SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
---------------------------
Date of report (Date of earliest event reported): April 30, 1998
IPC INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25492 58-1636502
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
WALL STREET PLAZA, 88 PINE STREET, NEW YORK, NEW YORK 10005
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (212) 825-9060
NONE
(Former name or former address, if changed since last report)
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Item 1. Changes in Control of Registrant
(a) On April 30, 1998, Arizona Acquisition Corp., a Delaware
corporation ("AAC"), controlled by Cable Systems Holding, LLC, a Delaware
limited liability company ("CSH LLC"), and its affiliates (with CSH LLC, the
"CSH Affiliates"), merged with and into the Registrant, IPC Information Systems,
Inc., a Delaware corporation (the "Company") (the "Merger"), pursuant to the
Agreement and Plan of Merger, dated as of December 18, 1997, as amended and
restated on April 9, 1998 (the "Merger Agreement"), between AAC and the Company.
Pursuant to the Merger, each share of the Company's common stock, par
value $0.01 per share ("Company Common Stock"), issued and outstanding
immediately prior to the effective time (the "Effective Time") of the Merger
(other than treasury shares, which were canceled) was converted, at the election
of the holder thereof into (i) either the right to receive $21.00 per share in
cash or (ii) the right to retain one fully paid and nonassessable share of
common stock of the surviving corporation (the "Surviving Corporation") (the
"Surviving Corporation Common Stock"). The Company's stockholders elected to
retain 1,203,870 shares of Surviving Corporation Common Stock (which included
the election of Richard P. Kleinknecht, the current Vice Chairman of the
Surviving Corporation, to retain 380,952 shares) which was less than the maximum
stock election number (1,752,381) and greater than the minumum stock election
number (380,952); therefore, proration was not required.
Upon the Merger, the CSH Affiliates acquired 2,462,887 shares of
Surviving Corporation Common Stock in exchange for shares of common stock of AAC
for which the CSH Affiliates paid an aggregate of $51,720,627 in cash. Such
shares (representing 64.65% of the outstanding shares of Surviving Corporation
Common Stock upon the Merger) represent control of the Surviving Corporation.
Pursuant to the Merger Agreement and the Amended and Restated Investors
Agreement (as defined below), the Company's Board of Directors approved a
resolution authorizing an increase in the number of directors constituting the
Board from six to nine. Upon the Merger, four directors (Peter J. Kleinknecht,
Theodore J. Johnson, Peter M. Stein and Robert J. McInerney) resigned from the
Board of Directors, and the remaining directors appointed the following six
designees of the CSH Shareholders (as defined in the Amended and Restated
Investors Agreement) to serve as directors of the Surviving Corporation: Richard
W. Smith and Kilin To, as independent directors, Richard M. Cashin, Jr., David
Y. Howe, Peter A. Woog and David Walsh. In addition, Robert J. McInerney, a
designee of the Kleinknecht Shareholders (as defined in the Amended and Restated
Investors Agreement), was appointed to serve as a director of the Surviving
Corporation.
At the Effective Time, the Surviving Corporation entered into debt
financing arrangements, consisting of both Notes (as defined below) and a senior
secured revolving credit facility (the "Revolving Credit Facility"). The amount
invested by the CSH Affiliates plus the proceeds of the Notes were used to
finance the conversion into cash of the 9,536,665 shares of outstanding Company
Common Stock that were not retained by the Company's then-existing stockholders,
to
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refinance a portion of the Company's outstanding indebtedness and to pay related
transaction fees and expenses. The Revolving Credit Facility is intended to be
available for the Company's working capital requirements following the Merger.
The Surviving Corporation issued $247,400,000 aggregate principal
amount at maturity ($180,010,714 initial proceeds upon issuance) of 10 7/8%
Senior Discount Notes due May 1, 2008 (the "Notes"). Cash interest on the Notes
will be payable semiannually on May 1 and November 1 of each year commencing
November 1, 2001 at a rate of 10 7/8%. The Notes are unsubordinated, unsecured
indebtedness of the Surviving Corporation, ranking pari passu in right of
payment with all existing and future unsubordinated indebtedness of the
Surviving Corporation and senior in right of payment to all subordinated
indebtedness of the Surviving Corporation.
On or after May 1, 2003, the Surviving Corporation may redeem the Notes
in whole or in part from time to time pursuant to the terms thereof. At any time
on or before May 1, 2001, the Surviving Corporation may redeem up to 35% of the
aggregate principal amount at maturity of the Notes with the proceeds of one or
more Equity Offerings (as defined in the Indenture, dated as of April 30, 1998
(the "Indenture"), between the Company and United States Trust Company of New
York, pursuant to which the Notes were issued) at 110.875% of their Accreted
Value (as defined in the Indenture) on the redemption date, provided that after
any such redemption, Notes representing at least 65% of the Notes originally
issued remain outstanding.
Upon a Change of Control (as defined in the Indenture), the Surviving
Corporation will be required to make an offer to purchase the Notes at a
purchase price equal to 101% of their Accreted Value on the date of purchase
plus accrued interest, if any. In addition, a Change of Control would also
require the Surviving Corporation to repay outstanding indebtedness under the
Revolving Credit Facility.
The Indenture restricts the ability of the Surviving Corporation and
its Restricted Subsidiaries (as defined in the Indenture), among other things,
to incur additional indebtedness, create liens, engage in sale-leaseback
transactions, pay dividends or make investments or certain other restricted
payments, sell assets, redeem capital stock, issue or sell stock of Restricted
Subsidiaries, enter into transactions with stockholders or affiliates or effect
a consolidation or merger.
The Company, IPC Funding Corp. (a newly-formed subsidiary), Morgan
Stanley Senior Funding, Inc. ("MSFF"), as syndication agent and arranger,
Goldman Sachs Credit Partners L.P., as documentation agent, General Electric
Capital Corporation, as collateral agent, and MSSF, as administrative agent,
entered into a Credit Agreement, dated as of April 30, 1998, pursuant to which
the Surviving Corporation was provided with $55 million of revolving credit
(subject to borrowing base and other limitations). The Revolving Credit Facility
included a $10 million sublimit for the issuance of letters of credit. Funds
from the Revolving Credit Facility were not needed in order to consummate the
Merger and the transactions contemplated thereby. The Revolving Credit Facility
will bear interest at a rate equal to, at the Surviving Corporation's option,
(i) the rate of interest announced publicly by Citibank, N.A. as its base rate
and (ii) a rate equal to 1/2 of 1% per annum above the weighted average of the
rates on overnight Federal funds
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transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as determined for any day by the administrative agent. The Base
Rate and LIBOR Rate will be subject to step-downs based on the leverage ratio of
the Surviving Corporation and its subsidiaries on a consolidated basis.
The Revolving Credit Facility expires five years from the Effective
Time. The obligations of the Company under the Revolving Credit Facility are
secured by substantially all of the real and personal property of the Company
and its subsidiaries including inventory, accounts receivable
and the proceeds of the foregoing.
The Revolving Credit Facility contains customary covenants of the
Surviving Corporation and its subsidiaries, including, without limitation,
restrictions in (i) asset dispositions, (ii) mergers or acquisitions, (iii)
capital expenditures, (iv) restricted payments, including prohibitions on the
payment of dividends to, or the repurchase or redemption of stock from,
stockholders, (v) the incurrence of indebtedness, (vi) loans and investments,
(vii) liens and (viii) transactions with affiliates (as defined in the Revolving
Credit Facility). Pursuant to the terms of the Revolving Credit Facility, the
Surviving Corporation would be in default under the Revolving Credit Facility
upon (i) the non-payment of principal or interest when due under the notes
issued in connection with the Revolving Credit Facility or, subject to
applicable grace periods in certain circumstances, upon the non-fulfillment of
the covenants described above, (ii) certain changes in control of the ownership
of the Company and (iii) various other events of default described in the
Revolving Credit Facility. If such an event of default occurs, the banks would
be entitled to take all actions permitted to be taken by a secured creditor
under the Uniform Commercial Code and to accelerate the amounts due under the
Revolving Credit Facility and may require all such amounts to be immediately
paid in full.
Immediately following the Merger, the transactions contemplated by the
Share Exchange and Termination Agreement dated as of December 18, 1997 (the
"Agreement") among the Company, International Exchange Networks, Ltd. ("IXnet"),
David Walsh and Anthony Servidio were consummated. Pursuant to the Agreement,
Mr. Walsh and Mr. Servidio exchanged 336 shares and 224 shares, respectively, of
common stock, par value $0.01 per share, of IXnet (the "Exchange") for 131,047
and 87,365 shares, respectively, of Surviving Corporation Common Stock (net of
(i) 15,239 and 10,159 shares, respectively, which the Company held back pending
receipt of certain releases from former shareholders of IXnet and (ii) 6,095 and
4,063 shares, respectively, which were transferred to a former shareholder of
IXnet in satisfaction of a certain Installment Share Purchase Agreement). As a
result of these transactions, all ownership interests in Surviving Corporation
Common Stock were immediately diluted. Upon consummation of the Exchange,
Richard P. Kleinknecht and the CSH Affiliates owned approximately 9.43% and
60.99%, respectively, of the outstanding shares of Surviving Corporation Common
Stock.
The Company, CSH LLC, Cable Systems International, Inc. ("CSI"),
Lawrence, Smith & Horey III, L.P. ("LSH"), Richard P. Kleinknecht, David Walsh
and Anthony Servidio entered into an Amended and Restated Investors Agreement
dated as of April 9, 1998 (the "Amended and Restated Investors Agreement"). The
Amended and Restated Investors Agreement provides for the addition of CSI and
LSH as parties thereto, but otherwise contains substantially the same terms
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and provisions as the Investors Agreement dated as of December 18, 1997 among
the Company, CSH LLC, Richard P. Kleinknecht, David Walsh and Anthony Servidio.
The Surviving Corporation announced on May 1, 1998 its intent to
effect, in May, 1998, a 3 for 2 stock split by way of a stock dividend of one
share for every two shares outstanding. Surviving Corporation Common Stock is
now listed on the Nasdaq SmallCap Market under the symbol "IPCX."
(b) Not applicable.
The Company issued a press release dated May 1, 1998 publicly
announcing the consummation of the Merger.
