<PAGE>
Exhibit 10.1
------------
EXECUTION
COMFORCE CORPORATION,
as Guarantor,
COMFORCE OPERATING, INC.,
as Guarantor,
UNIFORCE SERVICES, INC.,
as Guarantor,
THE DIRECT AND INDIRECT SUBSIDIARIES OF SUCH
GUARANTORS NAMED HEREIN,
as Borrowers and Guarantors,
THE LENDERS NAMED HEREIN,
as Lenders,
TRANSAMERICA BUSINESS CREDIT CORPORATION
as Co-Agent and Lender,
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Collateral Agent and Lender
and
IBJ WHITEHALL BUSINESS CREDIT CORPORATION,
as Administrative Agent and as Lender
----------------------------------------------------------
LOAN AND SECURITY AGREEMENT
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Dated as of December 14, 2000
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CONTENTS
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Clause Page
<S> <C>
1. DEFINITIONS......................................................................... 2
1.1 Certain Defined Terms...................................................... 2
1.2 Accounting Terms........................................................... 19
1.3 Other Definitional Provisions.............................................. 20
2. LOANS AND COLLATERAL................................................................ 20
2.1 Loans...................................................................... 20
2.2 Interest................................................................... 30
2.3 Fees....................................................................... 34
2.4 Payments and Prepayments................................................... 35
2.5 Use of Proceeds............................................................ 37
2.6 Term of this Agreement..................................................... 37
2.7 Statements................................................................. 37
2.8 Grant of Security Interest................................................. 38
2.9 Capital Adequacy and Other Adjustments..................................... 38
2.10 Taxes...................................................................... 39
2.11 Required Termination and Prepayment........................................ 41
2.12 Optional Prepayment/Replacement of Lenders in Respect of Increased Costs... 41
2.13 Compensation............................................................... 42
2.14 Booking of LIBOR Loans..................................................... 42
2.15 Assumptions Concerning Funding of LIBOR Loans.............................. 42
3. CONDITIONS TO LOANS................................................................. 43
3.1 Conditions to Loans........................................................ 43
4. BORROWERS' REPRESENTATIONS AND WARRANTIES........................................... 46
4.1 Organization, Powers, Capitalization....................................... 46
4.2 Authorization of Borrowing; No Conflict.................................... 47
4.3 Financial Condition........................................................ 47
</TABLE>
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4.4 Omitted.................................................. 47
4.5 Indebtedness and Liabilities............................. 47
4.6 Account Warranties....................................... 48
4.7 Names.................................................... 48
4.8 Locations; FEIN.......................................... 48
4.9 Title to Properties; Liens............................... 48
4.10 Litigation; Adverse Facts................................ 49
4.11 Payment of Taxes......................................... 49
4.12 Performance of Agreements................................ 49
4.13 Employee Benefit Plans................................... 49
4.14 Intellectual Property.................................... 50
4.15 Broker's Fees............................................ 50
4.16 Government Consents...................................... 50
4.17 Environmental Compliance................................. 50
4.18 Solvency................................................. 50
4.19 Disclosure............................................... 50
4.20 Insurance................................................ 51
4.21 Compliance with Laws..................................... 51
4.22 Bank Accounts............................................ 51
4.23 Subsidiaries............................................. 51
4.24 Employee Matters......................................... 52
4.25 Governmental Regulation.................................. 52
4.26 Amendments to Schedules.................................. 52
5. AFFIRMATIVE COVENANTS............................................. 52
5.1 Financial Statements and Other Reports................... 52
5.2 Access to Accountants and Management..................... 58
5.3 Inspection............................................... 58
5.4 Collateral Records....................................... 58
</TABLE>
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<TABLE>
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5.5 Account Covenants; Verification........................................ 59
5.6 Collection of Accounts and Payments; Cash Management Arrangements...... 59
5.7 Endorsement............................................................ 60
5.8 Corporate Existence.................................................... 61
5.9 Payment of Taxes....................................................... 61
5.10 Maintenance of Properties; Insurance................................... 61
5.11 Compliance with Laws................................................... 62
5.12 Further Assurances..................................................... 62
5.13 Collateral Locations................................................... 62
5.14 Instruments; Chattel Paper............................................. 63
5.15 Account Agreements..................................................... 63
5.16 Use of Proceeds and Margin Security.................................... 63
6. FINANCIAL COVENANTS............................................................. 64
6.1 Omitted................................................................ 64
6.2 Fixed Charge Coverage.................................................. 64
6.3 Minimum EBITDA......................................................... 64
6.4 Maximum Capital Expenditures........................................... 65
7. NEGATIVE COVENANTS.............................................................. 65
7.1 Indebtedness and Liabilities........................................... 65
7.2 Guaranties............................................................. 66
7.3 Transfers, Liens and Related Matters................................... 66
7.4 Investments and Loans.................................................. 68
7.5 Restricted Junior Payments............................................. 68
7.6 Restriction on Fundamental Changes..................................... 69
7.7 Transactions with Affiliates........................................... 72
7.8 Environmental Liabilities.............................................. 72
7.9 Conduct of Business.................................................... 72
7.10 Compliance with ERISA.................................................. 72
</TABLE>
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<TABLE>
<S> <C>
7.11 Tax Consolidations.............................................. 72
7.12 Subsidiaries.................................................... 73
7.13 Fiscal Year..................................................... 73
7.14 Press Release; Public Offering Materials........................ 73
7.15 Bank Accounts................................................... 73
7.16 Changes Relating to Senior Notes and Senior PIK Notes........... 73
8. DEFAULT, RIGHTS AND REMEDIES............................................. 73
8.1 Event of Default................................................ 73
8.2 Suspension of Commitments....................................... 78
8.3 Acceleration.................................................... 78
8.4 Remedies........................................................ 78
8.5 Appointment of Attorney-in-Fact................................. 80
8.6 Limitation on Duty of Agents with Respect to Collateral......... 80
8.7 Application of Proceeds......................................... 81
8.8 License of Intellectual Property................................ 81
8.9 Waivers, Non-Exclusive Remedies................................. 82
9. ASSIGNMENT AND PARTICIPATION............................................. 82
9.1 Assignments and Participations in Loans......................... 82
9.2 Agents.......................................................... 84
9.3 Consents........................................................ 90
9.4 Set Off and Sharing of Payments................................. 91
9.5 Disbursement of Funds........................................... 91
9.6 Settlements, Payments and Information........................... 92
9.7 Dissemination of Information.................................... 94
9.8 Discretionary Advances.......................................... 95
10. MISCELLANEOUS............................................................ 95
10.1 Expenses and Attorneys' Fees.................................... 95
10.2 Indemnity....................................................... 96
</TABLE>
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<TABLE>
<S> <C>
10.3 Amendments and Waivers.................................................... 96
10.4 Notices................................................................... 97
10.5 Survival of Warranties and Certain Agreements............................. 99
10.6 Indulgence Not Waiver..................................................... 99
10.7 Marshaling; Payments Set Aside............................................ 99
10.8 Entire Agreement.......................................................... 100
10.9 Independence of Covenants................................................. 100
10.10 Severability.............................................................. 100
10.11 Lenders' Obligations Several; Independent Nature of Lenders' Rights....... 100
10.12 Headings.................................................................. 101
10.13 APPLICABLE LAW............................................................ 101
10.14 Successors and Assigns.................................................... 101
10.15 No Fiduciary Relationship; Limitation of Liabilities...................... 101
10.16 CONSENT TO JURISDICTION................................................... 102
10.17 WAIVER OF JURY TRIAL...................................................... 102
10.18 Construction.............................................................. 102
10.19 Counterparts; Effectiveness............................................... 102
10.20 No Duty................................................................... 103
10.21 Confidentiality........................................................... 103
10.22 Co-Agent.................................................................. 103
10.23 Obligations Joint and Several............................................. 104
11. GUARANTIES......................................................................... 104
11.1 Guaranty of Guaranteed Obligations of Borrower............................ 104
11.2 Demand by Administrative Agent or Lenders................................. 105
11.3 Enforcement of Guaranty................................................... 105
11.4 Waiver.................................................................... 105
11.5 Benefit of Guaranty....................................................... 106
11.6 Modification of Guaranteed Obligations, Etc............................... 106
</TABLE>
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11.7 Reinstatement........................................... 107
11.8 Deferral of Subrogation, Etc............................ 107
11.9 Election of Remedies.................................... 108
11.10 Limitation on Guaranteed Obligations.................... 108
11.11 Liability Cumulative.................................... 109
</TABLE>
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<PAGE>
EXHIBITS
A. Assignment and Assumption Agreement
B. Borrowing Base Certificate
C. Compliance Certificate
D. Rollforward Report
E. Notice of Borrowing
SCHEDULES
1.1(B) Other Liens
2.1(B) Account Debtors
3.1(A) List of Closing Documents
4.1(B) Capitalization of Loan Parties
4.5 Other Indebtedness
4.7 Trade Names (Present and Past Five Years)
4.8 Location of Principal Place of Business, Books and Records and
Collateral; FEIN
4.9 Owned and Leased Real Property
4.10 Litigation
4.11 Audits
4.14 Intellectual Property
4.22 Bank Accounts
4.24 Employee Matters
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<PAGE>
LOAN AND SECURITY AGREEMENT dated as of December 14, 2000,
AMONG
(1) COMFORCE CORPORATION, a Delaware corporation ("CC");
(2) COMFORCE OPERATING, INC., a Delaware corporation ("COI") (together with CC,
each a "Holding Party" and collectively, the "Holding Parties");
(3) UNIFORCE SERVICES, INC., a New York corporation ("USI"), BRENTWOOD OF
CANADA, INC., a New York corporation, BRENTWOOD SERVICE GROUP, INC., a New
York corporation ("Brentwood"), CAMELOT COMMUNICATIONS GROUP, INC., a New
Jersey corporation, CAMELOT CONTROL GROUP, INC., a New Jersey corporation,
CAMELOT CONSULTING GROUP, INC., a New Jersey corporation, CAMELOT GROUP,
INC., a New Jersey corporation, COMFORCE INFORMATION TECHNOLOGIES, INC., a
New York corporation, COMFORCE TECHNICAL ADMINISTRATIVE SERVICES, INC., a
New York corporation, COMFORCE TECHNICAL SERVICES, INC., a Delaware
corporation, COMFORCE TELECOM, INC., a Delaware corporation, COMPUTER
CONSULTANTS FUNDING & SUPPORT, INC., a New York corporation, GERRI G.,
INC., a New York corporation, G.M.G. RESOURCES, INC., a New York
corporation, CLINICAL LABFORCE OF AMERICA, INC., a New York corporation,
LABFORCE OF AMERICA, INC., a New York corporation, PROFESSIONAL STAFFING
FUNDING & SUPPORT, INC., a New York corporation, PRO SERVICES, INC., a
Delaware corporation, PRO UNLIMITED, INC., a New York corporation, PRO
UNLIMITED SERVICES, INC., a Delaware corporation, TEMPORARY HELP INDUSTRY
SERVICING COMPANY, INC., a New York corporation ("THISCO"), UNIFORCE MIS
SERVICES OF GEORGIA, INC., a Georgia corporation, UNIFORCE PAYROLLING
SERVICES, INC., a New York corporation, UNIFORCE PAYROLLING TRI-STATE, INC.
a New York corporation, UNIFORCE STAFFING SERVICES, INC., a New York
corporation, UTS OF DELAWARE, INC., a Delaware corporation, SUMTEC
CORPORATION, a Delaware corporation, THISCO OF CANADA, INC., a New York
corporation (each a "Borrower" and, collectively, jointly and severally,
"Borrowers");
(4) COMFORCE ACQUISITION 1 CORP. a Delaware corporation ("Inactive
Subsidiary");
(5) The financial institution(s) listed on the signature pages hereof and their
respective successors and assigns (each a "Lender" and, collectively,
"Lenders");
(6) TRANSAMERICA BUSINESS CREDIT CORPORATION, a Delaware corporation ("Co-
Agent") for itself as a Lender and as Co-Agent;
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(7) THE CIT GROUP/BUSINESS CREDIT, INC. (in its individual capacity, "CIT"), a
New York corporation, for itself as a Lender and as a Collateral Agent; and
(8) IBJ WHITEHALL BUSINESS CREDIT CORPORATION (in its individual capacity,
"IBJW"), with offices at One State Street, New York, New York 10004, for
itself as a Lender and as Administrative Agent.
WHEREAS
(1) All capitalized terms used herein are defined in Section 1 of this
Agreement;
(2) Holding Parties and Borrowers desire that Lenders extend a credit facility
to Borrowers to i) acquire and retire in one or more purchases Senior Notes
at a discounted purchase price as permitted by this Agreement (the "Senior
Note Prepayment") and to pay related tax expenses; ii) to refinance certain
indebtedness of Borrowers; and iii) to provide financing for working
capital and for general corporate purposes from time to time to Borrowers
and their Subsidiaries;
(3) Borrowers desire to secure their obligations under the Loan Documents by
granting to Administrative Agent, for the benefit of Lenders, a security
interest in and lien upon certain of their property; and
(4) All Holding Parties, Borrowers and all Inactive Subsidiaries (each referred
to herein individually as a "Corporate Guarantor" and jointly and severally
and collectively as "Corporate Guarantors") are willing to guaranty all of
the obligations of Borrowers to Administrative Agent and Lenders under the
Loan Documents and to grant to Administrative Agent, for benefit of
Lenders, a security interest in and lien upon certain property of the
Corporate Guarantors to secure such guaranties;
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Borrowers, the Corporate Guarantors,
Administrative Agent, Collateral Agent and Lenders agree as follows:
1. DEFINITIONS
1.1 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"Account Agreements" means all agreements pursuant to which Purchased
Accounts are purchased or Service Fee Accounts are generated.
"Accounting Changes" has the meaning assigned to such term in subsection
1.2.
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"Accounts" means all "accounts" (as defined in the UCC), accounts
receivable, contract rights and general intangibles relating thereto, notes,
drafts and other forms of obligations owed to or owned by any Borrower
arising or resulting from the sale of goods or the rendering of services and
including, in any event, all Purchased Accounts and Service Fee Accounts.
"Account Debtor" means any Person who may become obligated to any Loan Party
under, with respect to, or on account of, an Account or Chattel Paper.
"Account Seller" means, in the case of any Purchased Account, the Person
from whom such Purchased Account was purchased and, in the case of any
Service Fee Account, means the independent supplemental staffing firm or
Licensee which provided the services creating such Service Fee Account.
"Acquisition Costs" means the price, cost and expenses payable in connection
with a Permitted Acquisition (including all transaction costs and all
Indebtedness, liabilities and contingent obligations incurred or assumed in
connection therewith).
"Acquisition Pro Forma" has the meaning assigned to such term in subsection
7.6(B)(7)(i).
"Acquisition Projections" has the meaning assigned to such term in
subsection 7.6(B)(7)(i).
"Activation Event" means the occurrence of both of the following events:
(i) Unused Availability is less than $7,500,000 and (ii) the Borrowing Base
less the sum of (x) the outstanding principal balance of the Revolving Loan
plus (y) the Letter of Credit Reserve is less than $10,000,000.
"Adjustment Date" means, the first day of each March, June, September or
December next succeeding the date on which Administrative Agent receives the
financial statements required to be delivered pursuant to subsection 5.1(B)
for the most recently completed Fiscal Quarter, commencing with the Fiscal
Quarter ending on December 31, 2001, together with the Compliance
Certificate and the Applicable Margin Report required to be delivered
pursuant to subsection 5.1(E) with such financial statement provided, that
notwithstanding the foregoing, the first Adjustment Date shall be the first
anniversary of the Closing Date.
"Administrative Agent" means IBJW in its capacity as an agent for Lenders
under the Loan Documents and any successor in such capacity appointed
pursuant to subsection 9.2.
"Administrative Agent's Account" means ABA No. 026007825, Account No.
27725809 at IBJ Whitehall Bank & Trust Company, Reference: IBJ Whitehall
Credit Corporation for the benefit of COMFORCE.
"Affected Lender" has the meaning assigned to such term in subsection 2.12.
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"Affiliate" means any Person (other than any Agent or Lender): (a) directly
or indirectly controlling, controlled by, or under common control with, any
Loan Party; (b) directly or indirectly owning or holding five percent (5%)
or more of any equity interest in any Loan Party; (c) five percent (5%) or
more of whose stock or other equity interest having ordinary voting power
for the election of directors or the power to direct or cause the direction
of management, is directly or indirectly owned or held by any Loan Party; or
(d) which has a senior executive officer who is also a senior executive
officer of any Loan Party. For purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled
by" and "under common control with") means the possession directly or
indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities
or other equity interest, or by contract or otherwise.
"Agent" means IBJW in its capacity as Administrative Agent and CIT in its
capacity as Collateral Agent.
"Agreement" means this Loan and Security Agreement as it may be amended,
restated, supplemented or otherwise modified from time to time.
"Allocable Amount" has the meaning assigned to such term in subsection
11.2(A).
"Applicable Base Rate Margin" means, at any date, the applicable percentage
set forth below opposite the Level of Leverage Ratio as of such date (as
reflected, except as provided below, in the then most recent financial
statements delivered pursuant to subsection 5.1(B) or 5.1(C) hereof, the
Compliance Certificate and Applicable Margin Report):
<TABLE>
<CAPTION>
Applicable Base
Level or Leverage Ratio Rate Margin
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<S> <C>
Level I: Leverage Ratio is equal to or less than 4.00 .0%
Level II: Leverage Ratio is greater than 4.00 but less than or equal to 4.50 .25%
Level III: Leverage Ratio is greater than 4.50 but less than or equal to 5.50 .50%
Level IV: Leverage Ratio is greater than 5.50 but less than or equal to 6.00 .75%
Level V: Leverage Ratio is greater than 6.00 1.00%
</TABLE>
; provided that (a) the Applicable Base Rate Margin shall be that set forth
above opposite Level IV from the Closing Date until the first Adjustment
Date, (b) the Applicable Base Rate
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Margin determined for any Adjustment Date shall remain in effect until a
subsequent Adjustment Date for which the Leverage Ratio falls within a
different Level, and (c) if the financial statements, the related Compliance
Certificate and the Applicable Margin Report for any fiscal period are not
delivered by the date due pursuant to subsections 5.1(B), 5.1(C) and 5.1(E),
the Applicable Base Rate Margin shall be that set forth above opposite Level
V until the next subsequent Adjustment Date.
"Applicable LIBOR Margin" means, at any date, the applicable percentage set
forth below opposite the Level of Leverage Ratio as of such date (as
reflected, except as provided below, in the then most recent financial
statements delivered pursuant to subsection 5.1(B) or 5.1(C) hereof, the
Compliance Certificate and Applicable Margin Report):
<TABLE>
<CAPTION> Applicable LIBOR
Level or Leverage Ratio Margin
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<S> <C>
Level I: Leverage Ratio is equal to or less than 4.00 1.75%
Level II: Leverage Ratio is greater than 4.00 but less than or equal to 4.50 2.00%
Level III: Leverage Ratio is greater than 4.50 but less than or equal to 5.50 2.25%
Level IV: Leverage Ratio is greater than 5.50 but less than or equal to 6.00 2.50%
Level V: Leverage Ratio is greater than 6.00 2.75%
</TABLE>
; provided that (a) the Applicable LIBOR Margin shall be that set forth
above opposite Level IV from the Closing Date until the first Adjustment
Date and (b) the Applicable LIBOR Margin determined for any Adjustment Date
shall remain in effect until a subsequent Adjustment Date for which the
Leverage Ratio falls within a different Level, and (c) if the financial
statements, the related Compliance Certificate and Applicable Margin Report
for any fiscal period are not delivered by the date due pursuant to
subsections 5.1(B), 5.1(C) and 5.1(E), the Applicable LIBOR Margin shall be
that set forth above opposite Level V until the next subsequent Adjustment
Date.
"Applicable Margin Report" has the meaning assigned to such term in
subsection 5.1(E).
"Asset Disposition" means the disposition, whether by sale, lease, transfer,
loss, damage, destruction, condemnation or otherwise, of any or all of the
assets of any Loan Party.
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"Assignment and Assumption Agreement" means an agreement among
Administrative Agent, a Lender and such Lender's assignee regarding their
respective rights and obligations with respect to assignments of the Loans,
the Commitments and other interests under this Agreement and the other Loan
Documents substantially in the form of Exhibit A.
"Bank" means IBJ Whitehall Bank & Trust Company.
"Base Rate" means a variable rate of interest per annum equal to the higher
of (a) the base commercial lending rate of the Bank as publicly announced to
be in effect from time to time, such rate to be adjusted automatically,
without notice, on the effective date of any change in such announced rate;
(such rate of interest being determined from time to time by the Bank as a
means of pricing some loans to its customers and is neither tied to any
external rate of interest or index nor does it necessarily reflect the
lowest rate of interest actually charged by the Bank to any particular class
or category of customers), or (b) the Federal Funds Effective Rate plus one-
half of one percent (.50%).
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate.
"Blocked Accounts" has the meaning assigned to such term in subsection
5.6(a).
"Blocked Account Agreements" has the meaning assigned to such term in
subsection 5.6(a).
"Borrower" and "Borrowers" have the meanings assigned to such terms in the
preamble to this Agreement.
"Borrowing Base" has the meaning assigned to such term in subsection
2.1(A)(2).
"Borrowing Base Certificate" means a certificate and assignment schedule
duly executed by an officer of Borrower Representative appropriately
completed and in substantially the form of Exhibit B.
"Borrower Representative" has the meaning assigned to such term in
subsection 2.1(H).
"Business Day" means 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 closed, or for the purposes
of LIBOR Loans only, a day on which commercial banks are open for dealings
in Dollar deposits in the London, England (U.K.) market.
"Capital Expenditures" means all expenditures (including deposits) for, or
contracts for expenditures (excluding contracts for expenditures under or
with respect to Capital Leases, but including cash down payments for assets
acquired under Capital Leases) with respect to any fixed assets or
improvements, or for replacements, substitutions or additions thereto, which
have
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a useful life of more than one year, including the direct or indirect
acquisition of such assets by way of increased product or service charges,
offset items or otherwise.
"Capital Lease" means any lease of any property (whether real, personal or
mixed) that, in conformity with GAAP, should be accounted for as a capital
lease.
"Cash Equivalents" means: (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within six (6) months from the date of acquisition
thereof; (b) commercial paper maturing no more than six (6) months from the
date issued and, at the time of acquisition, having a rating of at least A-1
from Standard & Poor's Ratings Services, a Division of the McGraw-Hill
Companies, Inc. or at least P-1 from Moody's Investors Service, Inc.; (c)
certificates of deposit or bankers' acceptances maturing within six (6)
months from the date of issuance thereof issued by, or overnight reverse
repurchase agreements from, any commercial bank organized under the laws of
the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $250,000,000
and not subject to setoff rights in favor of such bank; and (d) compensating
balances with and deposits in banks to the extent required to maintain
payroll accounts with such banks.
"Cash Dominion Arrangement" has the meaning assigned to such term in
subsection 5.6(b).
"CCI" means Comforce Columbus, Inc., a New York corporation.
"Certificate of Exemption" has the meaning assigned to such term in
subsection 2.10(C).
"Chattel Paper" shall mean any "chattel paper," as such term is defined in
the UCC, now owned or hereafter acquired by any Loan Party, wherever
located.
"Closing Date" means the time and date, not later than December 22, 2000, on
which the initial Revolving Advance is made.
"Collateral" has the meaning assigned to such term in subsection 2.8;
provided, however, that for the purposes of Section 8, the term "Collateral"
shall include the "Collateral" (as defined in subsection 2.8) as well as all
other property in which a security interest is granted under any Loan
Document.
"Collateral Agent" means CIT in its capacity as an agent for Lenders under
the Loan Documents and any successor in such capacity appointed pursuant to
subsection 9.2.
"Collecting Banks" has the meaning assigned to such term in subsection
5.6(a).
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"Commitment" or "Commitments" means the Revolving Loan Commitment or
Revolving Loan Commitments.
"Compliance Certificate" means a certificate duly executed by a Responsible
Officer of Borrower Representative appropriately completed and in
substantially the form of Exhibit C.
"Consent Solicitations" means (i) the Solicitation of Consents to Amend the
Senior Notes Indenture by COI pursuant to the Amended Consent Solicitation
Statement dated November 6, 2000 and (ii) the Form of Consent regarding the
amendments to the Senior Debentures Indenture distributed on or about
November 29, 2000.
"Contract" shall mean all "contracts," as such term is defined in the UCC,
now owned or hereafter acquired by any Loan Party, in any event, including
all contracts, undertakings, or agreements (other than rights evidenced by
Chattel Paper, Documents of Instruments) in or under which any Loan Party
may now or hereafter have any right, title or interest, including, without
limitation, all Account Agreements and all other agreements relating to the
terms of payment or the terms of performance of any Account.
"Corporate Guarantor" and "Corporate Guarantors" have the meanings assigned
to such terms in the preamble to this Agreement.
"Corporate Overhead" means payments made in cash by CC or COI in connection
with the supervision and management of the businesses and operations of
Borrowers including, without limitation, in respect of compensation for
executive officers and other employees of CC and/or COI who participate in
such supervision and management, and financial, accounting, legal, computer
service, insurance and other similar payments made in cash relating thereto,
in all such cases being reasonable in amount.
"Default" means a condition, act or event that, after notice or lapse of
time or both, would constitute an Event of Default if that condition or
event were not cured or removed within any applicable grace or cure period.
"Defaulted Amount" means, with respect to any Lender at any time, any amount
required to be paid by such Lender to Administrative Agent or any other
Lender hereunder or under any other Loan Document at or prior to such time
which has not been so paid as of such time, including, without limitation,
any amount required to be paid by such Lender to (a) an Issuing Bank (or to
Administrative Agent for the account of such Issuing Bank) to purchase any
participation in a Letter of Credit issued by such Issuing Bank, and (b)
Administrative Agent to reimburse Administrative Agent for the amount of any
Loan made by Administrative Agent for the account of such Lender.
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"Defaulting Lender" means, at any time, any Lender that, at such time, owes
a Defaulted Amount.
"Defaulting Lender Notice" has the meaning assigned to such term in
subsection 9.6(B)(4).
"Default Rate" has the meaning assigned to such term in subsection 2.2(A).
"Dollars" means legal currency of the United States of America.
"EBITDA" means, for any period, without duplication, the total of the
following for CC and its Subsidiaries on a consolidated basis, each
calculated for such period: (1) net income determined in accordance with
GAAP; plus, to the extent included in the calculation of net income, (2) the
sum of (a) income and franchise taxes paid or accrued; (b) Interest
Expenses, net of interest income (but excluding service revenues and fees
relating to the financing of the accounts receivable of third-party, non-
affiliated entities engaged in the provision of temporary personnel
services), paid or accrued; (c) interest paid in kind; (d) amortization
including write off of financing costs related to the Heller Financial, Inc.
credit facility and depreciation and (e) two payments of $325,000 and
$300,000, respectively, to be made on January 2, and May 1, 2001,
respectively, to settle certain lawsuits as well as the cost to CC and its
Subsidiaries of 555,628 options or warrants to purchase CC stock to be
issued by CC in connection with such settlement at an exercise price of
$0.6625 per share, less, to the extent included in the calculation of net
income, (3) the sum of (a) the income of any Person (other than a wholly-
owned Subsidiary) in which any Loan Party or a wholly owned Subsidiary of a
Loan Party has an ownership interest; (b) gains or losses from sales or
other dispositions of assets; and (c) extraordinary or non-recurring gains,
but not net of extraordinary or non-recurring "cash" losses.
"Eligible Accounts" has the meaning assigned to such term in subsection
2.1(B).
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of any Loan
Party or any ERISA Affiliate or (b) has at any time within the preceding six
(6) years been maintained for the employees of any Loan Party or any current
or former ERISA Affiliate.
"Environmental Claims" means claims, liabilities, investigations,
litigation, administrative proceedings, judgments or orders relating to
Hazardous Materials.
"Environmental Laws" means any present or future federal, state or local
law, rule, regulation or order relating to pollution, waste, disposal, clean
up or the protection of human health or safety, plant life or animal life,
natural resources or the environment.
"Equipment" means all "equipment" (as defined in the UCC), including,
without limitation, all furniture, furnishings, fixtures, machinery, motor
vehicles, trucks, trailers, vessels, aircraft and
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rolling stock and all parts thereof and all additions and accessions thereto
and replacements therefor.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means any Person who is a
member of a group which is under common control with any Loan Party, who
together with any Loan Party is treated as a single employer within the
meaning of Section 414(b) and (c) of the IRC.
"Event of Default" means each of the events set forth in subsection 8.1.
"Excess Availability" means the amount, if any, by which (1) the Maximum
Revolving Loan Amount exceeds (2) the sum of (a) the aggregate amount of
Revolving Advances requested to be made on the Closing Date plus (b) all
trade Liabilities of Borrowers outstanding beyond normal trade terms as
indicated on the initial Notice of Borrowing plus (c) fees and expenses in
connection with the transactions contemplated by this Agreement and the
Consent Solicitations and the Senior Note Prepayment for which Borrowers are
responsible and which have accrued and which have not yet been charged to
Borrowers' accounts or otherwise paid by Borrowers plus (d) all tax expense
of CC and its Subsidiaries due and payable in the fourth quarter of 2000.
"Excess Interest" has the meaning assigned to such term in subsection
2.2(D).
"Excess Proceeds" has the meaning assigned to such term in subsection
2.4(B)(2).
"Federal Funds Effective Rate" means, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on
the immediately following Business Day by the Federal Reserve Bank of New
York or, if such rate is not published for any Business Day, the average of
the quotations for the day of the requested Loan received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
"Fee Letter" means that certain letter agreement between COI and
Administrative Agent, dated of even date herewith relating to fees.
"Fiscal Quarter" has the meaning assigned to such term in the definition of
Fiscal Year.
"Fiscal Year" means each twelve month period ending on the last day of
December in each year (with quarterly accounting periods ending on or about
March 31, June 30, September 30 and December 31 of each Fiscal Year (each a
"Fiscal Quarter").
"Fixed Charge Coverage" means, for any period, Operating Cash Flow divided
by Fixed Charges.
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<PAGE>
"Fixed Charges" means, for any period, and each calculated for such period
(without duplication), (a) Interest Expenses paid or accrued by Borrowers
and their respective Subsidiaries; plus (b) scheduled payments of principal
with respect to all Indebtedness of Borrowers and their respective
Subsidiaries; plus (c) any provision for (to the extent it is greater than
zero) income or franchise taxes included in the determination of net income,
excluding any provision for deferred taxes excluding taxes due or paid by CC
or any of its Subsidiaries on non-recurring gain associated with the
acquisition, prepayment or retirement of Senior Notes; plus (d) payment of
deferred taxes accrued in any prior period; plus (e) Restricted Junior
Payments made during such period plus (f) the aggregate amount of contingent
and "earn-out" payments made in cash by any Loan Party in connection with
any Permitted Acquisition during such period.
"Foreign Lender" has the meaning assigned to such term in subsection
2.10(C).
"Funded Debt" means Indebtedness which matures more than one year from the
date of its creation or matures within one year from such date but is
renewable or extendible, at the option of the debtor, to a date more than
one year from such date or arises under a revolving credit or similar
agreement which obligates the lender or lenders to extend credit during a
period of more than one year from such date including, without limitation,
all amounts of Funded Debt required to be paid or prepaid within one year
from the date of determination.
"Funding Date" means the date (including the Closing Date) of each funding
of a Loan or issuance of a Letter of Credit.
"GAAP" means generally accepted accounting principles set forth in the
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 that are
applicable to the circumstances as of the date of determination.
"Granting Lender" shall have the meaning assigned to such term in subsection
9.1(A).
"Guarantor Payment" has the meaning assigned to such term in subsection
11.2(A).
"Guaranty" means the guaranty provisions set forth in Section 11 of this
Agreement.
"Hazardous Material" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
Environmental Laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
or toxicity; (b) oil, petroleum or petroleum derived substances, natural
gas, natural gas liquids or synthetic gas and
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drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or
geothermal resources; (c) any flammable substances or explosives or any
radioactive materials; and (d) asbestos in any form or electrical equipment
which contains any oil or dielectric fluid containing polychlorinated
biphenyls.
"Holding Party" means each of CC and COI.
"Inactive Subsidiary" and "Inactive Subsidiaries" have the meanings assigned
to such terms in the preamble to this Agreement.
