lender’s obligation to make a Revolving Loan pursuant to Section 2.2(a) when required by this Section 2.2(c)(ii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or Event of Default, and that its payment to Agent, for the account of the Swing Line Lender, of the proceeds of such Revolving Loan shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated. Borrower irrevocably authorizes and instructs Agent to apply the proceeds of any borrowing pursuant to this Section 2.2(c)(ii) to repay in full such Swing Loan. Each Revolving Lender is hereby authorized to record on its records relating to its Revolving Credit Note (or, if such Revolving Lender has not requested a Revolving Credit Note, its records relating to Revolving Loans) such Revolving Lender’s pro rata share of the amounts paid to refund such Swing Loan.
30
(iii) Participation in Swing Loans . If, for any reason, Agent is unable to or, in the opinion of Agent, it is impracticable to, convert any Swing Loan to a Revolving Loan pursuant to the preceding Section 2.2(c)(ii), then on any day that a Swing Loan is outstanding (whether before or after the maturity thereof), Agent shall have the right to request that each Revolving Lender purchase a participation in such Swing Loan, and Agent shall promptly notify each Revolving Lender thereof (by facsimile or telephone, confirmed in writing). Upon such notice, but without further action, the Swing Line Lender hereby agrees to grant to each Revolving Lender, and each Revolving Lender hereby agrees to acquire from the Swing Line Lender, an undivided participation interest in such Swing Loan in an amount equal to such Revolving Lender’s Applicable Commitment Percentage of the principal amount of such Swing Loan. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to Agent, for the benefit of the Swing Line Lender, such Revolving Lender’s ratable share of such Swing Loan (determined in accordance with such Revolving Lender’s Applicable Commitment Percentage). Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swing Loans pursuant to this Section 2.2(c)(iii) is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the occurrence and continuance of a Default or an Event of Default, and that each such payment shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever and whether or not the Revolving Credit Commitment shall have been reduced or terminated. Each Revolving Lender shall comply with its obligation under this Section 2.2(c)(iii) by wire transfer of immediately available funds, in the same manner as provided in Section 2.6 hereof with respect to Revolving Loans to be made by such Revolving Lender.
Subject to the terms and conditions of this Agreement, the Term Lenders shall make the Term Loan to Borrower on the Closing Date, in the amount of the Term Loan Commitment. The Term Loan shall be payable in full on August 15, 2006. Borrower shall notify Agent, in accordance with the notice provisions of Section 2.6 hereof, whether the Term Loan will be a Base Rate Loan or Eurodollar Loans. The Term Loan may be a mixture of a Base Rate Loan and Eurodollar Loans.
(a) Revolving Loans .
(i) Base Rate Loan . Borrower shall pay interest on the unpaid principal amount of a Base Rate Loan outstanding from time to time from the date thereof until paid at the Derived Base Rate from time to time in effect. Interest on such Base Rate Loan shall be payable, commencing December 31, 2005 and on each Regularly Scheduled Payment Date thereafter and at the maturity thereof.
31
(ii) Eurodollar Loans . Borrower shall pay interest on the unpaid principal amount of each Eurodollar Loan outstanding from time to time, fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to changes in the Applicable Margin for Eurodollar Loans), at the Derived Eurodollar Rate. Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that if an Interest Period shall exceed three months, the interest must be paid every three months, commencing three months from the beginning of such Interest Period).
(b) Swing Loans . Borrower shall pay interest to Agent, for the sole benefit of the Swing Line Lender (and any Revolving Lender that shall have purchased a participation in such Swing Loan), on the unpaid principal amount of each Swing Loan outstanding from time to time from the date thereof until paid at the Derived Base Rate from time to time in effect. Interest on each Swing Loan shall be payable on the Swing Loan Maturity Date applicable thereto. Each Swing Loan shall bear interest for a minimum of one day.
(c) Term Loan .