The Company hereby incorporates by reference the Indenture attached
hereto as Exhibit 4.1, the Amended and Restated Investors Agreement attached
hereto as Exhibit 10.15.1, the Credit Agreement attached hereto as Exhibit 10.22
and the press release attached hereto as Exhibit 99, each made a part hereof,
into this Item 1.
ITEMS 2 THROUGH 6, 8 AND 9
Not applicable.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits. The following Exhibits are filed as part of this
report:
Exhibit No. Description
----------- -----------
4.1 Indenture dated as of April 30, 1998 between IPC Information
Systems, Inc. and United States Trust Company of New York,
as indenture trustee.
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10.15.1 Amended and Restated Investors Agreement, dated as of April
9, 1998, by and among, IPC Information Systems, Inc., Cable
Systems Holding, LLC, Cable Systems International, Inc.,
Richard P. Kleinknecht, David Walsh, Anthony Servidio and
Lawrence, Smith & Horey III, L.P.
10.22 Credit Agreement dated as of April 30, 1998 among IPC
Information Systems, Inc., IPC Funding Corp., Morgan Stanley
Senior Funding, Inc., ("MSSF"), as syndication agent and
arranger, Goldman Sachs Credit Partners L.P., as
documentation agent, General Electric Capital Corporation,
as collateral agent, and MSSF, as administrative agent.
99 Press Release issued on May 1, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IPC INFORMATION SYSTEMS, INC.
By: /s/ TERRY CLONTZ
-----------------------------------------
Terry Clontz
President and Chief Executive Officer
Dated: May 15, 1998
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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4.1 Indenture dated as of April 30, 1998 between IPC Information
Systems, Inc. and United States Trust Company of New York,
as indenture trustee.
10.15.1 Amended and Restated Investors Agreement, dated as of April
9, 1998, by and among, IPC Information Systems, Inc., Cable
Systems Holding, LLC, Cable Systems International, Inc.,
Richard P. Kleinknecht, David Walsh, Anthony Servidio and
Lawrence Smith & Horey III, L.P.
10.22 Credit Agreement dated as of April 30, 1998 among IPC
Information Systems, Inc., IPC Funding Corp., Morgan Stanley
Senior Funding, Inc., ("MSSF"), as syndication agent and
arranger, Goldman Sachs Credit Partners L.P., as
documentation agent, General Electric Capital Corporation,
as collateral agent, and MSSF, as administrative agent.
99 Press Release issued on May 1, 1998.
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Exhibit 4.1
================================================================================
IPC Information Systems, Inc.,
Issuer
and
United States Trust Company of New York,
Trustee
Indenture
Dated as of April 30, 1998
10 7/8% Senior Discount Notes due 2008
================================================================================
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CROSS-REFERENCE TABLE
---------------------
TIA Sections Indenture Sections
- ------------ ------------------
ss. 310(a)(1).......................................... 7.10
(a)(2).......................................... 7.10
(b)............................................. 7.03; 7.08
ss. 311(a)............................................. 7.03
(b)............................................. 7.03
ss. 312(a)............................................. 2.03
(b)............................................. 10.02
(c)............................................. 10.02
ss. 313(a)............................................. 7.06
(b)(2).......................................... 7.07
(c)............................................. 7.05; 7.06; 10.02
(d)............................................. 7.06
ss. 314(a)............................................. 7.05; 10.02
(a)(4).......................................... 4.17; 10.02
(c)(1).......................................... 10.03
(c)(2).......................................... 10.03
(e)............................................. 4.17; 10.04
ss. 315(a)............................................. 7.02
(b)............................................. 7.05; 10.02
(c)............................................. 7.02
(d)............................................. 7.02
(e)............................................. 6.11
ss. 316(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(b)............................................. 6.07
(c)............................................. 9.03
ss. 317(a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
ss. 318(a)............................................. 10.01
(c)............................................. 10.01
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
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Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. Definitions........................................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................................20
SECTION 1.03. Rules of Construction.............................................................................20
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating...................................................................................21
SECTION 2.02. Execution, Authentication and Denominations.......................................................21
SECTION 2.03. Registrar and Paying Agent........................................................................23
SECTION 2.04. Paying Agent to Hold Money in Trust...............................................................23
SECTION 2.05. Transfer and Exchange.............................................................................24
SECTION 2.06. Replacement Notes.................................................................................25
SECTION 2.07. Outstanding Notes.................................................................................26
SECTION 2.08. Temporary Notes...................................................................................26
SECTION 2.09. Cancellation......................................................................................27
SECTION 2.10. CUSIP Numbers.....................................................................................27
SECTION 2.11. Defaulted Interest................................................................................27
SECTION 2.12. Issuance of Additional Notes......................................................................27
ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption...............................................................................28
SECTION 3.02. Notices to Trustee................................................................................28
SECTION 3.03. Selection of Notes to Be Redeemed.................................................................28
SECTION 3.04. Notice of Redemption..............................................................................29
SECTION 3.05. Effect of Notice of Redemption....................................................................30
SECTION 3.06. Deposit of Redemption Price.......................................................................30
SECTION 3.07. Payment of Notes Called for Redemption............................................................30
SECTION 3.08. Notes Redeemed in Part............................................................................31
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Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
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ARTICLE FOUR
COVENANTS
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SECTION 4.01. Payment of Notes..................................................................................31
SECTION 4.02. Maintenance of Office or Agency...................................................................31
SECTION 4.03. Limitation on Indebtedness........................................................................32
SECTION 4.04. Limitation on Restricted Payments.................................................................34
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries................................................................37
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries.....................................................................................38
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted Subsidiaries..................................38
SECTION 4.08. Limitation on Transactions with Stockholders and Affiliates.......................................39
SECTION 4.09. Limitation on Liens...............................................................................40
SECTION 4.10. Limitation on Sale-Leaseback Transactions.........................................................40
SECTION 4.11. Limitation on Asset Sales.........................................................................40
SECTION 4.12. Repurchase of Notes upon a Change of Control......................................................41
SECTION 4.13. Existence.........................................................................................42
SECTION 4.14. Payment of Taxes and Other Claims.................................................................42
SECTION 4.15. Maintenance of Properties and Insurance...........................................................42
SECTION 4.16. Notice of Defaults................................................................................43
SECTION 4.17. Compliance Certificates...........................................................................43
SECTION 4.18. Commission Reports and Reports to Holders.........................................................43
SECTION 4.19. Waiver of Stay, Extension or Usury Laws...........................................................44
SECTION 4.20. Calculation of Original Issue Discount............................................................44
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc.......................................................................44
SECTION 5.02. Successor Substituted.............................................................................45
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.................................................................................45
SECTION 6.02. Acceleration......................................................................................47
SECTION 6.03. Other Remedies....................................................................................48
SECTION 6.04. Waiver of Past Defaults...........................................................................48
SECTION 6.05. Control by Majority...............................................................................48
SECTION 6.06. Limitation on Suits...............................................................................48
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SECTION 6.07. Rights of Holders to Receive Payment..............................................................49
SECTION 6.08. Collection Suit by Trustee........................................................................49
SECTION 6.09. Trustee May File Proofs of Claim..................................................................49
SECTION 6.10. Priorities........................................................................................50
SECTION 6.11. Undertaking for Costs.............................................................................50
SECTION 6.12. Restoration of Rights and Remedies................................................................50
SECTION 6.13. Rights and Remedies Cumulative....................................................................51
SECTION 6.14. Delay or Omission Not Waiver......................................................................51
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General .........................................................................................51
SECTION 7.02. Certain Rights of Trustee.........................................................................51
SECTION 7.03. Individual Rights of Trustee......................................................................52
SECTION 7.04. Trustee's Disclaimer..............................................................................53
SECTION 7.05. Notice of Default.................................................................................53
SECTION 7.06. Reports by Trustee to Holders.....................................................................53
SECTION 7.07. Compensation and Indemnity........................................................................53
SECTION 7.08. Replacement of Trustee............................................................................54
SECTION 7.09. Successor Trustee by Merger, Etc..................................................................55
SECTION 7.10. Eligibility.......................................................................................55
SECTION 7.11. Money Held in Trust...............................................................................55
ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations..............................................................56
SECTION 8.02. Defeasance and Discharge of Indenture.............................................................56
SECTION 8.03. Defeasance of Certain Obligations.................................................................59
SECTION 8.04. Application of Trust Money........................................................................60
SECTION 8.05. Repayment to Company..............................................................................60
SECTION 8.06. Reinstatement.....................................................................................61
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders........................................................................61
SECTION 9.02. With Consent of Holders...........................................................................62
SECTION 9.03. Revocation and Effect of Consent..................................................................63
SECTION 9.04. Notation on or Exchange of Notes..................................................................64
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SECTION 9.05. Trustee to Sign Amendments, Etc...................................................................64
SECTION 9.06. Conformity with Trust Indenture Act...............................................................64
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939......................................................................64
SECTION 10.02. Notices .........................................................................................64
SECTION 10.03. Certificate and Opinion as to Conditions Precedent...............................................66
SECTION 10.04. Statements Required in Certificate or Opinion....................................................66
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar......................................................66
SECTION 10.06. Payment Date Other Than a Business Day...........................................................67
SECTION 10.07. Governing Law....................................................................................67
SECTION 10.08. No Adverse Interpretation of Other Agreements....................................................67
SECTION 10.09. No Recourse Against Others.......................................................................67
SECTION 10.10. Successors.......................................................................................67
SECTION 10.11. Duplicate Originals..............................................................................67
SECTION 10.12. Separability.....................................................................................67
SECTION 10.13. Table of Contents, Headings, Etc.................................................................68
EXHIBIT A Form of Note.....................................................................................A-1
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INDENTURE, dated as of April 30, 1998, between IPC Information
Systems, Inc., a Delaware corporation (the "Company"), and the United States
Trust Company of New York, a bank and trust company organized under the New York
Banking Law (the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $247,400,000 aggregate
principal amount at maturity of the Company's 107/8% Senior Discount Notes due
2008 (the "Notes") issuable as provided in this Indenture. All things necessary
to make this Indenture a valid agreement of the Company, in accordance with its
terms, have been done, and the Company has done all things necessary to make the
Notes, when executed by the Company and authenticated and delivered by the
Trustee hereunder and duly issued by the Company, valid obligations of the
Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Accreted Value" means, for any Specified Date, the amount provided
below for each $1,000 principal amount at maturity of Notes:
(i) if the Specified Date occurs on one of the following dates
(each a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
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Semi-Annual Accrual Date Accreted Value
------------------------- --------------
November 1, 1998 $ 767.40
May 1, 1999 $ 809.13
November 1, 1999 $ 853.12
May 1, 2000 $ 899.51
November 1, 2000 $ 948.52
May 1, 2001 $1,000.00
(ii) if the Specified Date occurs before the first Semi-Annual
Accrual Date, the Accreted Value will equal the sum of (a) the original
issue price and (b) an amount equal to the product of (1) the Accreted
Value for the first Semi-Annual Accrual Date less the original issue
price multiplied by (2) a fraction, the numerator of which is the number
of days from the Closing Date to the Specified Date, using a 360-day
year of twelve 30-day months, and the denominator of which is the number
of days from the Closing Date to the first Semi-Annual Accrual Date,
using a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (a) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (b) an amount equal to the product of (1) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding Semi-Annual Accrual Date multiplied
by (2) a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual
Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in connection
with, or in anticipation of, such Person becoming a Restricted Subsidiary or
such Asset Acquisition; provided that Indebtedness of such Person which is
redeemed, defeased, retired or otherwise repaid at the time of or immediately
upon consummation of the transactions by which such Person becomes a Restricted
Subsidiary or such Asset Acquisition shall not be Acquired Indebtedness.
"Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of the Company and its Restricted Subsidiaries for such
period determined in conformity with GAAP; provided that the following items
shall be excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to the Company
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or any of its Restricted Subsidiaries by such Person during such period; (ii)
solely for the purposes of calculating the amount of Restricted Payments that
may be made pursuant to clause (C) of the first paragraph of Section 4.04 (and
in such case, except to the extent includable pursuant to clause (i) above), the
net income (or loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with the Company or any
of its Restricted Subsidiaries or all or substantially all of the property and
assets of such Person are acquired by the Company or any of its Restricted
Subsidiaries; (iii) the net income of any Restricted Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary; (iv) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (v) except for purposes of calculating the amount
of Restricted Payments that may be made pursuant to clause (C) of the first
paragraph of Section 4.04, any amount paid or accrued as dividends on Preferred
Stock (other than accrued dividends which, pursuant to the terms of the relevant
governing documents, will not be payable prior to the first anniversary after
the Stated Maturity of the Notes) of the Company or any Restricted Subsidiary
owned by Persons other than the Company and any of its Restricted Subsidiaries;
and (vi) all extraordinary gains and extraordinary losses.
"Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of the Company and its Restricted Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting
therefrom (i) all current liabilities of the Company and its Restricted
Subsidiaries (excluding intercompany items) and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent quarterly or annual
consolidated balance sheet of the Company and its Restricted Subsidiaries,
prepared in conformity with GAAP and filed with the Commission or provided to
the Trustee pursuant to Section 4.18.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Co-Registrar, Paying Agent or
authenticating agent.
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Person's
primary business is related, ancillary or complementary to the businesses of the
Company and its Restricted Subsidiaries on the date of such investment or (ii)
an acquisition
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by the Company or any of its Restricted Subsidiaries of the property and assets
of any Person other than the Company or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person;
provided that the property and assets acquired are related, ancillary or
complementary to the businesses of the Company and its Restricted Subsidiaries
on the date of such acquisition.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transaction) in one transaction
or a series of related transactions by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or any of its Restricted
Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets (other than the Capital Stock or other
Investment in an Unrestricted Subsidiary) of the Company or any of its
Restricted Subsidiaries outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by Article
Five; provided that "Asset Sale" shall not include (a) sales or other
dispositions of inventory, receivables and other current assets, (b) sales,
transfers or other dispositions of assets constituting a Restricted Payment
permitted to be made under Section 4.04, or (c) sales or other dispositions of
assets for consideration at least equal to the fair market value of the assets
sold or disposed of, to the extent that the consideration received would satisfy
clause (B) of Section 4.11.
"Average Life" means, at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter, including, without limitation, all Common
Stock and Preferred Stock.
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"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) other than a
Permitted Holder becomes the ultimate "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of Voting Stock representing more than 50% of the
total voting power of the Voting Stock of the Company on a fully diluted basis
or (ii) individuals who on the Closing Date constitute the Board of Directors
(together with any new directors whose election by the Board of Directors or
whose nomination by the Board of Directors for election by the Company's
stockholders was approved by a vote of at least two-thirds of the members of the
Board of Directors then in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
members of the Board of Directors then in office.
"Citicorp" means Citicorp, a Delaware corporation.
"Closing Date" means the date on which the Notes are originally issued
under this Indenture.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether outstanding on the Closing Date or issued thereafter,
including, without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article Five of this
Indenture and thereafter means the successor.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman, a Vice Chairman, its President or a Vice
President and (ii) by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary and delivered to the Trustee; provided, however, that such
written request or order may be signed by any two of the officers
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or directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.
"Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and (v)
all other non-cash items reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for the
Company and its Restricted Subsidiaries in conformity with GAAP; provided that,
if any Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (A) the amount of the Adjusted
Consolidated Net Income attributable to such Restricted Subsidiary multiplied by
(B) the percentage ownership interest in the income of such Restricted
Subsidiary not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries.
"Consolidated Interest Expense" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including, without limitation,
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements; and
Indebtedness that is Guaranteed or secured by the Company or any of its
Restricted Subsidiaries) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by the Company and its Restricted Subsidiaries during such
period; excluding, however, (i) any amount of such interest of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (iii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (iii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes, all as determined on a consolidated basis
(without taking into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio
of (i) the aggregate amount of Indebtedness of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date to
(ii) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters for which financial statements
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of the Company have been filed with the Commission or provided to the Trustee
pursuant to Section 4.18 (such four fiscal quarter period being the "Four
Quarter Period"); provided that, in making the foregoing calculation, pro forma
effect shall be given to the following events which occur from the beginning of
the Four Quarter Period through the Transaction Date (the "Reference Period"):
(i) the Incurrence of the Indebtedness with respect to which the computation is
being made and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness was incurred,
and the application of such proceeds occurred, at the beginning of the Four
Quarter Period; (ii) the Incurrence, repayment or retirement of any other
Indebtedness by the Company and its Restricted Subsidiaries since the first day
of the Four Quarter Period as if such Indebtedness was incurred, repaid or
retired at the beginning of the Four Quarter Period; (iii) in the case of
Acquired Indebtedness, the related acquisition, as if such acquisition occurred
at the beginning of the Four Quarter Period; (iv) any acquisition or disposition
by the Company and its Restricted Subsidiaries of any company or any business or
any assets out of the ordinary course of business, whether by merger, stock
purchase or sale or asset purchase or sale or any related repayment of
Indebtedness, in each case since the first day of the Four Quarter Period,
assuming such acquisition or disposition had been consummated on the first day
of the Four Quarter Period; and (v) the occurrence of any of the events
described in clauses (i)-(iv) above by any Person that has become a Restricted
Subsidiary or has been merged with or into the Company or any Restricted
Subsidiary during the Four Quarter Period.
"Consolidated Net Worth" means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Company and its Restricted Subsidiaries
(which shall be as of a date not more than 90 days prior to the date of such
computation, and which shall not take into account Unrestricted Subsidiaries),
less any amounts attributable to Disqualified Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 52).
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 114 West 47th Street, New York, New York 10036-1532; Attention: Louis
Young, Corporate Trust Department.
"Credit Agreement" means the revolving credit facility, dated the
Closing Date among the Company, Morgan Stanley Senior Funding, Inc. and the
other lenders party thereto.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
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"CVC" means Citicorp Venture Capital, Ltd. and its Permitted
Transferees.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees, and their
respective successors.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at any time prior to the Stated Maturity
of the Notes or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Maturity of the Notes; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the "asset sale" or "change of control" provisions
applicable to such Capital Stock are no more favorable to the holders of such
Capital Stock than the provisions contained in Section 4.11 and Section 4.12 and
such Capital Stock specifically provides that such Person will not repurchase or
redeem any such stock pursuant to such provision prior to the Company's
repurchase of such Notes as are required to be repurchased pursuant to Section
4.11 and Section 4.12.
"Equity Offering" means any public or private sale of common stock or
preferred stock of the Company (other than Disqualified Stock), other than
public offerings with respect to the Company's Common Stock registered on Form
S-8.
"Event of Default" has the meaning provided in Section 6.01.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.
"Foreign Subsidiary" means any Subsidiary of the Company incorporated or
organized, as the case may be, outside of the United States of America.
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"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those 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 or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization or write
off of any expenses incurred in connection with the Transaction and (ii) except
as otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.
"Global Notes" has the meaning provided in Section 2.01.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services
(unless such purchase arrangements are on arm's-length terms and are entered
into in the ordinary course of business), to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guaranteed Indebtedness" has the meaning provided in Section 4.07.
"Holder" or "Noteholder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such
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Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto, but
excluding obligations with respect to letters of credit (including trade letters
of credit) securing obligations (other than obligations described in (i) or (ii)
above or (v), (vi) or (vii) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn upon
or, if drawn upon, to the extent such drawing is reimbursed no later than the
third Business Day following receipt by such Person of a demand for
reimbursement), (iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase price is due more
than six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, except Trade
Payables, (v) all Capitalized Lease Obligations, (vi) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (viii) to the extent not otherwise
included in this definition, obligations under Currency Agreements and Interest
Rate Agreements. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation,
provided (A) that the amount outstanding at any time of any Indebtedness issued
with original issue discount is the original issue price of such Indebtedness,
(B) that money borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness shall not be deemed to be "Indebtedness" so long as such money is
held to secure the payment of such interest and (C) that Indebtedness shall not
include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.