"Indebtedness", as applied to any Person, means without duplication: (a)
all indebtedness for borrowed money; (b) obligations under leases which in
accordance with GAAP constitute Capital Leases; (c) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money; (d) any obligation owed for all or any part
of the deferred purchase price of property or services if the purchase price
is due more than six months from the date the obligation is incurred or is
evidenced by a note or similar written instrument and any "earn-out" or
similar obligation, whether or not contingent, incurred in connection with
any acquisition of capital stock or assets, whether prior to or after the
Closing Date; (e) 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 non recourse to
the credit of that Person; (f) obligations in respect of letters of credit;
and (g) any advances under any factoring arrangement.
"Indemnitees" has the meaning assigned to such term in subsection 10.2.
"Indemnified Liabilities" has the meaning assigned to such term in
subsection 10.2.
"Instruments" shall mean "instruments," as such term is defined in the UCC,
now owned or hereafter acquired by any Loan Party, wherever located.
"Intangible Assets" means all intangible assets (determined in conformity
with GAAP) including, without limitation, goodwill, Intellectual Property,
licenses, organizational costs, deferred amounts, covenants not to compete,
unearned income and restricted funds.
"Intellectual Property Assignment" means the assignment for security of
patents, trademarks and copyrights, to be executed and delivered by each
Loan Party (to the extent requested by Administrative Agent), in a form
reasonably acceptable to Administrative Agent, as such agreement may
hereafter be amended, restated, supplemented or otherwise modified from time
to time.
"Intercompany Indebtedness" means, with respect to any Borrower or any of
its respective Subsidiaries, all assets and liabilities howsoever arising,
which are due to such Person from, or
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which are due from such Person to, or which may otherwise arise from any
transactions by such Person with a Borrower or a Subsidiary.
"Interest Expenses" means, without duplication, for any period, the following,
for CC and its Subsidiaries on a consolidated basis each calculated for such
period: interest expenses deducted in the determination of net income (excluding
(i) the amortization of fees and costs with respect to the transactions
contemplated by this Agreement, the Senior Notes Indenture and the Senior PIK
Notes which have been capitalized as transaction costs in accordance with the
provisions of subsection 1.2; and (ii) interest paid in kind).
"Interest Period" has the meaning assigned to such term in subsection 2.2(B).
"Interest Rate" has the meaning assigned to such term in subsection 2.2(A).
"Interest Settlement Date" has the meaning assigned to such term in subsection
9.6(A)(3).
"Inventory" means all "inventory" (as defined in the UCC), including, without
limitation, finished goods, raw materials, work in process and other materials
and supplies used or consumed in a Person's business, and goods which are
returned or repossessed.
"IRC" means the Internal Revenue Code of 1986, as amended from time to time, and
any successor statute and all rules and regulations promulgated thereunder.
"Issuing Bank" means the Bank, or such other bank as a Borrower Representative,
with the consent of Administrative Agent, may select as the issuer of a letter
of credit in respect of which a Letter of Credit is to be issued.
"Landlord Waiver Reserves" means, at any time, the aggregate amount required to
be deposited by the Administrative Agent pursuant to the landlord waivers in
favor of Administrative Agent then in place in order to enable the
Administrative Agent to gain access to the properties covered by such landlords'
waivers.
"Lender" or "Lenders" has the meaning assigned to such term in the preamble to
this Agreement.
"Letter of Credit" has the meaning assigned to such term in subsection 2.1(F).
"Letter of Credit Liability" means, all reimbursement and other liabilities of
Borrowers with respect to each Letter of Credit, whether contingent or
otherwise, including: (a) the amount available to be drawn or which may become
available to be drawn; (b) all amounts which have been paid or made available by
an Issuing Bank under a Letter of Credit; and (c) all unpaid interest, fees and
expenses related thereto.
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<PAGE>
"Letter of Credit Reserve" means, at any time, an amount equal to (a) the
aggregate amount of Letter of Credit Liability with respect to all Letters of
Credit outstanding at such time plus, without duplication, (b) the aggregate
amount theretofore paid by any Issuing Bank, under Letters of Credit and not
debited to the Loan Account pursuant to subsection 2.1(F)(2) or otherwise
reimbursed by Borrowers.
"Letter of Non-Exemption" has the meaning assigned to such term in subsection
2.10(C).
"Level" means any of Level I, Level II Level III, Level IV or Level V appearing
in the definitions of "Applicable Base Rate Margin" or "Applicable LIBOR
Margin."
"Leverage Ratio" means, as of the last day of any Fiscal Quarter, the amount
obtained by dividing (a) the sum of (i) the sum of (x) average of the principal
balance of the Revolving Loan during the period of four Fiscal Quarters ending
on the last day of such Fiscal Quarter plus (y) the Letter of Credit Reserve as
of the last day of such Fiscal Quarter, plus (z) the outstanding principal (or
notional principal) amount of Capital Leases, as of the last day of such Fiscal
Quarter, plus (ii) the outstanding principal balance of the Senior Notes at such
last day of such Fiscal Quarter by (b) EBITDA for the period of four Fiscal
Quarters ending on the last day of such Fiscal Quarter.
"Liabilities" shall have the meaning given that term in accordance with GAAP and
shall include Indebtedness.
"LIBOR" means, for each Interest Period, a rate of interest equal to:
(a) the rate of interest determined by Administrative Agent at which deposits
in Dollars for the relevant Interest Period are offered based on
information presented on the Reuters Screen LIBOR Page or Telerate Page
3750 (as selected by Administrative Agent) as of 11:00 A.M. (London time)
on the day which is two (2) Business Days prior to the first day of such
Interest Period; provided that if at least two such offered rates appear on
the Reuters Screen LIBOR Page or Telerate Page 3750, as applicable, in
respect of such Interest Period, the arithmetic mean of all such rates (as
determined by Administrative Agent) will be the rate used; provided further
that if Reuters and Telerate ceases to provide LIBOR quotations, such rate
shall be the average rate of interest determined by Administrative Agent at
which deposits in Dollars are offered for the relevant Interest Period by
Bankers Trust Company and The Chase Manhattan Bank, or its successors to
prime banks in the London interbank market as of 11:00 A.M. (London time)
on the applicable interest rate determination date, divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements in effect
on the day which is
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two (2) Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations 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:
(such rate to be adjusted to the nearest one sixteenth of one percent (1/16
of 1%) or, if there is not a nearest one sixteenth of one percent (1/16 of
1%), to the next higher one sixteenth of one percent (1/16 of 1%).
"LIBOR Loans" means at any time that portion of the Loans bearing interest
at rates determined by reference to LIBOR.
"Licensee" means a licensee under a Licensing Agreement.
"Licensing Agreement" means a licensing agreement between Uniforce Staffing
Services, Inc., as licensor and a licensee.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement perfecting a
security interest under the UCC or comparable law of any jurisdiction).
"Loan" or "Loans" means a Revolving Advance or Revolving Advances.
"Loan Documents" means this Agreement, the Notes, the Fee Letter, the
Intellectual Property Assignment, the Pledge Agreement, the Letter of
Credit and Security Agreement, the Assignment of Business Interruption
Insurance, the Borrower Representative Agreement, each lock-box account
agreement, blocked account agreement, landlord waiver, each Letter of
Credit, and all other instruments, documents and agreements executed by or
on behalf of any Loan Party and delivered concurrently herewith or at any
time hereafter to or for any Agent or any Lender in connection with the
Loans, any Letter of Credit, and other transactions contemplated by this
Agreement, all as amended, restated, supplemented or modified from time to
time.
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<PAGE>
"Loan Party" means each Borrower, each Corporate Guarantor, and any other
Person (other than any Agent or any Lender) which is or becomes a party to
any Loan Document (collectively, referred to as the "Loan Parties").
"Material Adverse Effect" means a material adverse effect upon (a) the
business, operations, prospects, properties, assets or condition (financial
or otherwise) of any Loan Party on an individual basis or taken as a whole
or (b) the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party or of any Agent or any Lender to
enforce or collect any of the Obligations.
"Maximum Rate" has the meaning assigned to such term in subsection 2.2(D).
"Maximum Revolving Loan Amount" has the meaning assigned to such term in
subsection 2.1(A)(1).
"Notes" means the Revolving Notes.
"Notice of Activation Event" means a notice, issued by any Agent to a
Collecting Bank in accordance with subsection 5.6, directing such
Collecting Bank to immediately transfer all payments or deposits to the
Blocked Account to Administrative Agent's Account and to continue to do so
on a daily basis until such notice has been withdrawn in writing by the
Agent that issued same.
"Notice of Borrowing" has the meaning assigned to such term in subsection
2.1(C).
"Notice of Conversion/Continuation" has the meaning assigned to such term
in subsection 2.2(E).
"Obligations" means all obligations, liabilities and indebtedness of every
nature of each Loan Party from time to time owed to any Agent or to any
Lender under the Loan Documents or any Issuing Bank in respect of a Letter
of Credit or related documents including the principal amount of all debts,
claims and indebtedness (whether incurred before or after the Termination
Date), all reimbursement and other Obligations in respect of Letters of
Credit, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and/or from time to time hereafter owing, due or payable
including, without limitation, all interest, fees, costs and expenses
accrued or incurred after the filing of any petition under any bankruptcy
or insolvency law in which any Loan Party is a debtor, whether or not a
claim for such interest is an allowed claim in such proceeding.
"Operating Cash Flow" means, for any period, (a) EBITDA less (b) Capital
Expenditures (other than financed Capital Expenditures).
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<PAGE>
"Permitted Acquisition" has the meaning assigned to such term in subsection
7.6(B).
"Permitted Encumbrances" means the following types of Liens: (a) Liens
(other than Liens relating to Environmental Claims or ERISA) for taxes,
assessments or other governmental charges: (x) not yet due and payable; or
(y) due and payable that are being contested in good faith by appropriate
proceedings, provided that, in the case of Liens under this clause (y), a
reserve against the Borrowing Base shall have been established in the
amount of the claims for any such taxes, assessments or other governmental
charges; (b) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other similar liens imposed by law, which are
incurred in the ordinary course of business for sums not more than thirty
(30) days delinquent; (c) Liens (other than any Lien imposed by ERISA)
incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security, 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); (d) easements, rights-of-way, restrictions, and
other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of any Loan Party or any
of its Subsidiaries; (e) Liens for purchase money obligations, provided
that (i) the Indebtedness secured by any such Lien is permitted under
subsection 7.1 and (ii) such Lien encumbers only the asset so purchased;
(f) Liens in favor of Administrative Agent, on behalf of Lenders and
Issuing Banks; and (g) Liens set forth on Schedule 1.1(B).
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, 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 and agencies and political
subdivisions thereof.
"Pledge Agreement" means each stock pledge agreement executed and delivered
by each Loan Party that has a Subsidiary in favor of Administrative Agent,
on behalf of Lenders, in form and substance satisfactory to Administrative
Agent.
"Pro Rata Share" means with respect to any Lender the percentage obtained
by dividing (i) the Commitment of that Lender by (ii) all Commitments of
all Lenders as such percentage may be adjusted by assignments permitted
pursuant to subsection 9.1; provided, however, if any Commitment is
terminated pursuant to the terms hereof, then "Pro Rata Share" means the
percentage obtained by dividing (x) the aggregate principal amount of such
Lender's outstanding Loans by (y) the aggregate principal amount of all
outstanding Loans.
"Projections" means CC and its Subsidiaries' forecasted: (a) consolidated
balance sheets; (b) consolidated and consolidating profit and loss
statements; (c) consolidated cash flow
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<PAGE>
statements; (d) capitalization statements; and (e) consolidated schedule of
Indebtedness, all prepared on a division by division and Subsidiary by
Subsidiary basis and otherwise consistent with CC and its Subsidiaries'
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"Purchased Accounts" means those Accounts of Persons engaged in the
business of providing temporary employment personnel to clients, which
Accounts have been purchased by Borrowers from such Persons in the ordinary
course of Borrowers' business and have been identified by a Borrower
Representative as a "funding only" Account.
"Regulation T, Regulation U and Regulation X" shall mean such regulations
of the Board of Governors of the Federal Reserve System.
"Replacement Lender" has the meaning assigned to such term in subsection
2.12(A).
"Requisite Lenders" means Lenders holding fifty-one percent (51%) or more
of the sum of (a) outstanding Loans, (b) outstanding Letter of Credit
Liability and (c) unutilized Commitments; provided, that at any time during
which there are only two (2) Lenders, "Requisite Lenders" shall mean both
Lenders; provided, however, that with respect to any amendment,
modification, termination or waiver of any provision of subsection 7.6(B)
or (C), subsection 9.2(H)(1)(y), or subsection 9.2(K)(1)(y) or any consent
to any departure by any Loan Party therefrom to be signed by "Requisite
Lenders", this definition of Requisite Lenders shall be deemed modified to
the extent that such 51% shall increase to, except in the case of
subsection 9.2(K)(1)(y) with respect to a Corporate Guarantor that is not a
Significant Subsidiary, sixty-six and two-thirds percent (66.66%) and, in
case of subsection 9.2(K)(1)(y) with respect to a Corporate Guarantor that
is a Significant Subsidiary, one hundred percent (100%).
"Responsible Officer" means as to any Loan Party, each of the chief
executive officer, president, chief financial officer and vice-president-
finance of such Loan Party.
"Restricted Junior Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of CC or
any of its Subsidiaries now or hereafter outstanding, except a dividend
payable solely with shares of the class of stock on which such dividend is
declared; (b) any payment or prepayment of principal of, premium, if any,
or interest on, or any acquisition, redemption, conversion, exchange,
retirement, defeasance, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Indebtedness subordinated
in right of payment to the Obligations or any shares of any class of stock
of a CC or any of its Subsidiaries now or hereafter outstanding, or the
issuance of a notice of an intention to do any of the foregoing; (c) 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 CC or any of its Subsidiaries now or hereafter outstanding; and (d) any
payment by CC
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<PAGE>
or any of its Subsidiaries of any management fees, consulting fees or
similar fees to any Affiliate, whether pursuant to a management agreement
or otherwise.
"Revolving Advance" means each advance made by Lender(s) pursuant to
subsection 2.1(A).
"Revolving Loan" means the outstanding balance of all Revolving Advances
and any amounts added to the principal balance of the Revolving Loan
pursuant to this Agreement.
"Revolving Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make Revolving Advances pursuant to subsection 2.1(A), and
to purchase participations in Letters of Credit pursuant to subsection
2.1(F) in the aggregate amount set forth on the signature page of this
Agreement (or any amendment to this Agreement) below such Lender's
signature or in the most recent Assignment and Assumption Agreement, if
any, executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Revolving Advances and to purchase
participations in Letters of Credit.
"Revolving Note" means each promissory note of Borrowers in a form
reasonably acceptable to Administrative Agent, issued pursuant to
subsection 2.1(D).
"Rollforward Report" means a report duly executed by a Responsible Officer
of Borrower Representative appropriately completed and in substantially the
form of Exhibit D.
"Senior Debentures Indenture" means the Indenture dated as of November 26,
1997, by and between CC and The Bank of New York, as Trustee, executed and
delivered by the parties thereto in connection with the issuance of the
Senior PIK Notes, as in effect on the Closing Date (including the First and
Second Supplements thereto) and as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Agreement.
"Senior Note Prepayment" has the meaning assigned to such term in the
preamble to this Agreement.
"Senior Notes" means COI's 12% Senior Notes due 2007 in the original
aggregate principal amount of $110,000,000 issued under and pursuant to the
Senior Notes Indenture.
"Senior Notes Indenture" means the Indenture dated as of November 26, 1997,
by and between COI and Wilmington Trust Company, as Trustee, executed and
delivered by the parties thereto in connection with the issuance of the
Senior Notes as in effect on the Closing Date (including the First and
Second Supplements thereto) and as amended, modified or supplemented from
time to time in accordance with its terms and the terms hereof.
"Senior PIK Notes" means CC's 15% Senior Secured PIK Notes due 2009 in the
original aggregate principal amount of $20,000,000 issued under and
pursuant to the Senior Debentures
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Indenture and the "Additional PIK Securities" (as defined in the Senior
Debenture Indenture) issued on or prior to December 1, 2002 in lieu of the
payment of cash interest pursuant to the provisions to paragraph 1 of the
form of security provided in such Senior Debenture Indenture.
"Service Fee Accounts" means those Accounts (excluding Purchased Accounts)
of Borrowers arising under service agreements entered into by Borrowers
with independent supplemental staffing firms in the ordinary course of
business and under License Agreements.
"Settlement Date" has the meaning assigned to such term in subsection
9.6(A)(2).
"Significant Subsidiary" has the meaning provided to such term in Rule 12b-
2 of the Rules and Regulations of the Securities and Exchange Commission.
"Standby Letter of Credit" means a Letter of Credit other than a Trade
Letter of Credit.
"SPC" shall have the meaning assigned to such term in subsection 9.1(A).
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than fifty percent (50%)
of the total voting power of shares of stock (or equivalent ownership or
controlling interest) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
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.
"Target" means, with respect to any Permitted Acquisition, any Person whose
assets and business are being acquired pursuant to such Permitted
Acquisition.
"Tax Liabilities" has the meaning assigned to such term in subsection
2.10(A).
"Termination Date" means December 14, 2003.
"Trade Letter of Credit" means a Letter of Credit which entitles the
beneficiary to the delivery or release of goods upon, among other things,
presentation of evidence of shipment or delivery of such goods.
"Unbilled Eligible Accounts" means any Account (other than an Account which
is or may become a Purchased Account) for which no invoice has been sent to
any Account Debtor, as to which less than 45 days has elapsed since the
date of creation or accrual of such Account and which, but for the absence
of such invoice being sent, would constitute an Eligible Account.
"Uniforce Acquisition" means the acquisition consummated on November 26,
1997 pursuant to the Agreement and Plan of Merger dated as of August 13,
1997, by and among CC, CCI and USI.
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"UCC" means the Uniform Commercial Code as in effect on the date hereof in
the State of New York, as amended from time to time, and any successor
statute.
"Unused Availability" means, as of any date, the amount (if any) by which
the Maximum Revolving Loan Amount exceeds the Revolving Loan.
1.2 Accounting Terms
For purposes of this Agreement, all accounting terms not otherwise defined
herein shall have the meanings assigned to such terms in conformity with
GAAP. Financial statements and other information furnished to
Administrative Agent or any Lender pursuant to subsection 5.1 shall be
prepared in accordance with GAAP (as in effect at the time of such
preparation) on a consistent basis. In the event any "Accounting Changes"
(as defined below) shall occur and such changes affect financial covenants,
standards or terms in this Agreement, then Borrowers and Lenders agree to
enter into negotiations in order to amend such provisions of this Agreement
so as to equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the financial condition of Borrowers and
their respective Subsidiaries shall be the same after such Accounting
Changes as if such Accounting Changes had not been made, and until such
time as such an amendment shall have been executed and delivered by
Borrowers and the other Loan Parties and Requisite Lenders, (A) all
financial covenants, standards and terms in this Agreement shall be
calculated and/or construed as if such Accounting Changes had not been
made, and (B) Borrowers shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered hereunder
that show the differences between the financial statements delivered (which
reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes).
"Accounting Changes" means: (a) changes in accounting principles required
by GAAP and implemented by CC and its Subsidiaries; (b) changes in
accounting principles recommended by Borrowers' certified public
accountants; and (c) changes in carrying value of any CC or any of its
Subsidiaries' assets, liabilities or equity accounts resulting from (i) the
application of purchase accounting principles (A.P.B. 16 and/or 17 and EITF
88 16 and FASB 109) to the Uniforce Acquisition or any other Permitted
Acquisition or (ii) any other adjustments in excess of $350,000 in the
aggregate that, in each case, were applicable to, but not included in, the
Projections. All such adjustments resulting from expenditures made
subsequent to the Closing Date (including, but not limited to,
capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures
are made and deducted as part of the calculation of EBITDA in such period.
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1.3 Other Definitional Provisions
References to "Sections", "subsections", "Exhibits" and "Schedules" shall
be to Sections, subsections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined
in subsection 1.1 may, unless the context otherwise requires, be used in
the singular or the plural depending on the reference. In this Agreement,
words importing any gender include the other genders; the words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments,
and other modifications thereto, but only to the extent such amendments,
assignments and other modifications are not prohibited by the terms of this
Agreement or any other Loan Document; references to Persons include their
respective permitted successors and assigns or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and
all references to statutes and related regulations shall include any
amendments of same and any successor statutes and regulations.
2. LOANS AND COLLATERAL
2.1 Loans
(A) Revolving Loan
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Borrowers and the other
Loan Parties set forth herein and in the other Loan Documents, each
Lender, severally, agrees to lend to Borrowers from time to time its
Pro Rata Share of each Revolving Advance. The aggregate amount of all
Revolving Loan Commitments shall not exceed at any time $100,000,000
to all Borrowers less any reductions pursuant to subsection 2.4(B).
Notwithstanding the foregoing, the portion of the Revolving Loan made
on behalf of any Borrower at any time plus the Letter of Credit
Liability of such Borrower at such time, but only in respect of any
Letter of Credit issued on behalf of such Borrower (together with the
aggregate amount theretofore paid by Administrative Agent or any
Lender in respect of any Letter of Credit issued on behalf of such
Borrower and not debited to the Loan Account or otherwise reimbursed
by such Borrower) shall not exceed that portion of the Borrowing Base
attributable to such Borrower. Amounts borrowed under this subsection
2.1(A) may be repaid and reborrowed at any time prior to the earlier
of (i) the termination of the Revolving Loan Commitment pursuant to
subsection 8.3 or (ii) the Termination Date. Except as otherwise
provided herein, no Lender shall have any obligation to make an
advance under this subsection 2.1(A) to the extent such
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advance would cause the Revolving Loan (after giving effect to any
immediate application of the proceeds thereof) to exceed the Maximum
Revolving Loan Amount.
(1) "Maximum Revolving Loan Amount" means, as of any date of
determination, the lesser of (a) the Revolving Loan Commitment(s)
of all Lenders minus the Letter of Credit Reserve and (b) the
Borrowing Base minus the Letter of Credit Reserve.
(2) "Borrowing Base" means, as of any date of determination, an
amount equal to eighty-five per cent (85%) of Eligible Accounts
other than Eligible Accounts that are Purchased Accounts plus
eighty percent (80%) of Eligible Accounts that are Purchased
Accounts plus the lesser of eighty-five per cent (85%) of (x)
Unbilled Eligible Accounts and (y) an amount equal to 8% of the
sum of Unbilled Eligible Accounts plus Eligible Accounts; less
Landlord Waiver Reserves and less such other reserves as
Collateral Agent in its reasonable discretion may elect to
establish from time to time; provided, however, that so long as
any Senior Notes or Senior PIK Notes are outstanding, the
Borrowing Base shall not exceed the maximum principal amount of
Indebtedness permitted to be incurred under section 4.3(b)(i) of
the Senior Notes Indenture or section 4.3(b)(i) of the Senior
Debentures Indenture. With reasonable promptness following
delivery by the Borrower Representative of financial statements
in accordance with subsection 5.1(B) in respect of the Fiscal
Quarter ending on March 31, 2001, assuming that at such time
there shall be continuing no Default or Event of Default, the
Collateral Agent shall consider whether, in its sole discretion,
it shall recommend to the Lenders that the advance rate against
Eligible Accounts that are Purchased Accounts be increased to
85%; provided, however, that no such increase shall become
effective without the consent of all Lenders and the Collateral
Agent shall have no obligation to recommend any such increase.
(B) Eligible Accounts
"Eligible Accounts" means, as at any date of determination, the
aggregate of all Accounts that Collateral Agent, in its reasonable
judgment, deems to be eligible for borrowing purposes (provided, that
Collateral Agent shall give Borrower Representative reasonably prompt
notice following any determination by Collateral Agent to exclude any
Accounts from Eligible Accounts based on criteria other than those set
forth below, which notice shall include, subject to confidentiality
constraints as determined by Collateral Agent in its sole discretion,
the basis for such determination by Collateral Agent). Without
limiting the generality of the foregoing, unless otherwise agreed by
Collateral Agent, the following Accounts are not Eligible Accounts:
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(1) Accounts which, at the date of issuance of the respective invoice
therefor, were payable more than forty-five (45) days after the
date of issuance of such invoice;
(2) Accounts which (x), in the case of Accounts other than Accounts
owing by those customers identified on Schedule 2.1(B), remain
unpaid for more than ninety (90) days after the date of issuance
of the original invoice, and (y) in the case of Accounts
identified on Schedule 2.1(B), remain unpaid for more than one
hundred twenty (120) days after the date of issuance of the
original invoice; it being understood that Collateral Agent may,
in its sole discretion, add account debtors requested by either
Borrower Representative to, or delete account debtors from,
Schedule 2.1(B);
(3) Accounts which are otherwise eligible with respect to which the
account debtor is owed a credit by any Borrower, but only to the
extent of such credit;
(4) Accounts due from a customer whose principal place of business is
located outside the United States of America or Canada unless (i)
such Account is backed by a letter of credit, in form and
substance acceptable to Collateral Agent and issued or confirmed
by a bank that is organized under the laws of the United States
of America or a State thereof, that is acceptable to Collateral
Agent; provided that such letter of credit has been delivered to
Administrative Agent as additional collateral or (ii) the
Borrower generating such Account is organized under the laws of a
State of the United States and is located solely within the
United States of America, such Account, together with all other
Accounts deemed not ineligible under this clause (ii) does not
exceed $2,000,000 (and such Account is in Dollars and the Account
Debtor as to such Account is investment grade as determined in
the sole discretion of the Collateral Agent);
(5) Accounts due from a customer which Collateral Agent has notified
Borrower Representative does not have a satisfactory credit
standing;
(6) Accounts with respect to which the customer is the United States
of America, any state or any municipality, or any department,
agency or instrumentality thereof unless while a Notice of
Activation Event has been issued and not withdrawn, the
applicable Borrower has, with respect to such Accounts, complied
with the Federal Assignment of Claims Act (31 U.S.C. Section
3727) or any applicable statute or municipal ordinance of similar
purpose and effect; provided, however, that during any period in
which a Notice of Activation Event has been issued and not
withdrawn, Accounts which in the aggregate total not more than
$500,000 shall not be deemed ineligible by reason of
noncompliance with this clause;
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(7) Accounts with respect to which the customer is an Affiliate of
any Borrower or a director, officer, agent, stockholder or
employee of any Borrower or any of its Affiliates;
(8) Accounts due from a customer if (x) in the case of any account
debtor other than those account debtors identified on Schedule
2.1(B), more than fifty percent (50%) of the aggregate amount of
Accounts of such customer owing to any Borrower or in the
aggregate to all Borrowers have at the time remained unpaid for
more than ninety (90) days after the date of issuance of the
original invoice date; and (y) in the case of those account
debtors identified on Schedule 2.1(B), more than twenty-five
percent (25%) of the aggregate amount of the Accounts of such
account debtor owing to any Borrower or in the aggregate to all
Borrowers have at the time remained unpaid for more than one
hundred twenty (120) days after the date of the issuance of the
original invoice;
(9) Accounts with respect to which there is any unresolved dispute
with the respective customer (but only to the extent of such
dispute);
(10) Accounts evidenced by an "instrument" or "chattel paper" (as
defined in the UCC) not in the possession of or, as to electronic
chattel paper, not within the control of, Administrative Agent,
on behalf of Lenders;
(11) Accounts with respect to which Administrative Agent, on behalf of
Lenders, does not have a valid, first priority and fully
perfected security interest;
(12) Accounts subject to any Lien except those in favor of
Administrative Agent, on behalf of Lenders;
(13) Accounts with respect to which any Borrower has received notice
that the customer is the subject of any bankruptcy or other
insolvency proceeding;
(14) Accounts due from a customer to the extent that such Accounts
exceed in the aggregate an amount equal to fifteen percent (15%)
of the aggregate of all Accounts at said date;
(15) Accounts with respect to which the customer's obligation to pay
is conditional or subject to a repurchase obligation or right to
return or with respect to which the goods or services giving rise
to such Account have not been delivered (or performed, as
applicable) and accepted by such account debtor, including
progress billings, bill and hold sales, guarantied sales, sale or
return transactions, sales on approval or consignment sales;
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(16) any Account with respect to which the customer is located in New
Jersey or Minnesota, or any other state denying creditors access
to its courts in the absence of a Notice of Business Activities
Report or other similar filing, unless the Borrower holding such
Account has either qualified as a foreign corporation authorized
to transact business in such state or has filed a Notice of
Business Activities Report or similar filing with the applicable
state agency for the then current year;
(17) Accounts with respect to which the customer is a creditor of any
Borrower; provided, however, that any such Account shall only be
ineligible as to that portion of such Account which is less than
or equal to the amount owed by Borrowers to such Person;
(18) Purchased Accounts and Service Fee Accounts in which a first
priority perfected security interest has not been obtained (and
continuously maintained) by any Borrower to evidence and perfect
its ownership of such Accounts;
(19) Purchased Accounts and Service Fee Accounts with respect to which
any portion thereof has been charged back to the applicable
Account Seller or which has become a delinquent or defaulted
receivable or as to which any Borrower is entitled to a deduction
as to any amount owing to an Account Seller under an Account
Agreement;
(20) Purchased Accounts and Service Fee Accounts with respect to which
Collateral Agent has not received copies of lien search results
indicating the applicable Borrower as having a first priority
perfected ownership interest in each such Account, subject to no
Liens except those in favor of Administrative Agent, on behalf of
Lenders; and
(21) Purchased Accounts and Service Fee Accounts (other than arising
from Licensing Agreements) which exceed, in the aggregate, 50% of
otherwise Eligible Accounts;
(22) Purchased Accounts or Service Fee Accounts which exceed, as to
any single Account Seller, $7,000,000 in the aggregate; and
(23) any Account which is not an "Eligible Account Receivable" under
the Senior Notes Indenture or the Senior Debentures Indenture.
(C) Borrowing Mechanics
LIBOR Loans made on any Funding Date shall be in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of
such amount. (2) On any day
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when any Borrower desires an advance under this subsection 2.1,
Borrower Representative shall give Administrative Agent telephonic
notice of the proposed borrowing by 1:00 p.m. (New York time) on the
Funding Date of a Base Rate Loan and three (3) Business Days in
advance of the Funding Date of a LIBOR Loan, which notice shall also
specify the proposed Funding Date (which shall be a Business Day),
whether such Loans shall consist of Base Rate Loans or LIBOR Loans,
and for LIBOR Loans the Interest Period applicable thereto, and the
name(s) of Borrower(s) on whose behalf such Loans are being requested.
Any such telephonic notice shall be confirmed in writing on the same
day by delivery by one or both of the Borrower Representatives of a
notice of Borrowing in the form of Exhibit E annexed hereto (a "Notice
of Borrowing"). Neither Administrative Agent nor Lender shall incur
any liability to any Borrower for acting upon any telephonic notice
Administrative Agent believes in good faith to have been given by a
duly authorized officer or other Person authorized to convey such
notice on behalf of a Borrower or for otherwise acting in good faith
under this subsection 2.1(C). Neither Administrative Agent nor Lender
will make any advance pursuant to any telephonic notice unless
Collateral Agent has received the Borrowing Base Certificate and the
Administrative Agent shall have received all other documents most
recently required under subsection 5.1 by 1:00 p.m. (New York time).
Each Revolving Advance shall be deposited by wire transfer in
immediately available funds in such account (of the Borrower on whose
behalf such Revolving Advance was made) as Borrower Representative may
from time to time designate to Administrative Agent in writing. The
becoming due of any amount required to be paid under this Agreement or
any of the other Loan Documents as principal, accrued interest and
fees shall be deemed irrevocably to be a request by Borrowers or
Borrower Representative for a Base Rate Revolving Advance on the due
date of, and in the amount required to pay, such principal, accrued
interest and fees, and the proceeds of each such Revolving Advance if
made by Administrative Agent or any Lender shall be disbursed by
Administrative Agent or such Lender by way of direct payment of the
relevant obligation.
(D) Notes
Borrowers shall jointly and severally execute and deliver to each
Lender with appropriate insertions a Revolving Note to evidence such
Lender's Revolving Loan Commitment. In the event of an assignment
under subsection 9.1, Borrowers shall, upon surrender of the assigning
Lender's Note, issue new Notes to reflect the interest held by the
assigning Lender and its assignee.
