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EXHIBIT 10.10(a)
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of March 10, 2000
by and between
VIASOURCE COMMUNICATIONS, INC.
(formerly known as
THE RTK GROUP, INC.)
as Borrower
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Lender
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.......................................................................................... 1
1.1 Certain Defined Terms................................................................... 1
1.2 Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement............................................... 23
1.3 Other Definitional Provisions and Rules of Construction................................. 23
SECTION 2. THE LOAN............................................................................................. 24
2.1 Making of Loans; Notes.................................................................. 24
2.2 Interest on the Loans................................................................... 25
2.3 Letters of Credit....................................................................... 28
2.4 Repayments, Prepayments and Redemption of Loan;
General Provisions Regarding Payments.................................................. 32
2.5 Unused Facility Fee..................................................................... 36
2.6 Use of Proceeds......................................................................... 36
2.7 Special Provisions Governing LIBOR Rate Loan............................................ 37
2.8 Increased Costs, Taxes; Capital Adequacy................................................ 39
2.9 Guaranties of and Security for the Obligations.......................................... 42
SECTION 3. CONDITIONS TO THE LOANS.............................................................................. 42
3.1 Conditions to Effectiveness on Initial Effective Date................................... 42
3.2 Conditions to Effectiveness on New Effective Date....................................... 43
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES............................................................ 46
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.......................................................................... 46
4.2 Authorization of Borrowing, etc......................................................... 47
4.3 Financial Condition..................................................................... 48
4.4 No Material Adverse Change; No Restricted Junior Payments............................... 48
4.5 Title to Properties; Liens; Real Property............................................... 49
4.6 Litigation; Adverse Facts............................................................... 49
4.7 Payment of Taxes........................................................................ 49
4.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts............................................................................. 50
4.9 Governmental Regulation................................................................. 50
4.10 Securities Activities................................................................... 50
4.11 Employee Benefit Plans.................................................................. 51
4.12 Certain Fees............................................................................ 51
4.13 Employee Matters........................................................................ 51
4.14 Solvency................................................................................ 51
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4.15 Matters Relating to Collateral.......................................................... 52
4.16 Disclosure.............................................................................. 53
4.17 Insurance............................................................................... 53
4.18 Intellectual Property................................................................... 53
4.19 [Intentionally Omitted]................................................................. 54
4.20 Environmental Protection................................................................ 54
4.21 Year 2000 Compliance.................................................................... 55
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS..................................................................... 55
5.1 Financial Statements and Other Reports.................................................. 55
5.2 Existence, etc.......................................................................... 61
5.3 Payment of Taxes and Claims; Tax Consolidation.......................................... 61
5.4 Maintenance of Properties; Insurance;
Application of Net Insurance/Condemnation Proceeds..................................... 62
5.5 Inspection Rights; Lender Meeting....................................................... 63
5.6 Compliance with Laws, etc............................................................... 64
5.7 Environmental Disclosure and Inspection................................................. 64
5.8 Compliance with Related Documents; Use of Proceeds...................................... 67
5.9 Additional Real Property Collateral..................................................... 67
5.10 Dissolution of Inactive Subsidiaries.................................................... 67
SECTION 6. BORROWER'S NEGATIVE COVENANTS........................................................................ 68
6.1 Indebtedness............................................................................ 68
6.2 Liens and Related Matters............................................................... 69
6.3 Dividends; Seller Notes................................................................. 70
6.4 Investments; Joint Ventures............................................................. 71
6.5 Contingent Obligations.................................................................. 71
6.6 Restricted Junior Payments.............................................................. 71
6.7 Financial Covenant...................................................................... 72
6.8 Restriction on Fundamental Changes; Asset Sales and Acquisitions........................ 72
6.9 Sales and Lease-Backs................................................................... 73
6.10 Sale or Discount of Receivables......................................................... 73
6.11 Transactions with Shareholders and Affiliates........................................... 73
6.12 Disposal of Subsidiary Stock............................................................ 73
6.13 Conduct of Business..................................................................... 74
6.14 Amendments of Waivers of Related Documents and Charter Documents........................ 74
6.15 Fiscal Year............................................................................. 74
SECTION 7. EVENTS OF DEFAULT.................................................................................... 75
7.1 Failure to Make Payments When Due....................................................... 75
7.2 Default in Other Agreements............................................................. 75
7.3 Breach of Certain Covenants............................................................. 75
7.4 Breach of Warranty...................................................................... 75
7.5 Other Defaults Under Loan Documents..................................................... 76
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7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................................... 76
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc...................................... 76
7.8 Judgments and Attachments............................................................... 77
7.9 Dissolution............................................................................. 77
7.10 Employee Benefit Plans.................................................................. 77
7.11 Change in Control....................................................................... 77
7.12 Failure of Security or Guaranty......................................................... 77
SECTION 8. MISCELLANEOUS........................................................................................ 78
8.1 Assignments and Participations in Loans................................................. 78
8.2 Expenses................................................................................ 79
8.3 Indemnity............................................................................... 80
8.4 Set-Off; Security Interest in Deposit Accounts.......................................... 81
8.5 Amendments and Waivers.................................................................. 81
8.6 Independence of Covenants............................................................... 81
8.7 Notices................................................................................. 81
8.8 Survival of Representations, Warranties and Agreements.................................. 82
8.9 Failure or Indulgence Not Waiver; Remedies Cumulative................................... 82
8.10 Marshalling; Payments Set Aside......................................................... 82
8.11 Severability............................................................................ 82
8.12 Headings................................................................................ 83
8.13 Applicable Law.......................................................................... 83
8.14 Successors and Assigns.................................................................. 83
8.15 Consent to Jurisdiction and Service of Process.......................................... 83
8.16 Waiver of Jury Trial.................................................................... 84
8.17 Confidentiality......................................................................... 85
8.18 Counterparts; Effectiveness............................................................. 85
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EXHIBITS
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I-b Form of Notice of Borrowing (Revolving Advance)
II Form of Notice of Conversion/Continuation
III-b Form of Revolving Note
IV Form of Compliance Certificate
V-a Form of Opinion of Pitney, Hardin, Kipp & Szuch
V-b Form of Opinion of Dewey Ballantine
VI Form of Assignment Agreement
VII Form of Borrower Pledge Agreement
VIII Form of Borrower Security Agreement
IX Form of Subsidiary Guaranty
X Form of Subsidiary Security Agreement
XI Form of Holdings Pledge Agreement
XII Form of Landlord Consent
XIII Form of Financial Condition Certificate
XIV [Intentionally Omitted]
XV Form of Stockholders' Agreement
XVI Form of Seller Note Subordination Provisions
XVII Form of Tax Sharing Agreement
XVIII Form of Warrant
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SCHEDULES
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4.1(d) Subsidiaries
4.1(f) Collateral Matters
4.3 Financial Condition
4.4 No Material Adverse Change
4.5 Real Property Leases
4.6 Litigation; Adverse Facts
4.8 Material Contracts
4.12 Broker's Fee
4.17 Insurance
4.20 Environmental Matters
6.2 Existing Liens (including list of existing UCC filings)
6.3 Existing Subsidiaries
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 10,
2000 and entered into between VIASOURCE COMMUNICATIONS, INC. (formerly known as
THE RTK GROUP, INC.), a New Jersey corporation (together with its permitted
successors and assigns, "BORROWER") and GENERAL ELECTRIC CAPITAL CORPORATION
(together with its successors and assigns, "GECC" or "LENDER").
RECITALS
Borrower and Lender entered into a Credit Agreement, dated as
of September 7, 1999, as amended as of December 22, 1999 (as so amended, the
"ORIGINAL CREDIT AGREEMENT"), pursuant to which Lender provided to Borrower a
secured term loan in the initial principal amount of $15,000,000, the proceeds
of which were utilized by Borrower to finance, in part, the Telecrafter
Acquisition.
Borrower has requested, and Lender has agreed to provide
Lender with a $15,000,000 senior secured revolving credit facility, the initial
proceeds of which shall be contributed by Borrower to certain of its Domestic
Subsidiaries to make payment in full of all Indebtedness outstanding under the
Senior Credit Agreements, and ongoing proceeds of which shall be used for
working capital needs, capital expenditures, acquisitions (each, to the extent
permitted hereunder) and other general corporate purposes of Borrower and its
Subsidiaries.
NOW THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Borrower and Lender
hereby agree that the Original Credit Agreement is hereby AMENDED AND RESTATED
as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ADJUSTED LIBOR RATE" means, for each Interest Period, a rate
of interest determined by Lender equal to:
(a) the offered rate for deposits in United
States Dollars for the applicable Interest Period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the second full
Business Day next preceding the first day of each Interest Period
(unless such date is not a Business Day, in which event the next
succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but
without duplication) of the rate (expressed as a decimal fraction) of
reserve requirements
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in effect on the day which is two (2) Business Days prior to the
beginning of such Interest Period (including basic, supplemental,
marginal and emergency reserves under any regulation of the Board of
Governors of the Federal Reserve System or other governmental authority
having jurisdiction with respect thereto, as now and from time to time
in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) which are
required to be maintained by a member bank of the Federal Reserve
System.
If such interest rates shall cease to be available from
Telerate News Service, the Adjusted LIBOR Rate shall be determined from such
financial reporting service or other information as shall be mutually acceptable
to Lender and Borrower.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGREEMENT" means this Amended and Restated Credit Agreement
dated as of March __, 2000, as it may hereafter be amended, supplemented or
otherwise modified from time to time in accordance with the terms set forth
herein.
"APPLICABLE MARGIN" means, with respect to any Loan, the
percentage determined by reference to subsection 2.2(a).
"ASSET SALE" means the sale by Borrower or any of its
Subsidiaries to any Person other than Borrower or any of its Subsidiaries of (i)
any of the stock of any of the Subsidiaries, (ii) substantially all of the
assets of any division or line of business of Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrower or any of its Subsidiaries outside of the ordinary course of business.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of Exhibit VI annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOAN" means a Loan bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2(a).
"BORROWER" has the meaning assigned to such term in the
heading to this Agreement.
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"BORROWER PLEDGE AGREEMENT" means the Pledge and Security
Agreement executed and delivered by Borrower on the Initial Effective Date,
substantially in the form of Exhibit VII annexed hereto, as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time as
permitted thereunder and hereunder.
"BORROWER SECURITY AGREEMENT" means Borrower Security
Agreement executed and delivered by Borrower on the Initial Effective Date,
substantially in the form of Exhibit VIII annexed hereto, relating to the
Collateral owned by Borrower, as such agreement may thereafter be amended,
supplemented or otherwise modified from time to time as permitted thereunder and
hereunder.
"BREAKAGE COSTS" means, to the extent that Lender is funding
the maintenance of a Loan during such funding period at the Adjusted LIBOR Rate,
during which the amount of such investment is reduced (in whole or in part)
prior to the end of the period for which it was originally scheduled to remain
outstanding (the amount of such reduced investment being referred to as the
"Allocated Amount"), the excess of (a) the discount or interest that would have
accrued on the Allocated Amount during the remainder of such funding period if
such reduction had not occurred over (b) the income, if any, scheduled to be
received by Lender from investing the Allocated Amount for the remainder of such
funding period.
"BRIDGE LOAN" means that certain $5,000,000 bridge loan
provided by Crest to Borrower to enable Borrower to redeem certain shares of
capital stock held by existing shareholders, all pursuant to that certain Stock
Purchase Agreement, dated as of June 14, 1999, by and among Crest, the Initial
Investors and Borrower.
"BUSINESS DAY" means (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted LIBOR Rate
or a LIBOR Rate Loan, any day that is a Business Day described in clause (i)
above and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH COLLATERAL ACCOUNT" has the meaning assigned to that
term in subsection 2.3(c).
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the
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obligations of which are backed by the full faith and credit of the United
States, in each case maturing within one year after such date; (ii) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof,
in each case maturing within one year after such date and having, at the time of
the acquisition thereof, the highest rating obtainable from either Standard &
Poor's Ratings Group ("S&P") or Moody's Investors Service, Inc. ("MOODY'S");
(iii) commercial paper maturing no more than one year from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and issued or
accepted by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; and (v) shares of any money market mutual fund
that (a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's.
"CHANGE OF CONTROL" means:
(a) Crest ceasing for any reason to legally own
and control at least 13% (on a fully diluted basis) of the issued and
outstanding shares of capital stock of Borrower entitled to vote
(without regard to any contingency) for the election of members of the
Board of Directors thereof;
(b) prior to the consummation of an Initial
Public Offering, Crest ceasing for any reason to maintain those rights
granted to it pursuant to Section 2.02 of the Stockholders' Agreement;
(c) the sale, lease, or transfer of all or
substantially all of Borrower's assets to any person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) other than a
wholly-owned Subsidiary;
(d) the adoption of a plan relating to the
liquidation or dissolution of Borrower; or
(e) the first day on which a majority of the
members of Borrower's Boards of Directors are not individuals who on
the Initial Effective Date are members of such Board of Directors or
who were nominated for election or elected with the approval of a
majority of the directors who were directors on the Initial Effective
Date or whose nomination or election was previously so approved.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including capital stock), and all Intellectual Property, in
each case, in which Liens are purported to be granted pursuant to the Security
Documents as security for the Obligations.
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"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Lender by Borrower pursuant
to subsection 5.1(iv).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Borrower and its
Subsidiaries.
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount (if positive) equal to (1) consolidated net income, plus (2) solely to
the extent deducted in determining consolidated net income (a) consolidated
depreciation, amortization, plus (b) Consolidated Interest Expense plus (or
minus)(as the case may be) decreases (increases) in working capital, minus (3)
the sum, without duplication, of (a) scheduled repayments of Consolidated Total
Debt, (b) Consolidated Capital Expenditures, (c) Consolidated Interest Expense,
plus or minus (as the case may be), (4) solely to the extent deducted in
determining consolidated net income, extraordinary gains or losses which are
cash items, and plus (5) taxes deducted in determining consolidated net income
to the extent not paid for in cash.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest but excluding interest on the
Seller Notes payable via issuance of payment-in-kind promissory notes the form
of which are acceptable in form and substance to Lender in its reasonable
discretion but excluding interest on the Seller Notes to the extent not paid in
cash) of Borrower and its Subsidiaries on a consolidated basis with respect to
all outstanding Indebtedness of Borrower and its Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements, but excluding, however, any commitment or other similar fees paid to
Lender on or before the Initial Effective Date.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate amount of all Indebtedness that would be stated on
the balance sheet of Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"CONTINGENT OBLIGATION", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
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thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements. Contingent Obligations shall
include (a) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another, (b) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of another
through any agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (Y) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclauses
(X) or (Y) of this sentence, the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"CREST" means Crest Communications Partners LP, together with
its successors and assigns.
"CRI" means Communications Resources Incorporated, together
with its successors and assigns.
"DEFAULT" means a condition or event that, after notice or
lapse of time or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the
United States of America.
"DOMESTIC SUBSIDIARY" means each Subsidiary of Borrower
incorporated or organized in the United States of America or under the law of
the United States of America or of any state thereof.
"EBITDA" with respect to Borrower and its Subsidiaries on a
consolidated basis, means an amount equal to (a) consolidated net income of such
Persons for such period, minus (b) the sum of (i) income tax credits, (ii)
interest income,
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(iii) gain from extraordinary items for such period, (iv) any aggregate net gain
(but not any aggregate net loss) during such period arising from the sale,
exchange or other disposition of capital assets by such Person (including any
fixed assets, whether tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets and all securities), and (v) any other
non-cash gains which have been added in determining consolidated net income, in
each case to the extent included in the calculation of consolidated net income
of such Person for such period in accordance with GAAP, but without duplication,
plus (c) the sum of (i) any provision for income taxes, (ii) Consolidated
Interest Expense, (iii) loss from extraordinary items for such period, (iv) the
amount of non-cash charges (including depreciation and amortization) for such
period, (v) amortized debt discount for such period, and (vi) the amount of any
deduction to consolidated net income as the result of any grant to any members
of the management of such Person of any stock in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication. For purposes of this
definition, the following items shall be excluded in determining consolidated
net income of a Person: (1) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such person in the form of
cash dividends or distributions; (2) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (3) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (4) any write-up of any assets; (5) any net
gain from the collection of the proceeds of life insurance policies; (6) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person, (7) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, and (8) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary. For the purposes of
calculating the Total Leverage Ratio, the income (or deficit) of any other
Person accrued prior to the date such Person became a Subsidiary of, or was
merged or consolidated into, such Person or any of such Person's Subsidiaries,
in all events pursuant to a Permitted Acquisition, shall be included in
determining the consolidated net income of a Person.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is maintained or contributed to by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates or
with respect to which Borrower or any of its Subsidiaries has liabilities.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or
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alleged Hazardous Materials Activity, or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural resources or
the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities relating
to (i) environmental matters, including those relating to any Hazardous
Materials Activity, (ii) the generation, use, storage, transportation or
disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene or the protection of human, plant or animal health, in any
manner applicable to Company or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. ss. 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. ss. 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
ss. 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. ss. 1251
et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. ss. 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. ss. 136 et seq.), the Occupational Safety and Health
Act (29 U.S.C. ss. 651 et seq.), the Oil Pollution Act (33 U.S.C. ss. 2701 et
seq.) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. ss.
1100l et seq.), each as amended or supplemented, any analogous present or future
state or local statutes or laws, and any regulations promulgated pursuant to any
of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, is a
member. Any former ERISA Affiliate of Borrower or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Borrower or such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of Borrower or such Subsidiary and with respect to
liabilities arising after such period for which Borrower or such Subsidiary
could be liable under the Internal Revenue Code or ERISA as a result of such
affiliation with such former ERISA Affiliate.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
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<PAGE> 15
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which is
reasonably likely to constitute grounds under ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan; (vi) the
imposition of liability on Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates in
a complete or partial withdrawal (within the meaning of Sections 4203 and 4205
of ERISA) from any Multiemployer Plan if there is a reasonable likelihood for
the assessment of liability in connection therewith, or the receipt by Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which could give rise to the imposition on Borrower or any of its
Subsidiaries of fines, penalties, taxes or related charges under Chapter 43 of
the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits) against
any Employee Benefit Plan maintained by Borrower or any of its Subsidiaries or
against Borrower or any of its Subsidiaries in connection with any Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code other than a
Multiemployer Plan) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"FACILITY" or "FACILITIES" means any and all real property
(including all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Borrower or any of
its Subsidiaries or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
floating rate equal to the weighted average of the rates on overnight Federal
funds transactions among members of the Federal Reserve System, as determined by
Lender.
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"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 5.1(xii).
"FIRST UNION L/C" means that certain letter of credit in the
face amount of $500,000, Letter of Credit No. SM403725, issued by First Union
Bank on 03/07/99 with an expiry date of 06/30/00 and naming CRI as applicant and
Credit Protection Association, L.P. as beneficiary thereunder.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the 52/53 week fiscal period of Borrower
and its Subsidiaries ending on the Saturday immediately preceding December 31 of
each calendar year.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (x) the sum of (i) EBITDA minus (ii) Consolidated
Capital Expenditures, minus (iii) income Taxes excluded in determining EBITDA,
each as of end of any fiscal quarter, to (y) the sum of (i) mandatory principal
payments on Consolidated Total Debt, plus (ii) Consolidated Interest Expense, in
each case, for the twelve consecutive month period most recently ended, plus
(iii) dividends paid by Borrower to any member of the Investor Group for the 12
consecutive month period most recently ended.
"FOREIGN SUBSIDIARY" means each Subsidiary of Borrower other
than a Domestic Subsidiary.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Lender
located at 2325 Lakeview Parkway, Suite 7000, Alpharetta, Georgia 30004-1976,
Attn: Account Manager -ViaSource, and for wire transfer purposes, Bankers Trust
Company, New York, NY, ABA Routing No. 021001033, Credit Account No. 502-328-54,
Account Name: GECC/CAF Depository -ViaSource, or (ii) such other office of
Lender as may from time to time be hereafter designated as such in a written
notice delivered by Lender to Borrower.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GECC STOCK PURCHASE AGREEMENT" means that certain Stock
Purchase Agreement dated September 7, 1999 by and between GECC and Borrower.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
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<PAGE> 17
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority pursuant to applicable Environmental
Laws.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials which is regulated pursuant to applicable Environmental Laws,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HOLDINGS" means ViaSource Holdings, Inc., a Delaware
corporation.