"Interest Payment Date" means each semiannual interest payment date on
May 1 and November 1 of each year, commencing November 1, 2001.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but
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excluding advances to customers in the ordinary course of business that are, in
conformity with GAAP, recorded as accounts receivable on the balance sheet of
the Company or its Restricted Subsidiaries) or capital contribution to (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
such Person and shall include (i) the designation of a Restricted Subsidiary as
an Unrestricted Subsidiary and (ii) the fair market value of the Capital Stock
(or any other Investment), held by the Company or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a Restricted
Subsidiary, including without limitation, by reason of any transaction permitted
by clause (iii) of Section 4.06 provided that the fair market value of the
Investment remaining in any Person that has ceased to be a Restricted Subsidiary
shall not exceed the aggregate amount of Investments previously made in such
Person valued at the time such Investments were made less the net reduction of
such Investments. For purposes of the definition of "Unrestricted Subsidiary"
and Section 4.04, (i) "Investment" shall include the fair market value of the
assets (net of liabilities (other than liabilities to the Company or any of its
Restricted Subsidiaries)) of any Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii) the fair
market value of the assets (net of liabilities (other than liabilities to the
Company or any of its Restricted Subsidiaries)) of any Unrestricted Subsidiary
at the time that such Unrestricted Subsidiary is designated a Restricted
Subsidiary shall be considered a reduction in outstanding Investments and (iii)
any property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer.
"Investors Agreement" means the agreement by and among IPC, CSH LLC,
Richard P. Kleinknecht, David A. Walsh, Anthony Servidio and certain other
parties, dated as of December 18, 1997, as amended and restated from time to
time.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including, without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest).
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Restricted Subsidiary) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the
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consolidated results of operations of the Company and its Restricted
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Restricted Subsidiary as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with respect
to any issuance or sale of Capital Stock, the proceeds of such issuance or sale
in the form of cash or cash equivalents, including payments in respect of
deferred payment obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to the Company or any Restricted Subsidiary) and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of attorney's fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date and any other Notes issued after
the Closing Date under this Indenture. For purposes of this Indenture, all Notes
shall vote together as one series of Notes under this Indenture.
"Offer to Purchase" means an offer to purchase Notes by the Company from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
(the "Payment Date"); (iii) that any Note not tendered will continue to accrue
interest (or accrete in value) pursuant to its terms; (iv) that, unless the
Company defaults in the payment of the purchase price, any Note accepted for
payment pursuant to the Offer to Purchase shall cease to accrue interest (or
accrete in value) on and after the Payment Date; (v) that Holders electing to
have a Note purchased pursuant to the Offer to Purchase will be required to
surrender the Note, together with the form entitled "Option of the Holder to
Elect Purchase" on the reverse side of the Note completed, to the Paying Agent
at the address specified in the notice prior to the close of business on the
Business Day immediately preceding the Payment Date; (vi) that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the third Business Day immediately preceding the
Payment Date, a telegram, facsimile transmission or letter setting forth the
name of such Holder, the principal amount at maturity of Notes delivered for
purchase and a statement that such Holder is withdrawing his election to have
such Notes
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purchased; and (vii) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered; provided that each Note purchased
and each new Note issued shall be in a principal amount at maturity of $1,000 or
integral multiples thereof. On the Payment Date, the Company shall (i) accept
for payment on a pro rata basis Notes or portions thereof tendered pursuant to
an Offer to Purchase; (ii) deposit with the Paying Agent money sufficient to pay
the purchase price of all Notes or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee all Notes or portions thereof
so accepted together with an Officers' Certificate specifying the Notes or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the purchase price, and the Trustee shall promptly authenticate and mail to such
Holders a new Note equal in principal amount at maturity to any unpurchased
portion of the Note surrendered; provided that each Note purchased and each new
Note issued shall be in a principal amount at maturity of $1,000 or integral
multiples thereof. The Company will publicly announce the results of an Offer to
Purchase as soon as practicable after the Payment Date. The Trustee shall act as
the Paying Agent for an Offer to Purchase. The Company shall comply with Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable, in the event
that the Company is required to repurchase Notes pursuant to an Offer to
Purchase.
"Officer" means, with respect to the Company, (i) the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President or the
Chief Financial Officer, and (ii) the Treasurer or any Assistant Treasurer, or
the Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by one Officer listed
in clause (i) of the definition thereof and one Officer listed in clause (ii) of
the definition thereof or two officers listed in clause (i) of the definition
thereof. Each Officers' Certificate (other than certificates provided pursuant
to TIA Section 314(a)(4)) shall include the statements provided for in TIA
Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel,
who may be an employee of or counsel to the Company, that meets the requirements
of Section 10.04 hereof. Each such Opinion of Counsel shall include the
statements provided for in TIA Section 314(e).
"Paying Agent" has the meaning provided in Section 2.03, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Payment Date" has the meaning provided in the definition of Offer to
Purchase.
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"Permitted Holders" means CVC, is Permitted Transferees and any party to
the Investors Agreement; provided that any party to the Investors Agreement and
any Permitted Transferee (other than CVC or any direct or indirect wholly owned
Subsidiary of CVC) shall not be a "Permitted Holder" if such Person is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of Voting Stock that represents at least 30% of the
aggregate Voting Power of all classes of the Voting Stock of the Company
(without giving effect to the attribution of beneficial ownership as a result of
the provisions of the Investors Agreement as in effect on the Closing Date, and
any amendment to such agreement that does not materially change the allocation
of voting power provided for in such agreement).
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary or be merged or consolidated with or
into or transfer or convey all or substantially all its assets to, the Company
or a Restricted Subsidiary; provided that such person's primary business is
related, ancillary or complementary to the businesses of the Company and its
Restricted Subsidiaries on the date of such Investment; (ii) Temporary Cash
Investments; (iii) commission, payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses in accordance with GAAP; (iv) stock, obligations or securities
received in satisfaction of judgments; (v) Investments in prepaid expenses,
negotiable instruments held for collection, and lease, utility and workers'
compensation, performance and other similar deposits; and (vi) Interest Rate
Agreements and Currency Agreements to the extent permitted under clause (iv) of
Section 4.03.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, material men, repairmen or other
similar Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money); (v) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted Subsidiaries; (vi)
Liens (including extensions and renewals thereof) upon real or personal property
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acquired after the Closing Date; provided that (a) such Lien is created solely
for the purpose of securing Indebtedness Incurred, in accordance with Section
4.03, to finance the cost (including the cost of acquisition, installation,
improvement or construction) of the item of property or assets subject thereto
and such Lien is created prior to, at the time of or within six months after the
later of the acquisition, the completion of construction or the commencement of
full operation of such property (b) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost and (c) any such Lien
shall not extend to or cover any property or assets other than such item of
property or assets and any improvements on such item; (vii) leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of the Company and its Restricted Subsidiaries, taken as a whole;
(viii) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such property or assets; (ix) any interest or title of
a lessor in the property subject to any Capitalized Lease or operating lease;
(x) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xi) Liens on property of, or on shares of Capital Stock or
Indebtedness of, any Person existing at the time such Person becomes, or becomes
a part of, any Restricted Subsidiary; provided that such Liens do not extend to
or cover any property or assets of the Company or any Restricted Subsidiary
other than the property or assets acquired; (xii) Liens in favor of the Company
or any Restricted Subsidiary; (xiii) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary that does not
give rise to an Event of Default; (xiv) Liens securing reimbursement obligations
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof; (xv)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;
(xvi) Liens encumbering customary initial deposits and margin deposits, and
other Liens that are within the general parameters customary in the industry and
incurred in the ordinary course of business, in each case, securing Indebtedness
under Interest Rate Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar agreements or arrangements
designed solely to protect the Company or any of its Restricted Subsidiaries
from fluctuations in interest rates, currencies or the price of commodities;
(xvii) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business in accordance
with the past practices of the Company and its Restricted Subsidiaries prior to
the Closing Date; and (xviii) Liens on or sales of receivables, including
related intangible assets and proceeds thereof; and (xix) Liens that secure
Indebtedness with an aggregate principal amount not to exceed $5 million at any
time outstanding.
"Permitted Transferee" means with respect to CVC (i) Citicorp and any
direct or indirect wholly owned subsidiary of Citicorp and any officer, director
or employee of CVC, Citicorp or any wholly owned subsidiary of Citicorp, (ii)
any spouse or lineal descendant (including by adoption and stepchildren) of the
officers, directors and employees referred to in clause (i) above
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and (iii) any trust, corporation or partnership all of the beneficiaries,
stockholders or partners of which consist of one or more of the persons
described in clause (i) or (ii) above.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
outstanding on the Closing Date or issued thereafter, including, without
limitation, all series and classes of such preferred or preference stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price at which such Note is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning provided in Section 2.03.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 15 or October 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee in its corporate trust department customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.04.
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"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933.
"Security Register" has the meaning provided in Section 2.03.
"Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
and its successors.
"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest on any debt security, the
date specified in such debt security as the fixed date on which such installment
is due and payable.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" has the meaning provided in Section 4.07.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within one year of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50 million (or the
foreign currency equivalent thereof) and has outstanding debt which is rated "A"
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker dealer
or mutual fund distributor, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the
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qualifications described in clause (ii) above, (iv) commercial paper, maturing
not more than one year after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America, any state thereof or any foreign country
recognized by the United States of America with a rating at the time as of which
any investment therein is made of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, and (v) securities with maturities of six
months or less from the date of acquisition issued or fully and unconditionally
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or Moody's.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S. Code ss.ss. 77aaa-77bbbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.
"Trade Payables" means, with respect to any Person, any accounts payable
or any other indebtedness or monetary obligation to trade creditors created,
assumed or Guaranteed by such Person or any of its Subsidiaries arising in the
ordinary course of business in connection with the acquisition of goods or
services.