(i) Base Rate Loan . With respect to any portion of the Term Loan that shall be a Base Rate Loan, Borrower shall pay interest on the unpaid principal amount thereof outstanding from time to time from the date thereof until paid, commencing December 31, 2005, and continuing on each Regularly Scheduled Payment Date thereafter and at the maturity thereof, at the Derived Base Rate from time to time in effect.
(ii) Eurodollar Loans . With respect to any portion of the Term Loan that shall be a Eurodollar Loan, Borrower shall pay interest on the unpaid principal amount of such Eurodollar Loan outstanding from time to time, fixed in advance on the first day of the Interest Period applicable thereto through the last day of the Interest Period applicable thereto (but subject to changes in the Applicable Margin for Eurodollar Loans and subject to the additional increase pursuant to subpart (B) below), at (A) for the period from the Closing Date through June 30, 2006, the Derived Eurodollar Rate, and (B) on July 1, 2006 and thereafter, the Derived Eurodollar Rate plus two hundred (200) basis points. Interest on such Eurodollar Loan shall be payable on each Interest Adjustment Date with respect to an Interest Period (provided that if an Interest Period shall exceed three months, the interest must be paid every three months, commencing three months from the beginning of such Interest Period).
(d) Default Rate . Anything herein to the contrary notwithstanding, if an Event of Default pursuant to Section 8.1 or 8.11 hereof shall occur and be continuing, upon the election of the Required Lenders with respect to an Event of Default pursuant to Section 8.1 hereof and automatically with respect to an Event of Default pursuant to Section 8.11 hereof, (i) the principal of each Loan and the unpaid interest thereon shall bear interest, until paid, at the Default Rate, (ii) the fee for the aggregate undrawn amount of all issued and outstanding Letters of Credit shall be increased by two percent (2%) in excess of the rate otherwise applicable thereto, and (iii) in the case of any other amount due from Borrower hereunder or under any other Loan Document, such amount shall bear interest at the Default Rate.
32
(e) Limitation on Interest . In no event shall the rate of interest hereunder exceed the maximum rate allowable by law. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable law (the “Maximum Rate”). If Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to Borrower. In determining whether the interest contracted for, charged, or received by Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable law, (i) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations.
Section 2.5. Evidence of Indebtedness .
(a) Revolving Loans . Upon the request of a Lender, to evidence the obligation of Borrower to repay the Revolving Loans made by each Revolving Lender and to pay interest thereon, Borrower shall execute a Revolving Credit Note in the form of the attached Exhibit A , payable to the order of such Revolving Lender in the principal amount of its Applicable Commitment Percentage of the Revolving Credit Commitment, or, if less, the aggregate unpaid principal amount of Revolving Loans made by such Revolving Lender; provided, however, that the failure of a Lender to request a Revolving Credit Note shall in no way detract from Borrower’s obligations to such Lender hereunder.
(b) Swing Loan . Upon the request of the Swing Line Lender, to evidence the obligation of Borrower to repay the Swing Loans and to pay interest thereon, Borrower shall execute a Swing Line Note in the form of the attached Exhibit B , and payable to the order of the Swing Line Lender in the principal amount of the Swing Line Commitment, or, if less, the aggregate unpaid principal amount of Swing Loans made by the Swing Line Lender; provided, however, that the failure of the Swing Line Lender to request a Swing Line Note shall in no way detract from Borrower’s obligations to the Swing Line Lender hereunder.
(c) Term Loan . Upon the request of a Lender, to evidence the obligation of Borrower to repay the portion of the Term Loan made by each Term Lender and to pay interest thereon, Borrower shall execute a Term Note in the form of the attached Exhibit C , payable to the order of such Term Lender in the principal amount of its Commitment Percentage of the Term Loan Commitment; provided, however, that failure of a Lender to request a Term Note shall in no way detract from Borrower’s obligations to such Lender hereunder.
33
Section 2.6. Notice of Credit Event; Funding of Loans .