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(E) Evidence of Revolving Loan Obligations
Each Revolving Advance shall be evidenced by this Agreement, the
Revolving Notes, and notations made from time to time by
Administrative Agent in its books and records, including computer
records. Administrative Agent shall record in its books and records,
including computer records, the principal amount of the Revolving Loan
owing to each Lender from time to time. Administrative Agent's books
and records shall constitute presumptive evidence, absent manifest
error, of the accuracy of the information contained therein. Failure
by Administrative Agent to make any such notation or record shall not
affect the obligations of Borrowers to Lenders with respect to the
Revolving Loan.
(F) Letters of Credit
Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Borrowers and the other
Loan Parties, the Revolving Loan Commitments may, in addition to
Revolving Advances, be utilized, upon the request of Borrower
Representative, for (i) the issuance of letters of credit by an
Issuing Bank for the account of any Borrower (each a "Letter of
Credit"). Each Lender (other than the issuer thereof) shall be deemed
to have purchased a participation in each Letter of Credit issued on
behalf of any Borrower in an amount equal to its Pro Rata Share
thereof. In no event shall any Letter of Credit be issued to the
extent that the issuance of such Letter of Credit would cause the sum
of the Letter of Credit Reserve (after giving effect to such issuance)
plus the Revolving Loan to exceed the lesser of (x) the Borrowing Base
and (y) the Revolving Loan Commitment. Notwithstanding the foregoing,
in no event shall any Letter of Credit be issued on behalf of any
Borrower to the extent that the issuance of such Letter of Credit
would cause the sum of the Revolving Loan outstanding to such Borrower
plus the Letter of Credit Liability of such Borrower (together with
the aggregate amount theretofore paid by an Issuing Bank in respect of
any Letter of Credit issued on behalf of such Borrower and not debited
to the Loan Account or otherwise reimbursed by such Borrower) to
exceed that portion of the Borrowing Base attributable to such
Borrower.
(1) Maximum Amount
Subject to the foregoing provisions of this subsection 2.1(F),
the aggregate amount of Letter of Credit Liability with respect
to all Letters of Credit outstanding at any time shall not exceed
$10,000,000.
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(2) Reimbursement
Borrowers shall be irrevocably and unconditionally obligated
forthwith without presentment, demand, protest or other
formalities of any kind, to reimburse Administrative Agent or the
Issuing Bank for any amounts paid with respect to a Letter of
Credit. Borrowers hereby authorize and direct Administrative
Agent, at Administrative Agent's option, to debit any Borrower's
account (by increasing the principal balance of the Revolving
Loan) in the amount of any payment made with respect to any
Letter of Credit issued for the account of any Borrower. All
amounts paid with respect to any Letter of Credit that are not
immediately repaid by Borrowers with the proceeds of a Revolving
Advance or otherwise shall bear interest at the Default Rate
applicable to Base Rate Loans. In the event that Borrowers shall
fail to reimburse the Issuing Bank on the date of any payment
under a Letter of Credit in an amount equal to the amount of such
payment, Administrative Agent (to the extent so notified by the
Issuing Bank) shall promptly notify each Lender of the
unreimbursed amount of such payment together with accrued
interest thereon and each Lender, on the next Business Day, shall
deliver to Administrative Agent (for the account of the Issuing
Bank) an amount equal to its respective participation in same day
funds. The obligation of each Lender to deliver to Administrative
Agent an amount equal to its respective participation pursuant to
the foregoing sentence shall be absolute and unconditional and
such remittance shall be made notwithstanding the occurrence or
continuation of an Event of Default or Default or the failure to
satisfy any condition set forth in Section 3. In the event any
Lender fails to make available to Administrative Agent the amount
of such Lender's participation in such Letter of Credit,
Administrative Agent (for the account of the Issuing Bank) shall
be entitled to recover such amount on demand from such Lender
together with interest at the Base Rate.
(3) Conditions of Issuance
In addition to all other terms and conditions set forth in this
Agreement, the issuance of any Letter of Credit shall be subject
to the satisfaction of all conditions applicable to Revolving
Advances, the agreement of an Issuing Bank to issue such Letter
of Credit, and the conditions that the letter of credit be in
such form, be for such amount, contain such terms and support
such transactions as are reasonably satisfactory to
Administrative Agent (as well as the Issuing Bank). The
expiration date of each Letter of Credit, (i) in the case of any
Trade Letter of Credit shall be not more than 180 days after the
date of issuance thereof; (ii) in the case of any Standby Letter
of Credit shall be not more than one year after the date of the
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issuance thereof; and (iii) for any Trade Letter of Credit or
Standby Letter of Credit shall be on a date which is at least
thirty (30) days prior to the Termination Date.
(4) Request for Letters of Credit
Borrower Representative shall give Administrative Agent and
Issuing Bank at least three (3) Business Days' prior notice
specifying the date a Letter of Credit is to be issued,
identifying the beneficiary 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 being
requested.
(G) Other Letter of Credit Provisions
(1) Obligations Absolute
The obligation of Borrowers to reimburse the Issuing Bank or any
Lender for payments made under, and other amounts payable in
connection with, any Letter of Credit shall be unconditional and
irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including the
following circumstances:
(a) any lack of validity or enforceability of any Letter of Credit or
any other agreement;
(b) the existence of any claim, set-off, defense or other right which
any Borrower, any of its Affiliates, any Issuing Bank,
Administrative Agent or any Lender, on the one hand, may at any
time have against any beneficiary or transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), Administrative Agent, any Issuing Bank, any Lender or
any other Person, on the other hand, whether in connection with
this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction
between any Borrower or any of its Affiliates and the beneficiary
of the letter of credit);
(c) any draft, demand, certificate or any other document presented
under any Letter of Credit is alleged or proves to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(d) payment under any Letter of Credit against presentation of a
demand, draft or certificate or other document which does not
comply with the terms of such letter of credit; provided that, in
the case of any payment by an Issuing Bank under any
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Letter of Credit, such Issuing Bank has not acted with gross
negligence or willful misconduct (as determined by a court of
competent jurisdiction) in determining that the demand for
payment under such Letter of Credit complies on its face with any
applicable requirements for a demand for payment under such
Letter of Credit;
(e) any other circumstance or happening whatsoever, which is similar
to any of the foregoing; or
(f) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(2) Nature of Lender's Duties
As between the Issuing Banks, Agents and Lenders, on the one
hand, and Borrowers, on the other hand, Borrowers assume all
risks of the acts and omissions of, or misuse of any Letter of
Credit by the beneficiary thereof. In furtherance and not in
limitation of the foregoing, neither any Issuing Bank, any Agent
nor any Lender shall be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document 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 thereunder;
provided that, in the case of any payment by any Issuing Bank,
under any Letter of Credit, such Issuing Bank has not acted with
gross negligence or willful misconduct (as determined by a court
of competent jurisdiction) in determining that the demand for
payment under such Letter of Credit complies on its face with any
applicable requirements for a demand for payment thereunder; (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; (g) for the credit
of the proceeds of any drawing under any Letter of Credit; and
(h) for any consequences arising from causes beyond the control
of any Issuing Bank.
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None of the above shall affect, impair, or prevent the vesting of
any of any Issuing Bank's, any Agent's or any Lender's rights or
powers hereunder.
(3) Liability
In furtherance and extension of and not in limitation of, the
specific provisions herein above set forth, any action taken or
omitted by any Issuing Bank, any Agent or any Lender under or in
connection with any Letter of Credit, if taken or omitted in good
faith, shall not put any Issuing Bank, any Agent or any Lender
under any resulting liability to any Borrower.
(H) Appointment of Borrower Representative
Each Borrower hereby designates each of COI and USI, each acting
singly or together with the other as its representative and agent
(each a "Borrower Representative") for the purposes of initiating
borrowing requests, requesting Lender Letters of Credit, selecting
interest rate options and giving and receiving notices and consents
hereunder or under any of the other Loan Documents. Each Agent and
each Lender may regard any notice or other communication pursuant to
any Loan Document from either Borrower Representative as a notice or
communication from Borrowers. Each Borrower hereby covenants and
agrees that each representation and warranty, covenant, agreement and
undertaking made in its name or on its behalf by either Borrower
Representative shall be deemed for all purposes to have been made by
such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by
such Borrower.
2.2 Interest
(A) Rate of Interest
The Loans and all other Obligations shall bear interest from the date
such Loans are made or such other Obligations become due to the date
paid at a rate per annum equal to (i) in the case of Base Rate Loans
and other Obligations for which no other interest rate is specified,
the Base Rate plus the Applicable Base Rate Margin, and (ii) in the
case of LIBOR Loans, LIBOR, plus the Applicable LIBOR Margin (the
"Interest Rate"). The applicable basis for determining the rate of
interest shall be selected by Borrower Representative initially at the
time a Notice of Borrowing is given pursuant to subsection 2.1(C).
The basis for determining the interest rate with respect to any Loan
or a portion of any Loan may be changed from time to time pursuant to
subsection 2.2(E). If on any day a Loan or a portion of any Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance
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with the terms of this Agreement specifying the basis for determining
the rate of interest, then for that day that Loan or portion thereof
shall bear interest determined by reference to the Base Rate.
After the occurrence and during the continuance of an Event of Default
(i) the Loans and all other Obligations shall, at the option of
Requisite Lenders, bear interest at a rate per annum equal to two
percent (2%) plus the applicable Interest Rate (the "Default Rate"),
(ii) each LIBOR Loan shall automatically convert to a Base Rate Loan
at the end of any applicable Interest Period and (iii) no Loans may be
converted to LIBOR Loans.
(B) Interest Periods
In connection with each LIBOR Loan, Borrower Representative shall
elect an interest period (each an "Interest Period") to be applicable
to such Loan, which Interest Period shall be either a one, two, three
or six month period, or if all Lenders have agreed in writing in such
instance to provide same, twelve months; provided that:
(1) the initial Interest Period for any LIBOR Loan shall commence on
the Funding Date of such LIBOR Loan;
(2) Interest Periods from the Closing Date until the date which is
ninety (90) days after the Closing Date or, if earlier, the date
which Administrative Agent notifies a Borrower Representative
that the syndication of the Revolving Loan Commitments is
completed, Interest Periods for LIBOR Loans shall be one month;
(3) in the case of successive Interest Periods, each successive
Interest Period shall commence on the day on which the
immediately preceding Interest Period expires;
(4) if an Interest Period expiration date is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day;
provided that if any Interest Period expiration date 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 immediately preceding Business Day;
(5) 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 (6) below, end on the
last Business Day of a calendar month;
(6) no Interest Period shall extend beyond the Termination Date;
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(7) no Interest Period may extend beyond a scheduled principal
payment date unless the sum of (a) the aggregate principal amount
of Loans that are Base Rate Loans or that have Interest Periods
expiring on or before such date and (b) the available, unused
Revolving Loan Commitment or Borrowing Base (whichever is less)
equals or exceeds the principal amount required to be paid on the
Loans on such date; and
(8) there shall be no more than seven (7) Interest Periods relating
to LIBOR Loans outstanding at any time.
(C) Computation and Payment of Interest
Interest on the Loans and all other Obligations shall be computed on
the daily principal balance on the basis of a 360 day year for the
actual number of days elapsed in the period during which it accrues.
In computing interest on any Loan, the date of funding of the 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 Loan, the
date of conversion of such LIBOR Loan to such Base Rate Loan, 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 Loan, the date of conversion
of such Base Rate Loan to such LIBOR Loan, 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. Interest on Base Rate Loans
and all other Obligations other than LIBOR Loans shall be payable to
Administrative Agent for benefit of Lenders monthly in arrears on the
first day of each month, on the date of any prepayment of Loans, and
at maturity, whether by acceleration or otherwise. Interest on LIBOR
Loans shall be payable to Administrative Agent for benefit of Lenders
on the last day of the applicable Interest Period for such Loan, on
the date of any prepayment of the Loans, and at maturity, whether by
acceleration or otherwise. In addition, for each LIBOR Loan having an
Interest Period longer than three (3) months, interest accrued on such
Loan shall also be payable on the last day of each three (3) month
interval during such Interest Period.
(D) Interest Laws
Notwithstanding any provision to the contrary contained in this
Agreement or any other Loan Document, Borrowers shall not be required
to pay, and neither Administrative Agent nor any Lender shall be
permitted to collect, any amount of interest in excess of the maximum
amount of interest permitted by applicable law ("Excess Interest").
If any Excess Interest is provided for or determined by a court of
competent jurisdiction to
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have been provided for in this Agreement or in any other Loan
Document, then in such event: (1) the provisions of this subsection
shall govern and control; (2) neither any Borrower nor any other Loan
Party shall be obligated to pay any Excess Interest; (3) any Excess
Interest that Administrative Agent or any Lender may have received
hereunder shall be, at such Lender's option, (a) applied as a credit
against the outstanding principal balance of the Obligations or
accrued and unpaid interest (not to exceed the maximum amount
permitted by law), (b) refunded to the payor thereof, or (c) any
combination of the foregoing; (4) the interest rate(s) provided for
herein shall be automatically reduced to the maximum lawful rate
allowed from time to time under applicable law (the "Maximum Rate"),
and this Agreement and the other Loan Documents shall be deemed to
have been and shall be, reformed and modified to reflect such
reduction; and (5) neither any Borrower nor any other Loan Party shall
have any action against any Agent or any Lender for any damages
arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on
any Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable
rate becomes less than the Maximum Rate, the rate of interest payable
on such Obligations shall remain at the Maximum Rate until each Lender
shall have received the amount of interest which such Lender would
have received during such period on such Obligations had the rate of
interest not been limited to the Maximum Rate during such period.
(E) Conversion or Continuation
Subject to the provisions of subsection 2.2(A) Borrower Representative
shall have the option to (1) convert at any time all or any part of
outstanding Loans equal to $500,000 and integral multiples of $100,000
in excess of that amount from Base Rate Loans to LIBOR Loans or (2)
upon the expiration of any Interest Period applicable to a LIBOR Loan,
to (a) continue all or any portion of such LIBOR Loan equal to
$500,000 and integral multiplies of $100,000 in excess of that amount
as a LIBOR Loan or (b) convert all or any portion of such LIBOR Loan
to a Base Rate Loan (so long as the amount not converted is equal to
$500,000 or an integral multiple of $100,000 in excess of that
amount). The succeeding Interest Period(s) of such continued or
converted Loan commence on the last day of the Interest Period of the
Loan to be continued or converted; provided that no outstanding Loan
may be continued as, or be converted into, a LIBOR Loan, when any
Event of Default or Default has occurred and is continuing.
Borrower Representative shall deliver a notice of
conversion/continuation to Administrative Agent no later than noon
(New York time) at least three (3) Business Days in advance of the
proposed conversion/continuation date ("Notice of
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Conversion/Continuation"). A Notice of Conversion/Continuation shall
certify: (1) the proposed conversion/continuation date (which shall be
a Business Day); (2) the amount of the Loan to be converted/continued;
(3) the nature of the proposed conversion/continuation; (4) in the
case of conversion to, or a continuation of, a LIBOR Loan, the
requested Interest Period; and (5) that no Default or Event of Default
has occurred and is continuing or would result from the proposed
conversion/continuation.
In lieu of delivering the Notice of Conversion/Continuation, Borrower
Representative may give Administrative Agent telephonic notice by the
required time of any proposed conversion/continuation under this
subsection 2.2(E); provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the
proposed conversion/continuation date.
Neither Agent nor any Lender shall incur any liability to Borrowers in
acting upon any telephonic notice referred to above that
Administrative Agent 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(E) and upon conversion/continuation by Lenders in accordance with
this Agreement pursuant to any telephonic notice, Borrower
Representative shall have effected such conversion or continuation, as
the case may be, hereunder.
2.3 Fees
(A) Unused Line Fee
Borrowers shall pay to Administrative Agent, for the benefit of
Lenders, a fee in an amount equal to the Revolving Loan Commitment
less the sum of the average daily balance of the Revolving Loan plus
the average daily face amount of the Letter of Credit Liability during
the preceding month multiplied by three eighths of one percent
(0.375%) per annum, such fee to be calculated on the basis of a 360
day year for the actual number of days elapsed and to be payable
monthly in arrears on the first day of the first month following the
Closing Date and the first day of each month thereafter and on the day
of termination of the Commitments.
(B) Letter of Credit Fees
Borrowers shall pay to Administrative Agent for the account of
Lenders, a fee with respect to the Letters of Credit in the amount of,
for the account of Lenders, the average daily amount of Letter of
Credit Liability outstanding during such month multiplied by one and
one-half percent (1.50%) per annum, provided that, during the
continuance of an Event of Default, such fee with respect to the
Letters of Credit shall
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be three and one half percent (3.50%) per annum. Such fees will be
calculated on the basis of a 360-day year for the actual number of
days elapsed and will be payable monthly in arrears on the first day
of each month and on the day of termination of the Commitments.
Borrowers shall pay to the Issuing Bank of each Letter of Credit, such
Issuing Bank's customary charges for opening, processing,
transferring, confirming, amending or terminating letters of credit.
(C) Audit Fees
Borrowers agree to pay to Collateral Agent for its own account an
audit fee for each inspection equal to $750.00 per auditor per day or
any portion thereof, together with all out-of-pocket expenses, and
Borrowers agree to reimburse Collateral Agent for all fees, costs and
expenses paid by Collateral Agent to third party auditors.
(D) Termination Fee
If for any reason, the Revolving Loan is terminated during the first
eighteen (18) months after the Closing Date (other than pursuant to
subsection 8.3 or otherwise as a result of action by the
Administrative Agent or any one or more Lenders as a consequence of an
Event of Default), Borrowers agree to pay to Administrative Agent for
the account of the Lenders, a termination fee equal to one percent
(1%) of the Revolving Loan Commitment as in effect immediately after
the Closing Date.
(E) Other Fees and Expenses
Borrowers shall pay to Administrative Agent, for its own account, all
charges for returned items and all other bank charges incurred by
Administrative Agent, as well as Administrative Agent's standard wire
transfer charges for each wire transfer made under this Agreement.
(F) Fee Letter
COI and CC, jointly and severally, shall pay or cause to be paid to
Administrative Agent for Administrative Agent's own account all
payments due under and pursuant to the Fee Letter.
2.4 Payments and Prepayments
(A) Manner and Time of Payment
In its sole discretion, Administrative Agent may charge interest fees
and other amounts payable hereunder to the Revolving Loan, all as set
forth on Administrative Agent's books and records. If Administrative
Agent elects to bill Borrowers for any amount due
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hereunder, such amount shall be immediately due and payable with
interest thereon as provided herein. All payments made by Borrowers
with respect to the Obligations shall be made without deduction,
defense, setoff or counterclaim. All payments to Administrative Agent
hereunder shall, unless otherwise directed by Administrative Agent, be
made to Administrative Agent's Account or in accordance with
subsection 5.6. Proceeds remitted to Administrative Agent's Account
shall be credited to the Obligations on the Business Day such proceeds
were received in collected funds in accordance with subsection 5.6(c);
provided, however, that, for the purpose of calculating interest on
the Obligations, such proceeds shall be deemed received on the first
Business Day thereafter, unless such proceeds were remitted by
transfer of immediately available funds, in which case, for the
purpose of calculating interest on the Obligations, such proceeds
shall be deemed received on the Business Day received.
(B) Mandatory Prepayments
(1) Overadvance
At any time that the Revolving Loan exceeds the Maximum Revolving
Loan Amount, Borrowers shall, immediately repay the Revolving
Loan to the extent necessary to reduce the principal balance to
an amount equal to or less than the Maximum Revolving Loan Amount
and, to the extent necessary, provide cash collateral in respect
of the Letter of Credit Reserve in a manner acceptable to the
Administrative Agent. At any time that the sum of the Revolving
Credit Loan outstanding to any Borrower plus the Letter of Credit
Liability of such Borrower at such time, but only in respect of
any Letter of Credit issued on behalf of such Borrower (together
with the aggregate amount theretofore paid by any Issuing Bank in
respect of any Letter of Credit issued on behalf of such Borrower
and not debited to the Loan Account or otherwise reimbursed by
such Borrower) exceeds that portion of the Borrowing Base
attributable to such Borrower, then such Borrower shall
immediately repay the Revolving Loan to eliminate such excess
and, to the extent necessary, provide cash collateral in respect
of the Letter of Credit Reserve in a manner acceptable to the
Administrative Agent.
(2) Proceeds of Asset Dispositions
At such time that the sum of all proceeds of all Asset
Dispositions received by Borrowers and their respective
Subsidiaries exceeds $10,000,000, then any proceeds received
above such amount ("Excess Proceeds") shall be subject to this
subsection 2.4(B)(2) (it being understood that nothing contained
in this subsection 2 shall be construed as a permission to
consummate any Asset Disposition). The
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Borrowers shall, immediately upon receipt of such Excess
Proceeds, prepay the Obligations in an amount equal to such
Excess Proceeds, and the Revolving Loan Commitment shall
thereupon be deemed permanently reduced by the amount of such
Excess Proceeds; provided, however, that, if Borrowers reasonably
expect such Excess Proceeds to be reinvested within 270 days
after receipt thereof to repair or replace such assets with like
assets, then, immediately upon receipt of such Excess Proceeds,
Borrower shall deliver to Administrative Agent a written notice
to such effect and shall deliver such Excess Proceeds to
Administrative Agent, and Administrative Agent, upon receipt
thereof, shall apply the amount thereof to the Revolving Loans
and concurrently establish a reserve against the Maximum
Revolving Loan Amount in such amount. The amount of such reserve
shall, provided that under all other terms and conditions of this
Agreement Borrowers are then entitled to obtain a Revolving Loan
in such amount, be available to be borrowed by Borrowers solely
to finance the purchase or investment in such like assets within
such 270 day period. If Borrowers fail to obtain a Revolving Loan
in the amount of all or any portion of such reserve within such
270 day period for such purpose, then the balance of such reserve
shall be eliminated at the end of such period and the Revolving
Loan Commitment shall thereupon be deemed permanently reduced by
such amount.
(C) Termination or Reduction of Commitments
Borrowers may, at any time upon not less than three (3) Business Days'
prior notice to Administrative Agent, terminate or reduce, in
increments of $10,000,000 or any integral multiple of $5,000,000 in
excess thereof, the Revolving Loan Commitment and thereupon shall, in
the case of termination, pay in full all of the Obligations and shall
cause all Issuing Banks to be released from all liability under all
Letters of Credit or, at Administrative Agent's option, Borrowers will
deposit cash collateral with Administrative Agent in an amount equal
to 105% of the Letter of Credit Reserve that will remain outstanding
after prepayment or repayment, all under and pursuant to such
instruments and documents in form and substance satisfactory to
Administrative Agent or, in the case of reduction, repay the Revolving
Loan to the extent the sum of the Revolving Loan plus the Letter of
Credit Reserve exceeds the Maximum Revolving Loan Amount after giving
effect to such reduction and to the extent necessary provide cash
collateral in respect of the Letter of Credit Reserve in a manner
acceptable to Administrative Agent.
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(D) 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, the payment may be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the amount of interest or fees due hereunder.
2.5 Use of Proceeds
Borrower shall utilize the proceeds of the Revolving Loan solely (i) for
the Senior Note Prepayment; (ii) to refinance senior revolving debt of the
Borrowers; and (iii) to provide working capital and for general corporate
purposes from time to time for CC and its Subsidiaries. Prior to and as a
condition to the making of the Revolving Loan, a Borrower Representative
will, as of the Closing Date, deliver to Administrative Agent a funds flow
memorandum detailing how funds from the Revolving Loan are to be
transferred to particular uses.
2.6 Term of this Agreement
The Commitments shall (unless earlier terminated pursuant to this
Agreement) terminate upon the earlier of (i) the occurrence of an event
specified in subsection 8.3 or (ii) the Termination Date. Upon termination
in accordance with subsection 8.3 or on the Termination Date, all
Obligations shall become immediately due and payable without notice or
demand. Notwithstanding any termination, until all Obligations have been
fully paid and satisfied, Administrative Agent, on behalf of Lenders, shall
be entitled to retain security interests in and liens upon all Collateral
(all of which shall be released at Borrowers' expense upon termination of
this Agreement and the Commitments and the payment and satisfaction in full
of all Obligations), and even after payment of all Obligations hereunder,
Loan Parties' obligation to indemnify the Agents and each Lender in
accordance with the terms hereof shall continue.
2.7 Statements
Administrative Agent shall render a monthly statement of account to
Borrower Representative within twenty (20) days after the end of each
month. Such statement of account shall constitute an account stated unless
Borrower Representative makes written objection thereto within thirty (30)
days from the date such statement is mailed to Borrower Representative.
Borrowers promise to pay all of their Obligations as such amounts become
due or are declared due pursuant to the terms of this Agreement.
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2.8 Grant of Security Interest
To secure the payment and performance of the Obligations, including all
renewals, extensions, restructurings and refinancings of any or all of the
Obligations, each Loan Party hereby grants to Administrative Agent, on
behalf of Lenders and on behalf of the Issuing Banks a continuing security
interest, lien and mortgage in and to all right, title and interest of such
Loan Party in the following property of such Loan Party (whether owned or
consigned by or to, or leased from or to such Loan Party), whether now
owned or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral"): (A)
Accounts, and all guaranties and security therefor, and all goods and
rights represented thereby or arising therefrom including the rights of
stoppage in transit, replevin and reclamation; (B) Inventory; (C) general
intangibles (as defined in the UCC), including the Account Agreements; (D)
documents (as defined in the UCC) or other receipts covering, evidencing or
representing goods; (E) instruments (as defined in the UCC); (F) Chattel
Paper (as defined in the UCC); (G) Equipment; (H) all letter of credit
rights; (I) all deposit accounts of each Loan Party maintained with any
bank or financial institution; (J) all money, cash or cash equivalents and
property of such Borrower and such Holding Party, any Lender or any
participant; (K) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that
at any time evidence or contain information relating to any of the property
described above or are otherwise necessary or helpful in the collection
thereof or realization thereon; (L) proceeds of all or any of the property
described above, including, without limitation, the proceeds of any
insurance policies covering any of the above described property; (M) all
Contracts; (N) all goods; (O) all Fixtures (as defined in the UCC); (P) all
Investment Property (as defined in the UCC) (other than any covered by the
Pledge Agreement); and (Q) proceeds of all or any of the property described
above, including, without limitation, the proceeds of any insurance
policies covering any of the above described property and all accessions
to, substitutions and replacements for and rents and profits of, each of
the foregoing.
2.9 Capital Adequacy and Other Adjustments
In the event Administrative Agent or any Lender shall have determined that
the adoption after the date hereof of any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by
Administrative Agent or such Lender or any corporation controlling
Administrative Agent or such Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or
not having the force of law and whether or not failure to comply therewith
would be unlawful) from any central bank or governmental agency or body
having jurisdiction does or shall have the effect of increasing the amount
of capital, reserves or other funds required to be maintained by
Administrative Agent or such Lender or any corporation controlling
Administrative Agent or such Lender and thereby
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reducing the rate of return on Administrative Agent's or such Lender's or
such corporation's capital as a consequence of its obligations hereunder,
then Borrowers shall from time to time within fifteen (15) days after
notice and demand from such Lender (with a copy to Administrative Agent) or
Administrative Agent (together with the certificate referred to in the next
sentence) pay to Administrative Agent or such Lender additional amounts
sufficient to compensate Administrative Agent or such Lender for such
reduction. A certificate as to the amount of such cost and showing the
basis of the computation thereof submitted by Administrative Agent or any
Lender to Borrower Representative shall, absent manifest error, be final,
conclusive and binding for all purposes.
2.10 Taxes
(A) No Deductions
Any and all payments or reimbursements made hereunder or under the
Notes shall be made free and clear of and without deduction for any
and all taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto; excluding, however, the
following: taxes imposed on the net income of any Lender or any Agent
by the jurisdiction under the laws of which such Agent or such Lender
is organized or doing business or any political subdivision thereof
and taxes imposed on its net income by the jurisdiction of such
Agent's or such Lender's applicable lending office or any political
subdivision thereof (all such taxes, levies, imposts, deductions,
charges or withholdings and all liabilities with respect thereto
excluding such taxes imposed on net income, herein "Tax Liabilities").
If any Loan Party shall be required by law to deduct any such Tax
Liabilities from or in respect of any sum payable hereunder to any
Agent or any Lender, then the sum payable hereunder shall be increased
as may be necessary so that, after making all required deductions,
such Agent or such Lender receives an amount equal to the sum it would
have received had no such deductions been made.
(B) Changes in Tax Laws
In the event that, subsequent to the Closing Date, (i) any changes in
any existing law, regulation, treaty or directive or in the
interpretation or application thereof, (ii) any new law, regulation,
treaty or directive enacted or any interpretation or application
thereof, or (iii) compliance by Lender with any request or directive
(whether or not having the force of law) from any governmental
authority, agency or instrumentality:
(1) does or shall subject any Agent or any Lender to any tax of any
kind whatsoever with respect to this Agreement, the other Loan
Documents or any Loans made or Lender Letters of Credit issued
hereunder, or change the basis of taxation of
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payments to such Agent or such Lender of principal, fees,
interest or any other amount payable hereunder (except for net
income taxes, or franchise taxes imposed in lieu of net income
taxes, imposed generally by federal, state or local taxing
authorities with respect to interest or commitment or other fees
payable hereunder or changes in the rate of tax on the overall
net income of such Agent or such Lender); or
(2) does or shall impose on any Agent or any Lender any other
condition or increased cost in connection with the transactions
contemplated hereby or participations herein; and the result of
any of the foregoing is to increase the cost to such Agent or
such Lender of issuing any Letter of Credit or making or
continuing any Loan hereunder, as the case may be, or to reduce
any amount receivable hereunder,
then, in any such case, Loan Parties shall promptly pay to such Agent
or such Lender, upon its demand, any additional amounts necessary to
compensate such Agent or such Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by such
Agent or such Lender with respect to this Agreement or the other Loan
Documents. If any Agent or any Lender becomes entitled to claim any
additional amounts pursuant to this subsection 2.10(B)(2), it shall
promptly notify Borrower Representative of the event by reason of
which Agent or such Lender has become so entitled. A certificate as
to any additional amounts payable pursuant to the foregoing sentence
submitted by any Agent or any Lender to Borrower Representative shall,
absent manifest error, be final, conclusive and binding for all
purposes.
(C) Foreign Lenders
Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax or are subject to United States withholding tax at a
reduced rate under an applicable statute or tax treaty shall provide
to Borrower Representative and Administrative Agent (i) a properly
completed and executed Internal Revenue Service Form W8-BEN, W8-ECI or
W-8 or other applicable form, certificate or document prescribed by
the Internal Revenue Service of the United States certifying as to
such Foreign Lender's entitlement to such exemption or reduced rate of
withholding with respect to payments to be made to such Foreign Lender
under this Agreement and under the Notes (a "Certificate of
Exemption"), or (ii) a letter from any such Foreign Lender stating
that it is not entitled to any such exemption or reduced rate of
withholding (a "Letter of Non-Exemption"). Prior to becoming a Lender
under this Agreement and within fifteen (15) days after a reasonable
written request of Borrower Representative or Administrative Agent
from time to time
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thereafter, each Foreign Lender that becomes a Lender under this
Agreement shall provide a Certificate of Exemption or a Letter of Non-
Exemption to Borrower Representative and Administrative Agent.
If a Foreign Lender is entitled to an exemption with respect to
payments to be made to such Foreign Lender under this Agreement (or to
a reduced rate of withholding) and does not provide a Certificate of
Exemption to Borrower Representative and Administrative Agent within
the time periods set forth in the preceding paragraph, Borrowers shall
withhold taxes from payments to such Foreign Lender at the applicable
statutory rates and Borrowers shall not be required to pay any
additional amounts as a result of such withholding; provided, however,
that all such withholding shall cease upon delivery by such Foreign
Lender of a Certificate of Exemption to Borrower Representative and
Administrative Agent.
2.11 Required Termination and Prepayment
If on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties)
that the making or continuation of its LIBOR Loans has become unlawful or
impossible by compliance by Lender in good faith with any law,
governmental rule, regulation or order (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful),
then, and in any such event, that Lender shall promptly give notice (by
telephone confirmed in writing) to Borrower Representative and
Administrative Agent of that determination. Subject to prior withdrawal of
a Notice of Borrowing or a Notice of Conversion/Continuation or prepayment
of LIBOR Loans as contemplated by subsection 2.12, the obligation of
Lender to make or maintain its LIBOR Loans during any such period shall be
terminated at the earlier of the termination of the Interest Period then
in effect or when required by law and Borrowers shall no later than the
termination of the Interest Period in effect at the time any such
determination pursuant to this subsection 2.11 is made or, earlier when
required by law, repay or prepay LIBOR Loans together with all interest
accrued thereon or convert LIBOR Loans to Base Rate Loans.