"HOLDINGS PLEDGE AGREEMENT" means the Holdings Pledge
Agreement executed and delivered by Holdings on the Initial Effective Date,
substantially in the form of Exhibit XI annexed hereto, as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time as
permitted thereunder and hereunder.
"INACTIVE SUBSIDIARY" means the Subsidiaries identified on
Schedule 4.1(d) hereto as inactive.
"INDEBTEDNESS", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
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<PAGE> 18
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements constitute
Contingent Obligations, not Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that
term in subsection 8.3.
"INDEMNITEE" has the meaning assigned to that term in
subsection 8.3.
"INITIAL EFFECTIVE DATE" means September 7, 1999.
"INITIAL INVESTORS" means Crest, Jackson National Life
Insurance Company, Old Hickory Fund I, LLC, and BancBoston Investments Inc.
"INITIAL PUBLIC OFFERING" means an underwritten public
offering of the common stock of the Borrower that generates cash proceeds to the
Borrower of at least $50,000,000, pursuant to which the Term Loan is repaid in
full upon the consummation (and with the proceeds) thereof.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in and necessary
for the conduct of the business of Borrower and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise), business
or operations of Borrower and its Subsidiaries, taken as a whole.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2(b).
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Borrower or any of its Subsidiaries is
a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the Initial Effective Date and from time to time thereafter,
any successor statute and the Treasury regulations promulgated under the
Internal Revenue Code.
"INVESTMENT" means (i) any direct or indirect purchase or
other acquisition by any Loan Party of, or of a beneficial interest in, any
Securities of any other Person (other than a Person that prior to such purchase
or acquisition was a wholly-owned Subsidiary of such Loan Party), (ii) any
direct or indirect redemption, retirement, purchase or other acquisition for
value, by any Subsidiary of Borrower from any Person other than any Loan Party,
of any equity Securities of such Loan Party, or (iii) any direct or indirect
loan, advance (other than advances to employees for moving, entertainment
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<PAGE> 19
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or capital contribution by Borrower or any of its
Subsidiaries to any other Person (other than a wholly-owned Subsidiary of
Borrower), including all indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto
minus, all cash returns of principal on such investment, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"INVESTOR GROUP" means the Initial Investors and the New
Investors.
"ISSUANCE" means the issuance by any Loan Party of
Indebtedness for borrowed money (other than the Obligations) or any equity
security.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT" means, with respect to any Material
Leasehold Property, a letter from the owner of such property substantially in
the form of Exhibit XII, annexed hereto, satisfactory in form and substance to
Lender, pursuant to which such owner agrees, for the benefit of Lender, (i) that
without any further consent of such owner or any further action on the part of
the Loan Party holding such Material Leasehold Property, such Material Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Lender, or an Affiliate of Lender so
acquires such Material Leasehold Property), (ii) that such owner shall not
terminate such lease as a result of a default by such Loan Party thereunder
without first giving Lender notice of such default and at least 60 days (or, if
such default cannot reasonably be cured by Lender within such period, such
longer period as may reasonably be required) to cure such default and (iii) to
such other matters relating to such Material Leasehold Property as Lender may
reasonable request.
"L/C ISSUER" has the meaning assigned to that term in
subsection 2.3(a).
"L/C SUBLIMIT" has the meaning assigned to that term in
subsection 2.3(a).
"LENDER" means General Electric Capital Corporation, together
with its successors and permitted assigns pursuant to subsection 8.1.
"LETTER OF CREDIT" means a commercial or standby letter of
credit issued for the account of Borrower by any L/C Issuer, or a banker's
acceptance issued by Borrower, for which Lender has incurred Letter of Credit
Obligations, and "LETTERS OF CREDIT" means all such Letters of Credit.
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"LETTER OF CREDIT FEE" has the meaning assigned to that term
in subsection 2.3(d).
"LETTER OF CREDIT OBLIGATIONS" means all outstanding
obligations incurred by Lender at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of a reimbursement agreement or guaranty by Lender with respect to any
Letter of Credit. The amount of such Letter of Credit Obligations shall equal
the maximum amount which may be payable by Lender thereupon or pursuant thereto.
"LIBOR RATE LOAN" means a Loan bearing interest at rates
determined by reference to the Adjusted LIBOR Rate as provided in subsection
2.2(a).
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" means the Term Loan or the Revolving Loan, and "LOANS"
means the Term Loan and the Revolving Loan, collectively.
"LOAN DOCUMENTS" means this Agreement, the Term Note, the
Revolving Note, each Letter of Credit, each reimbursement agreement or guaranty
by Lender with respect to any Letter of Credit, the Security Documents and all
the other agreements, certificates of similar documents executed by a Loan Party
hereunder or thereunder.
"LOAN PARTY" means Borrower and its current and future
Subsidiaries but excluding Inactive Subsidiaries from time to time executing a
Loan Document, and "LOAN PARTIES" means all such Persons, collectively.
"MANAGEMENT FEES" means any fee or other form of compensation
to any member of the Investor Group (or any Affiliate of any member of the
Investor Group) in compensation for services rendered or goods provided to
Borrower or any Subsidiary thereof.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, liabilities, condition
(financial or otherwise) or prospects of Borrower and its Subsidiaries (taken as
a whole) or (ii) the impairment of the ability of any Loan Party to perform, or
of Lender to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Borrower or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to renew
could have a Material Adverse Effect.
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"MATERIAL LEASEHOLD PROPERTY" means any leasehold interest of
any Loan Party as lessee under any lease of real property set forth on Schedule
4.5 annexed hereto, and any other leasehold interest designated from time to
time by Lender in its reasonable discretion as being required to be included in
the Collateral that is designated by Lender as a "Material Leasehold Property"
from time to time.
"MERGER AGREEMENT" means that certain Agreement and Plan of
Merger, dated as of July 23, 1999, among Borrower, CRI Acquisition Corp., CRI
and Crest/CRI LLC, pursuant to which Borrower acquired through merger the
capital stock of CRI.
"MORTGAGE" means a security instrument (whether designated as
a deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party as such instrument may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
"NET CASH PROCEEDS" means, with respect to any Asset Sale or
Issuance, the cash proceeds received by the Loan Parties in connection with such
transaction or transaction, minus the reasonable costs and expenses incurred in
connection therewith.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Borrower or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrower or such Subsidiary in respect thereof.
"NEW EFFECTIVE DATE" means the date on or before March __,
2000 on which the conditions set forth in subsection 3.2 are satisfied.
"NEW INVESTORS" means PNC Equity Management, Wood Street
Partner, II and General Electric Capital Corporation.
"NOTE" means the Term Note or the Revolving Note, and "NOTES"
means the Term Note and the Revolving Note, collectively.
"NOTICE OF BORROWING" means, with respect to the Revolving
Note, a notice substantially in the form of Exhibit I-b annexed hereto delivered
by Borrower to Lender pursuant to subsection 2.1(d) with respect to a proposed
Revolving Advance.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Borrower to
Lender pursuant to
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<PAGE> 22
subsection 2.2(d) with respect to a proposed conversion or continuation of the
applicable basis for determining the interest rate with respect to a Loan and
specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Lender under the Loan Documents, whether
for principal, interest, fees, expenses, reimbursement (with respect to Letters
of Credit or otherwise) indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its president or chief
financial officer; provided, that every Officer's Certificate with respect to
the compliance with a condition precedent to the making of the Loans hereunder
shall include (i) a statement that the officer or officers making or giving such
Officer's Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"O'LEARY SELLER NOTE" means that certain Subordinated
Promissory Note in the initial principal amount of $1,538,932 issued by Borrower
in favor of George O'Leary on January 3, 2000.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" has the meaning set forth in the
recitals hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means one or more related acquisitions
of specified assets or no less than 80% of the issued and outstanding stock of a
Person (other than a natural person or an Affiliate of a Loan Party), in each
case, that is directly engaged (or, in the case of a holding company, whose
Subsidiary is directly engaged) in the business of providing communication
services on an outsourced basis and related activities, and that, at the time of
such acquisition, would not result in the occurrence of a Default hereunder (and
is effectuated at such time as no other Event of Default is continuing
hereunder).
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"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Security Documents):
(a) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time, required by
subsection 5.3;
(b) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
(c) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(d) any attachment or judgment Lien not constituting
an Event of Default under subsection 7.8;
(e) leases or subleases granted to third parties in
accordance with any applicable terms of the Security Documents and not
interfering in any material respect with the ordinary conduct of the
business of Borrower or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(f) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title, in
each case which do not and will not interfere in any material respect
with the ordinary conduct of the business of Borrower or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral as security for the Obligations;
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<PAGE> 24
(g) Liens arising from the filing of UCC financing
statements for informational purposes in connection with operating
leases entered into by any Loan Party;
(h) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(i) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(j) Liens securing obligations (other than
obligations representing Indebtedness for borrowed money) under
operating, reciprocal easement or similar agreements entered into in
the ordinary course of business of Borrower and its Subsidiaries; and
(k) licenses of patents, trademarks and other
intellectual property rights granted by Borrower or any of its
Subsidiaries in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of
Borrower or such Subsidiary.
"PERMITTED EQUITY FINANCING" means an Issuance of any equity
security by Borrower, the Net Cash Proceeds of which are utilized exclusively to
finance a Permitted Acquisition.
"PERMITTED LIENS" means Liens permitted pursuant to subsection
6.2(a).
"PERMITTED SUBORDINATED DEBT FINANCING" means an Issuance of
Indebtedness for borrowed money by Borrower, the Net Cash Proceeds of which are
utilized exclusively to finance a Permitted Acquisition, SO LONG AS, as of the
date of incurrence thereof, any such Indebtedness contains subordination
provisions no less favorable to Lender as those set forth in Exhibit XVI annexed
hereto and pursuant to documentation containing interest rates, maturities,
redemption provisions, covenants, defaults, remedies and subordination
provisions reasonably acceptable to Lender.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLEDGE AGREEMENTS" means the Borrower Pledge Agreement and
the Holdings Pledge Agreement.
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<PAGE> 25
"PLEDGED COLLATERAL" means the "Pledged Collateral" as defined
in the Borrower Pledge Agreement and the Holdings Pledge Agreement.
"PNC STOCK PURCHASE AGREEMENT" means that certain Stock
Purchase Agreement dated September 7, 1999 by and between PNC Capital Corp. and
Wood Street Partners, II and Borrower.
"PRIME RATE" means, for any day, a floating rate equal to the
rate publicly quoted from time to time by The Wall Street Journal as the "base
rate on corporate loans at large U.S. money center commercial banks" (or, if The
Wall Street Journal ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15(519) entitled "Selected Interest Rates"
as the Bank prime loan rate or its equivalent). Each change in any interest rate
provided for in this Agreement based upon the Prime Rate shall take effect at
the time of such change in the Prime Rate.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means, collectively, Merger Agreement, the
PNC Stock Purchase Agreement, the GECC Stock Purchase Agreement and the
Telecrafter Purchase Agreement.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Borrower now
or hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Borrower now or hereafter outstanding, (iv) any
payment or prepayment of principal of, premium if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to any Subordinated
Indebtedness and (v) any payment of principal or interest with respect to the
Seller Notes.
"REVOLVING ADVANCE" has the meaning assigned to that term in
subsection 2.1(c).
"REVOLVING COMMITMENT" means the commitment of Lender to make
Revolving Advances and incur Letter of Credit Obligations, which aggregate
19
<PAGE> 26
commitment shall be $15,000,000 on the New Effective Date, as such amount may be
adjusted downward, if at all, from time to time in accordance with this
Agreement.
"REVOLVING LOAN" means at any time, the sum of (i) the
aggregate amount of Revolving Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower.
"REVOLVING NOTE" has the meaning assigned to that term in
subsection 2.1(e).
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENTS" means the Borrower Security Agreement
and the Subsidiary Security Agreements.
"SECURITY DOCUMENTS" means the Borrower Pledge Agreement (and
the bailee letter relating thereto), the Borrower Security Agreement, the
Subsidiary Guaranties, the Subsidiary Security Agreements, the Holdings Pledge
Agreement and all other instruments or documents delivered by any Loan Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to Lender a Lien on any real, personal or mixed property of that Loan Party as
security for the Obligations.
"SELLER NOTES" means (i) that certain Subordinated Promissory
Note in the initial principal amount of $3,000,000, dated September 7, 1999, and
issued by Telecrafter Acquisition Corp. in favor of Nassau Communications, Inc.
and (ii) any other note issued by Borrower to the seller of assets or equity
interests in connection with a Permitted Acquisition that contains subordination
provisions no less favorable to Lender as those set forth in Exhibit XVI annexed
hereto.
"SENIOR CREDIT AGREEMENTS" means:
(1) the Letter of Credit, Term Loan, Equipment Loan
and Revolving Line of Credit Loan and Security Agreement, dated June
27, 1997, between Statewide Savings Bank, S.L.A., and RTK Corporation,
Queens Cable Contractors, Inc., The RTK Group, Inc. (the corporate
predecessor of Borrower), Wireless Cable Contractors, Inc., Roy D.
Tartaglia and Richard A. Thomas, as amended by the First Amendment
thereto, dated February 11, 1999,
20
<PAGE> 27
(2) the Promissory Notes, dated, February 12, 1999,
July 27, 1998 and December 22, 1998, issued by RTK Group, Inc.(the
corporate predecessor of Borrower) and Queens Cable Contractors, Inc.
in favor of 1st Constitution Bank,
(3) the Loan and Security Agreement, dated July 14,
1998, by and among Congress Financial Corporation and Communication
Resources Incorporated, CRI Recoveries, L.P., CRI of Broward, L.P., Los
Angeles CRI, L.L.C., Texas CRI, L.L.C., Pennsylvania CRI, L.L.C., and
South Carolina CRI, L.L.C.,
(4) Agreement dated June 10, 1999 between Norwest
Bank Colorado N.A. and Telecrafter; and
(5) The reimbursement obligation of CRI and CRI of
Cherry Hill, Inc. to First Union Bank with respect to the First Union
L/C.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A)(i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STATED MATURITY DATE" means September 7, 2004.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement in
substantially the form of Exhibit XV annexed hereto.
"STOCK PURCHASE AGREEMENT" means those Stock Purchase
Agreements, each dated as of September 7, 1999 by and between each of the New
Investors and Borrower, pursuant to which Borrower received from the New
Investors $5,000,000 in capital contributions, which capital contributions were
utilized to pay in full all amounts outstanding under the Bridge Loan on the
Initial Effective Date.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of any Loan
Party subordinated in right of payment to the Obligations pursuant to
documentation containing maturities, amortization schedules, covenants,
defaults, remedies, subordination
21
<PAGE> 28
provisions and other material terms in form and substance reasonably
satisfactory to Lender.
"SUBSIDIARY" means (i) with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof, and (ii) with respect to Borrower and its Subsidiaries
after the New Effective Date, such Persons acquired or formed as a "Subsidiary"
in compliance with the provisions of Section 6.8 hereof, and (iii) on the New
Effective Date, the following Persons are Subsidiaries of the Borrower:
(i) CRI;
(ii) Telecrafter Acquisition Corp.,a
Delaware corporation;
(iii) RTK Corporation, a New Jersey
corporation;
(iv) RT/Katek Communications Group of
Puerto Rico, a Puerto Rico
corporation;
(v) Queens Cable Contractors Inc., a New
Jersey corporation;
(vi) The Drop Depot, Inc., a New Jersey
corporation;
(vii) CRI of Cherry Hill, Inc., a Delaware
corporation;
(viii) PC Network Solutions, Inc., a
Delaware corporation; and
(ix) Holdings.
"SUBSIDIARY GUARANTOR" means each Domestic Subsidiary of
Borrower (excluding any Inactive Subsidiary), and "SUBSIDIARY GUARANTORS" means
all such Subsidiary Guarantors.
"SUBSIDIARY GUARANTY" means, collectively (i) the Subsidiary
Guaranty executed and delivered by each Subsidiary Guarantor (other than
Holdings) on the Initial Effective Date, substantially in the form of Exhibit
IX-A, and (ii) the Holdings Guaranty executed and delivered by Holdings on the
Initial Effective Date, substantially in the form of Exhibit IX-B annexed
hereto, as such guaranties may thereafter be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"SUBSIDIARY SECURITY AGREEMENT" means, the Subsidiary Security
Agreement executed and delivered by each Subsidiary Guarantor on the Initial
Effective Date, substantially in the form of Exhibit X annexed hereto, relating
to the Collateral owned by such each such Subsidiary, as such agreement may
thereafter be amended,
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<PAGE> 29
supplemented or otherwise modified from time to time as permitted thereunder and
hereunder.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided, that "Tax on the overall net income" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or in which that Person's principal office (and/or, in
the case of Lender, its lending office) is located or in which that Person
(and/or, in the case of Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of Lender, its lending office).
"TAX BENEFIT" has the meaning assigned to that term in
subsection 2.8(b).
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement in
substantially the form of Exhibit XVII annexed hereto, as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time as
permitted thereunder and hereunder.
"TELECRAFTER" means Nassau Communications, Inc. (doing
business as Telecrafter Services Corporation), together with its successors and
assigns.
"TELECRAFTER ACQUISITION" means the acquisition by Telecrafter
Acquisition Corp. of certain assets of Telecrafter pursuant to the Telecrafter
Purchase Agreement.
"TELECRAFTER PURCHASE AGREEMENT" means that certain Asset
Purchase Agreement, dated as of July 28, 1999, among Borrower, Telecrafter
Acquisition Corp., Telecrafter, Bruce A. Nassau and Lurie S. Nassau.
"TERM LOAN" means the term loan made by Lender to Borrower
pursuant to subsection 2.1(a) on the Initial Effective Date.
"TERM NOTE" means (i) the promissory term note of Borrower
issued to Lender on the Initial Effective Date and (ii) any promissory notes
issued by Borrower pursuant to the last sentence of subsection 8.1(b) in
connection with assignments of the Term Loan of Lender, in each case,
substantially in the form of Exhibit III annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"TERMINATION DATE" means the earlier of (i) the Stated
Maturity Date, or (ii) the date on which the Loans and other Obligations are
declared immediately due and payable in accordance with Section 7.
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<PAGE> 30
"TOTAL LEVERAGE RATIO" means, as of any date of determination,
the ratio of (i) Consolidated Total Debt as of such date to (ii) EBITDA for the
twelve consecutive month period most recently ended.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"WARRANT" means that certain warrant, dated September 7,
1999,in the form attached as Exhibit XVIII annexed hereto, issued to General
Electric Capital Corporation to purchase shares of common stock of Borrower,
pursuant to that certain Stock and Warrant Purchase Agreement dated as of
September 7, 1999.
"YEAR 2000 COMPLIANT" means, in regard to any Person, that all
software, hardware, firmware, computer equipment and goods, or computer systems
under such Person's control and material to the business operations or financial
condition of such Person, will properly perform without error relating to date
data during and after the year 2000.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lender pursuant to clauses (i), (ii) and
(iii) of subsection 5.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 5.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
(a) Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural,
depending on the reference.
(b) References to "Sections" and "subsections" shall
be to Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided.
(c) The use in any of the Loan Documents of the word
"include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter
to the specific items or matters set forth immediately following such
word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words
of similar import) is used with reference thereto, but
24
<PAGE> 31
rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or
matter.
(d) All references contained herein to this
Agreement, any other Loan Document, any Related Document or any other
agreement or other instrument shall be a reference to such agreement or
instrument as it may be amended, restated, supplemented, replaced or
otherwise in a different form from time to time in accordance with the
terms thereof and hereof.