"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by the Company or any of its Restricted Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Transaction" means, collectively, the merger of Arizona Acquisition
Corp. with and into the Company; the entry into the Credit Agreement and the
equity investment in Arizona Acquisition Corp. by Cable Systems Holdings, LLC of
up to $72.0 million; and the ancillary and related transactions occurring
substantially contemporaneously therewith or as a direct result thereof.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
as amended and as codified in Title 11 of the United States Code, as amended
from time to time hereafter, or any successor federal bankruptcy law.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith
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and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof at any time
prior to the Stated Maturity of the Notes, and shall also include a depository
receipt issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligation or a specific payment of interest on or principal of
any such U.S. Government Obligation held by such custodian for the account of
the holder of a depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of interest on or principal of the U.S. Government Obligation evidenced by such
depository receipt.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below; and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary; provided that (A) any Guarantee by the Company or any
Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated
shall be deemed an "Incurrence" of such Indebtedness and an "Investment" by the
Company or such Restricted Subsidiary (or both, if applicable) at the time of
such designation; (B) either (I) the Subsidiary to be so designated has total
assets of $1,000 or less or (II) if such Subsidiary has assets greater than
$1,000, such designation would be permitted under Section 4.04 and (C) if
applicable, the Incurrence of Indebtedness and the Investment referred to in
clause (A) of this proviso would be permitted under Section 4.03 and Section
4.04. The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of this Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares
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or Investments by foreign nationals mandated by applicable law) by such Person
or one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the indenture securities means the Company or any
other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the
plural include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision;
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(vii) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP
set forth in Section 1.01; and
(viii) all references to Sections or Articles refer to Sections
or Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which the
Company is subject or usage. The Company shall approve the form of the Notes and
any notation, legend or endorsement on the Notes. Each Note shall be dated the
date of its authentication.
The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions of the Notes applicable to it and to be bound thereby.
The Notes shall be issued initially in the form of one or more global
Notes in registered form, substantially in the form set forth in Exhibit A (the
"Global Notes"), deposited with, or on behalf of the Depositary, duly executed
by the Company and authenticated by the Trustee as hereinafter provided. Each
Global Note shall bear such legend as may be required or reasonably requested by
the Depositary. The aggregate principal amount at maturity of the Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as the custodian for the Depositary or its nominee as
hereinafter provided
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officer executing such Notes, as evidenced
by such Officer's execution of such Notes.
SECTION 2.02. Execution, Authentication and Denominations. Subject to
Article Four and applicable law, the aggregate principal amount at maturity of
Notes which may be authenticated and delivered under this Indenture is
unlimited. The Notes shall be executed by an Officer of the Company. The
signature of such Officer on the Notes may be by facsimile or manual signature
in the name and on behalf of the Company.
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If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
At any time and from time to time after the execution of this Indenture,
the Trustee or an authenticating agent shall upon receipt of a Company Order
authenticate for original issue Global Notes in the aggregate principal amount
at maturity specified in such Company Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company in connection with such authentication of Notes. The Opinion of Counsel
shall, if requested by the Trustee, be to the effect that: (a) the form and
terms of such Notes have been established by or pursuant to a Board Resolution
or, if applicable, an indenture supplemental hereto in conformity with the
provisions of this Indenture; (b) such supplemental indenture, if any, when
executed and delivered by the Company and the Trustee, will constitute a valid
and binding obligation of the Company; (c) such Notes, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
binding obligations of the Company in accordance with their terms and will be
entitled to the benefits of this Indenture, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles; and (d) that the Company has been duly incorporated in,
and is a validly existing corporation in good standing under the laws of, the
State of Delaware. Such Company Order shall specify the amount of Global Notes
to be authenticated and the date on which the original issue of Notes is to be
authenticated and, in case of an issuance of Notes pursuant to Section 2.12,
shall certify that such issuance is in compliance with Article Four.
The Trustee may appoint an authenticating agent to authenticate Notes.
An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount at maturity and any integral
multiple thereof.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the
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Notes and this Indenture may be served, which shall be in the Borough of
Manhattan, The City of New York. The Company shall cause the Registrar to keep a
register of the Notes and of their transfer and exchange (the "Security
Register"). The Security Register shall be in written form or any other form
capable of being converted into written form within a reasonable time. The
Company may have one or more co-Registrars and one or more additional Paying
Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. The Company may remove any Agent upon written notice to
such Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by the Company and
such successor Agent and delivered to the Trustee or (ii) notification to the
Trustee that the Trustee shall serve as such Agent until the appointment of a
successor Agent in accordance with clause (i) of this proviso. The Company, any
Subsidiary of the Company, or any Affiliate of any of them may act as Paying
Agent, Registrar or co-Registrar, and/or agent for service of notice and
demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Holders and shall otherwise
comply with TIA ss. 312(a). If the Trustee is not the Registrar, the Company
shall furnish to the Trustee as of each Regular Record Date and at such other
times as the Trustee may reasonably request the names and addresses of Holders
as they appear in the Security Register, including the aggregate principal
amount at maturity of Notes held by each Holder.
SECTION 2.04. Paying Agent to Hold Money in Trust. Not later than 11:00
a.m. (New York City time) on each due date of the principal, premium, if any,
and interest on any Notes, the Company shall deposit with the Paying Agent money
in immediately available funds sufficient to pay such principal, premium, if
any, and interest so becoming due. The Company shall require each Paying Agent
other than the Trustee to agree in writing that such Paying Agent shall hold in
trust for the benefit of the Holders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, and interest on the
Notes (whether such money has been paid to it by the Company or any other
obligor on the Notes), and such Paying Agent shall promptly notify the Trustee
of any default by the Company (or any other obligor on the Notes) in making any
such payment. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and account for any funds disbursed, and the
Trustee may at any
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time during the continuance of any payment default, upon written request to a
Paying Agent, require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent
shall have no further liability for the money so paid over to the Trustee. If
the Company or any Subsidiary of the Company or any Affiliate of any of them
acts as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act.
SECTION 2.05. Transfer and Exchange. When Notes are presented to the
Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount at maturity of Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested if its requirements for such transactions are met
(including that such Notes are duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Trustee and Registrar duly
executed by the Holder thereof or by an attorney who is authorized in writing to
act on behalf of the Holder). To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall authenticate Notes at
the Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.08, 3.08 or 9.04).
The Registrar shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 or Section 3.08 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
Notwithstanding any other provisions of this Section 2.05, unless and
until it is exchanged in whole or in part for Notes in definitive registered
form, the Global Notes representing all or a portion of the Notes may not be
transferred except as a whole by the Depositary to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
If the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if at any time the Depositary
shall no longer be eligible under the next sentence of this paragraph, the
Company shall appoint a successor Depositary with respect
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to the Notes. Each Depositary appointed pursuant to this Section 2.05 must, at
the time of its appointment and at all times while it serves as Depositary, be a
clearing agency registered under the Exchange Act and any other applicable
statute or regulation. The Company will execute, and the Trustee, upon receipt
of an authentication order, will authenticate and deliver, Notes in definitive
registered form in any authorized denominations, in an aggregate principal
amount at maturity equal to the principal amount at maturity of the Global Note
or Notes representing such Notes in exchange for such Global Note or Notes if
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if at any time the Depositary
shall no longer be eligible to serve as Depositary and a successor Depositary
for the Notes is not appointed by the Company within 60 days after the Company
receives such notice or becomes aware of such ineligibility or (ii) an Event of
Default has occurred and is continuing.
The Company may at any time and in its sole discretion determine that
the Notes shall no longer be represented by a Global Note or Notes. In such
event the Company will execute, and the Trustee will, upon receipt of an
authentication order, authenticate and deliver, Notes in definitive registered
form in any authorized denominations, in an aggregate principal amount at
maturity equal to the principal amount at maturity of the Global Note or Notes
representing such Notes in exchange for such Global Note or Notes.
Upon the exchange of a Global Note for Notes in definitive registered
form, without coupons, in authorized denominations, such Global Note shall be
canceled by the Trustee. Notes in definitive registered form issued in exchange
for a Global Note pursuant to this Section 2.05 shall be registered in such
names and in such authorized denominations as the Depositary for such Global
Note, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes to
or as directed by the Persons in whose names such Notes are so registered.
All Notes issued upon any transfer or exchange of Notes shall be valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such transfer or
exchange.
SECTION 2.06. Replacement Notes. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such Note has been acquired by a bona fide purchaser, the Company shall
issue and the Trustee shall authenticate a replacement Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding;
provided that the requirements of this Section 2.06 are met. If required by the
Trustee or the Company, an indemnity bond must be furnished that is sufficient
in the judgment of both the Trustee and the Company to protect the Company, the
Trustee or any Agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge such Holder for its expenses and the expenses
of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed
or
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wrongfully taken Note has become or is about to become due and payable, the
Company in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.
Every replacement Note is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
SECTION 2.07. Outstanding Notes. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
2.07 as not outstanding.
If a Note is replaced pursuant to Section 2.06, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a maturity date money sufficient to pay Notes payable on that
date, then on and after that date such Notes cease to be outstanding and
interest on them shall cease to accrue.
A Note does not cease to be outstanding because the Company or
one of its Affiliates holds such Note, provided, however, that in determining
whether the Holders of the requisite principal amount at maturity of the
outstanding Notes have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by the Company or any other
obligor upon the Notes or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
which the Trustee has actual knowledge to be so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Company or any other obligor upon the Notes or any Affiliate of the Company
or of such other obligor.
SECTION 2.08. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Notes. Temporary Notes shall be substantially in the form of
definitive Notes but may have insertions, substitutions, omissions and other
variations determined to be appropriate by the Officer executing the temporary
Notes, as evidenced by their execution of such temporary Notes. If temporary
Notes are issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of the Company designated for such purpose
pursuant to Section 4.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes the Company shall execute and
the
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Trustee shall authenticate and deliver in exchange therefor a like principal
amount at maturity of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall be entitled to the same benefits under this
Indenture as definitive Notes.
SECTION 2.09. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee shall cancel all Notes surrendered
for transfer, exchange, payment or cancellation and shall destroy them in
accordance with its normal procedure.
SECTION 2.10. CUSIP Numbers. The Company in issuing the Notes may use a
"CUSIP" number (if then generally in use), and the Company and the Trustee shall
use such CUSIP number, in notices of redemption or exchange as a convenience to
Holders; provided that any such notice shall state that no representation is
made as to the correctness of such number either as printed on the Notes or as
contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes. The
Company shall promptly notify the Trustee of any change in "CUSIP", number for
the Notes.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.11 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
SECTION 2.12. Issuance of Additional Notes. The Company may, subject to
Article Four of this Indenture and applicable law, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Right of Redemption. The Notes are redeemable, at the
Company's option, in whole or in part, at any time or from time to time, on or
after May 1, 2003 and prior to maturity, upon not less than 30 nor more than 60
days' prior notice mailed by first class mail to each Holder's last address as
it appears in the Security Register, at the following Redemption Prices
(expressed in percentages of principal amount at maturity), plus accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant Regular Record Date that is on or prior to the
Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing May 1, of the years set forth
below:
Year Redemption Price
---- ----------------
2003.............................. 105.438%
2004.............................. 103.625%
2005.............................. 101.813%
2006 and thereafter............... 100.000%
In addition, at any time prior to May 1, 2001, the Company may redeem up
to 35% of the principal amount at maturity of the Notes with the proceeds of one
or more Equity Offerings, at any time or from time to time in part, at a
Redemption Price (expressed as a percentage of Accreted Value) of 110.875%, plus
accrued and unpaid interest to the Redemption Date (subject to the rights of
Holders of record on the relevant Regular Record Date that is prior to the
Redemption Date to receive interest due on an Interest Payment Date); provided
that (i) Notes representing 65% of the principal amount of Notes initially
issued remain outstanding after each such redemption and (ii) notice of such
redemption is mailed within 60 days of the related Equity Offering.