(a) Notice of Credit Event . Borrower, through an Authorized Officer, shall provide to Agent a Notice of Loan prior to (i) 12:00 noon (Eastern time) on the proposed date of borrowing or conversion of any Base Rate Loan, (ii) 12:00 noon (Eastern time) three Business Days prior to the proposed date of borrowing, conversion or continuation of any Eurodollar Loan, and (iii) 3:00 P.M. (Eastern time) on the proposed date of borrowing of any Swing Loan. Borrower shall comply with the notice provisions set forth in Section 2.2(b) hereof with respect to Letters of Credit.
(b) Funding of Loans . Agent shall notify each Revolving Lender of the date, amount and Interest Period (if applicable) promptly upon the receipt of a Notice of Loan (other than for a Swing Loan, or a Revolving Loan to be funded as a Swing Loan), and, in any event, by 2:00 P.M. (Eastern time) on the date such notice is received. On the date that the Credit Event set forth in such notice is to occur, each such Lender shall provide to Agent, not later than 3:00 P.M. (Eastern time), the amount in Dollars, in federal or other immediately available funds, required of it. If Agent shall elect to advance the proceeds of such Loan prior to receiving funds from such Revolving Lender, Agent shall have the right, upon prior notice to Borrower, to debit any account of Borrower or otherwise receive such amount from Borrower, promptly after demand, in the event that such Revolving Lender shall fail to reimburse Agent in accordance with this subsection. Agent shall also have the right to receive interest from such Revolving Lender at the Federal Funds Effective Rate in the event that such Revolving Lender shall fail to provide its portion of the Loan on the date requested and Agent shall elect to provide such funds.
(c) Conversion of Loans . At the request of Borrower to Agent, subject to the notice and other provisions of this Section 2.6, the appropriate Lenders shall convert a Base Rate Loan to one or more Eurodollar Loans at any time and shall convert a Eurodollar Loan to a Base Rate Loan on any Interest Adjustment Date applicable thereto. Swing Loans may be converted by the Swing Line Lender to Revolving Loans in accordance with Section 2.2(c)(ii) hereof.
(d) Minimum Amount . Each request for:
(i) a Base Rate Loan shall be in an amount of not less than One Million Dollars ($1,000,000), increased by increments of One Million Dollars ($1,000,000);
(ii) a Eurodollar Loan shall be in an amount of not less than One Million Dollars ($1,000,000), increased by increments of One Million Dollars ($1,000,000); and
(iii) a Swing Loan shall be in an amount of not less than One Hundred Thousand Dollars ($100,000).
(e) Interest Periods . Borrower shall not request that Eurodollar Loans be outstanding for more than six different Interest Periods at the same time.
34
Section 2.7. Payment on Loans and Other Obligations .
(a) Payments Generally . Each payment made hereunder by Borrower shall be made without any offset, abatement, recoupment, counterclaim, withholding or reduction whatsoever.
(b) Payments from Borrower . All payments (including prepayments) to Agent of the principal of or interest on each Loan or other payment, including but not limited to principal, interest, fees or any other amount owed by Borrower under this Agreement, shall be made in Dollars. All payments described in this subsection (b) shall be remitted to Agent, at the address of Agent for notices referred to in Section 11.4 hereof for the account of the Revolving Lenders (or the Fronting Lender or the Swing Line Lender, as appropriate) not later than 1:00 P.M. (Eastern time) on the due date thereof in immediately available funds. Any such payments received by Agent after 1:00 P.M. (Eastern time) shall be deemed to have been made and received on the next Business Day.
(c) Payments to Lenders . Upon Agent’s receipt of payments hereunder, Agent shall immediately distribute to the appropriate Lenders (except with respect to Swing Loans, which shall be paid to the Swing Line Lender or, with respect to Letters of Credit, certain of which payments shall be paid to the Fronting Lender) their respective ratable shares, if any, of the amount of principal, interest, and commitment and other fees received by Agent for the account of such Lender. Payments received by Agent shall be delivered to the Lenders in Dollars in immediately available funds. Each appropriate Lender shall record any principal, interest or other payment, the principal amounts of Base Rate Loans, Eurodollar Loans, Swing Loans and Letters of Credit, all prepayments and the applicable dates, including Interest Periods, with respect to the Loans made, and payments received by such Lender, by such method as such Lender may generally employ; provided, however, that failure to make any such entry shall in no way detract from the obligations of Borrower under this Agreement or any Note. The aggregate unpaid amount of Loans, types of Loans, Interest Periods and similar information with respect to the Loans and Letters of Credit set forth on the records of Agent shall be rebuttably presumptive evidence with respect to such information, including the amounts of principal, interest and fees owing to each Lender.