SECTION 2.
THE LOAN
2.1 MAKING OF LOANS; NOTES.
(a) THE TERM LOAN. Pursuant to the terms and
conditions of the Original Credit Agreement and in reliance upon the
representations and warranties of Borrower therein set forth, on the
Initial Effective Date Lender made a Term Loan to Borrower in the
amount of $15,000,000, which Term Loan is evidenced by a Term Note
delivered by Borrower to Lender substantially in the form of Exhibit
III-a annexed hereto. On the New Effective Date, the outstanding
principal amount outstanding on the Term Loan is $15,000,000.
(b) ALLOCATION. On the Initial Effective Date,
Borrower delivered to Lender the Warrant simultaneously with the
delivery of the Note. In order to establish the "issue price" within
the meaning of section 1273(b) of the Internal Revenue Code of 1986, as
amended (the "CODE"), and the regulations issued thereunder, of the
Term Note, and for all other purposes of the Code, Borrower and Lender
agree that the amount of the Term Loan allocated to the Warrant shall
be $1,500,000 and the amount of the Term Loan allocated to the Term
Note shall be $13,500,000.
(c) THE REVOLVING CREDIT FACILITY. Subject to the
terms and conditions of this Agreement and in reliance upon the
representations and warranties of Borrower herein set forth, Lender
agrees to make advances available to Borrower from time to time until
the Termination Date (each, a "REVOLVING ADVANCE"). The Revolving Loan
shall not at any time exceed the Revolving Commitment. Until the
Termination Date, Borrower may from time to time borrow, repay and
reborrow under this Section 2.1(c).
(d) BORROWING MECHANICS. Except with respect to
automatic Revolving Advances made pursuant to subsection 2.3(b),
Borrower shall deliver to Lender a Notice of Borrowing no later than
10:00 A.M. (New York time) at least three Business Days in advance of
the date of each proposed Revolving Advance (in the case of a LIBOR
Rate Loan) or at least one Business Day in advance of of the date of
each proposed Revolving Advance (in the case of a Base Rate Loan). A
Revolving Advance may be continued as or converted into a Base Rate
Loan and LIBOR Rate Loan in the manner provided in subsection 2.2(d).
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<PAGE> 32
Each Notice of Borrowing must be given in writing (by telecopy or
overnight courier) and shall include the information required in such
Exhibit I-b and such other information as may be required by Lender. If
Borrower desires to have the Revolving Advances bear interest by
reference to a LIBOR Rate, it must comply with the provisions of
subsection 2.2, including subsection 2.2(d).
(e) REVOLVING NOTE. Borrower shall execute and
deliver on the New Effective Date to Lender a Note substantially in the
form of Exhibit III-b annexed hereto to evidence the Revolving Loan
(the "REVOLVING NOTE"). The Revolving Note shall represent the
obligation of Borrower to pay the amount of the aggregate unpaid
principal amount of all Revolving Advances to Borrower together with
interest thereon set forth herein and therein. The entire unpaid
balance of the Revolving Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available
funds on the Termination Date.
2.2 INTEREST ON THE LOANS.
(a) RATE OF INTEREST. Subject to the provisions of
subsections 2.7 and 2.8, the Loans shall bear interest on the unpaid
principal amount thereof from the date made until paid in full (whether
by acceleration or otherwise) at a rate determined by reference to the
Base Rate or the Adjusted LIBOR Rate. The applicable basis for
determining the rate of interest with respect to the initial Revolving
Advance on the New Effective Date shall be selected by Borrower at the
time of delivery of a Notice of Borrowing pursuant to subsection
2.1(d). The rate of interest on the Term Loan on the New Effective Date
is 11.12% (that is, the LIBOR Rate of 6.12% plus 5.0%) and the Interest
Period with respect to such LIBOR Rate Loan expires on June 5, 2000.
Subject to the provisions of subsections 2.2(e) and 2.8, the
Loans shall bear interest until paid in full as follows:
(i) if a Base Rate Loan, then at the
sum of the Base Rate plus the
Applicable Margin per annum; or
(ii) if a LIBOR Rate Loan, then at the
sum of the Adjusted LIBOR Rate plus
the Applicable Margin per annum.
The "APPLICABLE MARGIN" for Term Loans that are Base Rate
Loans and LIBOR Rate Loans shall be determined quarterly, based upon the
calculation of the Total Leverage Ratio for the prior fiscal quarter, as
follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
APPLICABLE MARGIN FOR APPLICABLE MARGIN
TOTAL LEVERAGE RATIO LIBOR RATE LOANS FOR BASE RATE LOANS
----------------------------------------------------------------------------------------------------
<S> <C> <C>
less than or equal to 1.0x 4.0% 2.75%
----------------------------------------------------------------------------------------------------
greater than 1.0x 5.0% 3.75%
----------------------------------------------------------------------------------------------------
</TABLE>
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<PAGE> 33
The "APPLICABLE MARGIN" for Revolving Loans that are Base Rate
Loans and LIBOR Rate Loans shall be as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------
APPLICABLE MARGIN FOR APPLICABLE MARGIN FOR
LIBOR RATE LOANS BASE RATE LOANS
-------------------------------------------------------------------
<S> <C>
2.75% 1.50%
-------------------------------------------------------------------
</TABLE>
(b) INTEREST PERIODS. In connection with a LIBOR Rate
Loan, the interest period (each an "INTEREST PERIOD") to be applicable
to the Loans shall be a 1, 2, 3 or 6 month period, as selected by
Borrower; provided, that:
(i) in the case of immediately
successive Interest Periods
applicable to a LIBOR Rate Loan
continued as such pursuant to a
Notice of Conversion/Continuation,
each successive Interest Period
shall commence on the day on which
the next preceding Interest Period
expires;
(ii) if an Interest Period would
otherwise expire on a day that is
not a Business Day, such Interest
Period shall expire on the next
succeeding Business Day; provided,
that, if any Interest Period would
otherwise expire on a day that is
not a Business Day but is a day of
the month after which no further
Business Day occurs in such month,
such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period that begins on
the last Business Day of a calendar
month (or on a day for which there
is no numerically corresponding day
in the calendar month at the end of
such Interest Period) shall, subject
to clause (v) of this subsection
2.2(b), end on the last Business Day
of a calendar month; and
(iv) no Interest Period with respect to
any portion of the Loans shall
extend beyond the Termination Date.
(c) INTEREST PAYMENTS. Subject to the provisions of
subsection 2.2(e), interest on the Loans shall be payable on the last
day of each Interest Period with respect to LIBOR Rate Loans, and the
last Business Day of each quarter with respect to Base Rate Loans;
provided, that, interest with respect to a LIBOR Rate Loan with a
6-month Interest Period shall be payable at the end of the third and
sixth months of such Interest Period.
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<PAGE> 34
(d) CONVERSION OR CONTINUATION. Subject to the
provisions of subsection 2.7, Borrower shall have the option (i) to
convert at any time a Loan bearing interest at a rate determined by
reference to one basis to the alternative basis or (ii) upon the
expiration of an Interest Period applicable to a Loan bearing interest
at the LIBOR Rate, to continue a Loan as a LIBOR Rate Loan; provided,
however, that a LIBOR Rate Loan may only be converted into a Base Rate
Loan on the expiration date of an Interest Period applicable thereto;
and provided, further, that no Loan may be made as or converted into a
Base Rate Loan during the period from December 24 of any year to and
including January 7 of the immediately succeeding year for the purpose
of investing in securities bearing interest at a rate determined by
reference to any other basis for the purpose of arbitrage or
speculation.
Borrower shall deliver a Notice of
Conversion/Continuation to Lender no later than 10:00 A.M. (New York
time) at least one Business Day in advance of the proposed conversion
date (in the case of a conversion to a Base Rate Loan) and at least
three Business Days in advance of the proposed conversion/continuation
date (in the case of a conversion to, or a continuation of, a LIBOR
Rate Loan). A Notice of Conversion/Continuation shall specify (i) the
proposed conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Loan to be converted/continued, (iii)
the nature of the proposed conversion/continuation, (iv) in the case of
a conversion to, or a continuation of, a LIBOR Rate Loan, that no
Default or Event of Default has occurred and is continuing, (v) with
respect to each LIBOR Rate Loan, whether such LIBOR Rate Loan will be
for 1, 2, 3 or 6 months. In lieu of delivering the above-described
Notice of Conversion/Continuation, Borrower may give Lender telephonic
notice by the required time of any proposed conversion/continuation
under this subsection 2.2(d); provided, that such notice shall be
promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Lender on or before the proposed
conversion/continuation date, and provided, further, that no more than
five LIBOR Rate Loans shall be outstanding at any one time.
Lender shall not incur any liability to Borrower in acting
upon any telephonic notice referred to above that Lender believes in good faith
to have been given by a duly authorized officer or other person authorized to
act on behalf of Borrower or for otherwise acting in good faith under this
subsection 2.2(d), and upon conversion or continuation of the applicable basis
for determining the interest rate with respect to a Loan in accordance with this
Agreement pursuant to any such telephonic notice Borrower shall have effected a
conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.7(b), 2.7(c) and
2.7(g), a Notice of Conversion/Continuation for conversion to, or continuation
of, a LIBOR Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Borrower shall be bound to effect a conversion or continuation in accordance
therewith.
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<PAGE> 35
(e) DEFAULT RATE. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of the
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the Loans (or, in
the case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for a Term
Loan that is a Base Rate Loan); provided, that, in the case of a LIBOR Rate
Loan, upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such LIBOR Rate Loan shall thereupon
become a Base Rate Loan and shall thereafter bear interest payable upon demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for a Term Loan that is Base Rate Loan. Payment or
acceptance of the increased rates of interest provided for in this subsection
2.2(e) is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Lender.
(f) COMPUTATION OF INTEREST. Interest on the Loans shall be
computed (i) in the case of a Base Rate Loan, on the basis of a 365-day or
366-day year, as the case may be, and (ii) in the case of a LIBOR Rate Loan, on
the basis of a 360-day year, in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on the Loans, the
date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a LIBOR Rate Loan, the date of conversion of such LIBOR Rate Loan to such
Base Rate Loan, as the case may be, shall be included, and the date of payment
of such Loan or the expiration date of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted to a LIBOR Rate Loan,
the date of conversion of such Base Rate Loan to such LIBOR Rate Loan, as the
case may be, shall be excluded; provided, that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
2.3 LETTERS OF CREDIT.
(a) ISSUANCE. Subject to the terms and conditions of
this Agreement, Lender agrees to incur, from time to time prior to the
Termination Date, upon the request of Borrower and for the account of Borrower
or a Subsidiary, Letter of Credit Obligations by causing Letters of Credit to be
issued (by a bank or other legally authorized Person selected by or acceptable
to Borrower and acceptable to Lender in its sole discretion (each, an "L/C
ISSUER")) naming as account party Borrower or a Subsidiary, in each case
guaranteed by Lender. The aggregate amount of all such Letter of Credit
Obligations shall not at any time exceed the leasser of (i) $3,000,000 (the "L/C
SUBLIMIT"), and (ii) the Revolving Commitment minus the aggregate outstanding
principal balance of the
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<PAGE> 36
Revolving Advances. No such Letter of Credit shall have an expiry date which is
more than one year following the date of issuance thereof, and Lender shall not
be under any obligation to incur Letter of Credit Obligations in respect of any
Letter of Credit having an expiry date which is later than the Termination Date.
(b) ADVANCES AUTOMATIC. In the event that Lender
shall make any payment on or pursuant to any Letter of Credit Obligation, such
payment shall then be deemed automatically to constitute a Revolving Advance
under Section 2.1(c) hereof regardless of whether a Default or Event of Default
shall have occurred and be continuing and notwithstanding Borrower's failure to
satisfy the conditions precedent set forth herein.
(c) CASH COLLATERAL. If Borrower is required to
provide cash collateral for any Letter of Credit Obligations pursuant to the
Agreement prior to the Termination Date, Borrower will pay to Lender cash or
Cash Equivalents in an amount equal to 105% of the maximum amount then available
to be drawn under each applicable Letter of Credit outstanding. Such funds or
Cash Equivalents shall be held by Lender in a cash collateral account (the "CASH
COLLATERAL ACCOUNT") maintained at a bank or financial institution acceptable to
Lender. The Cash Collateral Account shall be in the name of Borrower and shall
be pledged to, and subject to the control of and in a manner satisfactory to
Lender. Borrower hereby pledges and grants to Lender a security interest in all
such funds and Cash Equivalents held in the Cash Collateral Account from time to
time, and all proceeds thereof, as security for the payment of all amounts due
in respect of the Letter of Credit Obligations and other Obligations, whether or
not then due.
If any Letter of Credit Obligations, whether or not
then due and payable, shall for any reason be outstanding on the Termination
Date, Borrower shall either (i) provide cash collateral therefor in the manner
described above, (ii) cause all such Letters of Credit and guaranties thereof to
be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guarantee of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like tenor and duration as, and in an amount
equal to 105% of the aggregate maximum amount then available to be drawn under,
the Letters of Credit to which such outstanding Letter of Credit Obligations
relate and shall be issued by a bank or financial institution, and shall be
subject to such terms and conditions, in each case, as satisfactory to Lender in
its sole discretion.
From time to time after funds are deposited in the
Cash Collateral Account by Borrower, whether before or after the Termination
Date, Lender may apply such funds or Cash Equivalents then held in the Cash
Collateral Account to the payment of any Obligations, in such order as Lender
may elect, as shall be or shall become due and payable by Borrower to Lenders
with respect to such Letter of Credit Obligations and, upon the satisfaction in
full of all Letter of Credit Obligations, to any other Obligations then due and
payable.
30
<PAGE> 37
Neither Borrower nor any Person claiming on behalf of
or through Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Lender in respect thereof, any funds remaining in the
Cash Collateral Account shall be applied to other Obligations when due and owing
and upon payment in full of such Obligations, any remaining amount shall be paid
to Borrower or as otherwise required by law.
(d) FEES AND EXPENSES. Borrower agrees to pay to
Lender for Letter of Credit Obligations incurred hereunder, (i) all costs and
expenses incurred by Lender on account of such Letter of Credit Obligations, and
(ii) for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "LETTER OF CREDIT FEE") in an amount equal to the per
annum rate of the Applicable Margin for Revolving Loans that are LIBOR Rate
Loans multiplied by the maximum amount available from time to time to be drawn
under the applicable Letter of Credit. Such fee shall be paid to Lender in
arrears, on the first day of each month. In addition, Borrower shall pay to any
L/C Issuer, on demand, such fees (including all per annum fees), charges and
expenses of such L/C Issuer in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter of
Credit is issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT
OBLIGATIONS. Borrower shall give Lender at least two Business Days prior written
notice requesting the incurrence of any Letter of Credit Obligation, specifying
the date such Letter of Credit Obligation is to be incurred, identifying the
beneficiary to which such Letter of Credit Obligation relates and describing the
nature of the transactions proposed to be supported thereby. The notice shall be
accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) to be guarantied. Notwithstanding anything contained herein to
the contrary, Letter of Credit applications by Borrower and approvals by Lender
may be made and transmitted pursuant to electronic codes and security measures
mutually agreed upon and established by and among Borrower, Lender and the L/C
Issuer.
(f) OBLIGATIONS ABSOLUTE. The obligation of Borrower
to reimburse Lender for payments made with respect to any Letter of Credit
Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities. Such obligations of
Borrower shall be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit, the Agreement or the other Loan Documents or any
other agreement;
31
<PAGE> 38
(ii) the existence of any claim, set-off, defense or
other right which Borrower or any of its Affiliates or Lender may at
any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Lender, or any other Person, whether in connection with the
Agreement, the Letter of Credit, the transactions contemplated herein
or therein or any unrelated transaction (including any underlying
transaction between Borrower or any of its Affiliates and the
beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by Lender (except as otherwise expressly
provided in paragraph (g)(ii)(C) below) or any L/C Issuer under any
Letter of Credit or guaranty thereof against presentation of a demand,
draft or certificate or other document which does not comply with the
terms of such Letter of Credit or such guaranty;
(v) any other circumstance or happening whatsoever,
which is similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default
shall have occurred and be continuing.
(g) INDEMNIFICATION; NATURE OF LENDER'S DUTIES.
(i) In addition to amounts payable as elsewhere
provided in the Agreement, Borrower hereby agrees to pay and to
protect, indemnify, and save harmless Lender from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including attorneys' fees) which Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of
any Letter of Credit or guaranty thereof, or (B) the failure of Lender
seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority, in
each case other than to the extent solely as a result of the gross
negligence or willful misconduct of Lender (as finally determined by a
court of competent jurisdiction).
(ii) As between Lender and Borrower, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of
Credit by beneficiaries of any Letter of Credit. In furtherance and not
in limitation of the foregoing, to the fullest extent permitted by law
Lender
32
<PAGE> 39
shall not be responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (C) for failure of
the beneficiary of any Letter of Credit to comply fully with conditions
required in order to demand payment under such Letter of Credit;
provided, that, in the case of any payment by Lender under any Letter
of Credit or guaranty thereof, Lender shall be liable to the extent
such payment was made solely as a result of its gross negligence or
willful misconduct (as finally determined by a court of competent
jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (D) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (E)
for errors in interpretation of technical terms; (F) for any loss or
delay in the transmission or otherwise of any document required in
order to make a payment under any Letter of Credit or guaranty thereof
or of the proceeds thereof; (G) for the credit of the proceeds of any
drawing under any Letter of Credit or guaranty thereof; and (H) for any
consequences arising from causes beyond the control of Lender. None of
the above shall affect, impair, or prevent the vesting of any of
Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to
limit or to expand any waivers, covenants or indemnities contained in
any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between Borrower and such L/C Issuer.
2.4 REPAYMENTS, PREPAYMENTS AND REDEMPTION OF LOAN; GENERAL PROVISIONS
REGARDING PAYMENTS.
(a) REPAYMENT OF LOAN. The aggregate principal amount
of, and interest on, the Loans shall be due and payable in full on the
Termination Date.
(b) VOLUNTARY PREPAYMENTS. Borrower may, upon not
less than ten days' prior written or telephonic notice given to Lender
by Noon (New York time) on the date required and, if given by
telephone, promptly confirmed in writing to Lender, at any time and
from time to time (i) voluntarily prepay all or part of the Term Loan,
or (ii) voluntarily prepay all or part of the Revolving Loan on any
Business Day in whole or in part in an aggregate minimum amount of
33
<PAGE> 40
$100,000 and integral multiples of $100,000 in excess of that amount;
provided, that if such prepayment does not occur on the expiration of
the Interest Period applicable thereto, Lender shall be entitled to
receive Breakage Costs from Borrower. Notice of prepayment having been
given as aforesaid, the principal amount of such Loan specified in such
notice shall become due and payable on the prepayment date specified
therein. Each notice of partial prepayment shall designate the Loan or
other Obligations to which such prepayment is to be applied, provided,
that amounts repaid on the Term Loan pursuant to this subsection shall
be applied to the Term Loan in inverse order of scheduled maturities.
Amounts prepaid on the Term Loan may not be reborrowed.
(c) TERMINATION OR REDUCTION OF REVOLVING COMMITMENT.
Borrower may at any time on at least ten days' prior written notice to
Lender terminate or reduce the Revolving Commitment or the L/C Sublimit
in whole or in part in an aggregate minimum amount of $100,000 and
integral multiples of $100,000 in excess of that amount; provided, that
the Revolving Commitment shall not be reduced to an amount less than
the L/C Sublimit, and provided, further, in no event shall the L/C
Sublimit be reduced or terminated below the amount of Letter of Credit
Obligations outstanding as of such date. Simultaneously (and as a
condition to) such termination or reduction of the Revolving Commitment
or the L/C Sublimit, all Revolving Loans and other Obligations in
excess of the Revolving Commitment (as so reduced) shall be immediately
due and payable in full. If such payment does not occur on the
expiration of the Interest Period applicable thereto, Lender shall be
entitled to receive Breakage Costs from Borrower. Upon any such
prepayment and reduction or termination of the Revolving Commitment or
the L/C Sublimit, Borrower's right to request Revolving Advances, or
request that Letter of Credit Obligations (and the related L/C
Sublimit) be incurred on its behalf shall simultaneously be permanently
reduced or terminated, as the case may be.