SECTION 3.02. Notices to Trustee. If the Company elects to redeem
Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount at maturity of Notes to be redeemed and
the clause of this Indenture pursuant to which redemption shall occur.
The Company shall give each notice provided for in this Section 3.02 in
an Officers' Certificate at least ten days before mailing the notice to the
Holders pursuant to Section 3.04 (unless a shorter period shall be satisfactory
to the Trustee).
SECTION 3.03. Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by the Company,
of the principal national securities exchange, if
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any, on which the Notes are listed or, if the Notes are not listed on a national
securities exchange or automated quotation system, by lot or by such other
method as the Trustee in its sole discretion shall deem fair and appropriate;
provided that no Note of $1,000 in principal amount at maturity or less shall be
redeemed in part.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount at maturity may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount at maturity or any
integral multiple thereof) of Notes that have denominations larger than $1,000
in principal amount at maturity. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify the Company and the Registrar promptly in
writing of the Notes or portions of Notes to be called for redemption.
SECTION 3.04. Notice of Redemption. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder whose Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to the
Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is
to receive payment of the Redemption Price plus accrued interest to the
Redemption Date upon surrender of the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of
the principal amount at maturity (equal to $1,000 in principal amount at
maturity or any integral multiple thereof) of such Note to be redeemed
and that, on and after the Redemption Date, upon surrender of such Note,
a new Note or Notes in principal amount at maturity equal to the
unredeemed portion thereof will be reissued; and
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(vii) that, if any Note contains a CUSIP number as provided in
Section 2.10, no representation is being made as to the correctness of
the CUSIP number either as printed on the Notes or as contained in the
notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least ten days before mailing
the notice to Holders referred to in this Section 3.04 (or such shorter period
as shall be satisfactory to the Trustee), the Trustee shall give the notice of
redemption in the name and at the expense of the Company. If, however, the
Company gives such notice to the Holders, the Company shall concurrently deliver
to the Trustee an Officers' Certificate stating that such notice has been given.
SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
SECTION 3.06. Deposit of Redemption Price. Prior to any Redemption Date,
the Company shall deposit with the Paying Agent (or, if the Company is acting as
its own Paying Agent, shall segregate and hold in trust as provided in Section
2.04) money sufficient to pay the Redemption Price of and accrued interest on
all Notes to be redeemed on that date other than Notes or portions thereof
called for redemption on that date that have been delivered by the Company to
the Trustee for cancellation.
SECTION 3.07. Payment of Notes Called for Redemption. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such date (unless the
Company shall default in the payment of such Notes at the Redemption Price and
accrued interest to the Redemption Date, in which case the principal, until
paid, shall bear interest from the Redemption Date at the rate prescribed in the
Notes), such Notes shall cease to accrue interest. Upon surrender of any Note
for redemption in accordance with a notice of redemption, such Note shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest, if any, to the Redemption Date; provided that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders registered as such at the close of business on the relevant Regular
Record Date.
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SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder without service charge, a new Note equal in principal
amount at maturity to the unredeemed portion of such surrendered Note.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes. The Company shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company, or any
Affiliate of any of them) holds on that date money designated for and sufficient
to pay the installment. If the Company or any Subsidiary of the Company or any
Affiliate of any of them acts as Paying Agent, an installment of principal,
premium, if any, or interest shall be considered paid on the due date if the
entity acting as Paying Agent complies with the last sentence of Section 2.04.
As provided in Section 6.09, upon any bankruptcy or reorganization procedure
relative to the Company, the Trustee shall serve as the Paying Agent, if any,
for the Notes.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at the
rate per annum specified in the Notes.
SECTION 4.02. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
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The Company hereby initially designates the Corporate Trust Office of
the Trustee as such office of the Company in accordance with Section 2.03.
SECTION 4.03. Limitation on Indebtedness. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(other than the Notes and Indebtedness existing on the Closing Date); provided
that the Company may Incur Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds
therefrom, the Consolidated Leverage Ratio would be positive and (i) with
respect to any Incurrence occurring from the Closing Date through January 1,
1999, greater than zero and less than 5.5:1 and (ii) with respect to any
Incurrence occurring thereafter, greater than zero and less than 5.0:1.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
(except as specified below) may Incur each and all of the following: (i)
Indebtedness of the Company (Guaranteed by Subsidiaries of the Company)
outstanding at any time in an aggregate principal amount not to exceed the
greater of (x) $55 million and (y) 80% of the consolidated net book value of the
accounts receivable and 25% of the net book value of the inventory, in each case
of the Company and its Restricted Subsidiaries as set forth on the consolidated
balance sheet of the Company then most recently filed pursuant to Section 4.18,
less any amount of such Indebtedness permanently repaid as provided under
Section 4.11; (ii) Indebtedness owed (A) to the Company evidenced by an
unsubordinated promissory note or (B) to any Restricted Subsidiary; provided
that any event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of such Indebtedness (other
than to the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute an Incurrence of such Indebtedness not permitted by this
clause (ii); (iii) Indebtedness issued in exchange for, or the net proceeds of
which are used to refinance or refund, then outstanding Indebtedness (other than
Indebtedness Incurred under clause (i), (ii), (iv), (vi), (viii), (x) or (xi) of
this paragraph) and any refinancings thereof in an amount not to exceed the
amount so refinanced or refunded (plus premiums, accrued interest, fees and
expenses); provided that Indebtedness the proceeds of which are used to
refinance or refund the Notes or Indebtedness that is pari passu with, or
subordinated in right of payment to, the Notes shall only be permitted under
this clause (iii) if (A) in case the Notes are refinanced in part or the
Indebtedness to be refinanced is pari passu with the Notes, such new
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such new Indebtedness is outstanding, is expressly made pari
passu with, or subordinate in right of payment to, the remaining Notes, (B) in
case the Indebtedness to be refinanced is subordinated in right of payment to
the Notes, such new Indebtedness, by its terms or by the terms of any agreement
or instrument pursuant to which such new Indebtedness is issued or remains
outstanding, is expressly made subordinate in right of payment to the Notes at
least to the extent that the Indebtedness to be refinanced is subordinated to
the Notes and (C) such new Indebtedness, determined as of the date of Incurrence
of such new Indebtedness, does not mature prior to the Stated Maturity of the
Indebtedness to be refinanced or refunded, and the Average Life of such new
Indebtedness is at least equal to the remaining Average Life of the Indebtedness
to be
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refinanced or refunded; and provided further that in no event may Indebtedness
of the Company be refinanced by means of any Indebtedness of any Restricted
Subsidiary pursuant to this clause (iii); (iv) Indebtedness (A) in respect of
performance, surety or appeal bonds or letters of credit supporting trade
payables, in each case provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements; provided that such agreements
(1) are designed solely to protect the Company or its Restricted Subsidiaries
against fluctuations in foreign currency exchange rates or interest rates and
(2) do not increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency exchange rates or
interest rates or by reason of fees, indemnities and compensation payable
thereunder; and (C) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from Guarantees or
letters of credit, surety bonds or performance bonds securing any obligations of
the Company or any of its Restricted Subsidiaries pursuant to such agreements,
in any case Incurred in connection with the disposition of any business, assets
or Restricted Subsidiary (other than Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business, assets or Restricted
Subsidiary for the purpose of financing such acquisition), in a principal amount
not to exceed the gross proceeds actually received by the Company or any
Restricted Subsidiary in connection with such disposition; (v) Indebtedness of
the Company, to the extent the net proceeds thereof are promptly (A) used to
purchase Notes tendered in an Offer to Purchase made as a result of a Change in
Control or (B) deposited to defease the Notes as described in Article Eight;
(vi) Guarantees of the Notes and Guarantees of Indebtedness of the Company by
any Restricted Subsidiary, provided the Guarantee of such Indebtedness is
permitted by and made in accordance with Section 4.07; (vii) Indebtedness
Incurred to finance the cost (including, without limitation, the cost of design,
development, construction, acquisition, installation or integration) of network
assets used in the telecommunications business (including, without limitation,
ownership interests in minimum investment units or indefeasible rights of use);
(viii) Indebtedness of the Company, not to exceed at any one time outstanding, 2
times the (A) Net Cash Proceeds received by the Company after the Closing Date
as a capital contribution or from the issuance and sale of its Capital Stock
(other than Disqualified Stock) to a Person that is not a Subsidiary of the
Company, to the extent such Net Cash Proceeds have not been used pursuant to
clause (C)(2) of the first paragraph or clause (iii), (iv) or (vi) of the second
paragraph of Section 4.04 to make a Restricted Payment and (B) 80% of the fair
market value of property (other than cash and cash equivalents) received by the
Company after the Closing Date from a contribution of capital or the sale of its
Capital Stock (other than Disqualified Stock) to a Person that is not a
Subsidiary of the Company, to the extent such capital contribution or sale of
Capital Stock has not been used pursuant to clause (iii), (iv) or (ix) of the
second paragraph of Section 4.04 to make a Restricted Payment; provided that
such Indebtedness does not mature prior to the Stated Maturity of the Notes and
has an Average Life longer than the Notes; (ix) Indebtedness of the Company
Incurred to finance capital expenditures in an amount not to exceed $5 million
in any given fiscal year of the Company; (x) Indebtedness of Foreign
Subsidiaries, not to exceed $5 million at any one time outstanding; and (xi)
Indebtedness of the Company (in addition to Indebtedness permitted under clauses
(i) through (x)
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above) in an aggregate principal amount outstanding at any time not to exceed
$100 million, less any amount of such Indebtedness permanently repaid as
provided under Section 4.11.