(d) Timing of Payments . Whenever any payment to be made hereunder, including, without limitation, any payment to be made on any Loan, shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next Business Day and such extension of time shall in each case be included in the computation of the interest payable on such Loan; provided, however, that, with respect to a Eurodollar Loan, if the next Business Day shall fall in the succeeding calendar month, such payment shall be made on the preceding Business Day and the relevant Interest Period shall be adjusted accordingly.
(a) Right to Prepay . Borrower shall have the right at any time or from time to time to prepay, on a pro rata basis for all of the appropriate Lenders (except with respect to Swing Loans, which shall be paid to the Swing Line Lender), all or any part of the principal amount of the Loans as designated by Borrower. Such payment shall include interest accrued on the
35
amount so prepaid to the date of such prepayment and any amount payable under Article III hereof with respect to the amount being prepaid. Prepayments of Base Rate Loans shall be without any premium or penalty, other than any prepayment fees, penalties or other charges that may be contained in any Hedge Agreement. Each prepayment of the Term Loan shall be applied to the principal installments thereof on a pro rata basis among the remaining principal installments.
(b) Notice of Prepayment . Borrower shall give Agent notice of prepayment of a Base Rate Loan or Swing Loan by no later than 11:00 A.M. (Eastern time) on the Business Day such prepayment is to be made and written notice of the prepayment of any Eurodollar Loan not later than 1:00 P.M. (Eastern time) three Business Days before the Business Day on which such prepayment is to be made.
(c) Minimum Amount . Each prepayment of a Eurodollar Loan shall be in the principal amount of not less than Five Hundred Thousand Dollars ($500,000), increased by increments of Two Hundred Fifty Thousand Dollars ($250,000), or, with respect to a Swing Loan, the principal balance of such Swing Loan, except in the case of a mandatory payment pursuant to Section 2.12 or Article III hereof.
Section 2.9. Commitment and Other Fees .
(a) Commitment Fee . Borrower shall pay to Agent, for the ratable account of the Revolving Lenders, as a consideration for the Revolving Credit Commitment, a commitment fee from the Closing Date to and including the last day of the Commitment Period, payable quarterly, at a rate per annum equal to (i) the Applicable Commitment Fee Rate in effect on the payment date, multiplied by (ii) (A) the average daily Revolving Amount in effect during such quarter, minus (B) the average daily Revolving Credit Exposure (exclusive of the Swing Line Exposure) during such quarter. The commitment fee shall be payable in arrears, on December 31, 2005 and continuing on each Regularly Scheduled Payment Date thereafter, and on the last day of the Commitment Period.
(b) Agent Fee . Borrower shall pay to Agent, for its sole benefit, the fees set forth in the Agent Fee Letter.
Section 2.10. Modifications of Commitment .
(a) Optional Reduction of Commitment . Borrower may at any time and from time to time permanently reduce in whole or ratably in part the Revolving Credit Commitment to an amount not less than the then existing Revolving Credit Exposure, by giving Agent not fewer than three Business Days’ written notice of such reduction, provided that any such partial reduction shall be in an aggregate amount, for all of the Revolving Lenders, of not less than Five Million Dollars ($5,000,000). Agent shall promptly notify each Revolving Lender of the date of each such reduction and such Revolving Lender’s proportionate share thereof. After each such reduction, the commitment fees payable hereunder shall be calculated upon the Revolving Amount as so reduced. If Borrower reduces in whole the Revolving Credit Commitment, on the effective date of such reduction (Borrower having prepaid in full the unpaid principal balance, if
36
any, of the Loans, together with all interest and commitment and other fees accrued and unpaid, and provided that no Letter of Credit Exposure or Swing Line Exposure shall exist), all of the Notes shall be delivered to Agent marked “Canceled” and Agent shall redeliver such Notes to Borrower. Any partial reduction in the Revolving Amount shall be effective during the remainder of the Commitment Period.