(d) PREPAYMENT PREMIUM. Borrower shall pay a
prepayment premium with respect to the Term Loan equal to 1% of the
amount of such prepayment with respect to any voluntary prepayment made
prior to September 7, 2000.
(e) SCHEDULED MANDATORY PREPAYMENTS. Borrower shall,
until payment in full of the Term Loan and subject to earlier
prepayment and payment as hereinafter provided, make installment
payments in respect of the principal of the Term Loan to Lender on the
dates (unless such date is not a Business Day, in which case, such
payment shall be made on the next succeeding Business Day) and in the
amounts set forth below.
<TABLE>
<CAPTION>
Payment Date Installment Amount
------------ ------------------
<S> <C>
December 31, 2000, March 31, 2001 $468,750.00
June 30, 2001 and September 30, 2001
</TABLE>
34
<PAGE> 41
<TABLE>
<S> <C>
December 31, 2001, March 31, 2002 $937,500.00
June 30, 2002, September 30, 2002
December 31, 2002, March 31, 2003
June 30, 2003 and September 30, 2003
December 31, 1 2003, March 31, 2004 $1,406,250.00
June 30, 2004 and September 7, 2004
</TABLE>
provided, however, that the last such installment shall be in the
amount necessary to repay in full the unpaid principal amount of the
Term Loan.
(f) MANDATORY PREPAYMENTS -- ASSET SALES. Borrower
shall, until payment in full of the Term Loan and subject to earlier
prepayment and payment as hereinafter provided, make prepayments in
respect of the principal of the Term Loan to Lender concurrently with
any Asset Sale, in an amount equal to the Net Cash Proceeds of such
Asset Sale, as follows: first, to the Term Loan, until the Term Loan is
paid in full, and second, to the Revolving Loan (and in permanent
reduction of the Revolving Commitment), until the Revolving Loan is
paid in full (and the Revolving Commitment is reduced to zero). Amounts
repaid pursuant to this subsection shall be applied on the Term Loan in
inverse order of scheduled maturities.
(g) MANDATORY PREPAYMENTS -- ISSUANCES. Borrower
shall, until payment in full of the Term Loan and subject to earlier
prepayment and payment as hereinafter provided, make a prepayment in
respect of the principal of the Term Loan to Lender concurrently with
any Issuance (other than an Issuance with respect to a Permitted
Subordinated Debt Financing), of a percentage of the Net Cash Proceeds
of such Issuance, as follows:
<TABLE>
<CAPTION>
Aggregate Amount of Proceeds from Percentage of Net Cash Proceeds
Such Issuance Plus all Prior and From Such Issuance To Be Applied
Simultaneous Issuances As Term Loan Prepayment
---------------------- -----------------------
<S> <C>
$0 to $5,000,000 0%
$5,000,001 to $10,000,000 50%
Over $10,000,000 100%
</TABLE>
Amounts repaid pursuant to this subsection shall be applied on the Term
Loan in inverse order of scheduled maturities.
(h) MANDATORY PREPAYMENTS -- CONSOLIDATED EXCESS CASH
FLOW. Borrower shall, until payment in full of the Term Loan and
subject to earlier prepayment and payment as hereinafter provided, make
prepayments in respect of the principal of the Term Loan to Lender not
later than 90 days following the end of each Fiscal Year, a prepayment
equal to (x) 25% of Consolidated Excess Cash Flow with respect to the
Fiscal Year ending on or
35
<PAGE> 42
about December 31, 2000, and (y) 50% of Consolidated Excess Cash Flow
with respect to each subsequent Fiscal Year. Amounts repaid pursuant to
this subsection shall be applied on the Term Loan in inverse order of
scheduled maturities
(i) GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All
payments by Borrower of principal,
interest, fees and other
Obligations hereunder and under the
Notes shall be made in Dollars in
same day funds, without defense,
setoff or counterclaim, free of any
restriction or condition, and
delivered to Lender not later than
12:00 Noon (New York time) on the
date due at the Funding and Payment
Office; funds received by Lender
after that time on such due date
shall be deemed to have been paid
by Borrower on the next succeeding
Business Day.
(ii) Payments on Business Days. Whenever
any payment to be made hereunder
shall be stated to be due on a day
that is not a Business Day, such
payment shall be made on the next
succeeding Business Day and such
extension of time shall be included
in the computation of the payment
of interest hereunder or of fees
hereunder, as the case may be.
(iii) Notation of Payment. Lender agrees
that before disposing of the Notes
held by it, or any part thereof
(other than by granting
participations therein), that
Lender will make a notation thereon
of all principal payments
previously made thereon and of the
date to which interest thereon has
been paid; provided, that the
failure to make (or any error in
the making of) any notation under
any Note shall not limit or
otherwise affect the obligations of
Borrower hereunder or under such
Note with respect to the unpaid
portion of the Obligations.
(j) APPLICATION OF NET CASH PROCEEDS OF COLLATERAL AND
PAYMENTS UNDER SUBSIDIARY GUARANTY.
(i) Application of Net Cash Proceeds of
Collateral. All Net Cash Proceeds
received by Lender in respect of
any sale of, collection from, or
other realization upon all or any
part of the Collateral under any
36
<PAGE> 43
Security Document may, in the
discretion of Lender, be held by
Lender as Collateral for, and/or
(then or at any time thereafter)
applied in full or in part by
Lender against, the applicable
Secured Obligations (as defined in
such Security Document) in the
following order of priority:
1) To the payment of all costs
and expenses of such sale,
collection or other
realization, including
reasonable compensation to
Lender and its counsel, and
all other expenses,
liabilities and advances
made or incurred by Lender
in connection therewith,
and all amounts for which
Lender is entitled to
indemnification under such
Security Document and all
advances made by Lender
thereunder for the account
of the applicable Loan
Party, and to the payment
of all costs and expenses
paid or incurred by Lender
in connection with the
exercise of any right or
remedy under such Security
Document, all in accordance
with the terms of this
Agreement and such Security
Document;
2) thereafter, to the extent
of any excess such Net Cash
Proceeds, to the payment of
all other such Secured
Obligations for the ratable
benefit of the holders
thereof, and
3) thereafter, to the extent
of any excess such Net Cash
Proceeds, to the payment to
or upon the order of such
Loan Party or to whosoever
may be lawfully entitled to
receive the same or as a
court of competent
jurisdiction may direct.
(ii) Application of Payments Under
Subsidiary Guaranty. All payments
received by Lender under the
Subsidiary Guaranty shall be
applied promptly from time to time
by Lender in the following order of
priority:
1) To the payment of the costs
and expenses of any
collection or other
realization under the
Subsidiary Guaranty,
including reasonable
compensation to Lender and
its counsel, and all
expenses, liabilities and
advances made
37
<PAGE> 44
or incurred by Lender in
connection therewith, all
in accordance with the
terms of this Agreement
and the Subsidiary
Guaranty;
2) thereafter, to the extent
of any excess such
payments, to the payment of
all other Guarantied
Obligations (as defined in
the Subsidiary Guaranty)
for the ratable benefit of
the holders thereof, and
3) thereafter, to the extent
of any excess such
payments, to the payment to
the applicable Subsidiary
Guarantor or to whosoever
may be lawfully entitled to
receive the same or as a
court of competent
jurisdiction may direct.
2.5 UNUSED FACILITY FEE. Borrower agrees to pay to Lender, in
arrears, on the first Business Day of each month prior to the Termination Date
and on the Termination Date, a fee for Borrower's non-use of available funds
under the Revolving Loan facility in an amount equal to 0.50% per annum
(calculated on the basis of a 360-day year for actual days elapsed) of the
difference between (x) the Revolving Commitment (as it may be reduced from time
to time) and (y) the average for the period of the daily closing balances of the
Revolving Loan outstanding during the period for which such fee is due.
2.6 USE OF PROCEEDS.
(a) REVOLVING LOAN. The proceeds of the initial
Revolving Advance on the New Effective Date shall be contributed by
Borrower to certain of its Domestic Subsidiaries to make payment in
full of all Indebtedness outstanding under the Senior Credit
Agreements. The ongoing proceeds of Revolving Advances shall be applied
by Borrower for working capital needs, capital expenditures,
acquisitions (each, to the extent permitted hereunder) and other
general corporate purposes of Borrower and its Subsidiaries.
(b) MARGIN REGULATIONS. No portion of the proceeds of
any borrowing under this Agreement shall be used by Borrower or any of
its Subsidiaries in any manner that might cause the borrowing or the
application of such proceeds to violate Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board or to violate the Exchange Act, in
each case as in effect on the date or dates of such borrowing and such
use of proceeds.
38
<PAGE> 45
2.7 SPECIAL PROVISIONS GOVERNING LIBOR RATE LOAN.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to a LIBOR Rate
Loan as to the matters covered:
(a) DETERMINATION OF APPLICABLE INTEREST RATE. As
soon as practicable after 10:00 A.M. (New York time) on each Interest
Rate Determination Date, Lender shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all
parties) the interest rate that shall apply to the LIBOR Rate Loan for
which an interest rate is then being determined for the applicable (as
designated by Borrower) 1, 2, 3 or 6-month Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrower.
(b) INABILITY TO DETERMINE APPLICABLE INTEREST RATE.
In the event that Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto), on
any Interest Rate Determination Date with respect to a LIBOR Rate Loan,
that by reason of circumstances affecting the London interbank market
adequate and fair means do not exist for ascertaining the interest rate
applicable to the Loans on the basis provided for in the definition of
Adjusted LIBOR Rate, Lender shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower of such
determination, whereupon (i) such Loan may not be made as, or converted
to, a LIBOR Rate Loan until such time as Lender notifies Borrower that
the circumstances giving rise to such notice no longer exist and (ii)
any Notice of Borrowing or Notice of Conversion/Continuation given by
Borrower with respect to a Loan in respect of which such determination
was made shall be deemed to be rescinded by Borrower.
(c) ILLEGALITY OR IMPRACTICABILITY OF LIBOR RATE
LOAN. In the event that on any date Lender shall have determined (which
determination shall be final and conclusive and binding upon all
parties hereto) that the making, maintaining or continuation of its
LIBOR Rate Loan (i) has become unlawful as a result of compliance by
Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force
of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause Lender
material hardship, as a result of contingencies occurring after the
date of this Agreement which materially and adversely affect the London
interbank market or the position of Lender in that market, then, and in
any such event, Lender shall on that day give notice (by telefacsimile
or by telephone confirmed in writing) to Borrower of such
determination. Thereafter (a) the obligation of Lender to make Loans
as, or to convert the Loan to, a LIBOR Rate Loan shall be suspended
until such notice shall be withdrawn by Lender, (b) to the extent such
determination by Lender relates to a LIBOR Rate Loan then being
requested by Borrower pursuant to a
39
<PAGE> 46
Notice of Borrowing or a Notice of Conversion/Continuation, Lender
shall make a Loan as (or convert a Loan to, as the case may be) a Base
Rate Loan, (c) Lender's obligation to maintain its outstanding LIBOR
Rate Loan (the "AFFECTED LOAN") shall be terminated at the earlier to
occur of the expiration of the Interest Period then in effect with
respect to the Affected Loan or when required by law, and (d) the
Affected Loan shall automatically convert into a Base Rate Loan on the
date of such termination. Notwithstanding the foregoing, to the extent
a determination by Lender as described above relates to a LIBOR Rate
Loan then being requested by Borrower pursuant to a Notice of Borrowing
or a Notice of Conversion/Continuation, Borrower shall have the option,
subject to the provisions of subsection 2.7(d), to rescind such Notice
of Borrowing or Notice of Conversion/Continuation by giving notice (by
telefacsimile or by telephone confirmed in writing) to Lender of such
rescission on the date on which Lender gives notice of its
determination as described above (which notice of rescission Lender
shall promptly transmit to each other Lender).
(d) COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF
INTEREST PERIODS. Borrower shall compensate Lender, upon written
request by Lender (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and
liabilities (including any interest paid by Lender to lenders of funds
borrowed by it to make or carry its LIBOR Rate Loan and any loss,
expense or liability sustained by Lender in connection with the
liquidation or re-employment of such funds) which Lender may sustain:
(i) if for any reason (other than a default by Lender) a borrowing of a
LIBOR Rate Loan does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing, or a conversion to
or continuation of a LIBOR Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request
for conversion or continuation, (ii) if any prepayment or other
principal payment or any conversion of a LIBOR Rate Loan occurs on a
date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of its LIBOR Rate Loan is not made on any
date specified in a notice of prepayment given by Borrower, or (iv) as
a consequence of any other default by Borrower in the repayment of
their LIBOR Rate Loan when required by the terms of this Agreement.
(e) BOOKING OF LIBOR RATE LOAN. Lender may make,
carry or transfer the LIBOR Rate Loan at, to, or for the account of any
of its branch offices or the office of an Affiliate of Lender, but in
any such event without discharging Lender from its obligations to make
Loans subject to and in accordance with the provisions this Agreement.
(f) ASSUMPTIONS CONCERNING FUNDING OF LIBOR RATE
LOAN. Calculation of all amounts payable to Lender under this
subsection 2.7 and under subsection 2.8(a) shall be made as though
Lender had actually funded its LIBOR Rate Loan through the purchase of
a LIBOR deposit bearing interest at the rate obtained pursuant to
clause (i) of the definition of Adjusted LIBOR Rate in an amount equal
to the amount of the LIBOR Rate Loan and having a maturity
40
<PAGE> 47
comparable to the relevant Interest Period and through the transfer of
such LIBOR deposit from an offshore office of Lender to a domestic
office of Lender in the United States of America; provided, however,
that Lender may fund its LIBOR Rate Loan in any manner it sees fit and
the foregoing assumptions shall be utilized only for the purposes of
calculating amounts payable under this subsection 2.7 and under
subsection 2.8(a).
(g) LIBOR RATE LOAN AFTER DEFAULT. After the
occurrence of and during the continuation of a Default or an Event of
Default, (i) Borrower may not elect to have a Loan be made or
maintained as, or converted to, a LIBOR Rate Loan after the expiration
of any Interest Period then in effect for the Loans and (ii) subject to
the provisions of subsection 2.7(d), any Notice of Borrowing or Notice
of Conversion/Continuation given by Borrower with respect to a
requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Borrower.
2.8 INCREASED COSTS, TAXES; CAPITAL ADEQUACY.
(a) COMPENSATION FOR INCREASED COSTS AND TAXES.
Subject to the provisions of subsection 2.8(b) (which shall be
controlling with respect to the matters covered thereby), in the event
that Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a
court or governmental authority, in each case that becomes effective
after the Initial Effective Date, or compliance by Lender with any
guideline, request or directive issued or made after the Initial
Effective Date by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects Lender (or its applicable
lending office) to any additional
Tax (other than any Tax on the
overall net income of Lender) with
respect to this Agreement or any of
its obligations hereunder or any
payments to Lender (or its
applicable lending office) of
principal, interest, fees or any
other amount payable hereunder;
(ii) imposes, modifies or holds
applicable any reserve (including
any marginal, emergency,
supplemental, special or other
reserve), special deposit,
compulsory loan, FDIC insurance or
similar requirement against assets
held by, or deposits or other
liabilities in or for the account
of, or advances or loans by, or
other credit extended by, or any
other acquisition of funds by, any
office of Lender
41
<PAGE> 48
(other than any such reserve or
other requirements with respect to
a LIBOR Rate Loan that are
reflected in the definition of
Adjusted LIBOR Rate); or
(iii) imposes any other condition (other
than with respect to a Tax matter)
on or affecting Lender (or its
applicable lending office) or its
obligations hereunder or the London
interbank market;
and the result of any of the foregoing is to increase the cost to
Lender of agreeing to make, making or maintaining the Loans hereunder
or to reduce any amount received or receivable by Lender (or its
applicable lending office) with respect thereto; then, in any such
case, Borrower shall promptly pay to Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as Lender in its sole discretion
shall determine) as may be necessary to compensate Lender for any such
increased cost or reduction in amounts received or receivable
hereunder; provided, however, that for purposes of this sentence, the
final U.S. Treasury regulations that were issued October 6, 1997 and
subsequently amended with respect to the withholding of United States
federal income tax (the "NEW WITHHOLDING REGULATIONS") shall not be
considered to constitute any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of
any new law, treaty or governmental rule, regulation or order), or any
determination of a court of governmental authority, in each case that
becomes effective after the Initial Effective Date, notwithstanding
that the New Withholding Regulations generally are only effective for
payments made after December 31, 2000. Lender shall deliver to Borrower
a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this subsection
2.8(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
(b) WITHHOLDING OF TAXES. All sums payable by
Borrower under this Agreement and the other Loan Documents shall
(except to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax (other than
a Tax on the overall net income of Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Borrower or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment. If Borrower pays an additional amount pursuant to subsection
2.8(a) or (b) with respect to Taxes imposed on any payments made to or
on behalf of Lender (including any Lender that is an assignee or
transferee of an interest under this Agreement pursuant to subsection
8.1) and such Lender determines in its good faith discretion that it
has actually received or realized in connection therewith
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any refund of Tax, or any reduction of, or credit against, its Tax
liabilities (a "TAX BENEFIT"), such Lender shall pay to Borrower an
amount that such Lender shall, in its good faith discretion, determine
is equal to the net benefit, after tax, which was obtained by such
Lender as a consequence of such refund, reduction or credit; provided,
however, that (i) such Lender may determine, in its good faith
discretion consistent with the policies of such Lender, whether to seek
a Tax Benefit and (ii) nothing in this subsection 2.8(b) shall require
such Lender to disclose any confidential information to Borrower
(including its tax returns).
(c) TAX FORMS. Lender represents that as of the
Initial Effective Date all payments to be made to it by Borrower
pursuant to this Agreement and the other Loan Documents will be totally
exempt from the withholding of United States federal tax. Lender agrees
to deliver to Borrower on or prior to the Initial Effective Date, or in
the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to subsection 8.1 on the date of such
assignment or transfer to such Lender, the appropriate Internal Revenue
Service forms or certificates that establish such Lender's entitlement
to a complete exemption from the withholding of United States federal
tax with respect to payments to be made pursuant to this Agreement and
the other Loan Documents. In addition, Lender (including any Lender
that is an assignee or transferee of an interest under this Agreement
pursuant to subsection 8.1) agrees that (i) from time to time after the
Initial Effective Date, when a lapse in time or change in circumstance
renders the previous Internal Revenue Service forms or certificates
obsolete or inaccurate in any material respect, or (ii) upon Borrower's
reasonable request after the occurrence of any other event requiring
the delivery of an Internal Revenue Service form or certificate in
addition to or in replacement of the forms or certificates previously
delivered, it will deliver to Borrower such Internal Revenue Service
forms or certificates as may be required in order to confirm or
establish such Lender's entitlement to a continued exemption from the
withholding of United States federal tax with respect to payments to be
made under this Agreement and the other Loan Documents. Notwithstanding
anything to the contrary contained in subsection 2.8(b), but subject to
subsection 2.8(a), Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar Taxes
imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from amounts payable hereunder for the
account of Lender (including any Lender that is an assignee or
transferee of any interest under this Agreement pursuant to subsection
8.1) and Borrower shall not be obligated pursuant to subsection 2.8(b)
to gross-up payments to be made to such Lender in respect of such Taxes
to the extent that such Lender has not provided to Borrower the
appropriate Internal Revenue Service forms or certificates that
establish a complete exemption from such deduction or withholding.