2.12 Optional Prepayment/Replacement of Lenders in Respect of Increased Costs
Within fifteen (15) days after receipt by Borrower Representative from
Administrative Agent or any Lender (an "Affected Lender") of (1) written
notice and demand for payment pursuant to subsection 2.9 or subsection
2.10 or (2) written notice of the inability to make or continue LIBOR
Loans pursuant to subsection 2.11, Borrowers may, at its option, notify
Administrative Agent and such Affected Lender of its intention to do one
of the following:
(A) Borrowers may obtain, at Borrowers' expense, a replacement Lender
("Replacement Lender") for such Affected Lender, which Replacement
Lender shall be reasonably
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satisfactory to Administrative Agent. In the event Borrowers obtain a
Replacement Lender within ninety (90) days following notice of its
intention to do so, the Affected Lender shall sell and assign its
Loans and Commitments to such Replacement Lender for cash
consideration equal to all Obligations owing to the Affected Lender,
provided that Borrowers have reimbursed such Affected Lender for its
increased costs for which it is entitled to reimbursement under this
Agreement through the date of such sale and assignment; or
(B) Borrowers may prepay in full all outstanding Obligations owed to such
Affected Lender and terminate such Affected Lender's Commitments.
Borrowers shall, within ninety (90) days following notice of their
intention to do so, prepay in full all outstanding Obligations owed to
such Affected Lender (including such Affected Lender's increased costs
for which it is entitled to reimbursement under this Agreement through
the date of such prepayment) and terminate such Affected Lender's
Commitments.
2.13 Compensation
Borrowers shall compensate any Lender, upon written request by such Lender
(which request shall set forth in reasonable detail the basis for
requesting such amounts and which shall, absent manifest error, be
conclusive and binding upon all parties hereto), for all reasonable
losses, expenses and liabilities including, without limitation, any loss
sustained by such Lender in connection with the re-employment of such
funds: (i) if for any reason (other than a default by such Lender) a
borrowing of any LIBOR Loan does not occur on a date specified therefor in
a Notice of Borrowing, a Notice of Conversion/Continuation or a telephonic
request for borrowing or Conversion/Continuation; (ii) if any prepayment
of any of its LIBOR Loans occurs on a date that is not the last day of an
Interest Period applicable to that LIBOR Loan; (iii) if any prepayment of
any of its LIBOR Loans is not made on any date specified in a notice of
prepayment given by Borrower Representative; or (iv) as a consequence of
any other default by Borrowers to repay their LIBOR Loans when required by
the terms of this Agreement; provided that during the period while any
such amounts have not been paid, Lender shall reserve an equal amount from
amounts otherwise available to be borrowed under the Revolving Loan.
2.14 Booking of LIBOR Loans
Each Lender may make, carry or transfer LIBOR Loans at, to, or for the
account of, any of its branch offices or the office of an Affiliate of
such Lender.
2.15 Assumptions Concerning Funding of LIBOR Loans
Calculation of all amounts payable to each Lender under subsection 2.13
shall be made as though such Lender had actually funded its relevant LIBOR
Loan through the purchase of a
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LIBOR deposit bearing interest at LIBOR in an amount equal to the amount
of that LIBOR Loan and having maturity comparable to the relevant Interest
Period and through the transfer of such LIBOR deposit from an offshore
office to a domestic office in the United States of America; provided,
however, that each Lender may fund each of its LIBOR Loans in any manner
it sees fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under subsection 2.13.
3. CONDITIONS TO LOANS
3.1 Conditions to Loans
The obligations of each Lender to advance its Pro Rate Share of each
Revolving Advance and the obligation of each Lender to purchase
participations in Letters of Credit on the Closing Date and on each
Funding Date are subject to satisfaction of all of the conditions set
forth below.
(A) Closing Deliveries
Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent and Lenders, all documents,
instruments and information identified on Schedule 3.1(A) and all
other agreements, notes, certificates, orders, authorizations,
financing statements, mortgages and other documents which
Administrative Agent may at any time reasonably request.
(B) Security Interests
Administrative Agent and Lenders shall have received satisfactory
evidence that all security interests and liens granted to
Administrative Agent for the benefit of Lenders pursuant to this
Agreement or the other Loan Documents (including, without limitation,
a pledge of all present and future capital stock of all Subsidiaries
of CC) have been duly perfected and constitute first priority liens
on the Collateral, subject only to Permitted Encumbrances. All
filings, recordations and searches necessary or desirable in
connection with such liens and security interests shall have been
duly made and all filing and recording fees and taxes shall have been
duly paid.
(C) Closing Date Availability
After giving effect to the consummation of the transactions
contemplated hereunder on the Closing Date and the payment by
Borrowers of all costs, fees and expenses relating thereto, Excess
Availability shall be no less than $15,500,000.
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(D) Representations and Warranties
The representations and warranties contained herein and in the Loan
Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though
made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into
account any amendments to the Schedules or Exhibits as a result of
any disclosures made by Borrowers to Administrative Agent after the
Closing Date and approved by Administrative Agent.
(E) Fees
With respect to Loans or Letters of Credit to be made or issued on
the Closing Date, Borrowers shall have paid the fees payable on the
Closing Date referred to in subsection 2.3.
(F) No Default
No event shall have occurred and be continuing or would result from
the consummation of the requested borrowing or notice requesting
issuance of a Letter of Credit that would constitute an Event of
Default or a Default.
(G) Performance of Agreements
Each Loan Party shall have performed in all material respects all
agreements and satisfied all conditions which any Loan Document
provides shall be performed by it on or before that Funding Date.
(H) No Prohibition
No order, judgment or decree of any court, arbitrator or governmental
authority shall purport to enjoin or restrain Administrative Agent or
any Lender from making any Loans or issuing any Letter of Credit.
(I) No Litigation
There shall not be pending or, to the knowledge of Borrowers,
threatened, any action, charge, claim, demand, suit, proceeding,
petition, governmental investigation or arbitration by, against or
affecting any Loan Party or any of its Subsidiaries or any property
of any Loan Party or any of its Subsidiaries that has not been
disclosed to Administrative Agent by Borrowers in writing, and there
shall have occurred no development in any such action, charge, claim,
demand, suit, proceeding, petition, governmental investigation or
arbitration that would reasonably be expected to have a Material
Adverse Effect.
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(J) Legal Structure and Capitalization
The Lenders shall be satisfied with the corporate and legal structure
and capitalization of each Borrower and each Guarantor.
(K) Senior Notes
The terms and conditions of the Senior Notes and the Senior PIK Notes
shall be acceptable to Administrative Agent in its sole discretion.
The amendments to the Senior Notes, Senior Note Indenture, Senior PIK
Notes and Senior Debenture Indenture contemplated by the Consent
Solicitations (and the second supplemental indentures thereto) shall
be acceptable to Administrative Agent in its sole discretion and
shall have become effective.
(L) Material Adverse Change
There shall have occurred no material adverse change in the business,
condition (financial or otherwise), operations, performance,
properties of CC and its Subsidiaries, individually or taken as a
whole, since December 31, 1999.
(M) Governmental Consents
All governmental and material third party consents and approvals
necessary in connection with each aspect of credit facilities
provided in this Agreement and the other transactions contemplated
hereby, including the Consent Solicitations and Senior Note
Prepayment shall have been obtained (without the imposition of any
conditions that are not acceptable to Administrative Agent or the
Lenders) and shall remain in effect.
(N) Compliance with Laws
All Revolving Advances being made by the Lenders to Borrowers, and
the consummation of the amendments contemplated by the Consent
Solicitations, shall be in full compliance with applicable law.
Without limitation of the foregoing, Administrative Agent and Lenders
shall be satisfied with Borrowers' and Guarantors' compliance with
ERISA, applicable environmental, health and safety statutes and
regulations, margin regulations and other applicable laws.
(O) Insurance
Administrative Agent shall have received evidence satisfactory to it
that the Loan Parties have complied with the requirements of
subsection 5.9.
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(P) Disclosure
Each Agent and the Lenders shall have received all additional
financial, business and other information regarding CC and its
Subsidiaries as any Agent or any Lender shall have reasonably
requested including, without limitation, satisfactory results of
field examinations conducted by or on behalf of Collateral Agent.
(Q) The Agents and Co-Agent shall have received the most recently
prepared monthly financial statements of CC and its Subsidiaries,
which shall be satisfactory in all respects to the Agents and Co-
Agent.
(R) Omitted.
(S) Solvency
Each Loan Party shall have delivered letters, in form and substance
satisfactory to Administrative Agent, attesting to the solvency of
such Loan Party, as the case may be, in each case individually and
together with its Subsidiaries, taken as a whole, immediately before
and immediately after giving effect to the Loans to be made on the
Closing Date and the use of proceeds thereof, from a Responsible
Officer.
(T) Material Contracts
Administrative Agent or its counsel shall have completed a review, to
Administrative Agent's satisfaction, of all material contracts of the
Loan Parties including, without limitation, leases, labor agreements,
vendor agreements, supply contracts, license agreements and
distributorship agreements, if any.
4. BORROWERS' REPRESENTATIONS AND WARRANTIES
To induce Administrative Agent and each Lender to enter into this
Agreement, and to induce each Lender to make Loans and to purchase
participations in Letters of Credit, each Loan Party represents and
warrants to Agents and each Lender that the following statements are and
will be true, correct and complete:
4.1 Organization, Powers, Capitalization
(A) Organization and Powers
Each of the Loan Parties is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and qualified to do business in all states where such
qualification is required except where failure to be so qualified
could not be reasonably expected to have a Material Adverse Effect.
Each of the Loan
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Parties has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and
proposed to be conducted and to enter into each Loan Document.
(B) Capitalization
Except as set forth on Schedule 4.1(B), all issued and outstanding
shares of capital stock of each of the Loan Parties are duly
authorized and validly issued, fully paid, nonassessable, and are
free and clear of all Liens other than those in favor of
Administrative Agent for the benefit of Lenders, and all such shares
were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. The capital stock of each of
the Loan Parties is owned by the stockholders and in the amounts set
forth on Schedule 4.1(B) (in the case of CC with shares held by the
public being specified in the aggregate). No shares of the capital
stock of any Loan Party, other than those described above, are issued
and outstanding. Except as set forth on Schedule 4.1(B), there are no
preemptive or other outstanding rights, options, warrants, conversion
rights or similar agreements or understandings for the purchase or
acquisition from any Loan Party, of any shares of capital stock or
other securities of any such entity.
4.2 Authorization of Borrowing; No Conflict
Each Loan Party has the corporate power and authority to incur the
Obligations and to grant security interests in the Collateral. On the
Closing Date, the execution, delivery and performance of the Loan
Documents by each Loan Party signatory thereto will have been duly
authorized by all necessary corporate and shareholder action. The
execution, delivery and performance by each Loan Party of each Loan
Document to which it is a party and the consummation of the transactions
contemplated by this Agreement and the other Loan Documents by each Loan
Party do not contravene and will not be in contravention of any applicable
law, the corporate charter or bylaws of any Loan Party or any agreement or
order by which any Loan Party or any Loan Party's property is bound. This
Agreement is, and the other Loan Documents, including the Notes when
executed and delivered will be, the legally valid and binding obligations
of the applicable Loan Parties respectively, each enforceable against the
Loan Parties, as applicable, in accordance with their respective terms.
4.3 Financial Condition
All financial statements concerning CC and its Subsidiaries which have
been or will hereafter be furnished by Borrowers to Administrative Agent
or any Lender pursuant to this Agreement have been or will be prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein) and do or will present fairly the financial
condition of the
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corporations covered thereby as at the dates thereof and the results of
their operations for the periods then ended. The Projections delivered and
to be delivered have been and will be prepared by CC in light of the past
operations of the business of CC and its Subsidiaries, and such
Projections represent and will represent the good faith estimate of CC and
its senior management concerning the most probable course of its business
as of the date such Projections are prepared and delivered.
4.4 Omitted.
4.5 Indebtedness and Liabilities
As of the Closing Date, no Loan Party has (a) any Indebtedness except as
reflected on Schedule 4.5 or (b) any Liabilities other than as reflected
on the most recent financial statements of CC and its Subsidiaries
delivered to Administrative Agent or as incurred in the ordinary course of
business following the date of such financial statements or set forth on
Schedule 4.5.
4.6 Account Warranties
As to each existing Account: (a) at the time of its creation, such Account
was a valid, bona fide account, representing an undisputed indebtedness
incurred by the named account debtor for goods actually sold and delivered
or for services completely rendered; (b) except to the extent of Accounts
not exceeding $100,000 outstanding at any time in the aggregate (which
$100,000 amount shall be deducted by Collateral Agent as a reserve from
the Borrowing Base), to the best of each of their knowledge, there are no
setoffs, offsets or counterclaims, genuine or otherwise, against such
Account; (c) such Account does not represent a sale to an Affiliate or a
consignment, sale or return or a bill and hold transaction; (d) no
agreement exists permitting any deduction or discount (other than the
discount stated on the invoice); (e) the Loan Party that holds such
Account is the lawful owner of the Account and has the right to assign the
same to Administrative Agent, for the benefit of Lenders; (f) such Account
is free of all security interests, liens and encumbrances other than those
in favor of Administrative Agent, on behalf of Lenders and, in the case of
Purchased Accounts and Service Fee Accounts, in favor of the Borrower
which purchased or generated same; and (g) such Account is due and payable
in accordance with its terms.
4.7 Names
Schedule 4.7 sets forth all names, trade names, fictitious names and
business names under which any Loan Party currently conducts business or
has at any time during the past five years conducted business.
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4.8 Locations; FEIN
Schedule 4.8 sets forth the location of each Loan Party's principal place
of business, chief executive office, the location of each Loan Party's
books and records, the location of all other offices of such Loan Party
and all Collateral locations, and such locations are such Loan Party's
sole locations for its business and the Collateral. Each Loan Party's
federal employer identification number is also set forth on Schedule 4.8.
4.9 Title to Properties; Liens
Each Loan Party has good, sufficient and legal title, subject to Permitted
Encumbrances, to all its respective material properties and assets. Except
for Permitted Encumbrances, all such properties and assets are free and
clear of Liens. To the best knowledge of any Loan Party after due inquiry,
there are no actual, threatened or alleged defaults with respect to any
leases of real property under which any Loan Party is lessee or lessor
which could reasonably be expected to have a Material Adverse Effect.
Schedule 4.9 sets forth a description of each lease of real property to
which a Loan Party is a lessee and each parcel of real property owned in
fee by any Loan Party.
4.10 Litigation; Adverse Facts
Except as set forth on Schedule 4.10, there are no judgments outstanding
against any Loan Party or affecting any property of any Loan Party nor is
there any action, charge, claim, demand, suit, proceeding, petition,
governmental investigation or arbitration now pending or, to the best
knowledge of any Borrower after due inquiry, threatened against or
affecting any Loan Party or any property of any Loan Party which could
reasonably be expected to result in any Material Adverse Effect. No Loan
Party has received any opinion or memorandum or legal advice from legal
counsel to the effect that it is exposed to any liability which could
reasonably be expected to result in any Material Adverse Effect.
4.11 Payment of Taxes
All material tax returns and reports of each Loan Party required to be
filed by any of them have been timely filed, and all taxes, assessments,
fees and other governmental charges upon such Persons and upon their
respective properties, assets, income and franchises which are shown on
such returns as due and payable have been paid when due and payable or are
being contested in good faith by appropriate proceedings and appropriate
reserves therefor have been established in accordance with GAAP. Except as
set forth on Schedule 4.11, as of the Closing Date, none of the United
States income tax returns of any Loan Party are under audit. No tax liens
have been filed and no claims (except as otherwise permitted by subsection
5.9) are being asserted with
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respect to any such taxes. The charges, accruals and reserves on the books
of any Loan Party in respect of any taxes or other governmental charges
are in accordance with GAAP.
4.12 Performance of Agreements
None of the Loan Parties is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained
in any contractual obligation of any such Person, and no condition exists
that, with the giving of notice or the lapse of time or both, would
constitute such a default.
4.13 Employee Benefit Plans
Each Loan Party, and each ERISA Affiliate is in compliance in all material
respects with all applicable provisions of ERISA, the IRC and all other
applicable laws and the regulations and interpretations thereof with
respect to all Employee Benefit Plans. No material liability has been
incurred by any Loan Party, or any ERISA Affiliate which remains
unsatisfied for any funding obligation, taxes or penalties with respect to
any Employee Benefit Plan.
4.14 Intellectual Property
Each Loan Party owns, is licensed to use or otherwise has the right to
use, all Intellectual Property used in or necessary for the conduct of its
business as currently conducted, and all such Intellectual Property is
identified on Schedule 4.14.
4.15 Broker's Fees
No broker's or finder's fee or commission will be payable with respect to
any of the transactions contemplated hereby.
4.16 Government Consents
All governmental and material third party consents and approvals necessary
in connection with the credit facilities provided under this Agreement and
the other transactions contemplated hereby, including the Consent
Solicitations and Senior Note Prepayment have been obtained (without the
imposition of any conditions that are not acceptable to the Lenders) and
shall remain in effect.
4.17 Environmental Compliance
Each Loan Party has been and is currently in compliance with all
applicable Environmental Laws, including obtaining and maintaining in
effect all permits, licenses or other authorizations required by
applicable Environmental Laws. There are no claims, liabilities,
investigations, litigation, administrative proceedings, whether pending or
threatened, or judgments or orders
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relating to any Hazardous Materials asserted or, to the best knowledge of
each Loan Party, threatened against any Loan Party or relating to any real
property currently or formerly owned, leased or operated by any Loan
Party.
4.18 Solvency
Before and after giving effect to the transactions contemplated by the
Loan Documents, and as of, from and after the date of this Agreement, each
Loan Party (after taking into consideration all rights of contribution and
indemnity such Loan Party has against the other Loan Party): (a) owns and
will own assets the fair salable value of which are (i) greater than the
total amount of its liabilities (including contingent liabilities) and
(ii) greater than the amount that will be required to pay the probable
liabilities of such Loan Party as they mature; (b) has capital that is not
unreasonably small in relation to its business as presently conducted or
any contemplated or undertaken transaction; and (c) does not intend to
incur and does not believe that it will incur debts beyond its ability to
pay such debts as they become due.
4.19 Disclosure
No representation or warranty of any Loan Party contained in this
Agreement, the financial statements, the other Loan Documents, or any
other document, certificate or written statement furnished to any Agent or
any Lender by or on behalf of any such Person for use in connection with
the Loan Documents contains any untrue statement of a material fact or
omitted, omits or will omit to state a material fact necessary in order to
make the statements contained herein or therein not misleading in light of
the circumstances in which the same were made. The Projections and pro
forma financial information contained in such materials are based upon
good faith estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by Agents and Lenders
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 is no material
fact known to any Loan Party that has had or will have a Material Adverse
Effect and that has not been disclosed herein or in such other documents,
certificates and statements furnished to any Agent or any Lender for use
in connection with the transactions contemplated hereby.
4.20 Insurance
Each Loan Party maintains adequate insurance policies for public
liability, workers compensation, employee benefit liability, fidelity
liability, directors' and officers' liability, errors and omissions,
property damage for its business and properties, product liability, and
business interruption in amounts customarily carried or maintained by
corporations of established reputation engaged in similar businesses. Such
policies are in full force and effect. No notice of
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cancellation has been received with respect to such policies and such Loan
Party and each of its Subsidiaries is in compliance with all conditions
contained in such policies.
4.21 Compliance with Laws
No Loan Party is in violation of any law, ordinance, rule, regulation,
order, policy, guideline or other requirement of any domestic or foreign
government or any instrumentality or agency thereof, having jurisdiction
over the conduct of its business or the ownership of its properties,
including, without limitation, any violation relating to any health and
safety statutes and regulations, and laws regarding the use, release,
storage, transport or disposal of any Hazardous Material, which violation
would subject such Loan Party, or any of its respective officers to
criminal liability or have a Material Adverse Effect and no such violation
has been alleged.
4.22 Bank Accounts
Schedule 4.22 sets forth the account numbers and locations of all bank
accounts of each Loan Party.
4.23 Subsidiaries
No Borrower has any Subsidiaries other than as set forth on Schedule
4.1(B).
4.24 Employee Matters
Except as set forth on Schedule 4.24, (a) no Loan Party and no Loan
Party's employees is subject to any collective bargaining agreement, (b)
no petition for certification or union election is pending with respect to
the employees of any Loan Party and no union or collective bargaining unit
has sought such certification or recognition with respect to the employees
of any Loan Party and (c) there are no strikes, slowdowns, work stoppages
or controversies pending or, to the best knowledge of any Loan Party after
due inquiry, threatened between any Loan Party and its respective
employees, other than employee grievances arising in the ordinary course
of business which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set
forth on Schedule 4.24, no Loan Party is subject to an employment
contract.
4.25 Governmental Regulation
None of the Loan Parties is, or after giving effect to any loan will be,
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act or the Investment Company Act of 1940 or to
any federal or state statute or regulation limiting its ability to incur
indebtedness for borrowed money.
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4.26 Amendments to Schedules
The Loan Parties may, at any time and from time to time and subject to
subsection 5.13, amend any one or more of the Schedules referred in this
Section 4 and any representation or warranty contained herein which refers
to any such Schedule shall from and after the date of any such amendment
refer to such Schedule as so amended; provided, however, that in no event
may the Loan Parties amend any such Schedule if such amendment would
reflect or evidence a Default or Event of Default.
5. AFFIRMATIVE COVENANTS
Each Loan Party covenants and agrees that, so long as any of the
Commitments hereunder shall be in effect and until payment in full of all
Obligations and termination of all Letters of Credit, unless Requisite
Lenders shall otherwise give their prior written consent, each Loan Party
shall perform, and shall cause each other Loan Party to perform, all
covenants in this Section 5 applicable to such Person or Persons.
5.1 Financial Statements and Other Reports
Each Loan Party will 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
Representative will deliver to Administrative Agent and each Lender
(unless specified to be delivered solely to Administrative Agent or to
Collateral Agent) the financial statements and other reports described
below.
(A) Monthly Financials
As soon as available, and in any event within forty-five (45) days
after the end of each month, Borrower Representative will deliver (1)
the consolidated balance sheet of CC and its Subsidiaries as at the
end of such month and the related consolidated statement of income
for such month and for the period from the beginning of the then
current Fiscal Year to the end of such month, (2) a schedule of the
outstanding Indebtedness for borrowed money of CC and its
Subsidiaries describing in reasonable detail each such debt issue or
loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan, and (3)
consolidated and consolidating statements of cash flow for such month
and for the period from the beginning of the then current Fiscal Year
to the end of such month.
(B) Quarterly Financials
(i) As soon as available, and in any event within one (1) Business
Day after CC files its quarterly report on Form 10-Q with the
Securities and Exchange Commission
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for each of its first three Fiscal Quarters in each Fiscal
Year, Borrower Representative will deliver, or will cause to
be delivered, to Administrative Agent and each Lender, such
report;
(ii) in respect of the fourth Fiscal Quarter in each Fiscal Year,
as soon as available, and in any event within forty-five (45)
days after the end of such Fiscal Quarter, Borrower
Representative will deliver to Administrative Agent and each
Lender financial statements that are equivalent in format to
the financial statements that would have been included in a
quarterly report on Form 10- Q made by CC for such Fiscal
Quarter; and
(iii) as soon as available, and in any event within forty-five (45)
days after the end of such Fiscal Quarter, Borrower
Representative will deliver consolidated and consolidating
statements of cash flow for such quarter and for the period
from the beginning of the then current Fiscal Year to the end
of such quarter.
(C) Year-End Financials
As soon as available, and in any event not later than one hundred
five (105) days after the end of each Fiscal Year or, if earlier, the
date on which CC files its annual report on Form 10-K with the
Securities and Exchange Commission in respect of such Fiscal Year,
Borrower Representative will deliver: (1) the consolidated balance
sheet of CC and its Subsidiaries as at the end of such year and the
related consolidated statements of income, stockholders' equity and
cash flow for such Fiscal Year; (2) a schedule of the outstanding
Indebtedness of CC and its Subsidiaries describing in reasonable
detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each
such debt issue or loan; (3) a report with respect to the financial
statements from a firm of independent certified public accountants
selected by CC and acceptable to Administrative Agent, which report
shall be unqualified as to going concern and scope of audit of CC and
its Subsidiaries and shall state that (a) such consolidated financial
statements present fairly the consolidated financial position of CC
and its Subsidiaries as at the dates indicated and the results of
their operations and cash flow for the periods indicated in
conformity with GAAP and (b) that the examination by such accountants
in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards; and
(4) copies of the consolidating financial statements of CC and its
Subsidiaries, including related consolidating statements of earnings
of CC and its Subsidiaries showing intercompany eliminations.
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(D) Accountants' Certification and Reports
Together with each delivery of consolidated financial statements of
CC and its Subsidiaries pursuant to subsection 5.1(C), Borrower
Representative will deliver (1) a written statement by their
independent certified public accountants (a) stating that the
examination has included a review of the terms of this Agreement as
same relate to accounting matters and (b) stating whether, in
connection with the examination, any condition or event that
constitutes a Default or an Event of 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 and
(2) a copy of a letter addressed to such accountants from CC
informing such accountants that a primary intent of CC was to have
the professional services of such accountants provided to CC and its
Subsidiaries in preparing their audit report and the letter referred
to in this subsection 5.1(D) benefit or influence Administrative
Agent and Lenders, and identifying Administrative Agent and Lenders
as parties that CC and its Subsidiaries have indicated intend to rely
on such professional services provided to CC and its Subsidiaries by
such accountants. Promptly upon receipt thereof, and Borrower
Representative will deliver copies of all significant reports
submitted to CC or its Subsidiaries by independent public accountants
in connection with each annual, interim or special audit of the
financial statements of CC and its Subsidiaries made by such
accountants, including the comment letter submitted by such
accountants to management in connection with their annual audit.
(E) Compliance Certificate
Together with the delivery of each set of financial statements
referenced in subparts (A), (B) and (C) of this subsection 5.1,
Borrower Representative will deliver a Compliance Certificate,
together with (i) copies of the calculations and work-up employed to
determine Loan Parties' compliance or noncompliance with the
financial covenants set forth in Section 6 and subsection 7.1 and
(ii) a report showing in reasonable detail the calculation of the
Applicable Base Rate Margin and the Applicable LIBOR Margin as at the
effective date of such financial statements (the "Applicable Margin
Report").
(F) Borrowing Base Certificates, Registers and Journals
(1) So long as no Event of Default has occurred and is continuing
and Unused Availability is equal to or greater than $7,500,000,
Borrower Representative shall deliver to Agents once during each
week, on the day in each week specified from time to time by
Collateral Agent: a Borrowing Base Certificate updated to
reflect
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the most recent sales and collections of each Borrower through
the second Sunday preceding such day .
(2) If an Event of Default has occurred and is continuing or if
Unused Availability is less than $7,500,000, Borrower
Representative shall deliver to Agents at such intervals (more
often than once each week) as Collateral Agent in its sole
discretion shall determine, on the days in each week specified
from time to time by Collateral Agent; (a) a Borrowing Base
Certificate updated to reflect the most recent sales and
collections of each Borrower through the immediately preceding
interval, (b) at the option of Collateral Agent, either an
assignment schedule of all Accounts created or acquired by each
Borrower during such interval together with cash receipt
journals and credit memo journals covering such interval, or a
summary aging of all such Accounts, (c) a written summary of all
billings, collections and payments with respect to all Borrowers
for such interval, and (d) such other information regarding the
business, affairs and condition of each Borrower as Collateral
Agent may from time to time request.
(3) Within fifteen (15) Business Days after the end of each month,
Borrower Representative shall deliver to Agents: (a) a Borrowing
Base Certificate updated to reflect the most recent sales and
collections of each Borrower through the immediately preceding
month, (b) a summary aging of all such Accounts, (c) a schedule
of each customer which is owed a credit or other amount in
excess of $25,000 (which amount shall be deducted by Collateral
Agent as a reserve from the Borrowing Base) by any Borrower and
listing each such amount, and (d) a schedule of all charge-backs
relating to any Purchased Account or Service Fee Account and
listing each such amount.
(G) Rollforward Reports and Listings and Agings
Within fifteen (15) Business Days after the last day of each month
and from time to time upon the request of Collateral Agent, Borrower
Representative will deliver to Collateral Agent: (i) an aged trial
balance of all then existing Accounts of each Borrower; (ii) a
detailed listing of all accruals, and an aged trial balance of
accounts payable; and (iii) a Rollforward Report as at the last day
of such period. All such reports shall be in form and substance
reasonably satisfactory to Collateral Agent.
(H) Management Report
Together with each delivery of financial statements of CC and its
Subsidiaries pursuant to subdivisions (A) (on a quarterly basis
only), and (B) of this subsection 5.1, Borrower Representative will
deliver a copy of the complete management's discussions and
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analysis of financial condition and results of operations included in
CC's Form 10-K or Form 10-Q, as applicable, filed with the Securities
and Exchange Commission for the period covered by such financial
statements. The information above shall be presented in reasonable
detail and shall be certified by a Responsible Officer of CC and each
Borrower to the effect that such information fairly presents the
results of operations and financial condition of CC and its
Subsidiaries as at the dates and for the periods indicated.
(I) Government Notices
Borrower Representative will deliver to Administrative Agent promptly
after receipt by any Loan Party copies of all notices, requests,
subpoenas, inquiries or other writings received from any governmental
agency concerning any Employee Benefit Plan, the violation or alleged
violation of any Environmental Laws, the storage, use or disposal of
any Hazardous Material, the violation or alleged violation of the
Fair Labor Standards Act or a Loan Party's payment or non-payment of
any taxes including any tax audit.
(J) Events of Default, etc.
Promptly upon (but in any event within five (5) Business Days after)
any officer of any Loan Party obtaining knowledge of any of the
following events or conditions, Borrower Representative shall deliver
a certificate of a Responsible Officer of such Loan Party specifying
the nature and period of existence of such condition or event and
what action such Loan Party has taken, is taking and proposes to take
with respect thereto: (1) any condition or event that constitutes an
Event of Default or Default; (2) any notice of default that any
Person has given to any Loan Party or any other action taken with
respect to a claimed default; or (3) any Material Adverse Effect.
(K) Trade Names
Borrower Representative will give Administrative Agent at least ten
(10) days advance written notice of any change of name or of any new
trade name or fictitious business name by any Loan Party. Each Loan
Party's use of any trade name or fictitious business name will be in
compliance with all laws regarding the use of such names.
(L) Locations
Borrower Representative will give Administrative Agent at least
thirty (30) days' advance written notice of any change in any Loan
Party's principal place of business or
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chief executive office or any change in the location of its books and
records or the Collateral or of any new location for its books and
records or any Collateral.
(M) Bank Accounts
Borrower Representative will give Administrative Agent prompt notice
of any new bank accounts any Loan Party intends to establish prior to
its opening same (and may open same only as provided in Section
7.15).
(N) Litigation
Promptly upon (but in any event within five (5) Business Days after)
any officer or any Loan Party obtaining knowledge of (1) the
institution of any action, suit, proceeding, governmental
investigation or arbitration against or affecting any Loan Party or
any property of any Loan Party not previously disclosed by a Loan
Party to Administrative Agent or (2) any material development in any
action, suit, proceeding, governmental investigation or arbitration
at any time pending against or affecting any Loan Party or any
property of any Loan Party which could reasonably be expected to have
a Material Adverse Effect, Borrower Representative will promptly give
notice thereof to Administrative Agent and provide such other
information as may be reasonably available to them to enable
Administrative Agent and its counsel to evaluate such matter.
(O) Projections
As soon as available and in any event no later than the end of each
Fiscal Year of CC, Borrower Representative will deliver preliminary
Projections of CC and its Subsidiaries for the forthcoming three
Fiscal Years, year by year, and for the forthcoming Fiscal Year,
quarter by quarter, and shall deliver the final Projections for such
periods as soon as available and in any event no later than December
31 in the first of such three Fiscal Years.