(b) Notwithstanding any other provision of this Section 4.03 the maximum
amount of Indebtedness that the Company or a Restricted Subsidiary may Incur
pursuant to this Section 4.03 shall not be deemed to be exceeded, with respect
to any outstanding Indebtedness due solely to the result of fluctuations in the
exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the Credit Agreement on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of the second paragraph of this Section 4.03, (2) Guarantees, Liens and
obligations with respect to letters of credit supporting Indebtedness otherwise
included in the determination of such particular amount shall not be included
and (3) any Liens granted pursuant to the equal and ratable provisions referred
to in Section 4.09 shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.03, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above clauses (other than Indebtedness referred to in clause
(1) of the preceding sentence), the Company, in its sole discretion, shall
classify, and from time to time may reclassify, such item of Indebtedness and
only be required to include the amount and type of such Indebtedness in one of
such clauses.
SECTION 4.04. Limitation on Restricted Payments. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on or with respect to its
Capital Stock (other than (x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified Stock) or in options,
warrants or other rights to acquire shares of such Capital Stock and (y) pro
rata dividends or distributions on Common Stock of Restricted Subsidiaries held
by minority stockholders) held by Persons other than the Company or any of its
Restricted Subsidiaries, (ii) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (A) the Company or an Unrestricted
Subsidiary (including options, warrants or other rights to acquire such shares
of Capital Stock) held by any Person or (B) a Restricted Subsidiary (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by any Affiliate of the Company (other than a Wholly Owned Restricted
Subsidiary) or any holder (or any Affiliate of such holder) of 5% or more of the
Capital Stock of the Company, (iii) make any voluntary or optional principal
payment, or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Company that is
subordinated in right of payment to the Notes (other than, in each case, the
purchase, repurchase or acquisition of Indebtedness in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in any case due within one year after the date of such purchase, repurchase or
acquisition) or (iv) make any Investment, other than a Permitted Investment, in
any Person (such payments or any other actions described in clauses (i) through
(iv) above being collectively "Restricted Payments") if, at the time of, and
after giving effect to, the proposed Restricted Payment: (A) a Default or Event
of Default shall have occurred
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and be continuing, (B) the Company could not Incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.03 or (C) the aggregate
amount of all Restricted Payments (the amount, if other than in cash, to be
determined in good faith by the Board of Directors, whose determination shall be
conclusive and evidenced by a Board Resolution) made after the Closing Date
shall exceed the sum of (1) 50% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net Income is a loss,
minus 100% of the amount of such loss) (determined by excluding income resulting
from transfers of assets by the Company or a Restricted Subsidiary to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter
immediately following the Closing Date and ending on the last day of the last
fiscal quarter preceding the Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.18 plus (2)
the aggregate Net Cash Proceeds received by the Company after the Closing Date
from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Disqualified Stock) to a Person who is not a Subsidiary of the
Company, including an issuance or sale permitted by this Indenture of
Indebtedness of the Company for cash subsequent to the Closing Date upon the
conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of the Company, or from the issuance to a Person who is not a Subsidiary
of the Company of any options, warrants or other rights to acquire Capital Stock
of the Company (in each case, exclusive of any Disqualified Stock or any
options, warrants or other rights that are redeemable at the option of the
holder, or are required to be redeemed, prior to the Stated Maturity of the
Notes) plus (3) an amount equal to the net reduction in Investments (other than
reductions in Permitted Investments and Investments made pursuant to clause
(vi), (ix) or (x) of the following paragraph) in any Person resulting from
payments of interest on Indebtedness, dividends, repayments of loans or
advances, or other transfers of assets, in each case to the Company or any
Restricted Subsidiary or from the Net Cash Proceeds from the sale of any such
Investment (except, in each case, to the extent any such payment or proceeds are
included in the calculation of Adjusted Consolidated Net Income), or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investment"), not to exceed, in
each case, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary.
The foregoing provision shall not be violated by reason of: (i) the
payment of any dividend within 60 days after the date of declaration thereof if,
at said date of declaration, such payment would comply with the foregoing
paragraph; (ii) the redemption, repurchase, defeasance or other acquisition or
retirement for value of Indebtedness that is subordinated in right of payment to
the Notes including premium, if any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness Incurred under clause (iii) of the
second paragraph of Section 4.03(a); (iii) the repurchase, redemption or other
acquisition of Capital Stock of the Company or an Unrestricted Subsidiary (or
options, warrants or other rights to acquire such Capital Stock) in exchange
for, or out of the proceeds of a substantially concurrent offering of, shares of
Capital Stock (other than Disqualified Stock) of the Company (or options,
warrants or other rights to acquire such Capital Stock); (iv) the making of any
principal payment or the repurchase,
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redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Company which is subordinated in right of payment to the
Notes in exchange for, or out of the proceeds of, a substantially concurrent
offering of, shares of the Capital Stock (other than Disqualified Stock) of the
Company (or options, warrants or other rights to acquire such Capital Stock);
(v) payments or distributions, to dissenting stockholders pursuant to applicable
law, pursuant to or in connection with a consolidation, merger or transfer of
assets that complies with Article Five; (vi) Investments in any Person the
primary business of which is related, ancillary or complementary to the business
of the Company and its Restricted Subsidiaries on the date of such Investments;
provided that the aggregate amount of Investments made pursuant to this clause
(vi) does not exceed $20 million at any one time outstanding; (vii) the
purchase, redemption, acquisition, cancellation or other retirement for value of
shares of Capital Stock of the Company to the extent necessary, in the judgment
of the Board of Directors, to prevent the loss or secure the renewal or
reinstatement of any material license or material franchise held by the Company
or any Restricted Subsidiary from any governmental agency; (viii) the purchase,
redemption, retirement or other acquisition for value of shares of Capital Stock
of the Company, or options to purchase such shares held by directors, employees,
or former directors or employees of the Company or any Restricted Subsidiary (or
their estates or beneficiaries under their estates) upon their death,
disability, retirement, termination of employment or pursuant to the terms of
any agreement under such shares of Capital Stock or options were issued;
provided that the aggregate consideration paid for such purchase, redemption,
retirement or other acquisition for value of such shares of Capital Stock or
options after the Closing Date does not exceed $2 million in any calendar year,
or $5 million in the aggregate; (ix) Investments acquired in exchange for
Capital Stock (other than Disqualified Stock) of the Company or acquired with
Net Cash Proceeds received by the Company after the Closing Date from the
issuance and sale of its Capital Stock (other than Disqualified Stock); provided
that such Net Cash Proceeds are used to make such Investment within 90 days of
receipt thereof; (x) Restricted Payments in any aggregate amount not to exceed
$20 million, increased by the amount of any Investment made pursuant to this
clause (x) that is an Investment and is not outstanding; or (xi) payments to
stockholders in connection with the recapitalization of the Company, in an
amount not to exceed $203 million, occurring in connection with the issuance of
the Notes; (provided that, except in the case of clauses (i) and (iii), no
Default or Event of Default shall have occurred and be continuing or occur as a
consequence of the actions or payments set forth therein.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payment referred to in clause (ii) thereof, an
exchange of Capital Stock for Capital Stock or Indebtedness referred to in
clause (iii) or (iv) thereof and an Investment referred to in clause (vi)
thereof), and the Net Cash Proceeds from any issuance of Capital Stock referred
to in clauses (iii) and (iv), shall be included in calculating whether the
conditions of clause (C) of the first paragraph of this Section 4.04 have been
met with respect to any subsequent Restricted Payments. In the event the
proceeds of an issuance of Capital Stock of the Company are used for the
redemption, repurchase or other acquisition of the Notes, or Indebtedness that
is pari passu with the Notes, then the Net Cash Proceeds of such issuance shall
be included in clause (C) of the
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first paragraph of this Section 4.04 covenant only to the extent such proceeds
are not used for such redemption, repurchase or other acquisition of
Indebtedness.
Any Restricted Payments made other than in cash shall be valued at fair
market value. The amount of any Investment "outstanding" at any time shall be
deemed to be equal to the amount of such Investment on the date made, less the
return of capital to the Company and its Restricted Subsidiaries with respect to
such Investment (up to the amount of such Investment on the date made).
SECTION 4.05. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or
restrictions: (i) existing on the Closing Date in the Credit Agreement, this
Indenture or any other agreements in effect on the Closing Date, and any
extensions, refinancings, renewals or replacements of such agreements; provided
that the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to the
Holders than those encumbrances or restrictions that are then in effect and that
are being extended, refinanced, renewed or replaced; (ii) existing under or by
reason of applicable law; (iii) existing with respect to any Person or the
property or assets of such Person acquired by the Company or any Restricted
Subsidiary, existing at the time of such acquisition and not incurred in
contemplation thereof, which encumbrances or restrictions are not applicable to
any Person or the property or assets of any Person other than such Person or the
property or assets of such Person so acquired; (iv) in the case of clause (iv)
of the first paragraph of this Section 4.05, (A) that restrict in a customary
manner the subletting, assignment or transfer of any property or asset that is a
lease, license, conveyance or contract or similar property or asset, (B)
existing by virtue of any transfer of, agreement to transfer, option or right
with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture or (C) arising
or agreed to in the ordinary course of business, not relating to any
Indebtedness, and that do not, individually or in the aggregate, detract from
the value of property or assets of the Company or any Restricted Subsidiary in
any manner material to the Company or any Restricted Subsidiary; (v) with
respect to a Restricted Subsidiary and imposed pursuant to an agreement that has
been entered into for the sale or disposition of all or substantially all of the
Capital Stock of, or property and assets of, such Restricted Subsidiary or (vi)
relating solely to any Foreign Subsidiaries and supporting Indebtedness of such
Foreign Subsidiaries Incurred under clause (x) of the second paragraph of
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Section 4.03. Nothing contained in this Section 4.05 shall prevent the Company
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.09 or (2) restricting the
sale or other disposition of property or assets of the Company or any of its
Restricted Subsidiaries that secure Indebtedness of the Company or any of its
Restricted Subsidiaries.