(d) CAPITAL ADEQUACY ADJUSTMENT. If Lender shall have
determined that the adoption, effectiveness, phase-in or applicability
after the Initial Effective Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or
in the interpretation or
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administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by Lender (or its applicable lending office)
with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such governmental
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of Lender or any
corporation controlling Lender as a consequence of, or with reference
to, Lender's Loan or other obligations hereunder with respect to the
Loan to a level below that which Lender or such controlling corporation
could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the
policies of Lender or such controlling corporation with regard to
capital adequacy), then from time to time, within five Business Days
after receipt by Borrower from Lender of the statement referred to in
the next sentence, Borrower shall pay to Lender such additional amount
or amounts as will compensate Lender or such controlling corporation on
an after-tax basis for such reduction. Lender shall deliver to Borrower
a written statement, setting forth in reasonable detail the basis of
the calculation of such additional amounts, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
2.9 GUARANTIES OF AND SECURITY FOR THE OBLIGATIONS.
(a) BORROWER AND ITS SUBSIDIARIES. (i) Subsidiary
Guarantors shall guaranty the Obligations of Borrower pursuant to the
Subsidiary Guaranties and (ii) to secure the full performance of the
Obligations (a) Borrower shall grant to Lender a duly perfected first
priority Lien on all of the issued and outstanding capital stock of
Holdings, and (b) Borrower and Subsidiary Guarantors shall grant to
Lender a duly perfected first priority Lien on all real, personal and
mixed Collateral of Borrower and Subsidiary Guarantors, now owned or
hereafter acquired, which Lender may request. Borrower and Subsidiary
Guarantors shall execute and deliver any and all Security Documents
including, without limitation, the Borrower Pledge Agreement, the
Borrower Security Agreement, the Holdings Pledge Agreement, financing
statements, termination statements, collateral search reports, title
reports, title insurance, landlord waivers and consents, trademark
documentation, opinions of counsel and such other perfection documents,
instruments, information and materials with respect to the Collateral
and Pledged Collateral as Lender may reasonably request. All of the
foregoing shall be in form and substance reasonably satisfactory to
Lender.
(b) FURTHER ASSURANCES; ADDITIONAL SECURITY. Borrower
shall, and shall cause each other Loan Party (whether now or hereafter
acquired or existing) to, from time to time, execute and deliver to
Lender such additional Security Documents, statements, documents,
agreements and reports as it may from time to time reasonably request
to evidence, perfect or otherwise implement or assure the security for
repayment of the Obligations; provided, that, no Loan Party shall be
required to provide any different type of Collateral from that
contemplated for such by the Security Documents to which it is a party
as of the
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Initial Effective Date. All reinsurance policies shall include direct access
agreements reasonably acceptable to Lender.
SECTION 3.
CONDITIONS TO THE LOANS
The obligations of Lender to make the Loan hereunder are
subject to the satisfaction of the following conditions.
3.1 CONDITIONS TO EFFECTIVENESS ON INITIAL EFFECTIVE DATE.
[Intentionally Omitted]
3.2 CONDITIONS TO EFFECTIVENESS ON NEW EFFECTIVE DATE.
The amendment and restatement of the Original Credit Agreement
contemplated hereunder shall become effective only upon, and the obligations of
Lender to make the Loan on the New Effective Date, are subject to, prior or
concurrent satisfaction of the following conditions:
(a) BORROWER AND SUBSIDIARY GUARANTORS DOCUMENTS. On
or before the New Effective Date, Borrower shall, and shall cause each
Subsidiary Guarantor to, deliver to Lender the following with respect
to Borrower or such Subsidiary Guarantor, as the case may be, each,
unless otherwise noted, dated the New Effective Date:
(i) Resolutions of the Board of
Directors of such Person approving
and authorizing the execution,
delivery and performance of the
Loan Documents to which it is a
party, certified as of the New
Effective Date by the corporate
secretary or an assistant secretary
of such Person as being in full
force and effect without
modification or amendment;
(ii) Signature and incumbency
certificates of the officers of
such Person executing the Loan
Documents to which it is a party;
(iii) Executed originals of (A) in the
case of Borrower, this Agreement,
the Revolving Note (duly executed
in accordance with subsection
2.1(e)) and amendments and
confirmations to the other Loan
Documents to which it is a party,
and (B) updates to the Schedules to
those attached to the Original
Credit Agreement such that the
information contained therein is
true, complete and correct as of
the New Effective Date; and
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(iv) Such other documents as Lender may
reasonably request.
(b) NO MATERIAL ADVERSE EFFECT. Since December 31,
1998, no Material Adverse Effect (in the reasonable opinion of Lender)
shall have occurred.
(c) NO MATERIAL LITIGATION. Since December 31, 1998,
no litigation has commenced, which, if successful, would have Material
Adverse Effect (in the reasonable opinion of Lender).
(d) NO MATERIAL MANAGEMENT CHANGES. Since December
31, 1998, no material changes in management personnel (in the
reasonable opinion of Lender) shall have occurred.
(e) NO MATERIAL INCREASE IN LIABILITIES. Since
December 31, 1998, no material increase in the liabilities, liquidated
or contingent, of the Subsidiaries, or a material decrease in the
assets of the Subsidiaries, has occurred.
(f) SECURITY INTERESTS IN PERSONAL PROPERTY. To the
extent not previously satisfied on the Initial Effective Date, Lender
shall have received evidence satisfactory to it that Borrower and
Subsidiary Guarantors shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and delivered
all such agreements, documents and instruments, and made or caused to
be made all such filings and recordings (other than the filing or
recording of items described in clauses (ii) and (iii) below) that may
be necessary or, in the opinion of Lender, desirable in order to create
in favor of Lender a valid and (upon such filing and recording)
perfected security interest in (i) the entire personal property
Collateral of Borrower and Subsidiary Guarantors and (ii) the Pledged
Collateral.
(g) FINANCIAL STATEMENTS. On or before the New
Effective Date, Lender shall have received the audited consolidated
statements of the Borrower and its Subsidiaries as of September 30,
1999, certified as true and correct pursuant to an Officer's
Certificate of the Borrower.
(h) SENIOR CREDIT AGREEMENTS. On or before the New
Effective Date, Lender shall have received evidence that Borrower and
the Domestic Subsidiaries shall have made payment in full of all
Indebtedness outstanding under the Senior Credit Agreements and the
Senior Credit Agreements (and all Liens granted thereunder) shall have
been terminated in full and filings of UCC-3 termination statements
relating to such Liens have been made or are in the possession of
Lender for prompt filing immediately following the New Effective Date.
(i) INACTIVE SUBSIDIARIES. On or before the New
Effective Date, Lender shall have received evidence that all documents
of dissolution with respect to the Inactive Subsidiaries have been duly
prepared and otherwise are
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either have been filed, or are in form ready for filing, with the
appropriate governmental authority or agency.
(j) DELIVERY OF SOURCES, USES AND FUNDING
CERTIFICATE. Borrower shall have delivered an Officers' Certificate
detailing the sources and uses of the initial Revolving Advance, with
proper wire instructions for Lender for the application of the Loan
proceeds, all in form and substance satisfactory to Lender.
(k) DELIVERY OF FINANCIAL CONDITION CERTIFICATE. On
or before the making of the initial Revolving Advance, Borrower shall
have delivered a Financial Condition Certificate, substantially in the
form of Exhibit XIII annexed hereto with appropriate attachments
demonstrating that, both immediately prior to and immediately after
giving effect to the consummation of the transactions on the New
Effective Date and each Loan Party is Solvent.
(l) OFFICER'S CERTIFICATE. As of the New Effective
Date, (i) no event which would constitute an Event of Default or
Default shall have occurred and be continuing; (ii) the representations
and warranties in Section 4 hereof shall be true, correct and complete
in all material respects on and as of the New Effective Date to the
same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier
date, in which case such representations or warranties shall have been
true, correct and complete in all material respects as of such date;
(iii) since December 31, 1998, (x) no Material Adverse Effect shall
have occurred, (y) no litigation, inquiry or other action and no
injunction or restraining order shall be pending or threatened with
respect to the Loans or the transactions contemplated by the Loan
Documents, and (z) no material changes in management personnel has
occurred, and (iv) each Loan Party shall have delivered to Lender an
Officer's Certificate to such effect, in form and substance
satisfactory to Lender.
(m) OPINIONS OF LOAN PARTIES' COUNSEL. Lender and its
counsel shall have received originally executed copies of one or more
favorable written opinions, dated as of the New Effective Date, of (i)
Pitney, Hardin, Kipp & Szuch LLP, local counsel for the Loan Parties,
in form and substance reasonably satisfactory to Lender and its counsel
and setting forth substantially the matters in the opinions designated
in Exhibit V-a annexed hereto and, as to such other matters as Lender
may reasonably request and (ii) Dewey Ballantine LLP, counsel for the
Loan Parties as to the matters set forth in Exhibit V-b annexed hereto
and as to such other matters as Lender may reasonably request, all in
form and substance satisfactory to Lender and its counsel.
(n) COMPLETION OF PROCEEDINGS. All corporate and
other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto
not previously found acceptable by Lender and its counsel shall be
satisfactory in form and substance to Lender and
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such counsel, and Lender and its counsel shall have received all such
counterpart originals or certified copies of such documents as Lender
may reasonably request.
(o) PAYMENT OF FEES. On or before the New Effective
Date, Borrower shall have paid to Lender those fees referred to in the
proposal letter, dated December 10, 1999 that are payable on the New
Effective Date.
SECTION 4.
BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the
Loan, Borrower represents and warrants to Lender on the date of this Agreement
that the following statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
BUSINESS AND SUBSIDIARIES.
(a) ORGANIZATION AND POWERS. Each Loan Party is a
corporation, partnership, limited liability company or trust, as the
case may be, duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization as specified in
Schedule 4.1(d) annexed hereto. Each Loan Party has all requisite power
and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter
into the Loan Documents to which it is a party and to carry out the
transactions contemplated thereby.
(b) QUALIFICATION AND GOOD STANDING. Each of Borrower
and each Subsidiary Guarantor is qualified to do business and in good
standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing
has not had and will not have a Material Adverse Effect.
(c) CONDUCT OF BUSINESS. Borrower and the Subsidiary
Guarantors are engaged only in the businesses permitted to be engaged
in pursuant to subsection 6.13 and are conducting their business in
accordance with the provisions of subsection 6.13. Each of Borrower and
each Subsidiary Guarantor holds all licenses, permits, franchises,
certificates of authority, or any waivers of the foregoing that are
necessary to permit them to conduct their respective businesses as now
conducted and to hold and operate their respective properties except as
could not reasonably be expected to have a Material Adverse Effect. All
such licenses, permits, franchises, certificates of authority, and
waivers are valid and in full force and effect.
(d) SUBSIDIARIES. All of the Subsidiaries of Borrower
as of the New Effective Date are identified in Schedule 4.1(d) annexed
hereto. The capital stock of each of the Subsidiaries of Borrower
identified in Schedule 4.1(d) annexed hereto is duly authorized,
validly issued, fully paid and nonassessable
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and none of such capital stock constitutes Margin Stock. Schedule
4.1(d) annexed hereto correctly sets forth, as of the New Effective
Date, the ownership interest of Borrower and each of its Subsidiaries
in each of the Subsidiaries of Borrower identified therein.
(e) REAL PROPERTY. No Loan Party owns any interest in
real property.
(f) COLLATERAL MATTERS. Other than as may be
supplemented by written notices delivered to Lender pursuant to the
Pledge Agreements and the Security Agreements:
(i) the chief executive office and
principal place of business of each
Loan Party is as set forth in Part
One of Schedule 4.1(f) annexed
hereto;
(ii) the office where each Loan Party
keeps its records concerning
Accounts (as defined in the Security
Agreements) and all originals of all
chattel paper which evidence any
Accounts are located at the
addresses specified for such Loan
Party in Part Two of Schedule 4.1(f)
annexed hereto;
(iii) the location where each Loan Party
keeps any Inventory (as defined in
the Security Agreements) of at least
$50,000 in the aggregate is at the
address specified for such Loan
Party in Part Three of Schedule
4.1(f) annexed hereto;
(iv) the location where each Loan Party
keeps any Equipment (as defined in
the Security Agreements) of at least
$50,000 in the aggregate is at the
address specified for such Loan
Party in Part Four of Schedule
4.1(f) annexed hereto;
(v) other than as set forth in Part Five
of Schedule 4.1(f) annexed hereto,
no Loan Party does any business
under any fictitious business names
or tradenames or has done business
under any fictitious business names
or tradenames during the five years
preceding the Initial Effective
Date.
4.2 AUTHORIZATION OF BORROWING, ETC.
(a) AUTHORIZATION OF BORROWING. The execution,
delivery and performance of the Loan Documents and the Related
Documents have been duly authorized by all necessary action on the part
of each Loan Party that is a party thereto.
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(b) NO CONFLICT. The execution, delivery and
performance by Loan Parties of the Loan Documents and the Related
Documents and the consummation of the transactions contemplated thereby
do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to any Loan Party, the
Certificate or Articles of Incorporation or Bylaws or other
organizational documents of any Loan Party or any order, judgment or
decree of any court or other agency of government binding on any Loan
Party, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual
Obligation of any Loan Party, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of any
Loan Party (other than any Liens created under any of the Loan
Documents in favor of Lender), or (iv) require any approval of
stockholders or any approval or consent of any Person under any
Contractual Obligation of any Loan Party, except for such approvals or
consents which have already been obtained that on or before the Initial
Effective Date, such consents to be obtained shall be disclosed in
writing to Lender.
(c) GOVERNMENTAL CONSENTS. The execution, delivery
and performance by Loan Parties of the Loan Documents and the Related
Documents and the consummation of the transactions contemplated thereby
do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body.
(d) BINDING OBLIGATION. Each of the Loan Documents
and the Related Documents has been duly executed and delivered by each
Loan Party that is a party thereto and is the legally valid and binding
obligation of such Loan Party, enforceable against such Loan Party in
accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
4.3 FINANCIAL CONDITION.
Borrower has heretofore delivered to Lender, at Lender's
request, the financial statements described in subsection 3.2(g). Except as set
forth in Schedule 4.3 annexed hereto, all such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated and, where applicable, consolidating basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated and,
where applicable, consolidating basis) of the entities described therein for
each of the periods then ended, subject, in the case of any such unaudited
financial statements, to changes resulting from audit and normal year-end
adjustments. Borrower and its Subsidiaries do not (and will not following the
funding of the initial Revolving Advance) have any Contingent Obligation,
contingent liability or liability for Taxes, long-term lease or unusual forward
or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material
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in relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Borrower or any of its Subsidiaries.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED
JUNIOR PAYMENTS.
Except as set forth in Schedule 4.4 annexed hereto, since
December 31, 1998, no event or change has occurred that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect. Since
December 31, 1998, neither Borrower nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 6.6 or except in connection with the transactions contemplated in the
Recitals to this Agreement.
4.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
(a) TITLE TO PROPERTIES; LIENS. The Loan Parties have
(i) good, sufficient and legal title to (in the case of fee interests
in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title
to (in the case of all other personal property), all of their
respective properties and assets reflected in the financial statements
referred to in subsection 4.3 or in the most recent financial
statements delivered pursuant to subsection 5.1, in each case except
for assets disposed of since the date of such financial statements in
the ordinary course of business or as otherwise permitted under
subsection 6.8 and except as could not reasonably be expected to have a
Material Adverse Effect. Except as permitted by this Agreement, all
such properties and assets are free and clear of Liens.
(b) REAL PROPERTY. As of the New Effective Date, (i)
no Loan Party owns any Real Property, and (ii) Schedule 4.5 annexed
hereto contains a true, accurate and complete list of all Material
Leasehold Properties of any Loan Party, regardless of whether such Loan
Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Except
as specified in Schedule 4.5 annexed hereto, each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and
effect and Borrower does not have knowledge of any default that has
occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable
Loan Party, enforceable against such Loan Party in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
4.6 LITIGATION; ADVERSE FACTS.
Except as set forth on Schedule 4.6, there are no actions,
suits, proceedings, arbitrations or governmental investigations (whether or not
purportedly on behalf of any Loan Party) at law or in equity, or before or by
any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality,
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domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of any Loan Party, threatened against or affecting any Loan Party
or any property of any Loan Party and that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. No Loan
Party (i) is in violation of any applicable laws (including any Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all tax
returns and reports of each Loan Party required to be filed by any of them have
been timely filed, and all Taxes shown on such tax returns to be due and payable
and all assessments, fees and other governmental charges upon each Loan Party
and upon their respective properties, assets, income, businesses and franchises
which are due and payable have been paid when due and payable. No Loan Party
knows of any proposed Tax assessment against any Loan Party which is not being
actively contested by such Loan Party in good faith and by appropriate
proceedings; provided, that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS;
MATERIAL CONTRACTS.
(a) No Loan Party is in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no
condition exists that, with the giving of notice or the lapse of time
or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any,
would not have a Material Adverse Effect.
(b) No Loan Party is a party to or is otherwise
subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 4.8 contains a true, correct and
complete list of all the Material Contracts in effect on the New
Effective Date. Except as described on Schedule 4.8, all such Material
Contracts are in full force and effect and no material defaults
currently exist thereunder.
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4.9 GOVERNMENTAL REGULATION.
No Loan Party is subject to regulation under the Public
Utility Holding Borrower Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Borrower Act of 1940 or under any other federal
or state statute or regulation which may limit its ability to incur Indebtedness
or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 SECURITIES ACTIVITIES.
(a) No Loan Party is engaged principally, or as one
of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
(b) Not more than 25% of the value of the assets
(either of Borrower only or of Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of subsections 6.2 or 6.8
or subject to any restriction contained in any agreement or instrument,
between Borrower and Lender or any Affiliate of Lender, relating to
Indebtedness and within the scope of subsection 7.2, will be Margin
Stock.
4.11 EMPLOYEE BENEFIT PLANS.
(a) Each Loan Party is in compliance with all
applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Employee
Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each Employee Benefit Plan (other than a
Multiemployer Plan) which is intended to qualify under Section 401(a)
of the Internal Revenue Code is so qualified.
(b) No ERISA Event has occurred or is reasonably
expected to occur that could reasonably be expected to have a Material
Adverse Effect.
(c) Except to the extent required under Section 4980B
of the Internal Revenue Code, no Employee Benefit Plan provides health
or welfare benefits (through the purchase of insurance or otherwise)
for any retired or former employee of any Loan Party.
(d) As of the most recent valuation date for any
Pension Plan, the amount of benefit liabilities (as defined in Section
4001(a)(16) of ERISA and determined using the actuarial assumptions set
forth in the most recent actuarial report pertaining to such Pension
Plan), individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with
respect to which assets exceed benefit liabilities), does not exceed
the fair market value of the assets of such Pension Plans by more than
$50,000.
(e) To the knowledge of Borrower, after due inquiry,
the potential liability of Borrower, its Subsidiaries and their
respective ERISA
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Affiliates for a complete withdrawal from each Multiemployer Plan
(within the meaning of Section 4203 of ERISA), when aggregated with
such potential liability for a complete withdrawal from all
Multiemployer Plans, does not exceed $50,000.
4.12 CERTAIN FEES.
Except as set forth on Schedule 4.12, no broker's or finder's
fee or commission will be payable with respect to this Agreement or any of the
transactions contemplated hereby, and Borrower hereby indemnifies Lender
against, and agrees that it will hold Lender harmless from. any claim, demand or
liability for any such broker's or finder's fees alleged to have been incurred
in connection herewith or therewith and any expenses (including reasonable fees,
expenses and disbursements of counsel) arising in connection with any such
claim, demand or liability.
4.13 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving any Loan Party that could reasonably be expected to have a Material
Adverse Effect.
4.14 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations
by such Loan Party on any date on which this representation is made, will be,
Solvent.