(P) Other Indebtedness Notices
Borrower Representative shall promptly deliver copies of all notices
given or received by (but in any event with five (5) Business Days
after receipt from) any Loan Party with respect to noncompliance with
any term or condition related to any Indebtedness in excess of
$250,000 either individually or in the aggregate, and shall promptly
notify Lenders and Administrative Agent of any potential or actual
event of default with respect to any such Indebtedness.
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(Q) Other Information
With reasonable promptness, Borrower Representative will deliver such
other information and data with respect to any Loan Party, or the
Collateral as any Agent or any Lender may reasonably request from
time to time.
(R) Omitted.
(S) Public Filings
Within one (1) Business Day after the filing or release thereof,
Borrower Representative will deliver a copy of each registration
statement (and amendment and supplement thereto), report, press
release, prospectus, proxy statement or other filing or disclosure
made by CC or any other Loan Party with any securities commission,
exchange or association or under the Securities Act of 1933, the
Securities Exchange Act of 1934, any related laws or regulations or
any comparable state acts, laws or regulations.
5.2 Access to Accountants and Management
The Loan Parties authorize Administrative Agent and Lenders to discuss the
financial condition and financial statements of any Loan Party with such
Loan Party's independent public accountants upon reasonable notice to
Borrower Representative of its intention to do so, and authorizes such
accountants to respond to all of Administrative Agent's and Lenders'
inquiries. Each Lender may, with the consent of Administrative Agent,
which will not be unreasonably denied, confer with any Loan Party's
management directly regarding such Loan Party's business, operations and
financial condition.
5.3 Inspection
The Loan Parties shall permit any one or more of the Agents and Co-Agent
and any authorized representatives designated by any Agent or Co-Agent to
visit and inspect any of the properties of any Loan Party, including their
financial and accounting records (for the purposes of field audit or
otherwise), and in conjunction with such inspection, to make copies and
take extracts therefrom, and to discuss their affairs, finances and
business with their officers and independent public accountants, at such
reasonable times during normal business hours and as often as may be
reasonably requested. Each Lender may, with the consent of any Agent or
Co-Agent making such visit or inspection, which consent will not be
unreasonably denied, accompany such Agent or Co-Agent on any such visit or
inspection.
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5.4 Collateral Records
The Loan Parties shall keep full and accurate books and records relating
to the Collateral and shall mark such books and records to indicate
Administrative Agent's security interests in the Collateral, for the
benefit of Lenders.
5.5 Account Covenants; Verification
Borrowers shall, at their own expense: (a) cause all invoices evidencing
Accounts and all copies thereof to bear a notice that such invoices are
payable to the lockboxes established in accordance with subsection 5.6
and (b) use their best efforts to assure prompt payment of all amounts
due or to become due under the Accounts. Discounts, credits or allowances
will be issued, granted or allowed by each Borrower to customers and
returns will be accepted solely in accordance with the ordinary course of
such Borrower's business and consistent with past practices, provided
that, upon written notice to such effect given by Collateral Agent at any
time during the existence of any Event of Default, such practice shall
cease. Borrower Representative will immediately notify Collateral Agent
in the event that a customer alleges any dispute or claim with respect to
an Account if the amount in dispute is, or the claim involves an amount,
in excess of $50,000 or of any other circumstances known to any Borrower
that may impair the validity or collectibility of such an amount in
respect of any Account. Collateral Agent shall have the right, at any
time or times hereafter, to verify the validity, amount or any other
matter relating to an Account, by mail, telephone or in person. While a
Default or an Event of Default is continuing, no Borrower shall, without
the prior consent of Collateral Agent, adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any
customer or obligor thereof, or allow any credit or discount thereon.
5.6 Collection of Accounts and Payments; Cash Management Arrangements
(a) On or prior to the date 45 days following the Closing Date,
Borrowers shall establish lockboxes and blocked accounts
(collectively, "Blocked Accounts") in Borrowers' names or, by
separate agreement with Administrative Agent, in Administrative
Agent's name, with such banks ("Collecting Banks") as are acceptable
to Administrative Agent (subject to irrevocable instructions
acceptable to Administrative Agent as hereinafter set forth and
contained in agreements in form and substance acceptable to
Administrative Agent among the applicable Borrowers and Collecting
Banks and Administrative Agent ("Blocked Account Agreement")) to
which all Account Debtors shall directly remit all payments on
Accounts and in which Borrowers will immediately deposit all
payments constituting proceeds of Collateral in the identical form
in which such payment was made, whether by cash or check. The
Collecting Banks shall acknowledge and agree, in a manner
satisfactory to Administrative Agent, that all payments made to the
Blocked
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Accounts are the sole and exclusive property of Administrative
Agent, for the benefit of Lenders, and that the Collecting Banks
have no right of setoff against the Blocked Accounts and that all
such payments received will, upon delivery of Notice of Activation
Event from any Agent to the Collecting Banks, be promptly
transferred to Administrative Agent's Account. Borrowers hereby
agree that all payments received by Administrative Agent, whether by
cash, check, wire transfer or any other instrument, made to such
Blocked Accounts or otherwise received by Administrative Agent and
whether on the Accounts or as proceeds of other Collateral or
otherwise will be the sole and exclusive property of Administrative
Agent, for the benefit of Lenders. Borrowers shall irrevocably
instruct each Collecting Bank, upon receipt of Notice of Activation
Event from any Agent, immediately to transfer all payments or
deposits to the Blocked Accounts into Administrative Agent's
Account. Borrowers, and their respective Affiliates, employees,
agents or other Persons acting for or in concert with any Borrower,
shall, acting as trustee for Administrative Agent, receive, as the
sole and exclusive property of Administrative Agent, any monies,
checks, notes, drafts or any other payments relating to and/or
proceeds of Accounts or other Collateral which come into the
possession or under the control of any Borrower or any of such
Borrower's Affiliates, employees, agents or other Persons acting for
or in concert with any Borrower, and immediately upon receipt
thereof, Borrowers or such Persons shall remit the same or cause the
same to be remitted, in kind, to the Blocked Accounts or, upon
written direction from any Agent, to Administration Agent at its
address set forth in subsection 10.4 below. No Agent shall issue a
Notice of Activation Event unless either (i) an Event of Default
shall have occurred and be continuing or (ii) an Activation Event
shall have occurred and be continuing. The Agent issuing Notice of
Activation Event shall withdraw each Notice of Activation Event that
has not previously been withdrawn if no Event of Default is
continuing, Requisite Lenders shall have otherwise agreed or
following the issuance of such Notice of Activation Event, there
shall have been a period of at least ten (10) consecutive Business
Days during which no Activation Event shall be continuing.
(b) Borrowers shall, in addition to the matters referred to in (a)
above, on or prior to the dated 45 days following the Closing Date
establish a cash management arrangement pursuant to such instruments
and documents and with such bank or banks as shall be satisfactory
to Administrative Agent. The arrangements referred to in (a) above
and the cash management arrangement referred to in this clause (b)
are herein referred to collectively as the "Cash Dominion
Arrangement."
(c) Except as otherwise provided in subsection 8.7(b), all amounts
deposited in the Administrative Agent's Account from the Collecting
Banks may be applied to the
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Obligations by Administrative Agent in such manner as Administrative
Agent may deem advisable notwithstanding any previous entry by
Administrative Agent upon any books and records. Borrowers shall
receive credit for any such application as provided in subsection
2.4(A).
5.7 Endorsement
Each Borrower hereby constitutes and appoints Administrative Agent and all
Persons designated by Administrative Agent for that purpose as such
Borrower's true and lawful attorney-in-fact, with power to endorse such
Borrower's name to any of the items of payment or proceeds described in
subsection 5.6 above and all proceeds of Collateral that come into
Administrative Agent's possession or under Administrative Agent's control.
Both the appointment of Administrative Agent as such Borrower's attorney
and Administrative Agent's rights and powers are coupled with an interest
and are irrevocable until payment in full and complete performance of all
of the Obligations.
5.8 Corporate Existence
Except as permitted pursuant to subsection 7.6, each Loan Party will, at
all times preserve and keep in full force and effect its corporate
existence and all rights and franchises material to its business. Borrower
Representative will promptly notify Administrative Agent of any change in
the ownership or corporate structure of any Loan Party.
5.9 Payment of Taxes
Each Loan Party will pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or with respect
to any of its franchises, business, income or property before any penalty
accrues thereon; provided, however, that no such tax need be paid if such
Loan Party is contesting same in good faith by appropriate proceedings
promptly instituted and diligently conducted, if such Loan Party has
established appropriate reserves as shall be required in conformity with
GAAP and no Lien in respect of such tax has arisen and attached to any
Collateral.
5.10 Maintenance of Properties; Insurance
Each Loan Party will maintain or cause to be maintained in good repair,
working order and condition all material properties used in the business
of any Loan Party and will make or cause to be made all appropriate
repairs, renewals and replacements thereof. Each Loan Party will maintain
or cause to be maintained, with financially sound and reputable insurers,
public liability insurance, workers compensation, employee benefit
liability insurance, fidelity insurance, errors and omissions insurance,
directors' and officers' liability insurance, and property damage
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insurance with respect to each Loan Party's business and properties and
the business and properties of its Subsidiaries against loss or damage of
the kinds customarily carried or maintained by corporations of established
reputation engaged in similar businesses and in amounts acceptable to
Administrative Agent in its reasonable credit judgement. Each Loan Party
shall cause Administrative Agent, for the benefit of Lenders, to be named
as loss payee on all insurance policies relating to any Collateral and as
additional insured under all liability policies, in each case pursuant to
appropriate endorsements in form and substance satisfactory to
Administrative Agent and shall collaterally assign to Administrative
Agent, for the benefit of Lenders, as security for the payment of the
Obligations all business interruption insurance of the Loan Parties. Loan
Parties shall apply any proceeds received from any policies of insurance
relating to any Collateral to the Obligations as set forth in subsection
2.4(B). Each Loan Party will, and will cause each other Loan Party to,
deliver to Administrative Agent, within ten (10) Business Days prior to
the expiration or termination of any such insurance policy, a certificate
of renewal or replacement of such insurance policy, as issued by the
applicable insurance company or its duly authorized agent.
5.11 Compliance with Laws
Each Loan Party will, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority as now in
effect and which may be imposed in the future in all jurisdictions in
which such Borrower, other Loan Party or Subsidiary is now doing business
or may hereafter be doing business, other than those laws the
noncompliance with which would not have a Material Adverse Effect.
5.12 Further Assurances
Each Loan Party shall, from time to time, execute such guaranties,
financing or continuation statements, documents, security agreements,
reports and other documents or deliver to Administrative Agent such
instruments, certificates of title or other documents as Administrative
Agent at any time may reasonably request to evidence, perfect or otherwise
implement the guaranties and security for repayment of the Obligations
provided for in the Loan Documents. Upon creation or acquisition thereof,
each Loan Party shall cause any newly created or acquired Subsidiary of a
Borrower or a Loan Party promptly to become a Borrower and/or Corporate
Guarantor hereunder (as specified by Administrative Agent) and to grant to
Administrative Agent, on behalf of Lenders, perfected first priority
(subject only to Permitted Encumbrances) security interests in all present
and future real, personal and mixed property of such Subsidiary, and shall
cause all present and future equity interests in such Subsidiary to be
pledged to Administrative Agent as security for the Obligations on a first
priority basis (subject only to Permitted Encumbrances) and, to the extent
requested by Administrative Agent, and at Borrowers' sole cost and
expense, shall deliver or cause to be delivered to Administrative Agent
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such legal opinion, certificates, title insurance, evidence of UCC and
other searches, evidence of perfection of security interests,
environmental reports, appraisals (including real estate appraisals
contemplated by the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, and the regulations promulgated
thereunder), landlord waivers, bailee letters and similar documents and
agreements, as Administrative Agent may have reasonably requested. Each
Loan Party that is a party hereto authorizes Administrative Agent to file
financing statements describing Collateral of such Loan Party without the
signature of such Loan Party to the extent permitted by law. Each Loan
Party will deliver to Administrative Agent the original of all letters of
credit issued to it as a beneficiary along with a collateral assignment
thereof evidencing the consent to such assignment by the issuer of such
letter of credit and each correspondent or confirming bank, all in form
and substance reasonably acceptable to Administrative Agent.
5.13 Collateral Locations
Each Loan Party will keep the Collateral at the locations specified on
Schedule 4.8. With respect to any new location (which in any event shall
be within the continental United States), each Loan Party will execute
such documents and take such actions as Administrative Agent deems
necessary to perfect and protect the security interests of Administrative
Agent, on behalf of Lenders, in the Collateral prior to the transfer or
removal of any Collateral to such new location.
5.14 Instruments; Chattel Paper
Except to the extent Indebtedness evidenced thereby does not exceed
$50,000 outstanding at any time in the aggregate, Loan Parties will
deliver and pledge to Administrative Agent all notes and instruments (as
defined in the UCC) duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to Administrative Agent. The Loan Parties will mark
conspicuously all chattel paper with a legend, in form and substance
satisfactory to Administrative Agent, indicating that such chattel paper
is subject to the security interest of Administrative Agent, for the
benefit of itself and Lenders. Borrowers shall take all steps necessary to
grant to Administrative Agent control of all electronic chattel paper in
accordance with any provisions of the UCC regarding same which may come
into effect.
Without limiting the generality of the foregoing, Loan Parties will mark
conspicuously all Account Agreements with the legend referred to in the
preceding paragraph.
5.15 Account Agreements
Borrower Representative will deliver to each Agent a copy of each Account
Agreement, or material amendment to any Account Agreement, entered into
after the Closing Date, each
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certified as being a complete, accurate and correct copy thereof by a
Responsible Officer of Borrower Representative, together with, in the case
of any Account Agreement entered into after the Closing Date, copies of
lien search results indicating the applicable Loan Party as having a first
priority perfected ownership interest in each applicable Account, subject
to no Liens except those in favor of Administrative Agent on behalf of
Lenders. No Loan Party shall waive any material rights under any Account
Agreement or settle or compromise any claim under any Account Agreement,
in any case, which would affect title of such Loan Party to any Account or
materially increase the obligations of such Loan Party to the applicable
Account Seller without, in each case, the prior written consent of
Collateral Agent.
5.16 Use of Proceeds and Margin Security
Borrowers shall use the proceeds of all Loans as described in subsection
2.5 of this Agreement consistent with all applicable laws, statutes, rules
and regulations. No portion of the proceeds of any Loan shall be used by
any Borrower or any other Loan Party for the purpose of purchasing or
carrying margin stock within the meaning of Regulation U, or in any manner
that might cause the borrowing, the application of such proceeds, or the
transactions contemplated hereby or by the other Loan Documents to violate
Regulation T, Regulation U or Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934 or the rules and regulations thereunder.
6. FINANCIAL COVENANTS
Each Loan Party covenants and agrees that so long as any of the
Commitments remain in effect and until payment in full of all Obligations
and termination of all Lender Letters of Credit, unless Borrowers have
received the prior written consent of Requisite Lenders, such Loan Party
shall comply with, and shall cause each other Loan Party to comply with,
all covenants in this Section 6.
6.1 Omitted
6.2 Fixed Charge Coverage
The Loan Parties shall not suffer or permit Fixed Charge Coverage for any
period of one fiscal quarter, or two or three consecutive fiscal quarters,
ending on December 31, 2000, March 31, 2001 and June 30, 2001,
respectively, or of four consecutive fiscal quarters ending on the last
day of any fiscal quarter thereafter, to be less than 1.05:1.00 (in the
case of the two fiscal quarters ending March 31, 2001) and otherwise
1.10:1.00.
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6.3 Minimum EBITDA
CC and its direct and indirect Subsidiaries shall maintain EBITDA in at
least the amount set forth below opposite each period specified if a
Notice of Activation Event shall have been issued (or could have been
issued) at any time during the last two calendar months of such period or
after the end of such period and up to and including the date of delivery
to Administrative Agent of the financial statements required to be
delivered in respect of the Fiscal Quarter or Fiscal Year ending on the
last day of such period, under Section 5.1(B) or (C), as the case may be:
Period Minimum EBIDTA
------ --------------
Four Fiscal Quarters Ending:
December 31, 2000 $30,650,000
March 31, 2001 $31,400,000
June 30, 2001 $31,400,000
September 30, 2001 $31,400,000
December 31, 2001 $33,000,000
March 31, 2002 $34,000,000
June 30, 2002 $35,000,000
September 30, 2002 $36,000,000
December 31, 2002 $37,000,000
March 31, 2003 $38,000,000
June 30, 2003 $39,000,000
September 30, 2003 $40,000,000
December 31, 2003 $41,000,000
6.4 Maximum Capital Expenditures
The Loan Parties shall not suffer or permit CC and its Subsidiaries, on a
consolidated basis, to make Capital Expenditures during any period set
forth below in excess of the amount set forth opposite such period.
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Period Maximum Capital Expenditure
------ ---------------------------
Closing Date through December 31, 2001 $5,000,000
Fiscal Year Ending December 31, 2002 $5,500,000
Each Fiscal Year Ending on or after December 31, 2003 $6,000,000
7. NEGATIVE COVENANTS
Each Loan Party covenants and agrees that so long as any of the
Commitments remain in effect and until payment in full of all Obligations
and termination of all Letters of Credit, unless such Loan Party has
received the prior written consent of Requisite Lenders, such Loan Party
shall not, and shall not permit any other Loan Party to:
7.1 Indebtedness and Liabilities
Directly or indirectly create, incur, assume, guaranty, or otherwise
become or remain directly or indirectly liable, on a fixed or contingent
basis, with respect to any Indebtedness except: (a) the Obligations; (b)
Intercompany Indebtedness (i) among Borrowers (other than that described
in clause (ii) of this paragraph (b)) and (ii) provided that no Default or
Event of Default shall have occurred and be continuing at the time of the
incurrence thereof or would result therefrom, Indebtedness incurred by CC
or COI (and advanced by a Borrower other than CC or COI) to permit CC or
COI to make payments in cash then due under and pursuant to the Senior
Notes and the Senior PIK Notes, pay expenses incurred in the ordinary
course of business and to make Restricted Junior Payments permitted under
subsection 7.5; provided that, in each case, such Indebtedness shall be
unsecured and subordinated in right of payment to the Obligations in a
manner and upon terms acceptable to Administrative Agent (and by its
execution and delivery hereof, each Borrower agrees that any such
Indebtedness shall be so unsecured and so to subordinate such
Indebtedness) and shall not be evidenced by any note or other instrument,
unless the same is pledged to Administrative Agent and Lenders pursuant to
subsection 5.14; (c) Indebtedness (excluding Capital Leases) not to exceed
$250,000 in the aggregate at any time outstanding secured by purchase
money Liens; (d) Indebtedness under Capital Leases not to exceed
$5,000,000 outstanding at any time in the aggregate; (e) Indebtedness
existing on the Closing Date and identified on Schedule 4.4; (f)
Indebtedness incurred by any Borrower in connection with Permitted
Acquisitions permitted under subsection 7.6(B); provided that (1) such
Indebtedness (A) shall be unsecured and subordinated in right of payment
to the Obligations in a manner and upon terms acceptable to Administrative
Agent, (B) shall not exceed $5,000,000 outstanding at any time in the
aggregate with respect to any individual Permitted Acquisition and (C)
shall be on terms and conditions acceptable to Administrative Agent and
(2) all such Indebtedness incurred by Borrowers shall not exceed
$10,000,000 outstanding in the aggregate at any time; (g) Indebtedness not
exceeding $100,000,000 in aggregate principal amount under the Senior
Notes or such lesser principal amount as may be outstanding from time to
time; and
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(h) Indebtedness not exceeding $28,800,000 in aggregate principal amount
under the Senior PIK Notes or such lesser principal amount as may be
outstanding from time to time, plus the amount of "Additional PIK
Securities" (as defined in the Senior Debentures Indenture) issued in lieu
of cash interest on or after the Closing Date and on or prior to December
1, 2002. Except for Indebtedness permitted in the preceding sentence, no
Loan Party will incur any Liabilities except for trade payables and normal
accruals in the ordinary course of business not yet due and payable or
with respect to which any Loan Party is contesting in good faith the
amount or validity thereof by appropriate proceedings and then only to the
extent such Loan Party has established adequate reserves therefor, if
appropriate under GAAP.
7.2 Guaranties
Except for the guaranties of the Obligations provided hereunder and under
the other Loan Document and except for (a) endorsements of instruments or
items of payment for collection in the ordinary course of business and (b)
the agreements of THISCO and Brentwood in their respective Account
Agreements to fund the payroll of Account Sellers in respect of Service
Fee Accounts consistent with current practices at the Closing Date,
guaranty, endorse, or otherwise in any way become or be responsible for
any obligations of any other Person, whether directly or indirectly by
agreement to purchase the indebtedness of any other Person or through the
purchase of goods, supplies or services, or maintenance of working capital
or other balance sheet covenants or conditions, or by way of stock
purchase, capital contribution, advance or loan for the purpose of paying
or discharging any indebtedness or obligation of such other Person or
otherwise.
7.3 Transfers, Liens and Related Matters
(A) Transfers
Sell, assign (by operation of law or otherwise) or otherwise dispose
of, or grant any option with respect to any of the Collateral or the
assets of such Person, except that (i) Borrowers may sell inventory
in the ordinary course of business; and (ii) Loan Parties may make
Asset Dispositions if all of the following conditions are met: (1)
the market value of assets sold or otherwise disposed of in any
single transaction or series of related transactions does not exceed
$125,000 and the aggregate market value of assets sold or otherwise
disposed of in any Fiscal Year does not exceed $500,000; (2) the
consideration received is at least equal to the fair market value of
such assets, as determined in good faith by such Loan Party's board
of directors; (3) the sole consideration received is cash; (4) the
net proceeds of such Asset Disposition are applied as required by
subsection 2.4(B); (5) after giving effect to the sale or other
disposition of the assets included within the Asset Disposition and
the repayment of the
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Obligations with the proceeds thereof, Loan Parties are in compliance
on a pro forma basis with the covenants set forth in Section 6
recomputed for the most recently ended month for which information is
available and are in compliance with all other terms and conditions
contained in this Agreement; and (6) no Default or Event of Default
shall then exist or result from such sale or other disposition. In no
event shall any Loan Party make any Asset Disposition with respect to
any capital stock of any other Loan Party other than to another Loan
Party which is a Corporate Guarantor and a party as a pledgor to the
Pledge Agreement and so long as Administrative Agent retains a
perfected first priority lien on such capital stock and has received
such legal opinions and other documents as it may have reasonably
requested in connection therewith.
(B) Liens
Except for Permitted Encumbrances, directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of
the Collateral or the assets of such Person or any proceeds, income or
profits therefrom.
(C) No Negative Pledges
Enter into, assume or suffer to exist any agreement (other than the
Senior Notes Indenture and the Senior Debentures Indenture (each as in
effect on the Closing Date) and the Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties or assets,
whether now owned or hereafter acquired.
(D) No Restrictions on Subsidiary Distributions to any Borrower
Except as provided herein or in the Senior Notes Indenture, the Senior
Debentures Indenture (each as in effect on the Closing Date) or the
Loan Documents, directly or indirectly create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Loan Party to: (1) pay
dividends or make any other distribution on any of such Loan Party's
capital stock; (2) subject to subordination provisions, pay any
indebtedness owed to any Loan Party; (3) make loans or advances to any
Loan Party; or (4) transfer any of its property or assets to any Loan
Party.
7.4 Investments and Loans
Make or permit to exist investments in or loans to any other Person,
except: (a) Cash Equivalents; (b) loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business in an aggregate outstanding amount not in excess of
$250,000 at any time; (c) Intercompany Indebtedness permitted under
subsection 7.1;
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(d) Permitted Acquisitions permitted under subsection 7.6(B); (e) advances
made in the ordinary course of business consistent with current practices
at the Closing Date by THISCO and Brentwood to independent supplemental
staffing firms to induce such firms to enter into Account Agreements;
provided, that such advances are secured by a first priority perfected
security interest in the Accounts under such Account Agreements in favor of
THISCO or Brentwood, as the case may be, subject to no Liens other than
Permitted Encumbrances; and (f) in addition to advances made pursuant to
clause (e) above, advances not to exceed $500,000 outstanding at any time
in the aggregate made by Borrowers in the ordinary course of business
consistent with current practices at the Closing Date to Persons engaged in
the business of providing temporary employment personnel to clients to
induce such Persons to enter into, or remain party to, Account Agreements
or Licensing Agreements.
7.5 Restricted Junior Payments
Directly or indirectly declare, order, pay, make or set apart any sum for
any Restricted Junior Payment, except that, so long as no Default or Event
of Default shall have occurred and be continuing or would result therefrom
(other than in the case of Restricted Junior Payments made pursuant to
clauses (B)(iv) and (B)(vi) below, which may be made whether or not a
Default or Event of Default shall have occurred and is continuing or would
result therefrom), a Loan Party (other than CC except in the case of clause
(vii) below) may make Restricted Junior Payments (A) to effect the Senior
Note Prepayment so long as (i) immediately after giving effect to the
Senior Note Prepayment, there shall be Unused Availability equal to the sum
of (w) $10,000,000 plus (x) the tax expense of CC and its Subsidiaries
related to any non-recurring gain arising from such Senior Note Prepayment
plus (y) accrued and unpaid interest (other than interest payable in kind)
on the Senior Notes and Senior PIK Notes, (ii) the total cost of such
Senior Note Prepayment, including such tax expenses and all other costs and
expenses paid or incurred in connection with such Senior Note Prepayment
shall not exceed $16,500,000, and (iii) the Senior Note Prepayment shall
comply with all applicable laws and the terms of all agreements (including
the Senior Notes Indenture and Senior Debentures Indenture) to which CC or
any of its Subsidiaries is a party or by which any of them is bound; and
(B) with respect to its common stock to the extent necessary (i) to permit
Borrowers to pay the Obligations; (ii) to permit COI to make scheduled
payments (but not prepayments) of interest in cash then due under and
pursuant to the Senior Notes; (iii) to permit CC to make scheduled payments
(but not prepayments) of interest in cash then due under and pursuant to
the Senior PIK Notes; (iv) to permit CC to make payments in cash directly
related to compliance by it with laws and regulations applicable to it by
virtue of its status as a publicly-held corporation; (v) to permit CC
and/or COI to make optional prepayments or purchases of the Senior Notes
and/or Senior PIK Notes, and related payments of interest and reasonable
fees, costs and expenses related thereto, but only to the extent of and
directly out of the proceeds of the concurrent consummation of an issuance
by CC
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for cash of its common stock, or options, warrants or rights with respect
to its common stock; (vi) to permit CC and COI to make payments in cash in
respect of Corporate Overhead; (vii) to permit CC to pay dividends in
respect of (but not to effect any redemption or purchase of) its
outstanding shares of Series F preferred stock, in an amount not in excess
of $25,000 in any Fiscal Year; and (viii) to permit any Borrower to pay
expenses incurred in the ordinary course of business.
7.6 Restriction on Fundamental Changes
(A) (i) Enter into any transaction of merger or consolidation; (ii)
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution); (iii) convey, sell, lease, sublease, transfer or
otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets,
or the capital stock of any of its Subsidiaries, whether now owned
or hereafter acquired; provided, however, that (1) any Borrower may
merge or consolidate with, or convey, sell or transfer all or
substantially all of its assets to, any other Borrower; and (2) any
Inactive Subsidiary may be liquidated, wound-up or dissolved into
any other Subsidiary of a Borrower.
(B) Acquire by purchase or otherwise, all or any substantial part of the
business or assets of, or stock or other evidence of beneficial
ownership of, any Person; provided, however, that so long as: (i) no
Default or Event of Default has occurred and is continuing before
and after giving effect thereto; and (ii) the Cash Dominion
Arrangement (as defined in subsection 5.6) is in effect, any
Borrower, may acquire all or substantially all of the assets of any
Person (in each case, a "Permitted Acquisition"); provided that each
Permitted Acquisition shall be subject to the satisfaction of the
condition precedent that the Unused Availability shall be not less
than $15,000,000 without giving effect to the proposed Permitted
Acquisition for the ninety (90) day period preceding the
consummation thereof and to the satisfaction of each of the
following additional conditions precedent:
(1) Administrative Agent shall receive not less than fifteen (15)
Business Days' prior written notice of such proposed Permitted
Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition;
(2) such Permitted Acquisition shall only be of those assets of a
Target which are located solely in the United States and
comprising a business, or those assets of a business, of the
type engaged in by Borrowers as of the Closing Date, including,
without limitation, the temporary personal services business,
the consulting placement business and the staffing services
business, and which business would not subject any Agent or any
Lender to regulatory or third party approvals in
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connection with the exercise of its rights and remedies under
this Agreement or any other Loan Documents;
(3) such Permitted Acquisition shall be consensual and shall have
been approved by the Target's board of directors;
(4) the business and assets of the Target acquired in such
Permitted Acquisition shall be acquired free and clear of all
Liens (other than Permitted Encumbrances);
(5) no Indebtedness, contingent obligations or other liabilities
shall be incurred or assumed in connection with such Permitted
Acquisition, except (x) loan advances, (y) ordinary course
trade payables, accrued expenses and Indebtedness of Target
assumed in connection therewith to the extent permitted to be
incurred by Borrowers pursuant to subsection 7.1 and (z)
Indebtedness incurred in connection therewith to the extent
permitted to be incurred by Borrowers pursuant to subsection
7.1;
(6) on or prior to the date thereof, Administrative Agent will be
granted a first and prior perfected security interest (subject
to Permitted Encumbrances) in all assets being acquired
pursuant to such Permitted Acquisition, and Borrowers shall
have executed such documents and taken such actions as may be
required by Administrative Agent in connection therewith as
contemplated by subsection 5.12;
(7) Borrower Representative shall have delivered to Administrative
Agent, in form and substance satisfactory to Administrative
Agent:
(i) pro forma balance sheets of CC and its Subsidiaries (the
"Acquisition Pro Forma") on a consolidated basis, based on
financial data as of a recent date, which shall be
complete and shall accurately and fairly represent the
assets, liabilities, financial condition and results of
operations of, CC and its Subsidiaries in accordance with
GAAP consistently applied, but taking into account such
Permitted Acquisition and the funding of all Loans in
connection therewith, and the Acquisition Projections (as
hereinafter defined) shall reflect that Unused
Availability for the 90-day period following the
consummation of such Permitted Acquisition will exceed
$15,000,000 on a pro forma basis (giving effect to such
Permitted Acquisition and the Eligible Accounts that would
be acquired in connection therewith, and all Loans funded
in connection therewith as if made on the first day of
such period);
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(ii) updated versions of the most recently delivered
projections covering the one (1) year period commencing on
the date of such Permitted Acquisition and otherwise
prepared in accordance with subsections 4.3 and 4.19 (the
"Acquisition Projections") and based upon historical
financial data of a recent date satisfactory to
Administrative Agent, taking into account such Permitted
Acquisition provided, that Acquisition Projections for any
--------
Permitted Acquisition for which total consideration
therefor does not exceed $500,000 may be limited to
projected revenues and EBITDA for such one year period;
and
(iii) a certificate of a Responsible Officer of each Loan Party
to the effect that: (I) each Loan Party (after taking into
consideration all rights of contributions and indemnity
such Loan Party has against each Holding Party and each
other Subsidiary of Holding Parties) will be solvent (as
represented in subsection 4.18) upon the consummation of
the transaction contemplated by the Permitted Acquisition;
(II) the Acquisition Pro Forma fairly presents the
financial condition of CC and its Subsidiaries (on a
consolidated basis) as of the date thereof after giving
effect to the transactions contemplated by such Permitted
Acquisition; (III) the Acquisition Projections are good
faith estimates, based on assumptions believed at the date
of such certificate in good faith to be reasonable, of the
future financial performance of CC and its Subsidiaries
subsequent to the date thereof based upon the historical
performance and the projected future financial performance
of CC and its Subsidiaries; and (IV) the Loan Parties have
completed their due diligence investigation with respect
to the Target and such Permitted Acquisition, which
investigation was conducted in a manner similar to that
which would have been conducted by a prudent purchaser of
a comparable business and the results of which
investigation were acceptable to the Loan Parties;
(8) on or prior to the date of such Permitted Acquisition,
Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent, all collateral and security
documents, opinions, certificates, lien search results and other
documents reasonably requested by Administrative Agent to
evidence compliance with the foregoing provisions of this
subsection 7.6(B) and subsection 5.12; and
(9) the total Acquisition Costs payable in connection with such
Permitted Acquisition plus the sum of all Acquisition Costs paid
in connection with previous Permitted Acquisitions shall not
exceed $30,000,000.