(b) Increase in Commitment . At any time during the Commitment Increase Period, Borrower may request that Agent increase the Revolving Amount from the Closing Revolving Amount up to the Maximum Revolving Amount by either (i) proportionally increasing, for one or more Revolving Lenders, with their prior written consent, their respective Applicable Commitment Percentage of the Revolving Credit Commitment, or (ii) including one or more Additional Lenders, each with a new commitment under the Revolving Credit Commitment, as a party to this Agreement (collectively, the “Additional Commitment”); provided, however, that existing Lenders shall be given the first opportunity to provide Additional Commitments. During the Commitment Increase Period, the Lenders agree that Agent shall permit one or more Additional Commitments upon satisfaction of the following requirements: (A) each Additional Lender, if any, shall execute an Additional Lender Assumption Agreement, (B) Agent shall provide to Borrower and each Revolving Lender a revised Schedule 1 to this Agreement, including revised Applicable Commitment Percentages for each of the Revolving Lenders with respect to the Revolving Credit Commitment (revised so that each Revolving Lender will have a new Applicable Commitment Percentage for the Revolving Credit Commitment), at least three Business Days prior to the date of the effectiveness of such Additional Commitments (each an “Additional Lender Assumption Effective Date”), (C) Borrower shall execute and deliver to Agent and the Revolving Lenders such replacement or additional Revolving Credit Notes as shall be required by Agent, and (D) Borrower shall, on the Additional Lender Assumption Effective Date, deliver to Agent, for the benefit of the Lenders, (1) written confirmation (in form and substance reasonably satisfactory to Agent) that Borrower shall have given written notice to each Convertible Subordinated Noteholder that the Obligations incurred pursuant to the Additional Commitments are being designated as Senior Indebtedness (as defined in the Convertible Subordinated Notes), and (2) a certificate and any other reasonable evidence required by Agent or the Required Lenders demonstrating that all terms and conditions for designating Senior Indebtedness (as defined in the Convertible Subordinated Notes) under the Convertible Subordinated Notes are being met. The Revolving Lenders hereby authorize Agent to execute each Additional Lender Assumption Agreement on behalf of the Revolving Lenders. On each Additional Lender Assumption Effective Date, the Revolving Lenders shall make adjustments among themselves with respect to the Revolving Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of Agent, in order to reallocate among such Revolving Lenders such outstanding amounts, based on the revised Applicable Commitment Percentages and to otherwise carry out fully the intent and terms of this subsection (b). In connection therewith, it is understood and agreed that the Maximum Amount of any Revolving Lender will not be increased (or decreased except pursuant to Section 2.10(a) hereof) without the prior written consent of such Revolving Lender. Borrower shall not request any increase in the Revolving Amount (or the Total Commitment Amount) pursuant to this subsection (b) if a Default or an Event of Default shall then exist, or immediately after giving effect to any such increase would exist. Upon each increase of the Revolving Amount, the Total Commitment
37
Amount shall be proportionally increased from the Closing Commitment Amount up to the Maximum Commitment Amount.
Section 2.11. Computation of Interest and Fees . With the exception of Base Rate Loans, interest on Loans Related Expenses and commitment and other fees and charges hereunder shall be computed on the basis of a year having three hundred sixty (360) days and calculated for the actual number of days elapsed. With respect to Base Rate Loans, interest shall be computed on the basis of a year having three hundred sixty-five (365) days or three hundred sixty-six (366) days, as the case |
AGREEMENTS / CONTRACTS
CLAUSES
| Get Email Updates |