4.15 MATTERS RELATING TO COLLATERAL.
(a) CREATION, PERFECTION AND PRIORITY OF LIENS. The
execution and delivery of the Security Documents by Loan Parties,
together with the amendments and confirmations entered into on the New
Effective Date, filings of UCC-3 termination statements with respect to
the Senior Credit Agreements and the filings and recordations
previously made of the Uniform Commercial Code financing statements
naming each Loan Party as "debtor", naming Lender as "secured party"
and describing the Collateral (as defined in the Security Agreements)
in the filing offices set forth in Part Six of Schedule 4.1(f) annexed,
constitute, to the extent a security interest in such Collateral may be
perfected by filing Uniform Commercial Code financing statements, valid
and perfected security interests therein subject to no Liens (other
than Permitted Encumbrances) and prior to all other Liens. Upon the
filing of such Uniform Commercial Code filing statements and the filing
of the notices of trademarks and copyrights and other similar documents
provided by Borrower with the United States Patent and Trademark
Office, United States Copyright Office and the United States Trademark
Office, as applicable, together with the special powers of attorney
provided by Borrower, the security interests in such Collateral granted
to Lender and constituting Intellectual Property will constitute valid
and perfected security interests therein subject to no Liens (other
than Permitted Encumbrances) and prior to all other Liens. The Pledge
Agreements create in favor of Lender a valid perfected security
interest in such Pledged Collateral as security for the Secured
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Obligations (as such term is defined in the Pledge Agreements), to the
extent contemplated by the Security Documents subject to no equal or
prior security interests and prior to all other Liens. Upon the filing
of the Uniform Commercial Code financing statements, and with respect
to the common stock of Holdings, Lender's taking possession of the
certificates evidencing that portion of the Pledged Collateral
consisting of Holdings' stock certificates, duly endorsed by the
Pledgor (as defined in the Pledge Agreement), the security interest in
such Pledged Collateral will be a perfected security interest, subject
to no equal or prior security interest and prior to all other Liens.
(b) GOVERNMENTAL AUTHORIZATIONS. No authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for either (i)
the pledge or grant by any Loan Party of the Liens purported to be
created in favor of Lender pursuant to any of the Security Documents or
(ii) the exercise by Lender of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of
the Security Documents or created or provided for by applicable law),
except for filings or recordings contemplated by subsections 2.9(b) and
4.15(a) and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the
offering and sale of securities.
(c) ABSENCE OF FILINGS. Except for filings that
relate to the UCC-3 termination statements in the possession of Lender
on the New Effective Date, no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording
office.
(d) MARGIN REGULATIONS. The pledge of the Pledged
Collateral pursuant to the Security Documents does not violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
(e) INFORMATION REGARDING COLLATERAL. All information
supplied to Lender by or on behalf of any Loan Party with respect to
any of the Collateral (in each case taken as a whole with respect to
any particular Collateral) is accurate and complete in all material
respects.
4.16 DISCLOSURE.
No representation or warranty of any Loan Party contained in
any Loan Document or Related Document or in any other document, certificate or
written statement furnished to Lender by or on behalf of such Loan Party for use
in connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact (known to
such Loan Party, in the case of any document not furnished by it) necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by each Loan Party to be
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reasonable at the time made, it being recognized by Lender that such projections
as to future events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ from the
projected results. There are no facts known (or which should upon the reasonable
exercise of diligence be known) to any Loan Party (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lender for use in connection with the transactions contemplated
hereby.
4.17 INSURANCE.
Each Loan Party maintains, with, to its knowledge, financially
sound and reputable insurers, insurance with respect to its properties and
business and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by corporations of established
reputation engaged in the same or similar business of such types and in such
amounts as are customarily carried under similar circumstances by such other
corporations. Attached as Schedule 4.17 hereto is a complete and accurate
description of all policies of insurance that will be in effect as of the New
Effective Date for the Loan Parties.
4.18 INTELLECTUAL PROPERTY.
(a) The Loan Parties own, or are licensed to use, the
Intellectual Property and to the knowledge of the Loan Parties all such
Intellectual Property is duly and properly registered, filed or issued
in the appropriate office and jurisdictions for such registrations,
filing or issuances, except for common law trademarks and unregistered
copyrights.
(b) No material claim has been asserted by any Person
with respect to the use of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property. To each Loan Party's knowledge, the use of such
Intellectual Property by such Loan Party does not infringe on the
rights of any Person, subject to such claims and infringements as do
not, in the aggregate, give rise to any liabilities on the part of any
Loan Party that are material to such Loan Party. The consummation of
the transactions contemplated by this Agreement will not impair the
ownership of (or the license to use, as the case may be) any of such
Intellectual Property by any Loan Party.
4.19 [INTENTIONALLY OMITTED].
4.20 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 4.20 annexed hereto:
(a) the operations of each Loan Party (including,
without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all Environmental
Laws;
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(b) each Loan Party has obtained all Governmental
Authorizations under Environmental Laws necessary to its operations,
and all such Governmental Authorizations are in good standing, and each
Loan Party is in compliance with all material terms and conditions of
such Governmental Authorizations;
(c) no Loan Party has received (i) any notice or
claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials or (ii) any
letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. ss. 9604) or comparable state laws;
(d) none of the operations of any Loan Party is
subject to any judicial or administrative proceeding alleging the
violation of or liability under any Environmental Laws which if
adversely determined could reasonably be expected to have a Material
Adverse Effect;
(e) no Loan Party nor any of its Facilities or
operations are subject to any outstanding written order or agreement
with any governmental authority or private party relating to (i) any
Environmental Laws or (ii) any Environmental Claims;
(f) no Loan Party nor, to the best knowledge of each
Loan Party, any predecessor of such Loan Party or its Subsidiaries has
filed any notice under any Environmental Law indicating past or present
treatment or Release of Hazardous Materials at any Facility, and none
of any Loan Party's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent;
(g) no Hazardous Materials exist on or under any
Facility in a manner that has a reasonably possibility of giving rise
to an Environmental Claim having a Material Adverse Effect, and no Loan
Party has filed any notice or report of a Release of any Hazardous
Materials that has a reasonable possibility of giving rise to an
Environmental Claim against Borrower or any of its Subsidiaries having
a Material Adverse Effect;
(h) to the knowledge of each Loan Party, no Loan
Party nor any of its predecessors has disposed of any Hazardous
Materials in a manner that has a reasonable possibility of giving rise
to an Environmental Claim having a Material Adverse Effect;
(i) no underground storage tanks or surface
impoundments are on or at any Facility; and
(j) no Lien in favor of any Person relating to or in
connection with any Environmental Claim against Borrower or any of its
Subsidiaries has been filed or has been attached to any Facility.
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4.21 YEAR 2000 COMPLIANCE.
Each of Borrower and its Domestic Subsidiaries has performed
all acts necessary to ensure that Borrower and its Domestic Subsidiaries, and
any business in which Borrower and its Domestic Subsidiaries hold a substantial
interest, are and remain Year 2000 Compliant.
SECTION 5.
BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that until payment in full of
all Loans and other Obligations, unless Lender shall otherwise give prior
written consent, Borrower shall perform, and shall cause each other Loan Party
to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Borrower will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Borrower will deliver to Lender:
(i) Monthly Financials: as soon as
available and in any event within
45 days after the end of each month
ending after the Initial Effective
Date, copies of the monthly cash
flow statements, balance sheets and
income statements for such month of
Borrower and each Subsidiary, on a
consolidated and consolidating
basis, together with such
additional reports and information
provided to the Board of Directors
of Borrower on a monthly or
periodic basis;
(ii) Quarterly Financials: as soon as
available and in any event within
45 days after the end of each of
Borrower's first three Fiscal
Quarters, the consolidated balance
sheet of Borrower and its
Subsidiaries as at the end of such
Fiscal Quarter and the related
consolidated statements of income
and cash flows of Borrower and its
Subsidiaries for such Fiscal
Quarter and for the period from the
beginning of the then current
Fiscal Year to the end of such
Fiscal Quarter, setting forth in
each case in comparative form the
corresponding figures for the
corresponding periods of the
previous Fiscal Year and the
corresponding figures from the
Financial Plan for the current
Fiscal Year, all in reasonable
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detail and certified by an
executive officer of Borrower that
they fairly present, in all
material respects, the financial
condition of Borrower and its
Subsidiaries as at the dates
indicated and the results of their
operations and their cash flows for
the periods indicated, subject to
changes resulting from audit and
normal year-end adjustments;
(iii) Year-End Financials: as soon as
available and in any event within
90 days after the end of each
Fiscal Year, (a) the consolidated
balance sheet of Borrower and its
Subsidiaries as at the end of such
Fiscal Year and the related
consolidated statements of income
and cash flows of Borrower and its
Subsidiaries for such Fiscal Year,
setting forth in each case in
comparative form the corresponding
figures for the previous Fiscal
Year and the corresponding figures
from the Financial Plan for the
Fiscal Year covered by such
financial statements, all in
reasonable detail and certified by
an executive officer of Borrower
that they fairly present, in all
material respects, the financial
condition of Borrower and its
Subsidiaries as at the dates
indicated and the results of their
operations and their cash flows for
the periods indicated and (b) in
the case of such consolidated
financial statements, a report
thereon of independent certified
public accountants of recognized
standing selected by Borrower and
satisfactory to Lender, which
report shall be unqualified, shall
express no doubts about the ability
of Borrower and its Subsidiaries to
continue as a going concern, and
shall state that such consolidated
financial statements fairly
present, in all material respects,
the consolidated financial position
of Borrower and its Subsidiaries as
at the dates indicated and the
results of their operations and
their cash flows for the periods
indicated in conformity with GAAP
applied on a basis consistent with
prior years (except as otherwise
disclosed in such financial
statements) and that the
examination by such accountants in
connection with such consolidated
financial statements has been made
in accordance with generally
accepted auditing standards;
(iv) Officer's and Compliance
Certificates: together with each
delivery of financial statements of
Borrower
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and its Subsidiaries pursuant
to subdivisions (i), (ii) and (iii)
above, (a) an Officer's Certificate
of Borrower duly executed by an
executive officer of Borrower
stating that the signer has
reviewed the terms of this
Agreement and has made, or caused
to be made under his or her
supervision, a review in reasonable
detail of the transactions and
condition of Borrower and its
Subsidiaries during the accounting
period covered by such financial
statements and that such review has
not disclosed the existence during
or at the end of such accounting
period, and that the signer does
not have knowledge of the existence
as at the date of such Officer's
Certificate, of any condition or
event that constitutes an Event of
Default or Default, or, if any such
condition or event existed or
exists, specifying the nature and
period of existence thereof and
what action Borrower has taken, is
taking and proposes to take with
respect thereto; and (b) a
Compliance Certificate duly
executed by an executive officer of
Borrower demonstrating in
reasonable detail compliance during
and at the end of the applicable
accounting periods with the
restrictions contained in Section
6;
(v) Reconciliation Statements: if, as a
result of any change in accounting
principles and policies from those
used in the preparation of the
audited financial statements
referred to in subsection 4.3, the
consolidated financial statements
of Borrower and its Subsidiaries
delivered pursuant to subdivisions
(i), (ii), (iii) or (xii) of this
subsection 5.1 will differ in any
material respect from the
consolidated financial statements
that would have been delivered
pursuant to such subdivisions had
no such change in accounting
principles and policies been made,
then (a) together with the first
delivery of financial statements
pursuant to subdivision (i), (ii),
(iii) or (xii) of this subsection
5.1 following such change,
consolidated financial statements
of Borrower and its Subsidiaries
for (y) the current Fiscal Year to
the Initial Effective Date of such
change and (z) the two full Fiscal
Years immediately preceding the
Fiscal Year in which such change is
made, in each case prepared on a
pro forma basis as if such change
had been in effect during such
periods, and (b) together with each
delivery of financial statements
pursuant
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to subdivision (i), (ii), (iii) or
(xii) of this subsection 5.1
following such change, a written
statement of an executive officer
of Borrower setting forth the
differences (including any
differences that would affect any
calculations relating to the
financial covenant set forth in
subsection 6.7) which would have
resulted if such financial
statements had been prepared
without giving effect to such
change;
(vi) Accountants' Certification:
together with each delivery of
consolidated financial statements
of Borrower and its Subsidiaries
pursuant to subdivision (iii)
above, a written statement by the
independent certified public
accountants giving the report
thereon (a) stating that their
audit examination has included a
review of subsection 6.7 of this
Agreement as it relates to
accounting matters, (b) stating
whether, in connection with their
audit examination, any condition or
event that constitutes an Event of
Default or Default has come to
their attention and, if such a
condition or event has come to
their attention, specifying the
nature and period of existence
thereof; provided, that such
accountants shall not be liable by
reason of any failure to obtain
knowledge of any such Event of
Default or Default that would not
be disclosed in the course of their
audit examination, and (c) stating
that based on their audit
examination nothing has come to
their attention that causes them to
believe either or both that the
information contained in the
certificates delivered therewith
pursuant to subdivision (iv) above
is not correct or that the matters
set forth in the Compliance
Certificates delivered therewith
pursuant to clause (b) of
subdivision (iv) above for the
applicable Fiscal Year are not
stated in accordance with the terms
of this Agreement; provided,
however, that in issuing such
statements, such accountants shall
not be required to exceed the scope
of normal auditing procedures
conducted in connection with their
opinion referred to above;
(vii) SEC Filings and Press Releases:
promptly upon their becoming
available, copies of (a) all
financial statements, reports,
notices and proxy statements sent
or made available generally by
Borrower to its security holders or
by any Subsidiary of Borrower
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to its security holders other than
Borrower or another Subsidiary of
Borrower, (b) all regular and
periodic reports and all
registration statements (other than
on Form S-8 or a similar form) and
prospectuses, if any, filed by
Borrower or any of its Subsidiaries
with any securities exchange or
with the Securities and Exchange
Commission or any governmental or
private regulatory authority, and
(c) all press releases and other
statements made available generally
by Borrower or any of its
Subsidiaries to the public
concerning material developments in
the business of Borrower or any of
its Subsidiaries;
(viii) Events of Default, etc.: promptly
upon any officer of Borrower
obtaining knowledge (a) of any
condition or event that constitutes
an Event of Default or Default, (b)
that any Person has given any
notice to Borrower or any of its
Subsidiaries or taken any other
action with respect to a claimed
default or event or condition of
the type referred to in subsection
7.2, (c) of any condition or event
that would be required to be
disclosed in a current report filed
by Borrower with the Securities and
Exchange Commission on Form 8-K
(Items 1, 2, 4, 5 and 6 of such
Form as in effect on the Initial
Effective Date) if Borrower were
required to file such reports under
the Exchange Act, or (d) of the
occurrence of any event or change
that has caused or evidences,
either in any case or in the
aggregate, a Material Adverse
Effect, an Officer's Certificate
specifying the nature and period of
existence of such condition, event
or change, or specifying the notice
given or action taken by any such
Person and the nature of such
claimed Event of Default, Default,
default, event or condition, and
what action Borrower has taken, is
taking and proposes to take with
respect thereto;
(ix) Litigation or Other Proceedings:
promptly upon any officer of any
Loan Party obtaining knowledge of
(X) the institution of, or
non-frivolous threat of, any
action, suit, proceeding (whether
administrative, judicial or
otherwise), governmental
investigation or arbitration
against or affecting any Loan Party
or any property of any Loan Party
(collectively, "PROCEEDINGS") not
previously disclosed in writing
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by Loan Parties to Lender or (Y)any
material development in any
Proceeding that, in any case:
1) if adversely determined,
has a reasonable
possibility of giving rise
to a Material Adverse
Effect; or
2) seeks to enjoin or
otherwise prevent the
consummation of, or to
recover any damages or
obtain relief as a result
of, the transactions
contemplated hereby;
written notice thereof together
with such other information as may
be reasonably available to Borrower
to enable Lender and its counsel to
evaluate such matters;
(x) ERISA Events: promptly upon
becoming aware of the occurrence of
or forthcoming occurrence of any
ERISA Event, a written notice
specifying the nature thereof, what
action the Loan Parties or any of
their respective ERISA Affiliates
has taken, is taking or proposes to
take with respect thereto and, when
known, any action taken or
threatened by the Internal Revenue
Service, the Department of Labor or
the PBGC with respect thereto;
(xi) ERISA Notices: with reasonable
promptness, copies of (a) each
Schedule B (Actuarial Information)
to the annual report (Form 5500
Series) filed by any Loan Party or
any of their respective ERISA
Affiliates with the Internal
Revenue Service with respect to
each Pension Plan as Lender shall
request; (b) all notices received
by Loan Party or any of their
respective ERISA Affiliates from a
Multiemployer Plan sponsor
concerning an ERISA Event; and (c)
copies of such other documents or
governmental reports or filings
relating to any Employee Benefit
Plan as Lender shall reasonably
request;
(xii) Financial Plans: as soon as
practicable and in any event no
later than 45 days after the
beginning of each Fiscal Year, a
consolidated and a consolidating
plan and financial forecast for
such Fiscal Year, including without
limitation (a) statements of income
and cash flows of Borrower and its
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Subsidiaries for such Fiscal Year
and (b) such other information and
projections as Lender may
reasonably request;
(xiii) Board of Directors: with reasonable
promptness, written notice of any
change in the Board of Directors of
Borrower;
(xiv) Material Contracts: promptly, and
in any event within ten Business
Days after any Material Contract of
Borrower or any of its Subsidiaries
is terminated or amended in a
manner that is materially adverse
to Borrower or such Subsidiary, as
the case may be, or any new
Material Contract is entered into,
a written statement describing such
event with copies of such material
amendments or new contracts, and an
explanation of any actions being
taken with respect thereto;
(xv) UCC Search Report: as promptly as
practicable after the date of
delivery to Lender of any UCC
financing statement executed by any
Loan Party pursuant to subsection
3.2(h) or 2.7, copies of completed
UCC searches evidencing the proper
filing, recording and indexing of
such UCC financing statement and
listing all other effective
financing statements that name such
Loan Party as debtor, together with
copies of all such other financing
statements not previously delivered
to Lender by or on behalf of
Borrower or such Loan Party;
(xvi) Other Information: with reasonable
promptness, such other information
and data with respect to Borrower
or any of its Subsidiaries as from
time to time may be reasonably
requested by Lender.
5.2 EXISTENCE, ETC.
Except as permitted under subsection 6.8, each Loan Party
shall at all times (a) preserve and keep in full force and effect its existence
and all rights and franchises material to its business and (b) comply in all
material respects with all material provisions of all franchises and licenses,
material agreements and leases to which it is a party, and shall suffer no loss
or forfeiture thereof or thereunder.
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5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
(a) Each Loan Party will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any
penalty accrues thereon, and all claims (including claims for labor,
services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall
be incurred with respect thereto; provided, that no such charge or
claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted,
so long as (1) such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor
and (2) in the case of a charge or claim which has or may become a Lien
against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy
such charge or claim.
(b) No Loan Party will file or consent to the filing
of any consolidated income tax return with any Person (other than
Borrower).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF
NET INSURANCE/ CONDEMNATION PROCEEDS.
(a) MAINTENANCE OF PROPERTIES. Each Loan Party will,
and will cause each of its Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear
and tear excepted, all material properties used or useful in the
business of such Loan Party and its Subsidiaries (including all
Intellectual Property, except for any trademark and trade name
identified by a Loan Party in writing to Lender, that such Loan Party
has determined, in its best business judgment, to cease using because
such trademark or trade name no longer possess any material value to
the business and operations of such Loan Party) and from time to time
will make or cause to be made all appropriate repairs, renewals and
replacements thereof.
(b) INSURANCE. Each Loan Party will maintain or cause
to be maintained, with financially sound and reputable insurers,
insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of such Loan Party and its
Subsidiaries as may Customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in
similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the
generality of the foregoing, each Loan Party will maintain or cause to
be maintained replacement value casualty insurance on the Collateral
under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at
all times
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satisfactory to Lender in its commercially reasonable judgment. Each
such policy of insurance shall name Lender as additional named insured
or loss payee thereunder and provide for at least 30 days' prior
written notice to Lender of any material modification or cancellation
of such policy.
(c) APPLICATION OF NET INSURANCE/CONDEMNATION
PROCEEDS.
(i) Business Interruption Insurance.