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(C) Should Borrower Representative request Administrative Agent's consent
to an acquisition which would not otherwise qualify as a Permitted
Acquisition, Administrative Agent agrees to use its best efforts to
communicate its response to Borrower Representative in a reasonably
prompt manner, it being understood that Administrative Agent shall
have no obligation to consent to any such acquisition and no failure
or delay on the part of Administrative Agent in the delivery of such
response shall be construed to be a consent to such acquisition.
7.7 Transactions with Affiliates
Directly or indirectly, enter into or permit to exist any transaction
(including the purchase, sale or exchange of property or the rendering of
any service) with any Affiliate or with any officer, director or employee
of any Loan Party, except for transactions in the ordinary course of and
pursuant to the reasonable requirements of Loan Parties' business and upon
fair and reasonable terms which, except for transactions which are
expressly permitted pursuant to the terms of this Agreement, are fully
disclosed to Administrative Agent and Lenders and which are no less
favorable to Borrowers than they would obtain in comparable arm's length
transactions with unaffiliated Persons.
7.8 Environmental Liabilities
(a) Violate any applicable Environmental Law; (b) dispose of any Hazardous
Materials (except in accordance with applicable law) into or onto or from,
any real property owned, leased or operated by any Loan Party; or (c)
permit any Lien imposed pursuant to any Environmental Law to be imposed or
to remain on any real property owned, leased or operated by any Loan Party,
if any such event or circumstance could reasonably be expected to have a
Material Adverse Effect.
7.9 Conduct of Business
From and after the Closing Date, engage in any business other than
businesses of the type engaged in by Loan Parties on the Closing Date. The
Holding Parties shall not engage in any type of business activity other
than ownership of their respective Subsidiaries' capital stock and
activities incidental to the maintenance of its corporate existence.
7.10 Compliance with ERISA
Establish any new Employee Benefit Plan or amend any existing Employee
Benefit Plan if the liability or increased liability resulting from such
establishment or amendment is material. Neither any Loan Party nor any of
its Subsidiaries shall fail to establish, maintain and operate each
Employee Benefit Plan in compliance in all material respects with the
provisions of ERISA, the IRC and all other applicable laws and the
regulations and interpretations thereof.
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7.11 Tax Consolidations
File or consent to the filing of any consolidated income tax return with
any Person other than any other Loan Party; provided that in the event any
Borrower files a return with any other Loan Party (other than another
Borrower), such Borrower's contribution with respect to taxes as a result
of the filing of such consolidated return shall not be greater, nor the
receipt of tax benefits less, than they would have been had such Borrower
not filed a consolidated return with such other Loan Party.
7.12 Subsidiaries
Establish, create or acquire any new Subsidiaries.
7.13 Fiscal Year
Change its Fiscal Year.
7.14 Press Release; Public Offering Materials
Disclose the name of Administrative Agent or any Lender in any press
release or in any prospectus, proxy statement or other materials filed with
any governmental entity relating to a public offering of the capital stock
of any Loan Party except as may be required by law.
7.15 Bank Accounts
Establish any new bank accounts, or amend or terminate any Blocked Account
or lockbox agreement, without Administrative Agent's prior written consent;
provided, that Borrowers may establish additional bank accounts so long as
in each case (a) Borrower Representative provides Administrative Agent with
at least ten (10) Business Days' prior written notice thereof and (b) each
such bank account which is a depository account is subject to an effective
Blocked Account Agreement prior to the establishment thereof.
7.16 Changes Relating to Senior Notes and Senior PIK Notes
Change or amend, or agree to change or amend, any of the terms of the
Senior Notes, the Senior PIK Notes, the Senior Notes Indenture, the Senior
Debentures Indenture, or any related documents, if the effect of such
change or amendment is or would be to: (a) increase the interest rate on
the Indebtedness covered thereby; (b) change the dates upon which payments
of principal or interest are due on such Indebtedness; (c) modify or add
any event of default or add any covenant of the obligor of such
Indebtedness; (d) change the payment provisions of such Indebtedness; or
(e) change or amend any other term thereof if such change or amendment
would materially increase the obligations of COI or CC or confer additional
material rights on
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the holder of such Indebtedness in a manner adverse to the interests of any
Loan Party, any Agent or any Lender.
8. DEFAULT, RIGHTS AND REMEDIES
8.1 Event of Default
"Event of Default" shall mean the occurrence or existence of any one or
more of the following:
(A) Payment
Failure to make payment of any of the Obligations when due and in the
case of interest, such failure shall not be cured within five (5) days
of the applicable due date; or
(B) Default in Other Agreements
(A) (1) Failure of any Loan Party to pay when due any principal or
interest on any Indebtedness (other than the Obligations) or (2)
breach or default of any Loan Party with respect to any Indebtedness
(other than the Obligations); if such failure to pay, breach or
default entitles the holder to cause such Indebtedness having an
individual principal amount in excess of $300,000 or having an
aggregate principal amount in excess of $650,000 to become or be
declared due prior to its stated maturity; or (B) default by CC, COI
or any Subsidiary of either thereof under the Senior Notes Indenture
or Senior Debentures Indenture, including any breach of any covenant
thereunder regardless of whether such covenant is more restrictive
than, or conflicts with, or covers the same or similar matters as the
covenants set forth in this Agreement or any other Loan Documents; or
(C) Breach of Certain Provisions
Failure of any Loan Party to perform or comply with any term or
condition contained in subsections 5.1 (A), (B) and (C), 5.3, 5.5 or
5.6 or contained in Section 6 or Section 7; or
(D) Breach of Warranty
Any representation, warranty, certification or other statement made by
any Loan Party in any Loan Document or in any statement or certificate
at any time given by such Person in writing pursuant or in connection
with any Loan Document is false in any material respect on the date
made; or
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(E) Other Defaults Under Loan Documents
Any Loan Party defaults in the performance of or compliance with any
term contained in this Agreement or the other Loan Documents and such
default is not remedied or waived within ten (10) days after receipt
by Borrower Representative of notice from Administrative Agent, or
Requisite Lenders of such default (other than occurrences described in
other provisions of this subsection 8.1 for which a different grace or
cure period is specified or which constitute immediate Events of
Default); or
(F) Change in Control
(1) CC ceases to beneficially own and control, directly or indirectly,
at least one hundred percent (100%) of the issued and outstanding
shares of each class of capital stock of COI entitled (without regard
to the occurrence of any contingency) to vote for the election of a
majority of the members of COI's board of directors; (2) COI ceases to
beneficially own and control, directly or indirectly, at least one
hundred percent (100%) of the issued and outstanding shares of each
class of capital stock of each Borrower entitled (without regard to
the occurrence of any contingency) to vote for the election of a
majority of the members of such Borrower's board of directors or (3)
the occurrence of a "Change of Control" (as such term is defined in
the Senior Debentures Indenture or in the Senior Note Indenture, each
as in effect on the Closing Date and whether or not any such Indenture
is in effect on the date of such Change of Control).
(G) Involuntary Bankruptcy; Appointment of Receiver, etc.
(1) A court enters a decree or order for relief with respect to any
Loan Party in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which
decree or order is not stayed or other similar relief is not granted
under any applicable federal or state law; or (2) the continuance of
any of the following events for sixty (60) days unless dismissed,
bonded or discharged: (a) an involuntary case is commenced against
any Loan Party, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or (b) a decree or order of a
court for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over any
Loan Party, or over all or a substantial part of their respective
property, is entered; or (c) an interim receiver, trustee or other
custodian is appointed without the consent of any Loan Party, for all
or a substantial part of the property of any Loan Party; or
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(H) Voluntary Bankruptcy; Appointment of Receiver, etc.
(1) An order for relief is entered with respect to any Loan Party
commences a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consents 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 consents to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of
its property; or (2) any Loan Party makes any assignment for the
benefit of creditors; or (3) the board of directors of any Loan Party
adopts any resolution or otherwise authorizes action to approve any of
the actions referred to in this subsection 8.1(H); or
(I) Liens
Any lien, levy or assessment is filed or recorded with respect to or
otherwise imposed upon all or any part of (i) any assets of the Loan
Parties not constituting Collateral and having a value at any time in
excess of $250,000 in the aggregate or (ii) any Collateral, in any
case by the United States or any department or instrumentality thereof
or by any state, county, municipality or other governmental agency
(other than Permitted Encumbrances) and such lien, levy or assessment
is foreclosed upon or subject to execution or is not stayed, vacated,
paid or discharged within thirty (30) days; or
(J) Judgment and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving (1) an amount in any individual case in excess of $250,000
or (2) an amount in the aggregate at any time in excess of $1,000,000
(in either case not adequately covered by insurance as to which the
insurance company has acknowledged coverage) is entered or filed
against any Loan Party or any of its assets and remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in
any event later than five (5) days prior to the date of any proposed
sale thereunder; or
(K) Dissolution
Any order, judgment or decree is entered against any Loan Party
decreeing the dissolution or split up of such Loan Party and such
order remains undischarged or unstayed for a period in excess of
thirty (30) days; or
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(L) Solvency
Any Loan Party ceases to be solvent (as represented in subsection
4.18) or any Loan Party admits in writing its present or prospective
inability to pay its debts as they become due; or
(M) Injunction
Any Loan Party is enjoined, restrained or in any way prevented by the
order of any court or any administrative or regulatory agency from
conducting all or any material part of its business and such order
continues for more than thirty (30) days, if any such event or
circumstance could reasonably be expected to have a Material Adverse
Effect; or
(N) Invalidity of Loan Documents
Any of the Loan Documents for any reason, other than a partial or full
release in accordance with the terms thereof, ceases to be in full
force and effect or is declared to be null and void, or any Loan Party
denies that it has any further liability under any Loan Documents to
which it is party, or gives notice to such effect; or
(O) Failure of Security
Administrative Agent, on behalf of Lenders, does not have or ceases to
have a valid and perfected first priority security interest in the
Collateral (subject to Permitted Encumbrances), in each case, for any
reason other than the failure of Administrative Agent or any Lender to
take any action within its control; or
(P) Damage, Strike, Casualty
Any material damage to, or loss, theft or destruction of, any
Collateral, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other
casualty which causes, for more than sixty (60) consecutive days
beyond the coverage period of any applicable business interruption
insurance, the cessation or substantial curtailment of revenue
producing activities at any facility of any Loan Party if any such
event or circumstance could reasonably be expected to have a Material
Adverse Effect; or
(Q) Licenses and Permits
The loss, suspension or revocation of, or failure to renew, any
license or permit now held or hereafter acquired by any Loan Party, if
such loss, suspension, revocation or failure to renew could reasonably
be expected to have a Material Adverse Effect; or
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(R) Forfeiture
There is filed against any Loan Party, any civil or criminal action,
suit or proceeding under any federal or state racketeering statute
(including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970), which action, suit or proceeding (1) is not
dismissed within one hundred twenty (120) days; and (2) could
reasonably be expected result in the confiscation or forfeiture of any
material portion of the Collateral; or
(S) CC or COI Activities
CC or COI shall engage in any business activities, other than
activities solely related to ownership of the stock of COI (in the
case of CC) and of the stock of Borrowers (in the case of COI),
compliance with the Senior Notes Indenture and the Senior Debentures
Indenture, Corporate Overhead activities, and activities related to
compliance with laws and regulations applicable to CC as a publicly-
owned corporation; or
(T) Inactive Subsidiaries' Activities
Any Inactive Subsidiary shall hold or acquire any assets, incur any
liabilities (other than corporate franchise taxes and other similar
charges incidental to the maintenance of its corporate existence and
intercompany loans incurred in accordance with subsection 7.1(b)(ii)
solely for the purpose of paying such taxes and charges) or engage in
any business activity, unless, within ten (10) days after the first to
occur of any such activity, such entity shall have executed and
delivered to Administrative Agent such instruments and documents as
shall be satisfactory in form and substance to Administrative Agent
and as shall provide for such entity being a Borrower under this
Agreement.
8.2 Suspension of Commitments
Upon the occurrence of any Default or Event of Default, notwithstanding any
grace period or right to cure, Administrative Agent may or upon demand by
Requisite Lenders shall, without notice or demand, immediately cease making
additional Loans and the Commitments shall be suspended; provided that, in
the case of a Default, if the subject condition or event is waived or cured
within any applicable grace or cure period (without having become an Event
of Default), the Commitments shall be reinstated.
8.3 Acceleration
Upon the occurrence of any Event of Default described in the foregoing
subsection 8.1(G) or 8.1(H), all Obligations shall automatically become
immediately due and payable, without
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presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by any Loan Party, and the Commitments
shall thereupon terminate. Upon the occurrence and during the continuance
of any other Event of Default, Administrative Agent may, and upon demand by
Requisite Lenders shall, by written notice to Borrower Representative, (a)
declare all or any portion of the Obligations to be, and the same shall
forthwith become, immediately due and payable and the Commitments shall
thereupon terminate and (b) demand that Borrowers immediately deposit with
Administrative Agent an amount equal to one hundred five percent (105%) of
the Letter of Credit Reserve to enable Lender to make payments under the
Letters of Credit when required and such amount shall become immediately
due and payable.
8.4 Remedies
(A) If any Event of Default shall have occurred and be continuing, in
addition to and not in limitation of any other rights or remedies
available to Agents and Lenders at law or in equity, any Agent may and
shall upon the request of Requisite Lenders exercise in respect of the
Collateral, in addition to all other rights and remedies provided for
herein, in the other Loan Documents or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC
(whether or not the UCC applies to the affected Collateral) and may
also (a) notify any or all obligors on the Accounts to make all
payments directly to Administrative Agent; (b) require Loan Parties
to, and Loan Parties hereby agree that they will, at their expense and
upon request of Collateral Agent forthwith, assemble all or part of
the Collateral as directed by Collateral Agent and make it available
to Collateral Agent at a place to be designated by Collateral Agent
which is reasonably convenient to both parties; (c) withdraw all cash
in the Blocked Accounts and apply such monies in payment of the
Obligations in the manner provided in subsection 8.7; (d) without
notice or demand or legal process, enter upon any premises of Loan
Parties and take possession of the Collateral; (e) exercise any and
all rights of the applicable Borrower under Account Agreements, and
(f) without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at
any of any Agent's offices or elsewhere, at such time or times, for
cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Agent effecting such sale may deem
commercially reasonable. Loan Parties agree that, to the extent notice
of sale shall be required by law, at least ten (10) days' notice to
Borrower Representative of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification. At any sale of the Collateral, if permitted
by law, any Agent or any Lender may bid (which bid may be, in whole or
in part, in the form of cancellation of indebtedness) for the purchase
of the Collateral or any portion thereof for the account of
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such Agent or such Lender. No Agent shall be obligated to make any
sale of Collateral regardless of notice of sale having been given.
Loan Parties shall remain liable for any deficiency. The Agent that
has given notice of a private or public sale may adjourn such public
or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned. To the extent
permitted by law, Loan Parties hereby specifically waive all rights of
redemption, stay or appraisal which they have or may have under any
law now existing or hereafter enacted. No Agent shall be required to
proceed against any Collateral.
(B) At any time after an Event of Default shall have occurred and be
continuing, (i) Collateral Agent may, without prior notice to each
Loan Party, notify parties to the Contracts and obligors in respect of
Instruments and Chattel Paper, that the Accounts and the right, title
and interest of each Loan Party in and under such Contracts,
Instruments and Chattel Paper have been assigned to Administrative
Agent, and that payments shall be made directly to Administrative
Agent, for itself and the benefit of Lenders, and (ii) each Loan Party
shall, if so requested by Collateral Agent, so notify Account Debtors,
parties to Contracts and obligors in respect of Instruments and
Chattel Paper.
(C) Collateral Agent may, if an Event of Default shall have occurred and
be continuing, in Collateral Agent's own name or in the name of a Loan
Party, communicate with Account Debtors, parties to Contracts,
obligors in respect of Instruments and obligors in respect of Chattel
Paper to verify with such Persons, to Collateral Agent's satisfaction,
the existence, amount and terms of any such Accounts, Contracts,
Instruments or Chattel Paper. If a Default or Event of Default shall
have occurred and be continuing, each Loan Party, at its own expense,
shall use its best efforts to cause the independent certified public
accountants then engaged by Borrower to prepare and deliver to
Collateral Agent, Administrative Agent and each Lender at any time and
from time to time promptly upon Collateral Agent's request the
following reports with respect to each Loan Party: (i) a
reconciliation of all Accounts; (ii) an aging of all Accounts; (iii)
trial balances; and (iv) a test verification of such Accounts as
Collateral Agent may request. Borrower, at its own expense, shall
deliver to Collateral Agent the results of each physical verification,
if any, which Borrower may in its discretion have made, or caused any
other Person to have made on its behalf, of all or any portion of the
Inventory of each Loan Party.
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8.5 Appointment of Attorney-in-Fact
Each Loan Party hereby constitutes and appoints each Agent as such Loan
Party's attorney-in-fact with full authority in the place and stead of such
Loan Party and in the name of such Loan Party, any Agent or otherwise, from
time to time in such Agent's discretion while an Event of Default is
continuing to take any action and to execute any instrument that such Agent
may deem necessary or advisable to accomplish the purposes of this
Agreement, including: (a) to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys due and to
become due under or in respect of any of the Collateral; (b) to adjust,
settle or compromise the amount or payment of any Account, or release
wholly or partly any customer or obligor thereunder or allow any credit or
discount thereon; (c) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; (d) to file any claims or take any action or institute any
proceedings that such Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
such Agent and Lenders with respect to any of the Collateral; and (e) to
sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, assignments, verifications and notices in
connection with Accounts and other documents relating to the Collateral.
The appointment of Agents as each Loan Party's attorney and Agents' rights
and powers are coupled with an interest and are irrevocable until payment
in full and complete performance of all of the Obligations.
8.6 Limitation on Duty of Agents with Respect to Collateral
(A) Beyond the safe custody thereof, Agents and each Lender shall have no
duty with respect to any Collateral in its possession or control (or
in the possession or control of any agent or bailee) or with respect
to any income thereon or the preservation of rights against prior
parties or any other rights pertaining thereto. Each Agent shall be
deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which such Agent
accords its own property. Neither any Agent nor any Lender shall be
liable or responsible for any loss or damage to any of the Collateral,
or for any diminution in the value thereof, by reason of the act or
omission of any warehouseman, carrier, forwarding agency, consignee or
other agent or bailee selected by such Agent in good faith.
(B) It is expressly agreed by each Loan Party that, anything herein to the
contrary notwithstanding, each Loan Party shall remain liable under
each of its Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder. Neither any
Agent nor any Lender shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the granting
herein
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of a Lien thereon or the receipt by any Agent or any Lender of any
payment relating to any Contract pursuant hereto. Neither any Agent
nor any Lender shall be required or obligated in any manner to perform
or fulfill any of the obligations of each Loan Party under or pursuant
to any Contract, or to make any payment, or to make any inquiry as to
the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any Contract, or to
present or file any claims, or to take any action to collect or
enforce any performance or the payment of any amounts which may have
been assigned to it or to which it may be entitled at any time or
times.
8.7 Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default, (a)
Loan Parties irrevocably waive the right to direct the application of any
and all payments at any time or times thereafter received by any Agent from
or on behalf of any Loan Party, and Loan Parties hereby irrevocably agree
that Administrative Agent shall have the continuing exclusive right to
apply and to reapply any and all payments received at any time or times
after the occurrence and during the continuance of an Event of Default
against the Obligations in such manner as Administrative Agent may deem
advisable notwithstanding any previous entry by Administrative Agent upon
any books and records and (b) the proceeds of any sale of, or other
realization upon, all or any part of the Collateral (including deposits to
Administrative Agent's Account from Collecting Banks) shall be applied:
first, to all fees, costs and expenses incurred by Agents, any Lender or
any Issuing Bank with respect to this Agreement, the other Loan Documents
or the Collateral; second, to all fees due and owing to Agents, Lenders and
Issuing Banks; third, to accrued and unpaid interest on the Obligations;
fourth, to the principal amounts of the Obligations outstanding; fifth, to
provide cash collateral for and to the extent of 105% of any Letters of
Credit; sixth, to any other Obligations of Loan Parties owing to Agents,
any Lender or any Issuing Bank; and seventh, as instructed by a Borrower
Representative.
8.8 License of Intellectual Property
Each Loan Party hereby assigns, transfers and conveys to Administrative
Agent, for the benefit of Lenders, effective upon the occurrence of any
Event of Default hereunder, the non-exclusive right and license to use all
Intellectual Property owned or used by such Loan Party together with any
goodwill associated therewith, all to the extent necessary to enable
Administrative Agent to realize on the Collateral and any successor or
assign to enjoy the benefits of the Collateral. This right and license
shall inure to the benefit of all successors, assigns and transferees of
Administrative Agent and its successors, assigns and transferees, whether
by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary
payment whatsoever be made to any Loan Party by Administrative Agent.
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8.9 Waivers, Non-Exclusive Remedies
No failure on the part of any Agent or any Lender to exercise, and no delay
in exercising and no course of dealing with respect to, any right under
this Agreement or the other Loan Documents shall operate as a waiver
thereof; nor shall any single or partial exercise by any Agent or any
Lender of any right under this Agreement or any other Loan Document
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the other Loan Documents are
cumulative and are not exclusive of any other remedies provided by law.
9. ASSIGNMENT AND PARTICIPATION
9.1 Assignments and Participations in Loans
(A) Each Lender may assign its rights and delegate its obligations under
this Agreement to another Person; provided, that (a) except for
assignments to another Lender, an Affiliate of another Lender or any
investment fund (including any securitization vehicle) that invests in
commercial loans and that is managed by a Lender, an Affiliate of a
Lender, the same investment advisor as the assigning Lender or by an
Affiliate of such investment advisor, such Lender shall first obtain
the written consent of Administrative Agent and, so long as no Event
of Default is continuing, Borrower Representative, which shall not be
unreasonably withheld, (b) the amount of Commitments and Loans of the
assigning Lender being assigned shall unless otherwise agreed by
Administrative Agent and, so long as no Event of Default is
continuing, Borrower Representative, be not less than the lesser of
(i) $5,000,000 or (ii) the entire amount of the Commitments and Loans
of such assigning Lender and (c)(i) each such assignment shall be of a
pro rata portion of all such assigning Lender's Loans and Commitments
hereunder, and (ii) the parties to such assignment shall execute and
deliver to Administrative Agent for acceptance and recording an
Assignment and Assumption Agreement together with (x) a processing and
recording fee of $2,500 payable to Administrative Agent and (y) the
Notes originally delivered to the assigning Lender. Upon receipt of
all of the foregoing, Administrative Agent shall notify Borrower of
such assignment and Borrowers shall comply with their obligations
under the last sentence of subsection 2.1(D) regarding issuance of
Notes. In the case of an assignment authorized under this subsection
9.1, the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as it would if it were a Lender
hereunder. The assigning Lender shall be relieved of its obligations
hereunder with respect to its Commitment or assigned portion thereof.
The Loan Parties hereby acknowledge and agree that any assignment will
give rise to a direct obligation of Borrower to the assignee and that
the assignee shall be considered to be a "Lender". Notwithstanding
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the foregoing provisions of this subsection 9.1(A), any Lender may at
any time pledge the Obligations held by it and such Lender's rights
under this Agreement and the other Loan Documents to a Federal Reserve
Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement
and the other Loan Documents to another investment fund managed by the
same investment advisor; provided, that no such pledge to a Federal
Reserve Bank shall release such Lender from such Lender's obligations
hereunder or under any other Loan Document. Notwithstanding anything
to the contrary contained herein, any Lender (a "Granting Lender"),
may grant to a special purpose funding vehicle (an "SPC"), identified
as such in writing by the Granting Lender to Administrative Agent and
Borrower Representative, the option to provide to Borrowers all or any
part of any Loans that such Granting Lender would otherwise be
obligated to make to Borrowers pursuant to this Agreement; provided
that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan; and (ii) if an SPC elects not to exercise such option
or otherwise fails to provide all or any part of such Loan, the
Granting Lender shall be obligated to make such Loan pursuant to the
terms hereof. The making of a Loan by an SPC hereunder shall utilize
the Commitment of the Granting Lender to the same extent, and as if
such Loan were made by such Granting Lender. No SPC shall be liable
for any indemnity or similar payment obligation under this Agreement
(all liability for which shall remain with the Granting Lender). Any
SPC may (i) with notice to, but without the prior written consent of,
Borrower Representative and Administrative Agent and assign all or a
portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by Borrower Representative and
Administrative Agent) providing liquidity and/or credit support to or
for the account of such SPC to support the funding or maintenance of
Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. For the avoidance of doubt, the
Granting Lender shall for all purposes, including without limitation,
the approval of any amendment or waiver of any provision of any Loan
Document or the obligation to pay any amount otherwise payable by the
Granting Lender under the Loan Documents, continue to be the Lender of
record hereunder. This sentence and the immediately preceding three
sentences may not be amended without the prior written consent of each
Granting Lender, all or any of whose Loans are being funded by an SPC
at the time of such amendment.
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(B) Each Lender may sell participations in all or any part of any
Loans made by it to another Person; provided, that unless
otherwise agreed by Borrower Representative and Administrative
Agent any such participation shall be in a minimum amount of
$5,000,000, and provided, further, that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not
sold such participation and the holder of any such participation
shall not be entitled to require such Lender to take or omit to
take any action hereunder except action directly effecting (a)
any reduction in the principal amount, interest rate or fees
payable with respect to any Loan in which such holder
participates; (b) any extension of the Termination Date or the
date fixed for any payment of principal, interest or fees payable
with respect to any Loan in which such holder participates; and
(c) any release of substantially all of the Collateral (other
than in accordance with the terms of this Agreement or the Loan
Documents). The Loan Parties hereby acknowledge and agree that
any participation will give rise to a direct obligation of
Borrowers to the participant, and the participant under each
participation shall for purposes of subsections 2.9, 2.10, 2.11,
9.4 and 10.2 be considered to be a "Lender".
(C) Except as otherwise provided in this subsection 9.1 no Lender
shall, as between Borrowers and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment,
transfer or negotiation of, or granting of participation in, all
or any part of the Loans or other Obligations owed to such
Lender. Each Lender may furnish any information concerning any
Loan Party in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and
participants) provided that the Persons obtaining such
information agrees to maintain the confidentiality of such
information to the extent required by subsection 10.21.
9.2 Agents
(A) Appointment
Each Lender hereby designates and appoints IBJW as its
administrative agent and CIT as its collateral agent under this
Agreement and the Loan Documents, and each Lender hereby
irrevocably authorizes each Agent to take such action or to
refrain from taking such action on its behalf under the
provisions of this Agreement and the Loan Documents and to
exercise such powers as are set forth herein or therein, together
with such other powers as are reasonably incidental thereto.
Administrative Agent is authorized and empowered to amend,
modify, or waive any provisions of this Agreement or the other
Loan Documents on behalf of Lenders subject to the requirement
that certain of Lenders' consent be obtained in certain instances
as provided in subsection 9.3. Administrative Agent agrees to act
as such on the express conditions
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contained in this subsection 9.2. The provisions of this subsection
9.2 are solely for the benefit of Agents and Lenders and neither any
Borrower nor any other Loan Party shall have any rights as a third
party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Agents shall act solely as
representatives of Lenders and do not assume and shall not be deemed
to have assumed any obligation toward or relationship of agency or
trust with or for Lenders, or any Loan Party. Each Agent may perform
any of its duties hereunder, or under the Loan Documents, by or
through its agents or employees.
(B) Nature of Duties
No Agent shall have any duties, obligations or responsibilities except
those expressly set forth in this Agreement or in the Loan Documents.
The duties of Agents shall be mechanical and administrative in nature.
No Agent shall have by reason of this Agreement a fiduciary
relationship in respect of any Lender. Each Lender shall make its own
independent investigation of the financial condition and affairs of
Loan Parties in connection with the extension of credit hereunder and
shall make its own appraisal of the credit worthiness of Loan Parties,
and no Agent shall have any duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its
possession before the Closing Date or at any time or times thereafter.
If an Agent seeks the consent or approval of any Lenders to the taking
or refraining from taking any action hereunder, then such Agent shall
send notice thereof to each Lender. Such Agent shall promptly notify
each Lender any time that the applicable percentage of Lenders have
instructed such Agent to act or refrain from acting pursuant hereto.
(C) Rights, Exculpation, Etc.
Neither any Agent nor any of its officers, directors, employees or
agents shall be liable to any Lender for any action taken or omitted
by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that each Agent shall be obligated on
the terms set forth herein for performance of its express obligations
hereunder, and except that each Agent shall be liable with respect to
its own gross negligence or willful misconduct. No Agent shall be
liable for any apportionment or distribution of payments made by it in
good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse
of any Lender to whom payment was due but not made, shall be to
recover from other Lenders any payment in excess of the amount to
which they are determined to be entitled (and such other Lenders
hereby agree to return to such Lender any such erroneous payments
received by them). In performing its functions and duties
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hereunder, each Agent shall exercise the same care which it would in
dealing with loans for its own account, but no Agent shall be
responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility,
or sufficiency of this Agreement or any of the Loan Documents or the
transactions contemplated thereby, or for the financial condition of
any Loan Party. No Agent shall be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan
Documents or the financial condition of any Loan Party, or the
existence or possible existence of any Default or Event of Default.
Any Agent may at any time request instructions from Lenders with
respect to any actions or approvals which by the terms of this
Agreement or of any of the Loan Documents such Agent is permitted or
required to take or to grant, and each Agent shall be absolutely
entitled to refrain from taking any action or to withhold any approval
and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of
the Loan Documents until it shall have received such instructions from
the applicable percentage of Lenders. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against any Agent
as a result of such Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the
instructions of the applicable percentage of Lenders and
notwithstanding the instructions of Lenders, no Agent shall have any
obligation to take any action if it, in good faith believes that such
action exposes such Agent to any liability.
(D) Reliance
Each Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy
or telegram) believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with
respect to all matters pertaining to this Agreement or any of the Loan
Documents and its duties hereunder or thereunder, upon advice of
counsel selected by it. Each Agent shall be entitled to rely upon the
advice of legal counsel, independent accountants, and other experts
selected by such Agent in its sole discretion.
(E) Indemnification
Each Lender, severally, agrees to reimburse and indemnify each Agent
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Agent in any way relating
to
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or arising out of this Agreement or any of the Loan Documents or
any action taken or omitted by such Agent under this Agreement for any
of the Loan Documents, in proportion to each Lender's Pro Rata Share;
provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements resulting
from such Agent's gross negligence or willful misconduct. The
obligations of Lenders under this subsection 9.2(E) shall survive the
payment in full of the Obligations and the termination of this
Agreement.
(F) IBJW and CIT Individually
With respect to its Commitments and the Loans made by it, and the
Notes issued to it, IBJW and CIT shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders" or "Requisite Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include
IBJW in its individual capacity as a Lender or one of the Requisite
Lenders. IBJW may lend money to, and generally engage in any kind of
banking, trust or other business with any Loan Party as if it were not
acting as an Agent pursuant hereto.
(G) Successor Agents
(1) Resignation
Any Agent may resign from the performance of all its functions
and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to Borrower Representative
and Lenders. Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clause
(2) below or as otherwise provided below.
(2) Appointment of Successor
Upon any such notice of resignation pursuant to clause (G)(1)
above, Requisite Lenders shall, upon receipt of Borrower
Representative's prior consent, which consent shall not
unreasonably be withheld, appoint a successor Agent for the
retiring Agent. If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the
retiring Agent, upon notice to Borrower Representative, shall
then appoint a successor Agent who shall serve as Agent for the
retiring Agent until such time, as Requisite Lenders, upon
receipt of Borrower Representative's prior consent, which consent
shall not be unreasonably withheld, appoint a successor Agent for
the retiring Agent as provided above.
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(3) Successor Agents
Upon the acceptance by a successor Agent of any appointment as
Agent under the Loan Documents, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent's
resignation as Agent under the Loan Documents, the provisions of
this subsection 9.2 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under the
Loan Documents.