Upon receipt by Borrower or any of
its Subsidiaries of any proceeds of
business interruption insurance, if
any, constituting Net
Insurance/Condemnation Proceeds,
(a) so long as no Event of Default
or Default shall have occurred and
be continuing, Borrower may retain
and apply such Net
Insurance/Condemnation Proceeds for
working capital purposes, and (b)
if an Event of Default or Default
shall have occurred and be
continuing, Borrower shall apply an
amount equal to such Net
Insurance/Condemnation Proceeds to
prepay the Loans.
(ii) Casualty Insurance/Condemnation
Proceeds. Upon receipt by any
Borrower or any of its Subsidiaries
of any Net Insurance/Condemnation
Proceeds other than from business
interruption insurance, (a) so long
as no Event of Default or Default
shall have occurred and be
continuing and such proceeds are
less than $1,000,000 in the
aggregate, Borrower shall, or shall
cause one or more of its
Subsidiaries to, promptly and
diligently apply such Net
Insurance/Condemnation Proceeds to
pay or reimburse the costs of
repairing, restoring or replacing
the assets in respect of which such
Net Insurance/Condemnation Proceeds
were received or, to the extent not
so applied within 180 days of such
receipt, to prepay the Term Loan,
and (b) if (y) an Event of Default
or Default shall have occurred and
be continuing or (z) such proceeds
are in an aggregate amount of
$1,000,000 or more, Borrower shall
apply an amount equal to such Net
Insurance/Condemnation Proceeds to
prepay the Term Loan and, upon
payment in full of the Term Loan,
all other Obligations then
outstanding.
(iii) Net Insurance/Condemnation Proceeds
Received by Lender. Upon receipt by
Lender of any Net
Insurance/Condemnation Proceeds as
loss payee at a time that Borrower
would have been required to apply
such Net Insurance/Condemnation
Proceeds (if it had received them
directly) to prepay the Term Loan
(and if an Event of Default is
continuing, all other Obligations),
Lender shall, and Borrower hereby
authorizes Lender to,
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apply such Net Insurance/
Condemnation Proceeds to prepay the
Term Loan (and if an Event of
Default is continuing, all other
Obligations) and if Borrower would
not be required to so apply such
proceeds at such time then Lender
shall distribute such proceeds to
Borrower to apply as set forth in
subsections 5.4(c)(i) or (ii), as
applicable.
5.5 INSPECTION RIGHTS; LENDER MEETING.
(a) INSPECTION RIGHTS. Borrower shall, and shall
cause each of its Subsidiaries to, permit any authorized
representatives designated by Lender to visit and inspect any of the
properties of Borrower or any of its Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and
to discuss its and their affairs, finances and accounts with its and
their officers and independent public accountants (provided, that
Borrower may, if it so chooses, be present at or participate in any
such discussion), all upon reasonable notice and at such reasonable
times during normal business hours and as often as may reasonably be
requested.
(b) LENDER MEETING. Borrower will, upon the request
of Lender, participate in a meeting with Lender once during each Fiscal
Year to be held at Borrower's corporate offices (or at such other
location as may be agreed to by Borrower and Lender) at such time as
may be agreed to by Borrower and Lender.
5.6 COMPLIANCE WITH LAWS, ETC.
(a) COMPLIANCE GENERALLY . Borrower shall comply, and
shall cause each of its Subsidiaries to comply with the requirements of
all applicable laws, rules, regulations and orders of any governmental
authority, noncompliance with which could reasonably be expected to
cause, individually or in the aggregate, a Material Adverse Effect.
(b) ENVIRONMENTAL LAWS. Borrower shall, and shall
cause its Subsidiaries to, exercise all reasonable due diligence in
order to comply and cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other
Persons on or occupying such property, to comply with all Environmental
Laws.
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5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
(a) ENVIRONMENTAL REVIEW AND INVESTIGATION. Borrower
agrees that Lender may, at any time that Lender determines in its
reasonable discretion that any violation of Environmental Laws or risk
of any Environmental Claim may exist, (i) retain, at Borrower's
expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to
Hazardous Materials prepared by or for Borrower or any of its
Subsidiaries and (ii) conduct its own investigation of any Facility;
provided, that, in the case of any Facility no longer owned, leased,
operated or used by Borrower or any of its Subsidiaries. Borrower shall
only be obligated to use its best efforts to obtain permission for
Lender's professional consultant to conduct an investigation of such
Facility. For purposes of conducting such a review and/or
investigation, Borrower hereby grants to Lender and its agents,
employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased. operated or used by Borrower or
any of its Subsidiaries and to perform such tests on such property
(including taking samples of soil, groundwater and suspected
asbestos-containing materials) as are reasonably necessary in
connection therewith. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Borrower and Lender, during
normal business hours and, to the extent reasonably practicable, shall
be conducted so as not to interfere with the ongoing operations at such
Facility or to cause any damage or loss to any property at such
Facility. Borrower and Lender hereby acknowledge and agree that any
report of any investigation conducted at the request of Lender pursuant
to this subsection 5.7(a) will be obtained and shall be used by Lender
for the purposes of Lender's internal credit decisions, to monitor and
police the Loan and to protect Lender's security interests created by
the Loan Documents. Lender agrees to deliver a copy of any such report
to Borrower with the understanding that Borrower acknowledges and
agrees that (x) it will indemnify ind hold harmless Lender from any
costs, losses or liabilities relating to Borrower's use of or reliance
on such report, (y) Lender makes no representation or warranty with
respect to such report, and (z) by delivering such report to Borrower,
Lender is not requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
(b) ENVIRONMENTAL DISCLOSURE. Borrower will deliver to Lender:
(i) Environmental Audits and Reports.
As soon as practicable following
receipt thereof, copies of all
environmental audits,
investigations, analyses and
reports of any kind or character,
whether prepared by personnel of
Borrower or any of its Subsidiaries
or by independent consultants,
governmental authorities or any
other Persons, with respect to
significant environmental matters
at any Facility which, individually
or in the aggregate, could
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reasonably be expected to result in
a Material Adverse Effect or with
respect to any Environmental Claims
which, individually or in the
aggregate, could reasonably be
expected to result in a Material
Adverse Effect;
(ii) Notice of Certain Releases,
Remedial Actions, Etc. Promptly
upon the occurrence thereof,
written notice describing in
reasonable detail (a) any Release
required to be reported to any
federal, state or local
governmental or regulatory agency
under any applicable Environmental
Laws, (b) any remedial action taken
by Borrower or any other Person in
response to (1) any Hazardous
Materials Activities the existence
of which has a reasonable
possibility of resulting in one or
more Environmental Claims having,
individually or in the aggregate, a
Material Adverse Effect, or (2) any
Environmental Claims that,
individually or in the aggregate,
have a reasonable possibility of
resulting in a Material Adverse
Effect.
(iii) Written Communications Regarding
Environmental Claims, Releases,
Etc. As soon as practicable
following the sending or receipt
thereof by Borrower or any of its
Subsidiaries, a copy of any and all
written communications with respect
to (a) any Environmental Claims
that, individually or in the
aggregate, have a reasonable
possibility of giving rise to a
Material Adverse Effect, (b) any
Release required to be reported to
any federal, state or local
governmental or regulatory agency,
and (c) any request for information
from any governmental agency that
suggests such agency is
investigating whether Borrower or
any of its Subsidiaries may be
potentially responsible for any
Hazardous Materials Activity.
(iv) Notice of Certain Proposed Actions
Having Environmental Impact. Prompt
written notice describing in
reasonable detail (a) any proposed
acquisition of stock, assets, or
property by Borrower or any of its
Subsidiaries that could reasonably
be expected to (1) expose Borrower
or any of its Subsidiaries to, or
result in, Environmental Claims
that could reasonably be expected
to have, individually or in the
aggregate, a Material Adverse
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Effect or (2) affect the ability of
Borrower or any of its Subsidiaries
to maintain in full force and
effect all material Governmental
Authorizations required under any
Environmental Laws for their
respective operations and (b) any
proposed action to be taken by
Borrower or any of its
Subsidiaries to commence
manufacturing or other industrial
operations or to modify current
operations in a manner that could
reasonably be expected to subject
Borrower or any of its Subsidiaries
to any material additional
obligations or requirements
under any Environmental Laws that
could reasonably be expected to
have, individually or in the
aggregate, a Material Adverse
Effect.
(v) Other Information. With reasonable
promptness, such other documents
and information as from time to
time may be reasonably requested by
Lender in relation to any matters
disclosed pursuant to this
subsection 5.7.
(c) BORROWER'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
Borrower or any of its Subsidiaries shall promptly take, and shall
cause each of its Subsidiaries promptly to take:
(i) Remedial Actions Relating to
Hazardous Materials Activities. Any
and all investigations, studies,
sampling, testing, abatement,
cleanup, removal, remediation or
other response actions required by
Environmental Laws to be undertaken
by Borrower to remove, remediate,
clean up or abate any Hazardous
Materials Activity on or under any
Facility that is in violation of
any Environmental Laws or that
presents a material risk of giving
rise to any Environmental Claim
against Borrower or any of its
Subsidiaries. In the event Borrower
or any of its Subsidiaries
undertakes any such action,
Borrower or such Subsidiaries shall
conduct and complete such action in
compliance with all applicable
Environmental Laws and in
accordance with the orders and
directives of all federal, state
and local governmental authorities
except when, and only to the extent
that, Borrower or such Subsidiary's
liability with respect to such
Hazardous Materials Activity is
being contested in good faith by
Borrower or. such Subsidiary; and
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(ii) Actions with Respect to
Environmental Claims and Violations
of Environmental Laws. Any and all
actions necessary to (i) cure any
material violation of applicable
Environmental Laws by such Loan
Party that could reasonably be
expected to have, individually or
in the aggregate, a Material
Adverse Effect and (ii) make an
appropriate response to any
Environmental Claim against
Borrower or any of its Subsidiaries
and discharge any obligations it
may have to any Person thereunder
where failure to do so could
reasonably be expected to have,
individually or in the aggregate, a
Material Adverse Effect.
5.8 COMPLIANCE WITH RELATED DOCUMENTS; USE OF PROCEEDS.
Each Loan Party shall comply at all times with each of the
covenants under the Related Documents to which such Loan Party is a party.
Material waivers from compliance by such Loan Party or any other Person with the
obligations specified in such Related Documents shall not be effective as
waivers hereunder unless consented to in writing by Lender.
The proceeds of the Term Loan were applied by Borrower on the
Initial Effective Date to (i) partially finance the Telecrafter Acquisition,
(ii) to pay off the Bridge Loan and (iii) for working capital and general
corporate purposes of Borrower and its Subsidiaries, in compliance with the
terms set forth in the Original Credit Agreement.
5.9 ADDITIONAL REAL PROPERTY COLLATERAL.
Upon the request of Lender, at any time, Borrower and its
Subsidiaries shall take all action necessary or reasonably advisable such that
Lender shall receive a Lien on all real property interests of Borrower and its
Subsidiaries acquired after the Initial Effective Date, including, without
limitation, all leasehold interests, and other documents and instruments as
requested by Lender at the time of acquisition of such property.
5.10 DISSOLUTION OF INACTIVE SUBSIDIARIES.
Within 10 Business Days of the New Effective Date, Borrower
shall have received evidence that all documents of dissolution with respect to
the Inactive Subsidiaries have been duly prepared and filed with all appropriate
governmental authorities and agencies. Borrower shall not permit any Inactive
Subsidiary to incur any assets or liabilities after the Effective Date.
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SECTION 6.
BORROWER'S NEGATIVE COVENANTS
Borrower covenants and agrees that until payment in full of
the Loan and other Obligations, unless Lender shall otherwise give prior written
consent, Borrower shall perform, and Borrower shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS.
Borrower shall not, and Borrower shall not suffer or permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except:
(i) Borrower and its Subsidiaries may
become and remain liable with
respect to the Obligations;
(ii) Borrower and its Subsidiaries may
become and remain liable with
respect to Contingent Obligations
permitted by subsection 6.5 and,
upon any matured obligations
actually arising pursuant thereto,
the Indebtedness corresponding to
the Contingent Obligations so
extinguished;
(iii) Borrower and its Subsidiaries may
become and remain liable with
respect to Indebtedness in respect
of Capital Leases not to exceed
$400,000 notional amount at any
time;
(iv) Borrower may become and remain
liable with respect to Indebtedness
payable to any of its wholly-owned
Subsidiaries, and any wholly-owned
Subsidiary of Borrower may become
and remain liable with respect to
Indebtedness to Borrower or any
other wholly-owned Subsidiary of
Borrower; provided, that (a) all
such intercompany Indebtedness
shall be evidenced by promissory
notes, (b) all such intercompany
Indebtedness owed by Borrower to
any of its Subsidiaries shall be
subordinated (I) in right of
payment to the payment of any
payments currently or past due
constituting Obligations and (II)
upon the occurrence of a Default or
Event of Default, in right of
payment to the payment in full of
the Obligations pursuant to the
terms of the applicable promissory
notes or an intercompany
subordination agreement, and (c)
any payment by any Subsidiary of
Borrower under any
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guaranty of the Obligations shall
result in a pro tanto reduction of
the amount of any intercompany
Indebtedness owed by such
Subsidiary to Borrower or to any of
its Subsidiaries for whose benefit
such payment is made;
(v) So long as no Default or Event of
Default is continuing at the date
of incurrence thereof, Borrower and
its Subsidiaries may become and
remain liable with respect to
secured purchase money Indebtedness
in an aggregate amount not to
exceed $500,000 at any time
outstanding; provided, that such
Indebtedness shall be secured only
by the assets purchased with the
proceeds thereof and at least 80%
of the purchase price of such
assets shall be provided by the
proceeds thereof;
(vi) [Intentionally Omitted];
(vii) Borrower may remain liable with
respect to the O'Leary Seller Note
and the Seller Note existing on the
Initial Effective Date;
(viii) [intentionally omitted]
(ix) Following the Effective Date so
long as no Event of Default is
continuing, Borrower may become and
remain liable with respect to
additional Permitted Subordinated
Debt Financing (including, without
limitation, Seller Notes and the
O'Leary Seller Note).
(x) Any Subsidiary of Borrower may
become and remain liable with
respect to other Indebtedness in an
aggregate principal amount not to
exceed $250,000 at any time
outstanding.
6.2 LIENS AND RELATED MATTERS.
(a) PROHIBITION ON LIENS. Borrower shall not, and
Borrower shall not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind (including any
document or instrument in respect of goods or accounts receivable) of
Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or
other similar notice of any Lien with respect to any such property,
asset, income or profits under the
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Uniform Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the
Security Documents;
(iii) Borrower may grant purchase money
Liens securing purchase money
Indebtedness permitted pursuant to
subsection 6.1(v); provided, that
such Liens encumber only the assets
so purchased;
(iv) [intentionally omitted]; and
(v) the Liens described on Schedule 6.2.
(b) EQUITABLE LIEN IN FAVOR OF LENDER. If Borrower or
any of Borrower's Subsidiaries shall create or assume any Lien upon any
of its properties or assets, whether now owned or hereafter acquired,
other than Liens excepted by the provisions of subsection 6.2(a), it
shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably with any
and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided, that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Lender
to the creation or assumption of any such Lien not permitted by the
provisions of subsection 6.2(a).
(c) NO FURTHER NEGATIVE PLEDGES. Except with respect
to specific property encumbered to secure payment of particular
Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale, neither Borrower nor any of Borrower's
Subsidiaries shall, after the Initial Effective Date, enter into any
agreement (other than an agreement prohibiting only the creation of
Liens securing Subordinated Indebtedness) prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
6.3 DIVIDENDS; SELLER NOTES.
RESTRICTIONS ON ISSUANCES, DIVIDENDS. Borrower will
not, and Borrower will not permit any of its Subsidiaries to (i) pay
dividends or make any other distributions on any of Borrower's or any
Subsidiary's capital stock, (ii) repay or prepay any Indebtedness owed
by Borrower to any member of the Investor Group or any other
shareholder or investor in Borrower, (iii) repay or prepay any
Indebtedness with respect to the Seller Notes or any other Indebtedness
owed by Borrower or any Subsidiary to any shareholder or investor in
Borrower or such Subsidiary, (iv) make loans or advances to any member
of the Investor Group or any other shareholder or investor in Borrower,
(v) make loans or advances to any shareholder or investor in a
Subsidiary, (vi) transfer any
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of its property or assets to any member of the Investor Group or any
other shareholder or investor in Borrower; or (vii) transfer any of its
property or assets to any shareholder or investor in such Subsidiary;
provided, that, Borrower may make payments on the Seller Notes in the
manner permitted under Section 6.6 hereof; and provided, further, that
each Subsidiary of Borrower may pay dividends or make any other
distributions or payments to any Loan Party in order to satisfy any
obligations under the Tax Sharing Agreement; and provided, further, any
Subsidiary may (and shall) take any one or more of the above-described
actions if the purpose of such action is to enable Borrower to fulfill
its obligations under this Agreement; and provided, further, any
Subsidiary may take the actions described in subsection (i) hereof if
and only if such payment or distribution ultimately is paid to either
Holdings or Borrower.
6.4 INVESTMENTS; JOINT VENTURES.
Borrower shall not, and Borrower shall not permit any of
Borrower's Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture or make Consolidated Capital
Expenditures, except, so long as no Event of Default is continuing:
(i) Borrower and Borrower's
Subsidiaries may make and own
Investments in Cash and Cash
Equivalents;
(ii) Borrower and its Subsidiaries may
make intercompany loans to the
extent permitted under subsection
6.1(iv);
(iii) Borrower and its Subsidiaries may
make Consolidated Capital
Expenditures in any Fiscal Year in
an aggregate amount not to exceed
the sum of (i) $4,800,000 and (ii)
the unused portion (if any) of the
maximum amount of Consolidated
Capital Expenditures permitted
hereunder for the then immediately
preceding Fiscal Year (and without
giving effect to any additional
amounts permitted during such
preceding Fiscal Year because of
this clause (ii));
(iv) Borrower and its Subsidiaries may
make Investments permitted pursuant
to subsection 6.8; and
(v) following the consummation of an
Initial Public Offering, Borrower
may make additional Investments
that are directly related to the
business of providing communication
services on an outsourced basis and
related activities, that, in the
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aggregate at any time outstanding,
do not exceed $500,000.
6.5 CONTINGENT OBLIGATIONS.
Borrower shall not, and Borrower shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) Subsidiaries of Borrower may become
and remain liable with respect to
Contingent Obligations in respect
of the Loan Documents;
(ii) Borrower and its Subsidiaries may
become and remain liable with
respect to other Contingent
Obligations; provided, that the
maximum aggregate liability,
contingent or otherwise, of
Borrower and its Subsidiaries in
respect of all such Contingent
Obligations shall at no time exceed
$500,000; and
(iii) Contingent Obligations with respect
to transactions permitted pursuant
to subsection 6.8.
6.6 RESTRICTED JUNIOR PAYMENTS.
Borrower shall not, and Borrower shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Junior Payment, provided, that, so long as no Event
of Default is continuing and no accrued and unpaid interest is owing on the
Loans, (i) Borrower may make scheduled interest and principal payments on the
Seller Notes not more than once each Fiscal Year from Consolidated Excess Cash
Flow remaining following payment in full for such Fiscal Year of amounts
required to be paid pursuant to subsection 2.4(h) hereof, (ii) Borrower may make
scheduled interest and principal payments on the O'Leary Seller Note from the
Net Cash Proceeds of a Permitted Equity Financing; (iii) following the
consummation of an Initial Public Offering, Borrower may prepay amounts
outstanding under the Seller Notes and the O'Leary Seller Note from either (x)
the Consolidated Excess Cash Flow remaining following payment in full for such
Fiscal Year of amounts required to be paid pursuant to subsection 2.4(h) hereof,
or (y) the Net Cash Proceeds obtained from an Initial Public Offering; and (iv)
following the consummation of an Initial Public Offering, Borrower may make
payments to shareholders in lieu of the issuance of fractional shares and may
acquire or make cash payments in lieu of, shares of capital stock of warrants
for capital stock of Borrower held by any officer or employee up to the
termination of such Person's employment with Borrower or any of its
Subsidiaries.