(H) Collateral Matters
(1) Release of Collateral
Lenders hereby irrevocably authorize Administrative Agent, at its
option and in its discretion, to release any Lien granted to or
held by Administrative Agent upon any property covered by this
Agreement or the Loan Documents (i) upon termination of the
Commitments and payment and satisfaction of all Obligations; (ii)
constituting property being sold or disposed of if Borrower
Representative certifies to Administrative Agent that the sale or
disposition is made in compliance with the provisions of this
Agreement or, as applicable, the other Loan Documents (and
Administrative Agent may rely in good faith conclusively on any
such certificate, without further inquiry); or (iii) constituting
property leased to any Loan Party under a lease which has expired
or been terminated in a transaction permitted under this
Agreement or, as applicable, the other Loan Documents, or is
about to expire and which has not been, and is not intended by
such Loan Party to be, renewed or extended. In addition during
any Fiscal Year (x) Administrative Agent may release Collateral
having a value (as determined by Administrative Agent in its sole
discretion) of no more than $2,000,000 in the aggregate and (y)
Administrative Agent, with the consent of Requisite Lenders, may
release Collateral having a value (as determined by
Administrative Agent in its sole discretion) in excess of
$2,000,000 in the aggregate.
(2) Confirmation of Authority; Execution of Releases
Without in any manner limiting Administrative Agent's authority
to act without any specific or further authorization or consent
by Lenders (as set forth in subsection 9.2(H)(1)), each Lender
agrees to confirm in writing, upon request by Administrative
Agent, the authority to release any property covered by this
Agreement or the Loan Documents conferred upon Administrative
Agent under
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subsection 9.2(H)(1). So long as no Event of Default is then
continuing, upon receipt by Administrative Agent of confirmation
from the requisite percentage of Lenders, of its authority to
release any particular item or types of property covered by this
Agreement or the Loan Documents, and upon at least five (5)
Business Days' prior written request by Borrower Representative,
Administrative Agent shall (and is hereby irrevocably authorized
by Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to Administrative Agent
for the benefit of Lenders herein or pursuant hereto upon such
Collateral; provided, however, that (i) Administrative Agent
shall not be required to execute any such document on terms
which, in Administrative Agent's opinion, would expose
Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in
any manner discharge, affect or impair the Obligations or any
Liens upon (or obligations of any Loan Party, in respect of), all
interests retained by any Loan Party, including, without
limitation, the proceeds of any sale, all of which shall continue
to constitute part of the property covered by this Agreement or
the Loan Documents.
(3) Absence of Duty
No Agent shall have any obligation whatsoever to any Lender or
any other Person to assure that the property covered by this
Agreement or the Loan Documents exists or is owned by any Loan
Party or is cared for, protected or insured or has been
encumbered or that the Liens granted to Administrative Agent on
behalf of Lenders herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of
the rights, authorities and powers granted or available to
Administrative Agent in this subsection 9.2(H) or in any of the
Loan Documents, it being understood and agreed that in respect of
the property covered by this Agreement or the Loan Documents or
any act, omission or event related thereto, any Agent may act in
any manner it may deem appropriate, in its discretion, given such
Agent's own interest in property covered by this Agreement or the
Loan Documents as one of Lenders and that such Agent shall have
no duty or liability whatsoever to any of the other Lenders;
provided, that such Agent shall exercise the same care which it
would in dealing with loans for its own account.
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(I) Agency for Perfection
Each Lender hereby appoints each other Lender as agent for the purpose
of perfecting Lenders' security interest in Collateral which, in
accordance with Article 9 of the Uniform Commercial Code in any
applicable jurisdiction, can be perfected only by possession. Should
any Lender (other than Administrative Agent) obtain possession of any
such Collateral, such Lender shall notify Administrative Agent
thereof, and, promptly upon Administrative Agent's request therefor,
shall deliver such Collateral to Administrative Agent or in accordance
with Administrative Agent's instructions.
(J) Exercise of Remedies
Each Lender agrees that it will not have any right individually to
enforce or seek to enforce this Agreement or any Loan Document or to
realize upon any collateral security for the Loans, it being
understood and agreed that such rights and remedies may be exercised
only by Agents.
(K) Guaranties
(1) Release of Corporate Guarantor
Lenders hereby irrevocably authorize Administrative Agent to
release any Corporate Guarantor from its guaranty hereunder upon
termination of the Commitments and payment and satisfaction of
all Obligations. In addition (x) Administrative Agent, at its
option and in its discretion, may release any Inactive Subsidiary
from its guaranty hereunder, and (y) Administrative Agent, with
the consent of Requisite Lenders, may release any other Corporate
Guarantor from its guaranty hereunder.
(2) Confirmation of Authority: Execution of Releases
Without in any manner limiting Administrative Agent's authority
to act without any specific or further authorization or consent
by Lenders (as set forth in subsection 9.2(H)(1)), each Lender
agrees to confirm in writing, upon request by Administrative
Agent, the authority to release any Corporate Guarantor from its
guaranty hereunder conferred upon Administrative Agent under
subsection 9.2(K)(1). So long as no Event of Default is then
continuing, upon receipt by Administrative Agent of confirmation
from the requisite percentage of Lenders of Administrative
Agent's authority to release any particular Corporate Guarantor
from such Corporate Guarantor's guaranty hereunder, and upon at
least five (5) Business Days prior written request by Borrower
Representative, Administrative
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Agent shall (and is hereby irrevocably authorized by Lenders to)
execute such documents as may be necessary to evidence the release
of such Corporate Guarantor from its guaranty hereunder; provided,
however, that (i) Administrative Agent shall not be required to
execute any such document on terms which, in Administrative Agent's
opinion, would expose Administrative Agent to liability or create
any obligation or entail any consequence other than the release of
such Corporate Guarantor from its guaranty hereunder without
recourse or warranty, and (ii) as provided in clause (iv) of
subsection 11.3, such release shall not in any manner discharge,
affect or impair the Obligations or be deemed to be a release of
any other Guarantor.
9.3 Consents
(A) In the event Administrative Agent requests the consent of a Lender and
does not receive a written denial thereof within ten (10) Business
Days after such Lender's receipt of such request, then such Lender
will be deemed to have given such consent.
(B) In the event Administrative Agent requests the consent of a Lender and
such consent is denied, then Administrative Agent may, at its option,
require such Lender to assign its interest in the Loans to
Administrative Agent or, with the consent of such other Lender, to
another Lender, for a price equal to the then outstanding principal
amount thereof plus accrued and unpaid interest and fees and other
amounts due such Lender, which interest and fees and other amounts
will be paid when collected from Borrowers. In the event that
Administrative Agent elects to require any Lender to assign its
interest to Administrative Agent, Administrative Agent will so notify
such Lender in writing within forty-five (45) days following such
Lender's denial, and such Lender will assign its interest to
Administrative Agent no later than five (5) days following receipt of
such notice.
9.4 Set Off and Sharing of Payments
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 and during
the continuance of any Event of Default, each Lender and Issuing Bank is
hereby authorized by Loan Parties at any time or from time to time, with
reasonably prompt subsequent notice to Borrower Representative or to any
other Person (any prior or contemporaneous notice being hereby expressly
waived) to set off and to appropriate and to apply any and all (A) balances
held by such Lender or Issuing Bank at any of its offices for the account
of any Loan Party (regardless of whether such balances are then due to such
Loan Party, and (B) other property at any time held or owing by such Lender
or Issuing Bank to or for the credit or for the account of any Loan Party
against and on account of any of
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the Obligations which are not paid when due; except that no Lender or any
such holder shall exercise any such right without the prior written consent
of Administrative Agent. Any Lender which has exercised its right to set off
shall, to the extent the amount of any such set off exceeds its Pro Rata
Share of the Obligations, purchase for cash (and the other Lenders or
holders shall sell) participations in each such other Lender's or holder's
Pro Rata Share of the Obligations as would be necessary to cause such Lender
to share such excess with each other Lender or holder in accordance with
their respective Pro Rata Shares. The Loan Parties agree, to the fullest
extent permitted by law, that (a) any Lender or holder may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of
the Obligations and may sell participations in such excess to other Lenders
and holders, and (b) any Lender or holder so purchasing a participation in
the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender or
holder were a direct holder of Loans and other Obligations in the amount of
such participation.
9.5 Disbursement of Funds
Administrative Agent may, on behalf of Lenders, disburse funds to Borrowers
for Loans requested. Each Lender shall reimburse Administrative Agent on
demand for all funds disbursed on its behalf by Administrative Agent, or if
Administrative Agent so requests, each Lender will remit to Administrative
Agent its Pro Rata Share of any Loan before Administrative Agent disburses
same to Borrowers. If Administrative Agent elects to require that funds be
made available prior to disbursement to Borrowers, Administrative Agent
shall advise each Lender by telephone, telex or telecopy of the amount of
such Lender's Pro Rata Share of such requested Loan no later than (a) two
(2) Business Days prior to the Funding Date applicable thereto for LIBOR
Loans and (b) by 1:00 p.m. (New York time) on the Funding Date for Base Rate
Loans, and each such Lender shall pay Administrative Agent such Lender's Pro
Rata Share of such requested Loan, in same day funds, by wire transfer to
Administrative Agent's account not later than 10:00 a.m. (New York time) on
such Funding Date for LIBOR Loans and 3:00 p.m. (New York time) for Base
Rate Loans. If any Lender fails to pay the amount of its Pro Rata Share
forthwith upon Administrative Agent's demand, Administrative Agent shall
promptly notify Borrower Representative, and Borrowers shall immediately
repay such amount to Administrative Agent. Any repayment required pursuant
to this subsection 9.5 shall be without premium or penalty. Nothing in this
subsection 9.5 or elsewhere in this Agreement or the other Loan Documents,
including without limitation the provisions of subsection 9.6, shall be
deemed to require Administrative Agent to advance funds on behalf of any
Lender or to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Administrative Agent
or Borrowers may have against any Lender as a result of any default by such
Lender hereunder.
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9.6 Settlements, Payments and Information
(A) Revolving Advances and Payments; Fee Payments.
(1) The Revolving Loan may fluctuate from day to day through
Administrative Agent's disbursement of funds to, and receipt of
funds from, Borrowers. In order to minimize the frequency of
transfers of funds between Administrative Agent and each Lender
notwithstanding terms to the contrary set forth in Section 2 and
subsection 9.5, Revolving Advances and repayments may be settled
according to the procedures described in subsection 9.6(A)(2) and
9.6(A)(3) of this Agreement. Notwithstanding these procedures,
each Lender's obligation to fund its Pro Rata Share of any
advances made by Administrative Agent to Borrowers will commence
on the date such advances are made by Administrative Agent. Such
payments will be made by such Lender without set-off,
counterclaim or reduction of any kind.
(2) Once each week, or more frequently (including daily), if
Administrative Agent so elects (each such day being a "Settlement
Date"), Administrative Agent will advise each Lender by 1:00 p.m.
(New York time) by telephone, telex, or telecopy of the amount of
each such Lender's Pro Rata Share of the Revolving Loan. In the
event payments are necessary to adjust the amount of such
Lender's share of the Revolving Loan to such Lender's Pro Rata
Share of the Revolving Loan, the party from which such payment is
due will pay the other, in same day funds, by wire transfer to
the other's account not later than 3:00 p.m. (New York time) on
the Business Day following the Settlement Date.
(3) On the first Business Day of each month ("Interest Settlement
Date"), Administrative Agent will advise each Lender by
telephone, telefax or telecopy of the amount of interest and fees
charged to and collected from Borrowers for the proceeding month.
Provided that such Lender has made all payments required to be
made by it under this Agreement, Administrative Agent will pay to
such Lender, by wire transfer to such Lender's account (as
specified by such Lender on the signature page of this Agreement
as amended by such Lender from time to time after the date hereof
pursuant to the notice provisions contained herein or in the
applicable Assignment and Assumption Agreement) not later than 3
p.m. (New York time) on the next Business Day following the
Interest Settlement Date such Lender's share of such interest and
fees.
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(B) Availability of Lender's Pro Rata Share
(1) Unless Administrative Agent has been notified by a Lender prior
to a Funding Date of such Lender's intention not to fund its Pro
Rata Share of the Loan amount requested by Borrower
Representative, Administrative Agent may assume that such Lender
will make such amount available to Administrative Agent on the
Funding Date or the Business Day following the next Settlement
Date, as applicable, and Administrative Agent may (but shall not
be so required), in reliance upon such assumption, make available
to Borrowers on such date a corresponding amount.
(2) Nothing contained in this subsection 9.6(B) will be deemed to
relieve a Lender of its obligation to fulfill its Commitments or
to prejudice any rights Administrative Agent or Borrowers may
have against such Lender as a result of any default by such
Lender under this Agreement, but no Lender shall be responsible
for the failure of any other Lender to make such other Lender's
Pro Rata Share of the Loan to be made by such other Lender on any
Funding Date.
(3) Without limiting the generality of the foregoing, each Lender
shall be obligated to fund its Pro Rata Share of any Revolving
Advance made with respect to any draw on a Letter of Credit.
(4) If and to the extent that there is a Defaulted Amount, and
Administrative Agent has made available to Borrowers such amount,
the Defaulting Lender shall, on the Business Day following (i)
such Funding Date or (ii) the first Business Day following the
next Settlement Date, as applicable, make such Defaulted Amount
available to Administrative Agent, together with interest at the
Federal Funds Effective Rate plus one half of one percent (0.50%)
for each day the Defaulted Amount is outstanding until the date
such Lender makes such amount available to Administrative Agent.
A notice from Administrative Agent submitted to any Lender with
respect to amounts owing under this subsection shall be
conclusive, absent manifest error. If such amount is not made
available to Administrative Agent, Administrative Agent shall
promptly notify the applicable Borrowers of such failure to fund
(a "Defaulting Lender Notice"). Any payments received by
Administrative Agent thereafter shall be applied first to reduce
Administrative Agent's overfunding resulting from the default by
such Defaulting Lender, and any Revolving Advances made at the
request of Borrowers thereafter shall first be applied by
Administrative Agent to reduce such overfunding, and to the
extent any such payments or advances are insufficient to reduce
the entire Defaulted Amount, then Administrative Agent may, on or
after the tenth day following its delivery of
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the Defaulting Lender Notice, make demand upon Borrowers and
Borrowers shall immediately pay such amount to Administrative
Agent for Administrative Agent's account, together with interest
thereon for each day elapsed since the date of such borrowing, at
a rate per annum equal to the interest rate applicable at the
time to the Loan made by the other Lenders on such Funding Date.
(5) Administrative Agent shall not transfer to a Defaulting Lender
any payment made by Borrowers to Administrative Agent or any
amount otherwise received by Administrative Agent for application
to the Obligations, nor shall a Defaulting Lender be entitled to
the sharing of any fees or payments hereunder.
(6) For purposes of voting or consenting to matters with respect to
the Loan Documents and determining Pro Rata Shares and the
Revolving Loan Commitment, a Defaulting Lender shall be deemed
not to be a "Lender" and such Lender's Revolving Loan Commitments
shall be deemed to be zero (0).
(C) Return of Payments
(1) If Administrative Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has
been or will be received by Administrative Agent from a Loan
Party and such related payment is not received by Administrative
Agent, then Administrative Agent will be entitled to recover such
amount from such Lender without set-off, counterclaim or
deduction of any kind.
(2) If Administrative Agent determines at any time that any amount
received by Administrative Agent under this Agreement must be
returned to Borrowers or paid to any other person pursuant to any
solvency law or otherwise, then, notwithstanding any other term
or condition of this Agreement, Administrative Agent will not be
required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Administrative Agent on
demand any portion of such amount that Administrative Agent has
distributed to such Lender, together with interest at such rate,
if any, as Administrative Agent is required to pay to Borrowers
or such other Person, without set-off, counterclaim or deduction
of any kind.
9.7 Dissemination of Information
Each Agent will provide Lenders with any information received by such Agent
from Loan Parties which is required to be provided to a Lender hereunder;
provided, however, that no
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Agent shall be liable to Lenders for any failure to do so, except to the
extent that such failure is attributable to such Agent's gross negligence
or willful misconduct.
9.8 Discretionary Advances
Administrative Agent may, in its sole discretion, make Revolving Advances
on behalf of Lenders in an aggregate amount of not more than $5,000,000 in
excess of the limitations set forth in subsection 2.1(A)(1)(b) but not in
excess of any of the limitations set forth in (x) section 4.3(b)(i) of the
Senior Debenture Indenture, (y) section 4.3(b)(i) of the Senior Notes
Indenture, or (z) subsection 2.1(A)(1)(a), in any case, for the purpose of
preserving, protecting, collecting or enforcing the Collateral (including,
without limitation, the preservation of the perfection and priority of
Administrative Agent's Lien thereon) and/or rights and remedies of any
Agent and Lenders under the Loan Documents or applicable law.
10. MISCELLANEOUS
10.1 Expenses and Attorneys' Fees
Whether or not the transactions contemplated hereby shall be consummated,
Loan Parties agree to promptly pay all fees, costs and expenses incurred by
each Agent in connection with any matters contemplated by or arising out of
this Agreement or the other Loan Documents including the following, and all
such fees, costs and expenses shall be part of the Obligations, payable on
demand and secured by the Collateral: (a) fees, costs and expenses
(including reasonable attorneys' fees, allocated costs of internal counsel
and fees of environmental consultants, accountants and other professionals
retained by any Agent) incurred in connection with the examination, review
and due diligence investigation, of the financing arrangements evidenced by
the Loan Documents; (b) fees, costs and expenses (including reasonable
attorneys' fees, allocated costs of internal counsel and fees of
environmental consultants, accountants and other professionals retained by
any Agent and search, filing, recording costs and fees of search and filing
firms) incurred by any Agent in connection with the review, negotiation,
preparation, documentation, closing, execution, syndication, and
administration of the Loan Documents, the Loans, and any amendments,
waivers, consents, forbearances and other modifications relating thereto or
any subordination or intercreditor agreements; (c) fees, costs and expenses
incurred by Administrative Agent in creating, perfecting and maintaining
perfection of Liens in favor of Administrative Agent, on behalf of Lenders
and Issuing Banks; (d) fees, costs and expenses incurred by any Agent in
connection with forwarding to Borrowers the proceeds of Loans including
Administrative Agent's or any Lenders' standard wire transfer fee; (e)
fees, costs, expenses and bank charges, including bank charges for returned
checks, incurred by Administrative Agent or any Lender in establishing,
maintaining and handling lock box accounts, blocked accounts or other
accounts for collection of the Collateral; (f) fees, costs,
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expenses (including reasonable attorneys' fees and allocated costs of
internal counsel) of any Agent, any Lender or Issuing Bank and costs of
settlement incurred in collecting upon or enforcing rights against the
Collateral or incurred in any action to enforce this Agreement or the other
Loan Documents or to collect any payments due from Borrowers or any other
Loan Party under this Agreement or any other Loan Document or incurred in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement, whether in the nature of a "workout" or in
connection with any insolvency or bankruptcy proceedings or otherwise.
10.2 Indemnity
In addition to the payment of expenses pursuant to subsection 10.1, whether
or not the transactions contemplated hereby shall be consummated, each Loan
Party jointly and severally agrees to indemnify, pay and hold each Agent,
each Lender, any holder of the Notes and each Issuing Bank and the
officers, directors, employees, agents, consultants, auditors, persons
engaged by and of any Agent or any Lender and any holder of any of the
Notes to evaluate or monitor the Collateral, affiliates and attorneys of
any Agent, any Lender, such holders and each Issuing Bank (collectively
called the "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may be imposed on, incurred by,
or asserted against that Indemnitee, in any manner relating to or arising
out of this Agreement or the other Loan Documents, the consummation of the
transactions contemplated by this Agreement, the statements contained in
the commitment letters, if any, delivered by any Agent, any Lender or any
Issuing Bank, each Lender's agreement to make the Loans hereunder, the use
or intended use of the proceeds of any of the Loans or the exercise of any
right or remedy hereunder or under the other Loan Documents (the
"Indemnified Liabilities"); provided that Loan Parties shall have no
obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of that
Indemnitee as determined by a court of competent jurisdiction.
10.3 Amendments and Waivers
(A) Except as otherwise provided herein, no amendment, modification,
termination or waiver of any provision of this Agreement or any Loan
Document, or consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing
and signed by Requisite Lenders or Administrative Agent, as
applicable; provided, that no amendment, modification, termination or
waiver shall,
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unless in writing and signed by all Lenders, do any of the following:
(i) increase the Commitment of any Lender; (ii) reduce the principal
of, rate of interest on or fees payable with respect to any Loan;
(iii) extend the Termination Date or the date for any payment of fees
or interest hereunder; (iv) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Loans, or the
percentage of Lenders which shall be required for Lenders or any of
them to take any action hereunder; (v) amend or waive this subsection
10.3 or the definitions of the terms used in this subsection 10.3
insofar as the definitions affect the substance of this subsection
10.3; (vi) consent to the assignment or other transfer by any Loan
Party of any of its rights and obligations under any Loan Document;
and (vii) increase the percentages contained in the definition of
Borrowing Base and provided, further, that no amendment, modification,
termination or waiver affecting the rights or duties of Administrative
Agent under any Loan Document shall in any event be effective, unless
in writing and signed by Administrative Agent and/or Collateral Agent,
as the case may be, in addition to any Lenders required hereinabove to
take such action and provided, further, that notwithstanding the
foregoing, no amendment, modification, termination or waiver affecting
rights or duties of an Issuing Bank shall in any event be effective
unless in writing and signed by such Issuing Bank, in addition to any
Lenders required hereinabove to take such action.
(B) Each amendment, modification, termination or waiver shall be effective
only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall
be required for Administrative Agent to take additional Collateral
pursuant to any Loan Document.
(C) No notice to or demand on any Loan Party in any case shall entitle any
other Loan Party 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 10.3
shall be binding upon each Lender, and, if signed by a Loan Party, on
such Loan Party.
10.4 Notices
Unless otherwise specifically provided herein, all notices shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied or sent by overnight courier service or
United States mail and shall be deemed to have been given: (a) if delivered
in person, when delivered; (b) if delivered by telecopy, on the date of
transmission if transmitted on a Business Day before 4:00 p.m. (New York
time) or, if not, on the next succeeding Business Day; (c) if delivered by
overnight courier, two (2) days after delivery to such courier properly
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addressed; or (d) if by U.S. Mail, four (4) Business Days after depositing
in the United States mail, with postage prepaid and properly addressed.
If to any Loan Party:
COMFORCE Corporation
415 Crossways Park Drive
Woodbury, New York 11797-9006
Attention: Vice President - Finance
Telecopy No.: (516) 396-9528
With a copy to:
Doepken Keevican & Weiss
58th Floor, USX Tower
600 Grant Street
Pittsburgh, Pennsylvania 15219
Attention: David G. Edwards, Esq.
Telecopy No.: (412) 355-2609
If to Administrative Agent:
IBJ WHITEHALL BUSINESS
CREDIT CORPORATION
One State Street
New York, New York 10004
Attn: Adam Moskowitz
Telecopy No.: (212) 858-2151
With a copy to:
CLIFFORD CHANCE ROGERS & WELLS LLP
200 Park Avenue
New York, New York 10166-0153
Attn: Robert S. Finley
Telecopy No.: (212) 878-8375
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If to Collateral Agent:
The CIT Group/Business Credit, Inc.
1211 Avenue of the Americas
New York, New York 10036
Attn: Jessica Farbman
Telecopy No.: (212) 536-1295
With a copy to:
Wolf, Block, Shorr & Solis-Cohen LLP
250 Park Avenue
New York, New York 10177
Attn: Robert Stein
Telecopy No.: (212) 986-0604
If to any Lender:
Its address indicated on the signature page hereto, in an Assignment
and Assumption Agreement or in a notice to Agent and Borrower
Representative or to such other address as the party addressed shall
have previously designated by written notice to the serving party,
given in accordance with this subsection 10.4.
10.5 Survival of Warranties and Certain Agreements
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement and the making of the Loans
hereunder. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Loan Parties set forth in subsections 10.1
and 10.2 shall survive the payment of the Loans and the termination of this
Agreement.
10.6 Indulgence Not Waiver
No failure or delay on the part of any Agent, any Lender or any holder of
any Notes in the exercise of any power, right or privilege hereunder or
under the Notes 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 right, power or privilege.
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10.7 Marshaling; Payments Set Aside
Neither any Agent nor any Lender shall be under any obligation to marshal
any assets in favor of any Loan Party or any other party or against or in
payment of any or all of the Obligations. To the extent that any Loan
Party makes a payment or payments to Administrative Agent and/or any
Lender or any Agent and/or any Lender enforces security interests created
under the Loan Documents or exercises 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, state or federal
law, common law or equitable cause, then to the extent of such recovery,
the Obligations or part thereof originally intended to be satisfied, and
all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
10.8 Entire Agreement
This Agreement, the Notes and the other Loan Documents referred to herein
embody the final, entire agreement among the parties hereto and supersede
any and all prior commitments, agreements, representations, and
understandings, whether written or oral, relating to the subject matter
hereof and may not be contradicted or varied by evidence of prior,
contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. There are no oral agreements among the parties hereto.
10.9 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 be otherwise
within the limitations of, another covenant shall not avoid the occurrence
of a Default or an Event of Default if such action is taken or condition
exists.
10.10 Severability
The invalidity, illegality or unenforceability in any jurisdiction of any
provision in or obligation under this Agreement or the other Loan
Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this
Agreement, or the other Loan Documents or of such provision or obligation
in any other jurisdiction.
10.11 Lenders' Obligations Several; Independent Nature of Lenders' Rights
The obligation of each Lender hereunder is several and not joint and
neither any Agent nor any Lender shall be responsible for the obligation
or commitment of any other Lender hereunder. In the event that any Lender
at any time should fail to make a Loan as herein provided, Lenders, or
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any of them, at their sole option, may make the Loan that was to have been
made by Lender so failing to make such Loan. Nothing contained in any Loan
Document and no action taken by any Agent or any Lender pursuant hereto or
thereto shall be deemed to constitute Lenders to be a partnership, an
association, a joint venture or any other kind of entity. The amounts
payable at any time hereunder to each Lender shall be a separate and
independent debt, and, provided the Agents fail or refuse to exercise any
remedies against any Holding Party, any Borrower or any other Loan Party
after receiving the direction of the Requisite Lenders, each Lender shall
be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Lender to be joined
as an additional party in any proceeding for such purpose.
10.12 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.
10.13 APPLICABLE LAW
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).
10.14 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that no
Loan Party may assign its rights or obligations hereunder without the
prior written consent of Lenders.
10.15 No Fiduciary Relationship; Limitation of Liabilities
(A) No provision in this Agreement or in any of the other Loan Documents
and no course of dealing between the parties shall be deemed to create
any fiduciary duty by any Agent or any Lender to any Loan Party.
(B) Neither any Agent nor any Lender, nor any affiliate, officer,
director, shareholder, employee, attorney, or agent of any Agent or
any Lender shall have any liability with respect to, and Loan Parties
hereby waive, release, and agree not to sue any of them upon, any
claim for any special, indirect, incidental, or consequential damages
suffered or incurred by any Loan Party in connection with, arising out
of, or in any way related to, this Agreement or any of the other Loan
Documents, or any of the transactions
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contemplated by this Agreement or any of the other Loan Documents. The
Loan Parties hereby waive, release, and agree not to sue any Agent or
any Lender or any of any Agent's or any Lender's affiliates, officers,
directors, employees, attorneys, or agents for punitive damages in
respect of any claim in connection with, arising out of, or in any way
related to, this Agreement or any of the other Loan Documents, or any
of the transactions contemplated by this Agreement or any of the
transactions contemplated hereby.
10.16 CONSENT TO JURISDICTION
EACH LOAN PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE BOROUGH OF MANHATTAN STATE OF NEW YORK
AND IRREVOCABLY AGREES THAT, SUBJECT TO ANY AGENT'S ELECTION, ALL ACTIONS
OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES,
ANY LETTER OF CREDIT, OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. EACH LOAN PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT, THE NOTES, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS.
10.17 WAIVER OF JURY TRIAL
EACH LOAN PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS. EACH LOAN PARTY,
EACH AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN
THEIR RELATED FUTURE DEALINGS. EACH LOAN PARTY, EACH AGENT AND EACH
LENDER FURTHER WARRANTS AND REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
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10.18 Construction
Each Loan Party, each Agent and each Lender each acknowledge that it has
had the benefit of legal counsel of its own choice and has been afforded
an opportunity to review this Agreement and the other Loan Documents with
its legal counsel and that this Agreement and the other Loan Documents
shall be construed as if jointly drafted by each Loan Party, each Agent
and each Lender.
10.19 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 of which 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 the
parties hereto. Delivery of an executed counterpart of a signature page to
this Agreement, any amendments, waivers, consents or supplements, or to
any other Loan Document by telecopier shall be as effective as delivery of
a manually executed counterpart thereof.
10.20 No Duty
All attorneys, accountants, appraisers, and other professional Persons and
consultants retained by any Agent or any Lender shall have the right to
act exclusively in the interest of such Agent or such Lender and shall
have no duty of disclosure, duty of loyalty, duty of care, or other duty
or obligation of any type or nature whatsoever to any Loan Party, or any
of the Loan Parties' shareholders or any other Person.
10.21 Confidentiality
Agents and Lenders shall hold all nonpublic information obtained pursuant
to the requirements hereof and identified as such by any Loan Party in
accordance with such Person's customary procedures for handling
confidential information of this nature and in accordance with safe and
sound business practices and in any event may make disclosure to such of
its respective Affiliates, officers, directors, employees, agents and
representatives as need to know such information in connection with the
Loans. If any Lender is otherwise a creditor of a Loan Party, such Lender
may use the information in connection with its other credits. Agents and
Lenders may also make disclosure reasonably required by a bona fide
offeree or assignee (or participation), or as required or requested by any
Governmental Authority or representative thereof, or pursuant to legal
process, or to its accountants, lawyers and other advisors, and shall
require any such offeree or assignee (or participant) to agree (and
require any of its offerees, assignees or participants to agree) to comply
with this subsection 10.21. In no event shall any
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Agent or any Lender be obligated or required to return any materials
furnished by a Loan Party; provided, however, each offeree shall be
required to agree that if it does not become a assignee (or participant)
it shall return all materials furnished to it by any Loan Party in
connection herewith.
10.22 Co-Agent
The Lender identified on the facing page or signature pages of this
Agreement or any related document as "Co-Agent" shall have any right,
power, obligation, liability responsibility or duty under this Agreement
other than those applicable to all Lenders as such. Without limiting the
foregoing, the Lender so identified as "Co-Agent" shall not have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the
Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
10.23 Obligations Joint and Several
All obligations of Borrowers hereunder are joint and several.
11. GUARANTIES
11.1 Guaranty of Guaranteed Obligations of Borrower
Each Corporate Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Administrative Agent for the ratable benefit of
the Lenders and Issuing Banks and their respective successors, endorsees,
transferees and assigns, the prompt payment (whether at stated maturity,
by acceleration or otherwise) and performance of the Obligations. Each
Corporate Guarantor agrees that this Guaranty is a guaranty of payment
and performance and not of collection, and that its obligations under
this Guaranty shall be primary, absolute and unconditional, irrespective
of, and unaffected by:
(A) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Guaranty, any other Loan
Document or any other agreement, document or instrument to which
any Loan Party and/or any Corporate Guarantor is or may become a
party;
(B) the absence of any action to enforce this Guaranty or any other
Loan Document or the waiver or consent by Administrative Agent,
Lenders or Issuing Banks with respect to any of the provisions
thereof;
(C) the existence, value or condition of, or failure to perfect
Administrative Agent's Lien against, any Collateral for the
Obligations or any action, or the absence of any action,
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by Agent in respect thereof (including, without limitation, the
release of any such security);
(D) the insolvency of any Loan Party; or
(E) any other action or circumstances which might otherwise constitute a
legal or equitable discharge or defense of a surety by any Corporate
Guarantor,
it being agreed by each Corporate Guarantor that its obligations under
this Guaranty shall not be discharged until the Termination Date. Each
Corporate Guarantor shall be regarded, and shall be in the same position,
as principal debtor with respect to the Obligations. Each Corporate
Guarantor agrees that any notice or directive given at any time to
Administrative Agent which is inconsistent with the waiver in the
immediately preceding sentence shall be null and void and may be ignored
by Administrative Agent, Lenders and Issuing Banks, and, in addition, may
not be pleaded or introduced as evidence in any litigation relating to
this Guaranty for the reason that such pleading or introduction would be
at variance with the written terms of this Guaranty, unless
Administrative Agent, Lenders and Issuing Banks have specifically agreed
otherwise in writing. It is agreed among each Corporate Guarantor,
Administrative Agent, Lenders and Issuing Banks that the foregoing
waivers are of the essence of the transaction contemplated by the Loan
Documents and that, but for this Guaranty and such waivers,
Administrative Agent, Lenders and Issuing Banks would decline to enter
into this Agreement.
11.2 Demand by Administrative Agent or Lenders
In addition to the terms set forth in Section 11.1 hereof, and in no
manner imposing any limitation on such terms, it is expressly understood
and agreed that, if, at any time, the outstanding principal amount of the
Obligations under this Agreement (including all accrued interest thereon)
is declared to be immediately due and payable, then each Corporate
Guarantor shall jointly and severally, without demand, pay to the holders
of the Obligations the entire outstanding Obligations due and owing to
such holders. Payment by each Corporate Guarantor shall be made to
Administrative Agent in immediately available funds to an account,
designated by Administrative Agent or at the address set forth herein for
the giving of notice to Administrative Agent or at any other address that
may be specified in writing from time to time by Administrative Agent,
and shall be credited and applied to the Obligations.
11.3 Enforcement of Guaranty
In no event shall Administrative Agent have any obligation (although it
is entitled, at its option) to proceed against Borrower or any other Loan
Party or any Collateral pledged to secure Obligations before seeking
satisfaction from each Corporate Guarantor, and Administrative Agent may
proceed, prior or subsequent to, or simultaneously with, the enforcement
of
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Administrative Agent's rights hereunder, to exercise any right or remedy
which it may have against any Collateral, as a result of any Lien it may
have as security for all or any portion of the Obligations.
11.4 Waiver
In addition to the waivers contained in Section 11.1 hereof, each
Corporate Guarantor waives and agrees that it shall not at any time
insist upon, plead or in any manner whatever claim or take the benefit or
advantage of, any appraisal, valuation, stay, extension, marshaling of
assets or redemption laws, or exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect the
performance by each Corporate Guarantor of its Obligations under, or the
enforcement by Administrative Agent, Lenders or Issuing Banks of this
Guaranty. Each Corporate Guarantor hereby waives diligence, presentment
and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Obligations,
acceptance of further security, release of further security, composition
or agreement arrived at as to the amount of, or the terms of, the
Obligations, notice of adverse change in Borrower's financial condition
or any other fact which might increase the risk to any Corporate
Guarantor) with respect to any of the Obligations or all other demands
whatsoever and waives the benefit of all provisions of law which are or
might be in conflict with the terms of this Guaranty. Each Corporate
Guarantor represents, warrants and agrees that, as of the date of this
Guaranty, its obligations under this Guaranty are not subject to any
offsets or defenses against Administrative Agent or Lenders or any Loan
Party of any kind. Each Corporate Guarantor further agrees that its
obligations under this Guaranty shall not be subject to any
counterclaims, offsets or defenses against Administrative Agent or any
Lender or against any Loan Party of any kind which may arise in the
future.
11.5 Benefit of Guaranty
The provisions of this Guaranty are for the benefit of Administrative
Agent, Lenders and Issuing Banks and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall
impair, as between any Loan Party and Administrative Agent or Lenders,
the obligations of any Loan Party under the Loan Documents. In the event
all or any part of the Obligations are transferred, indorsed or assigned
by Administrative Agent or any Lender to any Person or Persons, any
reference to "Administrative Agent", "Lender" or "Issuing Banks" herein
shall be deemed to refer equally to such Person or Persons.
11.6 Modification of Guaranteed Obligations, Etc.
Each Corporate Guarantor hereby acknowledges and agrees that
Administrative Agent, Lenders and Issuing Banks may at any time or from
time to time, with or without the consent of, or notice to, any Corporate
Guarantor:
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(A) change or extend the manner, place or terms of payment of, or renew
or alter all or any portion of, the Obligations;
(B) take any action under or in respect of the Loan Documents in the
exercise of any remedy, power or privilege contained therein or
available to it at law, equity or otherwise, or waive or refrain
from exercising any such remedies, powers or privileges;
(C) amend or modify, in any manner whatsoever, the Loan Documents;
(D) extend or waive the time for any Loan Party's performance of, or
compliance with, any term, covenant or agreement on its part to be
performed or observed under the Loan Documents, or waive such
performance or compliance or consent to a failure of, or departure
from, such performance or compliance;
(E) take and hold Collateral for the payment of the Obligations
guaranteed hereby or sell, exchange, release, dispose of, or
otherwise deal with, any property pledged, mortgaged or conveyed, or
in which Administrative Agent, Lenders or Issuing Banks have been
granted a Lien, to secure any Obligations;
(F) release anyone who may be liable in any manner for the payment of
any amounts owed by any Corporate Guarantor or any Loan Party to
Administrative Agent or any Lender;
(G) modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of any
Corporate Guarantor or any Loan Party are subordinated to the claims
of Administrative Agent, Lenders and Issuing Banks; and/or
(H) apply any sums by whomever paid or however realized to any amounts
owing by any Corporate Guarantor or any Loan Party to Administrative
Agent or any Lender in such manner as Administrative Agent or any
Lender shall determine in its discretion, and Administrative Agent,
Lenders and Issuing Banks shall not incur any liability to any
Corporate Guarantor as a result thereof, and no such action shall
impair or release the Obligations of any Corporate Guarantor under
this Guaranty.
11.7 Reinstatement
This Guaranty shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Loan Party or
any Corporate Guarantor for liquidation or reorganization, should any
Loan Party or any Corporate Guarantor become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee
be appointed for all or any significant part of such Loan Party's or such
Corporate Guarantor's assets, and shall continue to be effective or be
reinstated, as the case may be, if at any time payment and performance of
the Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount,
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or must otherwise be restored or returned by Administrative Agent or any
Lender, whether as a "voidable preference", "fraudulent conveyance", or
otherwise, all as though such payment or performance had not been made.
In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.8 Deferral of Subrogation, Etc.
Notwithstanding anything to the contrary in this Guaranty, or in any
other Loan Document, each Corporate Guarantor hereby:
(A) expressly and irrevocably waives, on behalf of itself and its
successors and assigns (including any surety) until the Termination
Date, any and all rights at law or in equity to subrogation, to
reimbursement, to exoneration, to contribution, to indemnification,
to set off or to any other rights that could accrue to a surety
against a principal, to any Corporate Guarantor against a principal,
to any Corporate Guarantor against a maker or obligor, to an
accommodation party against the party accommodated, to a holder or
transferee against a maker, or to the holder of any claim against
any Person, and which any Corporate Guarantor may have or hereafter
acquire against any Loan Party in connection with or as a result of
such Corporate Guarantor's execution, delivery and/or performance of
this Guaranty, or any other documents to which such Corporate
Guarantor is a party or otherwise; and
(B) acknowledges and agrees that this waiver is intended to benefit
Administrative Agent, Lenders and Issuing Banks and shall not limit
or otherwise effect any Corporate Guarantor's liability hereunder or
the enforceability of this Guaranty, and that Administrative Agent,
Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in
this subsection 11.8 and their rights under this subsection 11.8
shall survive payment in full of the Obligations.
11.9 Election of Remedies
If Agent may, under applicable law, proceed to realize benefits under any
of the Loan Documents giving Agent, Lenders and Issuing Banks a Lien upon
any Collateral owned by any Loan Party, either by judicial foreclosure or
by non-judicial sale or enforcement, Administrative Agent may, at its
sole option, determine which of such remedies or rights it may pursue
without affecting any of such rights and remedies under this Guaranty.
If, in the exercise of any of its rights and remedies, Administrative
Agent shall forfeit any of its rights or remedies, including its right to
enter a deficiency judgment against any Loan Party, whether because of
any applicable laws pertaining to "election of remedies" or the like,
each Corporate Guarantor
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hereby consents to such action by Administrative Agent and waives any
claim based upon such action, even if such action by Administrative Agent
shall result in a full or partial loss of any rights of subrogation which
each Corporate Guarantor might otherwise have had but for such action by
Administrative Agent. Any election of remedies which results in the
denial or impairment of the right of Administrative Agent to seek a
deficiency judgment against any Loan Party shall not impair any Corporate
Guarantor's obligation to pay the full amount of the Obligations. In the
event Administrative Agent shall bid at any foreclosure or trustee's sale
or at any private sale permitted by law or the Loan Documents,
Administrative Agent may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Administrative
Agent but shall be credited against the Obligations. The amount of the
successful bid at any such sale shall be conclusively deemed to be the
fair market value of the collateral and the difference between such bid
amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this
Guaranty, notwithstanding that any present or future law or court
decision or ruling may have the effect of reducing the amount of any
deficiency claim to which Administrative Agent, Lenders and Issuing Banks
might otherwise be entitled but for such bidding at any such sale.
11.10 Limitation on Guaranteed Obligations
Notwithstanding any provision herein contained to the contrary, each
Corporate Guarantor's liability hereunder shall be limited to an amount
not to exceed as of any date of determination the greater of:
(A) the net amount of all Loans and other extensions of credit
(including Letters of Credit) advanced under this Agreement and
directly or indirectly re-loaned or otherwise transferred to, or
incurred for the benefit of each Corporate Guarantor, plus interest
thereon at the applicable rate specified in this Agreement; or
(B) the amount which could be claimed by the Administrative Agent,
Lenders and Issuing Banks from each Corporate Guarantor under this
Guaranty without rendering such claim voidable or avoidable under
Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
11.11 Liability Cumulative
The liability of the Guarantors under this Section 11 is in addition to
and shall be cumulative with all liabilities of each Guarantor to
Administrative Agent or any Lender under this Agreement and the other
Loan Documents to which any such Guarantor is a party or in respect of
any Obligations of the other Guarantors, without any limitation as to
amount, unless the
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instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
[SIGNATURE PAGE FOLLOWS]
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WITNESS the due execution of this Agreement by the respective duly authorized
officers of the undersigned as of the date first written above.
Holding Parties: COMFORCE CORPORATION
COMFORCE OPERATING, INC.
Borrowers: BRENTWOOD OF CANADA, INC.
BRENTWOOD SERVICE GROUP, INC.
CAMELOT COMMUNICATIONS GROUP, INC.
CAMELOT CONSULTING GROUP, INC.
CAMELOT CONTROL GROUP, INC.
CAMELOT GROUP, INC.
CLINICAL LABFORCE OF AMERICA, INC.
COMFORCE INFORMATION TECHNOLOGIES, INC.
COMFORCE TECHNICAL ADMINISTRATIVE SERVICES, INC.
COMFORCE TECHNICAL SERVICES, INC.
COMFORCE TELECOM, INC.
COMPUTER CONSULTANTS FUNDING & SUPPORT, INC.
G.M.G. RESOURCES, INC.
GERRI G., INC.
LABFORCE OF AMERICA, INC.
PRO SERVICES, INC.
PRO UNLIMITED, INC.
PRO UNLIMITED SERVICES, INC.
PROFESSIONAL STAFFING FUNDING & SUPPORT, INC.
SUMTEC CORPORATION
TEMPORARY HELP INDUSTRY SERVICING COMPANY, INC.
THISCO OF CANADA, INC.
UNIFORCE MIS SERVICES OF GEORGIA, INC.
UNIFORCE PAYROLLING SERVICES, INC.
UNIFORCE PAYROLLING TRI-STATE INC.
UNIFORCE SERVICES, INC.
UNIFORCE STAFFING SERVICES, INC.
UTS OF DELAWARE, INC.
Inactive Subsidiaries: COMFORCE ACQUISITION 1 CORP.
[Signatures Continued on Following Page]
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[Signature page to Loan Agreement]
For each of the foregoing corporations:
By: ______________________________________
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORPORATION, as
Administrative Agent and Lender
By: ______________________________________
Name:
Title:
Revolving Loan Commitment:
$33,333,334.00
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Collateral Agent and Lender
By: ______________________________________
Name:
Title:
Revolving Loan Commitment:
$$33,333,333.00
TRANSAMERICA BUSINESS CREDIT CORPORATION, as
Co-Agent and Lender
By: ______________________________________
Name:
Title:
Revolving Loan Commitment:
$33,333,333.00
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EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
This Assignment and Assumption Agreement ("Agreement") is made as of
this ___ day of ____________, _____ by and among IBJ Whitehall Business Credit
Corporation, a New York corporation, as Administrative Agent ("Administrative
Agent") for the benefit of Lenders referred to below, ___________________, a
_________________ ("Assigning Lender") and ________________________, a
____________________ ("Additional Lender"). All capitalized terms used in this
Agreement and not otherwise defined herein will have the respective meanings set
forth in the Loan Agreement (as hereinafter defined).
RECITALS
--------
WHEREAS, Assigning Lender, certain other Lenders, COMFORCE
Corporation, certain of its direct and indirect subsidiaries, and the Co-Agent,
Collateral Agent, and Administrative Agent named therein have entered into a
certain Loan and Security Agreement dated as of December 14, 2000, (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
"Loan Agreement") pursuant to which Assigning Lender has agreed to make certain
Loans to Borrowers; and
WHEREAS, Assigning Lender desires to assign to Additional Lender a
portion of its interest in the Loans and the Collateral and to delegate to
Additional Lender a portion of its Commitments and other duties with respect to
such Loans and Collateral; and
WHEREAS, Additional Lender desires to become a Lender under the Loan
Agreement and to accept such assignment and delegation from Assigning Lender;
and
WHEREAS, Assigning Lender desires to appoint Administrative Agent to
serve as agent for Additional Lender under the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assigning Lender, Administrative
Agent, and Additional Lender agree as follows:
SECTION 1
ASSIGNMENT, DELEGATION AND ACCEPTANCE
1.1 Assignment
----------
A. Assigning Lender hereby transfers and assigns to Additional Lender,
without recourse and without representations or warranties of any kind (except
as set forth in Section 1.1(C) and Section
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3.2 of this Agreement), such percentage of Assigning Lender's right, title and
interest in the Loans and the Collateral as will result in Additional Lender
having, as of the Effective Date (as hereinafter defined) of this Agreement, its
Pro Rata Share as set forth in Schedule A of this Agreement, attached hereto and
made a part hereof.
B. Assigning Lender hereby transfers and assigns to Additional Lender,
without recourse and without representations or warranties of any kind (except
as set forth in Section 1.1(C) and Section 3.2 of this Agreement), a portion of
its right, title, and interest in the Loan Documents equivalent to Additional
Lender's Pro Rata Share, except to the extent of any indemnification obligations
of Borrowers arising prior to the Effective Date (as hereinafter defined).
C. Assigning Lender hereby represents and warrants to Additional Lender
that it is the legal and beneficial owner of the Assigned Amount (as hereinafter
defined).
1.2 Delegation
----------
Assigning Lender hereby delegates to Additional Lender a portion of its
Commitments and its other duties and obligations as a Lender under the Loan
Documents equivalent to Additional Lender's Pro Rata Share of the Loans.
1.3 Acceptance by Additional Lender
-------------------------------
By its execution of this Agreement, Additional Lender accepts such
assignment and delegation and agrees to be a Lender under the Loan Documents and
to be bound by the terms and conditions thereof to the extent of its Pro Rata
Share of the Loans.
1.4 Effective Date
--------------
Such assignment and delegation will be effective and Additional Lender will
become a Lender under the Loan Documents on the date ("Effective Date") of
receipt by Assigning Lender of the payment of the Assigned Amount.
SECTION 2
INITIAL PAYMENT AND DELIVERY OF TERM NOTES
2.1 Payment of the Assigned Amount
------------------------------
Additional Lender will pay to Assigning Lender, in immediately available
funds, not later than noon (New York time) on or prior to _____, 200__, an
amount equal to its Pro Rata Share of the then outstanding principal amount of
the Loans ("Assigned Amount"). Interest and fees accrued prior to the Effective
Date in respect of the Assigned Amount shall be for the account of Assigning
Lender. Interest and fees accruing from and after the Effective Date in respect
of the Assigned Amount shall be for the account of the Additional Lender. In
each case such interest and fees shall be payable to Assigning Lender and
Additional Lender by Administrative Agent as and when paid by or collected from
Loan Parties. [No portion of the "closing fee" paid to the Assigned Lender is
subject to this Assignment.]
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2.2 Execution and Delivery of Notes
-------------------------------
Following payment by Additional Lender under Section 2.1 hereof, Borrowers
will execute and deliver to Administrative Agent, for delivery to Assigning
Lender and Additional Lender, new Notes evidencing Additional Lender's [and
Assigning Lender's respective] Pro Rata Shares in the Loans after giving effect
to the assignment described in Section 1 of this Agreement. Assigning Lender
will deliver the old Notes to Administrative Agent for redelivery to Borrowers.
Each such new Note will be issued in the aggregate maximum principal amount of
the Revolving Loan Commitment of the Lender to whom such Note is issued.
SECTION 3
ADDITIONAL LENDER'S AND ASSIGNING LENDER'S
REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Additional Lender hereby represents, warrants and covenants the following
to Assigning Lender and Administrative Agent :
A. This Agreement is a legal, valid and binding agreement of Additional
Lender, enforceable according to its terms.
B. The execution and performance by Additional Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to, or consent or approval by any federal, state or
local governmental or regulatory body.
C. Additional Lender is familiar with transactions of the kind and scope
reflected in the Loan Documents and in this Agreement.
D. Additional Lender has made its own independent investigation and
appraisal of the financial condition and affairs of the Loan Parties, has
conducted its own evaluation of the Loans and of the Loan Parties'
creditworthiness, has made its decision to become a Lender to Borrowers under
the Loan Agreement with respect to the Loans independently and without reliance
upon Assigning Lender or Administrative Agent, and will continue to do so.
E. Additional Lender is entering into this Agreement in the ordinary
course of its business, and is acquiring its interest in the Loans and the
Assigned Amount for its own account and not with a view to or for sale in
connection with any subsequent distribution; provided, however, that at all
times the distribution of Additional Lender's property shall be and remain
within its control. No assignment or participation by Additional Lender granted
pursuant to Section 9.1 of the Loan Agreement will require Assigning Lender,
Administrative Agent or Borrower to file any registration statement with the
Securities and Exchange Commission or to apply to qualify under the blue sky
laws of any state.
F. As of the Effective Date, Additional Lender has no loans to, written
or oral agreements with, or equity or other ownership interest in any of the
Loan Parties or any of their respective Affiliates. Additional Lender will not,
and will not permit any party to which it may grant any assignment or
participation under Section 9.1 of the Loan Agreement to, enter into any written
or oral agreement with, or acquire any equity or other ownership interest in any
of the Loan Parties or any of their respective Affiliates without the prior
written consent of Administrative Agent.
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G. Additional Lender is [not] a Foreign Lender. [Additional Lender [is
entitled to an exemption from or reduction of withholding tax imposed by the
United States of America and will furnish to Administrative Agent and Borrower
Representative an appropriate Certificate of Exemption as provided in subsection
2.10 of the Loan Agreement] [is not entitled to an exemption from or reduction
of withholding tax imposed by the United States of America and will furnish to
Administrative Agent and Borrower Representative a letter of Non-Exemption as
provided in subsection 2.10 of the Loan Agreement].]
3.2 Assigning Lender's Representations and Warranties
-------------------------------------------------
Assigning Lender hereby represents and warrants the following to Additional
Lender and Administrative Agent:
A. This Agreement is a legal, valid and binding agreement of Assigning
Lender, enforceable according to its terms.
B. The execution and performance by Assigning Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to or consent or approval by any federal, state or
local governmental or regulatory body.
C. Assigning Lender has full power and authority, and has taken all
action necessary to execute and deliver this Agreement and to fulfill the
obligations hereunder and to consummate the transactions contemplated hereby.
D. Assigning Lender is the legal and beneficial owner of the interests
being assigned hereby, free and clear of any adverse claim, lien, encumbrance,
security interest, restriction on transfer, purchase option, call or similar
right of a third party or other defect in title.
E. This Assignment by Assigning Lender to Additional Lender complies, in
all material respects, with the terms of the Loan Documents.
SECTION 4
LIMITATIONS OF LIABILITY
Except as provided in Section 1.1(C) and Section 3.2 hereof, neither
Assigning Lender nor Administrative Agent makes any representations or
warranties of any kind, Administrative nor assumes any responsibility or
liability whatsoever, with regard to the Loan Documents or the Loans, or the
validity, genuineness, enforceability, or collectibility of any of them. Neither
Assigning Lender nor Administrative Agent has or will have any duty, either
initially or on a continuing basis, to make any investigation, evaluation, or
appraisal on behalf of Additional Lender, nor will Assigning Lender or
Administrative Agent have any responsibility or liability with respect to the
accuracy or completeness of any information provided to Additional Lender which
has been provided to Assigning Lender or Administrative Agent by the Loan
Parties or by any third party.
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SECTION 5
FAILURE TO ENFORCE
5.1 Not a Waiver
------------
No failure or delay on the part of Administrative Agent or Assigning Lender
in the exercise of any power, right, or privilege hereunder or under any Loan
Document will impair such power, right, or privilege or be construed to be a
waiver of any default or acquiescence therein. No single or partial exercise of
any such power, right, or privilege will preclude further exercise thereof or of
any other right, power, or privilege.
5.2 Remedies Cumulative
-------------------
All rights and remedies existing under this Agreement are cumulative with,
and not exclusive of, any rights or remedies otherwise available.
SECTION 6
NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
SECTION 7
SURVIVAL OF INDEMNITIES AND CONTINUING EFFECT
This Agreement will continue in full force and effect as to Additional
Lender so long as any amounts of principal, interest, or fees are owed to
Additional Lender; provided, however, that Additional Lender's obligation to
indemnify Administrative Agent and Additional Lender's obligations of
confidentiality hereunder will continue notwithstanding any termination of this
Agreement or the Loan Agreement.
SECTION 8
AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of this
Agreement will be effective without the written concurrence of Assigning Lender,
Administrative Agent and Additional Lender.
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SECTION 9
SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law. In the event any
provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
SECTION 10
SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
SECTION 11
SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 12
APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF THE LAWS PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
SECTION 13
COUNTERPARTS
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, will be
deemed an original and all of which shall together constitute one and the same
instrument.
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Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
[NAME OF ADDITIONAL LENDER]
By: __________________________
Its:__________________________
Notice Address (regarding financial statements,
amendments, etc.):
[Name of Additional Lender]
[Address]
[City, State, Zip]
Attn:
Telephone: ( )
FAX: ( )
Administrative Contacts (regarding borrowings,
paydowns, interest, fees, etc.)
ABA #:
Attn:
Acct. #:
Reference:
II-134
<PAGE>
[ASSIGNING LENDER]
By: ____________________________
Its:____________________________
Notice Address
[Name of Assigning Lender]
[Address]
[City, State, Zip]
Attn:
Telecopy: ( )
Account Information:
[NAME OF BANK]
ABA #
Acct. #
Reference:
II-135
<PAGE>
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION, as Administrative Agent
By: _____________________________
Its:_____________________________
Notice Address:
One State Street
New York, New York 10004
Attn: [.]
Telecopy: (212)
Account Information:
[NAME OF BANK]
ABA #:
IBJ Whitehall Business Credit Corporation
Acct. #:
Reference: Comforce
II-136
<PAGE>
Schedule A to Assignment and Assumption Agreement
-------------------------------------------------
This Schedule reflects the assignment by Assigning Lender to Additional
Lender of its right, title and interest in the Loans and the Loan Documents
equivalent to Additional Lender's Pro Rata Share and the reduction of Assigning
Lender's Commitments. All capitalized terms used in this Schedule and not so
defined herein shall have the respective meaning set forth in the Assignment and
Assumption Agreement to which this Schedule is attached, or, if not so defined
therein, in the Loan Agreement. All percentages set forth on this Schedule A
have been carried to the fifth decimal, but all distributions and other
applications thereof shall be carried ad infinitum to result in payments to the
nearest whole penny.
1. Percentage of Commitments Assigned to Additional Lender
-------------------------------------------------------
Revolving Loan - ___________%
2. Percentage of Commitments Retained by Assigning Lender and Other Additional
---------------------------------------------------------------------------
Lenders
-------
Revolving Loan - ___________%
3. Pro Rata Share of Commitments Assigned to Additional Lender
-----------------------------------------------------------
Revolving Loan - $___________
4. Pro Rata Share of Commitments Retained by Assigning Lender and Other
--------------------------------------------------------------------
Additional Lenders
------------------
Revolving Loan - $___________
5. Level of Seniority
------------------
The Loans to be made by the Additional Lender will be on a pari passu basis
---- -----
with the Loans made by Assigning Lender pursuant to the Loan Agreement.
6. Collateral Security
-------------------
The Loans to be made by the Additional Lender will be secured by, and in
its capacity as a Lender the Additional Lender shall have an undivided
percentage security interest consistent with its aggregate percentage of the
outstanding Commitments to make Loans in, all of the Collateral.
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<PAGE>
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
Date: _________________
This Borrowing Base Certificate is given by COMFORCE Operating, Inc., a
Delaware corporation ("COI") and Uniforce Services, Inc., a New York corporation
("USI") (collectively, "Borrower Representatives") pursuant to subsection 5.1(F)
-----------------
of that certain Loan and Security Agreement dated as of ______, 2000 (as
amended, supplemented or modified from time to time, the "Loan Agreement") by
and among COMFORCE Corporation, certain of its direct subsidiaries, the Lenders,
Co-Agent, and Collateral Agent named therein, and IBJ Whitehall Business Credit
Corporation, as Administrative Agent for the Lenders thereunder. Capitalized
terms used herein without definition shall have the meanings set forth in the
Loan Agreement.
The officers executing this Borrowing Base Certificate are officers of
COMFORCE Operating, Inc. and Uniforce Services, Inc., respectively, and as such
are duly authorized to execute and deliver this Borrowing Base Certificate on
behalf of the Borrowers. By executing this Borrowing Base Certificate each such
officer hereby certifies to Collateral Agent that attached hereto as Schedule 1
----------
is a schedule, as of the date set forth above, of the Borrowing Base of each
Borrower and of the portion of the Revolving Loans and Lender Letters of Credit,
and the Unused Availability, attributable to each Borrower.
IN WITNESS WHEREOF, each Borrower Representative has caused this Borrowing
Base Certificate to be executed by its duly authorized officer as of the day
first set above.
COMFORCE OPERATING, INC.
By: ______________________________
Name: ____________________________
Title:____________________________
UNIFORCE SERVICES, INC.
By: ______________________________
Name: ____________________________
Title:____________________________
II-138
<PAGE>
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
The undersigned, do hereby certify that they are Responsible Officers of the
Borrower Representatives, and that as such are authorized to execute this
Compliance Certificate on behalf of the Loan Parties, and DO HEREBY FURTHER
CERTIFY on behalf of the Loan Parties that:
1. This Compliance Certificate is given pursuant to subsection 5.1(E) of the
-----------------
Loan and Security Agreement, dated as of December 14, 2000, among COMFORCE
Corporation, certain of its direct and indirect subsidiaries, the Lenders, Co-
Agent, and Collateral Agent named therein, and IBJ Whitehall Business Credit
Corporation, as Administrative Agent for the Lenders thereunder (as amended,
supplemented or modified from time to time, the "Loan and Security Agreement";
the foregoing and all other capitalized terms used but not defined herein are so
used as defined in the Loan Security Agreement);
2. They have reviewed the terms of the Loan and Security Agreement and have
made, or have caused to be made by employees or agents under their supervision,
a detailed review of the transactions and conditions of the Loan Parties during
the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 above did not disclose, and they
have no knowledge of, the existence of any condition or event which constitutes
a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Compliance Certificate, except as set forth below;
4. Schedule I attached hereto sets forth financial data and computations
----------
evidencing compliance or non-compliance with the covenants set forth in Section
6 of the Loan and Security Agreements (if such covenants are applicable as of
the date hereof), all of which data and computations are true, complete and
correct. Attached to such Schedule I are copies of the underlying calculations
----------
and work-up employed to determine such compliance or non-compliance;
5. Described below are the exceptions, if any, to paragraph 3 above by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Loan Parties have taken, are taking, or propose
to take with respect to each such condition or event:
_________________________________________
_________________________________________
6. Attached hereto are endnotes showing the differences between the financial
statements delivered herewith in accordance with subsections 5.1(A), (B), and
----------------------------
(C) of the Loan and the Security Agreement (which reflect all Accounting Changes
---
in accordance with subsection 1.2 of the Loan and Security Agreement) and the
--------------
basis for calculating financial covenant compliance for the purposes of this
Compliance Certificate (without reflecting such Accounting Changes).
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<PAGE>
The foregoing certifications, together with the computations set forth in
Schedule I and all other attachments to, and the financial statements delivered
----------
with and in support of, this Compliance Certificate are made and delivered this
_____ day of ____________, 200__.
UNIFORCE SERVICES, INC.
as Borrower Representative[s] for each of the Loan Parties
By: _______________________________________
Name: ______________________________________
Title: _____________________________________
II-140
<PAGE>
EXHIBIT D
ROLLFORWARD REPORT
Client Reporting
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
II-141
<PAGE>
<TABLE>
<CAPTION>
Collateral Roll Forward
<S> <C>
Beginning of Month General Ledger Balance: (as of __________) ___________________
Add: Sales -________ through ________ ___________________
Adjustments ___________________
Less: Credits -________ through ________ ___________________
Remittances - ________ through ________ ___________________
Adjustments ___________________
End of Month General Ledger Balance: ___________________
Balance per Aging: ___________________
Difference: ___________________
___________________
Explanation of Difference: ___________________
Description Amount
----------- ------
______________________ _____________________
______________________ _____________________
______________________ _____________________
Total Difference ___________________
-------------------------------------------------------------------------------------------------------------------
</TABLE>
II-142
<PAGE>
EXHIBIT E
FORM OF NOTICE OF BORROWING
---------------------------
[DATE]
IBJ Whitehall Business Credit Corporation
One State Street
New York, New York 10004
As Administrative Agent
Attn: [.]
Ladies and Gentlemen:
The undersigned, being a Responsible Officers of [COMFORCE Operating,
Inc., a Delaware corporation] [and] [Uniforce Services, Inc., a New York
corporation] ([collectively,] "Borrower Representative[s]"), [does] [do] hereby
[certify] [certifies] that [he is] [they are] authorized to execute and deliver
this Notice of Borrowing on behalf of all Borrowers named in the Loan Agreement
referred to below. This Notice of Borrowing is given to IBJ Whitehall Business
Credit Corporation, as Administrative Agent ("Administrative Agent") for all
Lenders pursuant to subsection 2.1(C) of that certain Loan and Security
-----------------
Agreement dated as of December 14, 2000 by and among COMFORCE Corporation,
certain of its direct and indirect subsidiaries, the Lenders, Co-Agent and
Collateral Agent named therein, and IBJ Whitehall Business Credit Corporation,
as Administrative Agent for the Lenders thereunder (as from time to time
amended, supplemented, restated or otherwise modified, the "Loan Agreement") and
is irrevocable. All capitalized terms used but not otherwise defined herein
shall have the meanings given such terms in the Loan Agreement.
Subject to the terms and conditions of the Loan Agreement and all other
Loan Documents not otherwise identified herein, please advance to the Borrowers
listed below the funds respectively requested below:
1. The proposed Funding Date shall be ______________, _____.
2. The proposed aggregate amount of the Loans shall be $__________.
The Borrower Representative[s] hereby [certify] [certifies] that the
aggregate amount of the Revolving Loans (including the Revolving Loan noticed
hereby) and outstanding Lender Letters of Credit will not exceed the Maximum
Revolving Loan Amount.
The portion of the Revolving Loans to be borrowed pursuant to this
Notice of Borrowing that are attributable to each Borrower shall be the amount
set forth on the attached Schedule.
3. The proposed Loan will bear interest at [Base Rate [plus] [minus]]
[LIBOR plus ____].
II-143
<PAGE>
4. The funds shall be deposited on behalf of Borrowers to Borrower
Representative's account #__________________ at __________________________.
Borrower Representative[s] [does] [do] hereby further [certify]
[certifies] that no Default or Event of Default has occurred and is continuing
under the Loan Agreement, or would result from the making of the Loan requested
hereby.
Please deposit the funds requested hereby into Borrower
Representative's account in the manner and in the amount designated above.
Very truly yours,
[COMFORCE OPERATING, INC.]
By: _________________________________
Name: _______________________________
Title: ______________________________
[UNIFORCE SERVICES, INC.]
By: _________________________________
Name: _______________________________
Title: ______________________________
II-144