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6.7 FINANCIAL COVENANT.
(a) TOTAL LEVERAGE RATIO. The Total Leverage Ratio
for each day of the rolling four quarter period ending as of each day
during each period listed below shall not exceed the ratio indicated
below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Initial Effective Date through December 30, 1999 3.5:1.0
December 31, 1999 through June 29, 2000 3.0:1.0
June 30, 2000 through December 30, 2000 2.5:1.0
at all times thereafter 2.0:1.0
</TABLE>
(b) FIXED CHARGE COVERAGE RATIO. The Fixed Charge
Coverage Ratio for the rolling four quarter period ending as at the end
of any fiscal quarter shall not be less than 1.25:1.0.
6.8 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.
Borrower shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, capital or legal structure of Borrower or
any of its Subsidiaries, or enter into any transaction of merger or
consolidation, or (except with respect to Inactive Subsidiaries) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution), or
convey, sell, lease, sub-lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business,
property or fixed assets, whether now owned or hereafter acquired (other than
sales including the sale, transfer, replacement or other disposition of
equipment and inventory, leases or sub-leases of its property, in each case, in
the ordinary course of business), or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, or acquire or create any additional Subsidiary;
provided, that, so long as no Default or Event of Default is continuing,
Borrower and its Subsidiaries may consummate a Permitted Acquisition, so long as
the payment of the purchase price and the financing of such Permitted
Acquisition shall not diminish (or result in the reduction with respect to the
immediately following Fiscal Year), of amounts payable pursuant to Section
2.4(h) hereof, and provided, further, the foregoing shall not restrict (i) the
Loan Parties from making Capital Expenditures otherwise permitted under
subsection 6.4(iii) (ii) Holdings or any other Subsidiary from acquiring or
forming any Subsidiary so long as contemporaneous with such acquisition or
formation such Subsidiary becomes a Subsidiary Guarantor, executes the
Subsidiary Security Agreement and any other Security Documents reasonably
required by Lender, in order to grant to Lender a first priority perfected Lien
(other than Permitted Liens) in its Assets in accordance with the terms of such
Security Documents, and the direct parent of such Subsidiary pledges all the
equity interests of such Subsidiary to Lender pursuant to the Holdings Pledge
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<PAGE> 84
Agreement, (iii) so long as no Event of Default is continuing, any Asset Sale,
so long as the Net Cash Proceeds thereof are applied in the manner required by
this Agreement.
6.9 SALES AND LEASE-BACKS.
Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
a guarantor or other surety with respect to any lease, whether an Operating
Lease or a Capital Lease, of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, (i) which Borrower or any of its
Subsidiaries has sold or transferred or is to sell or transfer to any other
Person (other than Borrower or any of its Subsidiaries) or (ii) which Borrower
or any of its Subsidiaries intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Borrower or
any of its Subsidiaries to any Person (other than Borrower or any of its
Subsidiaries) in connection with such lease.
6.10 SALE OR DISCOUNT OF RECEIVABLES.
Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
6.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any holder of 5% or more of any class of
equity Securities of Borrower or with any Affiliate of Borrower or of any such
holder, on terms that are less favorable to Borrower or such Subsidiary, as the
case may be, than those that might be obtained at the time from Persons who are
not such a holder or Affiliate; provided, that the foregoing restriction shall
not apply to any transaction between Borrower and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries or the transactions
contemplated by the Seller Notes; provided, further, that no Management Fees
shall be permitted.
6.12 DISPOSAL OF SUBSIDIARY STOCK.
Neither Borrower nor any Subsidiary shall, or suffer of permit
any other Person to directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity Securities of
any of its Subsidiaries, except to qualify directors if required by applicable
law, and to Lender.
6.13 CONDUCT OF BUSINESS.
From and after the Initial Effective Date, Borrower shall not
and shall not permit any of its Subsidiaries to, engage in any business other
than to own, actively manage or operate any business other than the business of
providing communication services on an outsourced basis and related activities.
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6.14 AMENDMENTS OF WAIVERS OF RELATED DOCUMENTS AND
CHARTER DOCUMENTS.
(a) NO AMENDMENT OR WAIVER OF RELATED DOCUMENTS. No
Loan Party will agree to any amendment to, or waive any of its rights
under, any of the Related Documents (other than nonmaterial amendments
or waivers which individually, or together with all other amendments,
waivers or changes made, would not be adverse to any Loan Party or
Lender), without obtaining the written consent of Lender to such
amendment or waiver.
(b) CHARTER DOCUMENTS. Borrower will not, and shall
not permit any of its Subsidiaries to agree to any material amendment
to, or waive any of its material rights under, its certificates or
articles of incorporation, bylaws or other documents relating to its
capital stock without, in each case, obtaining the written consent of
Lender to such amendment or waiver; provided, that, so long as no Event
of Default is continuing, Borrower may make those amendments to its
certificate of incorporation that are necessary in order to effectuate
a Permitted Equity Financing or an Initial Public Offering.
(c) AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
INDEBTEDNESS. Borrower shall not, and shall not permit any of its
Subsidiaries to, amend or otherwise change the terms of any
subordinated Indebtedness, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such amendment or
change is to change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or
condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period
related thereto), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions of such
Subordinated Indebtedness (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the
effect of such, amendment or change, together with all other amendments
or changes made, is to increase materially the obligations of the
obligor thereunder or to confer any additional rights on the holders of
such Subordinated Indebtedness (or a trustee or other representative on
their behalf) which would be adverse to Borrower, or Lender.
6.15 FISCAL YEAR.
Borrower shall not change its Fiscal Year-end from the
Saturday immediately preceding December 31 each calendar year without the
consent of Lender.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
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7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Borrower to pay any installment of principal of the
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Borrower to pay any interest on the Loan or any fee or any other amount due
under this Agreement within two Business Days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
Either (i) the failure of Borrower or any of Borrower's
Subsidiaries to pay when due (including any applicable grace period) any
principal of or interest on any Indebtedness (other than Indebtedness referred
to in subsection 7.1) or Contingent Obligations in an individual principal
amount of $150,000 or more or with an aggregate principal amount of $300,000 or
more, in each case beyond the end of any grace period provided therefor; or (ii)
the breach or default by Borrower or any of Borrower's Subsidiaries with respect
to any material term of one or more items of Indebtedness or Contingent
Obligations in the individual or aggregate principal amounts of $300,000 or more
or (iii) the breach or default by Borrower or any of Borrower's Subsidiaries
with respect to any loan agreement, mortgage, indenture or other agreement
relating to such items of Indebtedness or Contingent Obligations, if the effect
of such breach or default is to cause, or to permit the holder or holders of
that Indebtedness or Contingent Obligations (or a trustee on behalf of such
holder or holders) to cause, that Indebtedness or Contingent Obligations to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
7.3 BREACH OF CERTAIN COVENANTS.
Failure of Borrower to perform or comply with any term or
condition contained in subsections 2.6 or 5.2 or Section 6 of this Agreement; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement
made by Borrower or any of Borrower's Subsidiaries in any Loan Document or in
any statement or certificate at any time given by Borrower or any of Borrower's
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Borrower or any of Borrower's Subsidiaries shall default in
the performance of or compliance with any term contained in this Agreement or
any of the other Loan Documents, and such default shall not have been remedied
or waived within 30 days after the earlier of (i) an officer of Borrower
becoming aware of such default or (ii) receipt by Borrower any of notice from
Lender of such default; or
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7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall
enter a decree or order for relief in respect of
Borrower or any of Borrower's Subsidiaries in an
involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief
shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be
commenced against Borrower or any of Borrower's
Subsidiaries under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or a decree or order
of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer
having similar powers over trustee, Borrower or any
of Borrower's Subsidiaries, or over all or a
substantial part of its property, shall have been
entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other
custodian of trustee, Borrower or any of Borrower's
Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or
similar process shall have been issued against any
substantial part of the property of Borrower or any
of Borrower's Subsidiaries, and any such event
described in this clause (ii) shall continue for 60
days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Borrower or any of Borrower's Subsidiaries shall
have an order for relief entered with respect to it
or commence a voluntary case under the Bankruptcy
Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect,
or shall consent to the entry of an order for relief
in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such
law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or
Borrower or any of Borrower's Subsidiaries shall make
any assignment for the benefit of creditors; or (ii)
Borrower or any of Borrower's Subsidiaries shall be
unable, or shall fail generally, or shall admit in
writing its inability, to pay its debts as such debts
become due; or the Board of Directors of Borrower or
any of its Subsidiaries (or any committee thereof)
shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
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7.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $150,000 or
(ii) in the aggregate at any time an amount in excess of $300,000 (in either
case not adequately covered by insurance as to which a solvent and unaffiliated
insurance provider of Borrower or any of its Subsidiaries has acknowledged
coverage) shall be entered or filed against Borrower or any of Borrower's
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION.
Any order, judgment or decree shall be entered against
Borrower or any of its Subsidiaries (other than any Inactive Subsidiary)
decreeing the dissolution or split up of Borrower or any of its Subsidiaries
(other than any Inactive Subsidiary) and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
7.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in
liability of Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $150,000 during the term of this Agreement; or there
shall exist an amount of benefit liabilities (as defined in Section 4001(a)(16)
of ERISA and determined using the actuarial assumptions set forth in the most
recent actuarial reports pertaining to such Pension Plan), individually or in
the aggregate for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit liabilities),
which exceeds the fair market value of the assets of such Pension Plans by more
than $150,000; or
7.11 CHANGE IN CONTROL.
There shall occur any Change of Control; or
7.12 FAILURE OF SECURITY OR GUARANTY.
The Subsidiary Guaranty or any Security Document shall, at any
time, cease to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms thereof or the satisfaction in full of
all Obligations) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any party thereto, or Lender shall
not have or cease to have a valid and perfected security interest in the
Collateral (subject to Permitted Liens) to the extent contemplated by the
Security Documents;
THEN, (i) upon the occurrence of any Event of Default
described in subsection 7.6 or 7.7, each of (a) the unpaid principal amount of
and accrued interest on the Loans, and (b) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of
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which are hereby expressly waived by Borrower and (ii) upon the occurrence and
during the continuation of any other Event of Default, Lender shall by written
notice to Borrower, declare all or any portion of the amounts described in
clauses (a) through (b) above to be, and the same shall forthwith become,
immediately due and payable.
SECTION 8.
MISCELLANEOUS
8.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
(a) GENERAL. Lender shall have the right at any time
to (i) sell, assign or transfer to any Person, or (ii) sell
participations to any Person in, all or any part of the Loans made by
it or any other interest herein or in any other Obligations owed to it;
provided, that no such sale, Assignment, transfer or participation
shall, without the consent of Borrower, require Borrower to file a
registration statement with the Securities and Exchange Commission or
apply to qualify such sale, assignment, transfer or participation under
the securities laws of any state; provided, that, at no time shall
there be more than three Lenders at any one time; and provided, further
that upon any partial sale or assignment, Lenders shall designate a
single Lender to serve as administrative agent to whom all notices
shall be given on behalf of all Lenders; and provided, further that
Borrower shall not be responsible to pay the costs relating to any sale
or assignment except that, to the extent that Lender requires such
amendments, Borrower shall pay the cost of documentation for amendments
in order to place a single Lender to serve as agent on behalf of
Lenders within the Loan Documents.
(b) ASSIGNMENTS. Terms of Assignments. The parties to
any assignment shall execute and deliver to Lender, for its acceptance,
an Assignment Agreement, together with a processing fee of $3,500 and
such forms, certificates or other evidence, if any, described in
subsection 2.8(c) with respect to United States federal income tax
withholding matters and as may be required by Lender and Borrower. Upon
such execution, delivery and acceptance, from and after the effective
date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection
8.8(b) and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, Lender shall cease to be a party hereto). The assigning
Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Note to Lender for
cancellation, and thereupon new Notes shall be issued to the assignee
and to the assigning Lender, substantially in the form of Exhibit III
annexed hereto, as the case may be, with appropriate insertions, to
reflect the new
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outstanding Loans of the assignee and the assigning Lender. To the
extent that an assignment of all or any portion of a Lender's interests
and rights under this Agreement and the other Loan Documents to any
Person pursuant to this subsection 8.1(b) would, due to circumstances
existing at the time of such assignment, result in increased costs
under subsection 2.8 from those being charged by such assigning Lender
prior to such assignment, then Borrower shall not be obligated to pay
such increased costs (although Borrower shall be obligated to pay any
other increased costs of the type described above resulting from
changes after the date of the assignment).
(c) PARTICIPATIONS. The holder of any participation,
other than an Affiliate of Lender granting such participation, shall
not be entitled to require Lender to take or omit to take any action
hereunder except action directly affecting (i) the extension of the
regularly scheduled maturity of any portion of the principal amount of
or interest on the Loans allocated to such participation or (ii) a
reduction of the principal amount of or the rate of interest payable on
the Loans allocated to such participation, and all amounts payable by
Borrower hereunder (including amounts payable to Lender pursuant to
subsections 2.7(d) and 2.8) shall be determined as if Lender had not
sold such participation. Borrower and Lender hereby acknowledge and
agree that, solely for purposes of subsection 8.4, (a) any
participation will give rise to a direct obligation of Borrower to the
participant and (b) the participant shall be considered to be a
"Lender".
(d) INFORMATION. Lender may furnish any information
concerning Borrower and Borrower's Subsidiaries in the possession of
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject to subsection 8.17.
8.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all reasonable costs of
furnishing all opinions by counsel for Borrower (including any opinions
requested by Lender as to any legal matters arising hereunder) and of Borrower's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Lender (including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Borrower; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Lender pursuant to any Security Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and
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reasonable fees, expenses and disbursements of counsel to Lender and of counsel
providing any opinions that Lender may request in respect of the Security
Documents or the Liens created pursuant thereto; (v) a field examination fee of
$600 per auditor per diem plus all actual costs and reasonable expenses in
connection with the conduct of Lender's initial and ongoing field examinations;
(vi) all the actual costs and reasonable expenses (including the reasonable
fees, expenses and disbursements of any auditors, accountants or appraisers and
any environmental or other consultants, advisors and agents employed or retained
by Lender or its counsel) of obtaining and reviewing any appraisals
environmental audits or reports hereunder; (vii) the custody or preservation of
any of the Collateral; and (viii) after the occurrence of an Event of Default,
all costs and expenses, including reasonable attorneys' fees (including
allocated costs of internal counsel) and costs of settlement, incurred by Lender
in enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranty) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "workout" or
pursuant to any insolvency or bankruptcy proceedings.
8.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
8.2, whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Lender and the officers, directors, employees,
agents and affiliates of Lender (collectively called the "INDEMNITEES"), from
and against any and all Indemnified Liabilities (as hereinafter defined);
provided, that Borrower shall not have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent such
Indemnified Liabilities arise solely from the gross negligence or willful
misconduct of that Indemnitee as determined by a final judgment of a court of
competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or abate any Hazardous Materials
Activity), costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct (other than
indirect or consequential damages), and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other
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Loan Documents or the transactions contemplated hereby or thereby (including
Lender's agreement to make the Loan hereunder or the use or intended use of the
proceeds thereof, or any enforcement of any of the Loan Documents (including any
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty), (ii) the statements contained in the
commitment letter delivered by Lender to Borrower with respect thereto, or (iii)
any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 8.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
8.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, Lender is hereby authorized by Borrower at
any time or from time to time, without notice to Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or
unmeasured, but not including trust accounts) and any other Indebtedness at any
time held or owing by Lender to or for the credit or the account of Borrower
against and on account of the obligations and liabilities of Borrower to Lender
under this Agreement and the other Loan Documents, including all claims of any
nature or description arising out of or connected with this Agreement or any
other Loan Document, irrespective of whether or not (i) Lender shall have made
any demand hereunder or (ii) the principal of or the interest on the Loan or any
amounts in respect of any other amounts due hereunder shall have become due and
payable pursuant to Section 7 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Borrower hereby further grants to
Lender a security interest in all deposits and accounts maintained with Lender
as security for the Obligations.
8.5 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Note, or consent to any departure by
Borrower therefrom, shall in any event be effective without the written
concurrence of Lender. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 8.5 shall be binding upon Lender and, if signed by any Borrower, on
Borrower.
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8.6 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Default if such action is taken or
condition exists.
8.7 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States
mail or courier service and shall be deemed to have been given when received.
For the purposes hereof, the address of each party hereto shall be as set forth
under such party's name on the signature pages hereof or such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto.
8.8 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.
(a) All representations, warranties and agreements
made herein shall survive the execution and delivery of this Agreement
and the making of the Loan hereunder.
(b) Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Borrower set forth in
subsections 2.7(d), 2.8, 8.2, 8.3 and 8.4 shall survive the payment of
the Loan and the termination of this Agreement.
8.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE.
No failure or delay on the part of Lender in the exercise of
any power, right or privilege hereunder or under any other Loan Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
8.10 MARSHALLING; PAYMENTS SET ASIDE.
Lender shall not be under any obligation to marshal any assets
in favor of Borrower or any other party or against or in payment of any or all
of the Obligations. To the extent that Borrower make a payment or payments to
Lender or Lender enforces any security interests or exercise their rights of
setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
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law, common law or any equitable cause, then, to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or such enforcement or setoff had not occurred.
8.11 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.12 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
8.13 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR
THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION; PROVIDED, THAT THE
PROVISIONS RELATING TO THE PERFECTION AND PRIORITY OF THE COLLATERAL SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF THE LOCATION OF THE APPLICABLE COLLATERAL
AND THE UNIFORM COMMERCIAL CODE IN EFFECT IN SUCH STATE.
8.14 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of lender. Neither Borrower'
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Borrower without the prior written consent of all Lender.
8.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY
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EXECUTING AND DELIVERING THIS AGREEMENT, BORROWER, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY
1) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
2) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
3) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 8.7;
4) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (3) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
BORROWER IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT;
5) AGREES THAT LENDER RETAINS THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY
OTHER JURISDICTION; AND
6) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 8.15 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS
LAW SECTION 5-1402 OR OTHERWISE.
8.16 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it
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knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 8.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
8.17 CONFIDENTIALITY.
Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Borrower in accordance with Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Borrower that in any event
Lender may make disclosures to Affiliates of Lender or disclosures reasonably
required by any bona fide assignee, transferee or participant in connection with
the contemplated assignment or transfer by Lender of the Loan or any
participations therein or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided, that,
unless specifically prohibited by applicable law or court order, Lender shall
notify Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information; and
provided, further, that in no event shall Lender be obligated or required to
return any materials furnished by Borrower or any of Borrower's Subsidiaries.
8.18 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents, or
supplements may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts, together shall
constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart hereof by each of Borrower and
Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this
AMENDED AND RESTATED CREDIT AGREEMENT to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.
BORROWER:
VIASOURCE COMMUNICATIONS, INC.
By: /s/ Craig A. Russey
--------------------------------------
Name:
Title:
Notice Address:
c/o Communication Resources Incorporated
1001 W. Cypress Creek Road, Suite 118
Ft. Lauderdale, FL 33309
Attn: Craig Russey
with a copy to:
Crest Communications Partners, L.P.
320 Park Avenue, 17th Floor
New York, NY 10022
Attn: V. Michael Fitzgerald
Telecopy: (212) 317-2710
Crest Communications Partners, L.P.
320 Park Avenue, 17th Floor
New York, NY 10022
Attn: Matthew O'Connell
Telecopy: (212) 317-2710
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Attn: Richard A. Stenberg
Telecopy: (212) 259-6333
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LENDER:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Thomas P. Waters
--------------------------------------
Name: Thomas P. Waters
Title: Senior Vice President
Notice Address:
2325 Lakeview Parkway, Suite 7000
Alpharetta, Georgia 30004-1976
Attention: Viasource Account Manager
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