SECTION 4.06. Limitation on the Issuance and Sale of Capital Stock of
Restricted Subsidiaries. The Company will not sell, and will not permit any
Restricted Subsidiary, directly or indirectly, to issue or sell, any shares of
Capital Stock of a Restricted Subsidiary (including options, warrants or other
rights to purchase shares of such Capital Stock) except (i) to the Company or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to foreign nationals of shares of Capital Stock of foreign
Restricted Subsidiaries, to the extent required by applicable law; or (iii) if,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 4.04 if made on the date of such
issuance or sale or (iv) issuances or sales of Common Stock of a Restricted
Subsidiary, provided that the Company or such Restricted Subsidiary applies the
Net Cash Proceeds, if any, of any such sale in accordance with clause (A) or (B)
of Section 4.11.
SECTION 4.07. Limitation on Issuances of Guarantees by Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Company which is pari passu
with or subordinate in right of payment to the Notes ("Guaranteed
Indebtedness"), unless (i) such Restricted Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee (a "Subsidiary Guarantee") of payment of the Notes by such Restricted
Subsidiary and (ii) such Restricted Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; provided that this paragraph shall
not be applicable to any Guarantee of any Restricted Subsidiary (x) that existed
at the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary or (y) Indebtedness Incurred under clause (i) or (vii) of the second
paragraph of Section 4.03. If the Guaranteed Indebtedness is (A) pari passu with
the Notes, then the Guarantee of such Guaranteed Indebtedness shall be pari
passu with, or subordinated to, the Subsidiary Guarantee or (B) subordinated to
the Notes, then the Guarantee of such Guaranteed Indebtedness shall be
subordinated to the Subsidiary Guarantee at least to the extent that the
Guaranteed Indebtedness is subordinated to the Notes.
Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of the Company, of all of
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the Company's and each Restricted Subsidiary's Capital Stock in, or all or
substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (ii) the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.
SECTION 4.08. Limitation on Transactions with Stockholders and
Affiliates. The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
5% or more of any class of Capital Stock of the Company or with any Affiliate of
the Company or any Restricted Subsidiary, except upon fair and reasonable terms
no less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or, if such transaction is pursuant to
a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arm's-length transaction with a Person that is not
such a holder or an Affiliate.
The foregoing limitation does not limit, and shall not apply to (i)
transactions (A) approved by a majority of the disinterested members of the
Board of Directors or (B) for which the Company or a Restricted Subsidiary
delivers to the Trustee a written opinion of a nationally recognized investment
banking firm stating that the transaction is fair to the Company or such
Restricted Subsidiary from a financial point of view; (ii) any transaction
solely between the Company and any of its Wholly Owned Restricted Subsidiaries
or solely between Wholly Owned Restricted Subsidiaries; (iii) the payment of
reasonable and customary regular fees to directors of the Company who are not
employees of the Company; (iv) any payments or other transactions pursuant to
any tax-sharing agreement between the Company and any other Person with which
the Company files a consolidated tax return or with which the Company is part of
a consolidated group for tax purposes; (v) the existence of, or the performance
by the Company or any of its Restricted Subsidiaries of its obligations under
the terms of, any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a party as of
the Closing Date and any similar agreements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the Company or
any of its Restricted Subsidiaries of obligations under any future amendment to
any such existing agreement or under any similar agreement entered into after
the Closing Date shall only be permitted by this clause (v) to the extent that
the terms of any such amendment or new agreement are not otherwise
disadvantageous to the holders of the Notes in any material respect; (vi) the
payment of all fees and expenses and the performance of obligations related to
the Transaction; or (vii) any Restricted Payments not prohibited by Section
4.04. Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.08 and not covered
by clauses (ii) through (vii) of this paragraph, the aggregate amount of which
exceeds $2 million in value, must be approved or determined to be fair in the
manner provided for in clause (i)(A) or (B) above.
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SECTION 4.09. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or suffer to exist
any Lien on any of its assets or properties of any character, or any shares of
Capital Stock or Indebtedness of any Restricted Subsidiary, without making
effective provision for all of the Notes and all other amounts due under this
Indenture to be secured equally and ratably with (or, if the obligation or
liability to be secured by such Lien is subordinated in right of payment to the
Notes, prior to) the obligation or liability secured by such Lien.
The foregoing limitation does not apply to (i) Liens existing on the
Closing Date, including Liens securing obligations under the Credit Agreement;
(ii) Liens granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders; (iii)
Liens with respect to the assets of a Restricted Subsidiary granted by such
Restricted Subsidiary to the Company or a Wholly Owned Restricted Subsidiary to
secure Indebtedness owing to the Company or such other Restricted Subsidiary;
(iv) Liens securing Indebtedness which is Incurred to refinance secured
Indebtedness which is permitted to be Incurred under clause (i) or (iii) of the
second paragraph of Section 4.03; provided that such Liens do not extend to or
cover any property or assets of the Company or any Restricted Subsidiary other
than the property or assets securing the Indebtedness being refinanced; (v)
Liens on any property or assets of a Restricted Subsidiary securing Indebtedness
of such Restricted Subsidiary permitted under Section 4.03; or (vi) Permitted
Liens.
SECTION 4.10. Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, enter into any
sale-leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
The foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between the
Company and any Wholly Owned Restricted Subsidiary or solely between Wholly
Owned Restricted Subsidiaries; or (iv) the Company or such Restricted
Subsidiary, within 12 months after the sale or transfer of any assets or
properties is completed, applies an amount not less than the net proceeds
received from such sale in accordance with clause (A) or (B) of the first
paragraph of Section 4.11.
SECTION 4.11. Limitation on Asset Sales. The Company will not, and will
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless (i)
the consideration received by the Company or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of cash or Temporary Cash
Investments; provided that the amount of (a) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto) of
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the Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes), that are assumed by the transferee of
any such assets, to the extent the creditors with respect thereto execute a
written release of such liability, in favor of the Company or the Restricted
Subsidiary, as applicable, and (b) any notes or other obligations received by
the Company or such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received) within 180 days following the closing of such Asset Sale,
shall be deemed to be cash for purposes of this provision. In the event and to
the extent that the Net Cash Proceeds received by the Company or any of its
Restricted Subsidiaries from one or more Asset Sales occurring on or after the
Closing Date in any period of 12 consecutive months exceed 10% of Adjusted
Consolidated Net Tangible Assets (determined as of the date closest to the
commencement of such 12-month period for which a consolidated balance sheet of
the Company and its Subsidiaries has been filed pursuant to Section 4.18), then
the Company shall or shall cause the relevant Restricted Subsidiary to (i)
within twelve months after the date Net Cash Proceeds so received exceed 10% of
Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to such
excess Net Cash Proceeds to permanently repay unsubordinated Indebtedness of the
Company, or any Restricted Subsidiary providing a Subsidiary Guarantee pursuant
to Section 4.07 or Indebtedness of any other Restricted Subsidiary, in each case
owing to a Person other than the Company or any of its Restricted Subsidiaries
or (B) invest an equal amount, or the amount not so applied pursuant to clause
(A) (or enter into a definitive agreement committing to so invest within 12
months after the date of such agreement), in property or assets (other than
current assets) of a nature or type or that are used in a business (or in a
company having property and assets of a nature or type, or engaged in a
business) similar or related to the nature or type of the property and assets
of, or the business of, the Company and its Restricted Subsidiaries existing on
the date of such investment and (ii) apply (no later than the end of the
12-month period referred to in clause (i)) such excess Net Cash Proceeds (to the
extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.11. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds".
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate Accreted Value of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of the Accreted Value of the Notes, plus, in each case, accrued interest
(if any) to the Payment Date.
SECTION 4.12. Repurchase of Notes upon a Change of Control. The Company
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the Accreted Value thereof on the relevant Payment Date,
plus accrued interest, if any, to the Payment Date.
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SECTION 4.13. Existence. Subject to Article Five of this Indenture, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its existence and the existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of the
Company and each Restricted Subsidiary and the rights (whether pursuant to
charter, partnership certificate, agreement, statute or otherwise), licenses and
franchises of the Company and each Restricted Subsidiary; provided that the
Company shall not be required to preserve any such right, license or franchise,
or the existence of any Restricted Subsidiary, if the maintenance or
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries taken as a whole.
SECTION 4.14. Payment of Taxes and Other Claims. The Company will pay or
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; provided that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established.
SECTION 4.15. Maintenance of Properties and Insurance. The Company will
cause all properties used or useful in the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided that nothing in
this Section 4.15 shall prevent the Company or any Restricted Subsidiary from
discontinuing the use, operation or maintenance of any of such properties or
disposing of any of them, if such discontinuance or disposal is, in the judgment
of the Company, desirable in the conduct of the business of the Company or such
Restricted Subsidiary.
The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance, with reputable
insurers or with the government of the United States of America, or an agency or
instrumentality thereof, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly situated in the
industry in which the Company or any such Restricted Subsidiary, as the case may
be, is then conducting business.
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SECTION 4.16. Notice of Defaults. In the event that the Company or any
Officer becomes aware of any Default or Event of Default, the Company shall
promptly deliver to the Trustee an Officers' Certificate specifying such Default
or Event of Default.
SECTION 4.17. Compliance Certificates. (a) The Company shall deliver to
the Trustee, within 45 days after the end of each fiscal quarter (90 days after
the end of the last fiscal quarter of each year), an Officers' Certificate
stating whether or not the signers know of any Default or Event of Default that
occurred during such fiscal quarter. In the case of the Officers' Certificate
delivered within 90 days after the end of the Company's fiscal year, such
certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that
a review has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under this Indenture and that the Company has complied with all conditions and
covenants under this Indenture. For purposes of this Section 4.17, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If any of the officers of
the Company signing such certificate has knowledge of such a Default or Event of
Default, the certificate shall describe any such Default or Event of Default and
its status. The first certificate to be delivered pursuant to this Section
4.17(a) shall be for the first fiscal quarter beginning after the execution of
this Indenture.
(b) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, beginning with the fiscal year in which this Indenture
was executed, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Notes as they relate to accounting matters,
(ii) that they have read the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (a) of this Section 4.17 and (iii) whether, in
connection with their audit examination, anything came to their attention that
caused them to believe that the Company was not in compliance with any of the
terms, covenants, provisions or conditions of Article Four and Section 5.01 of
this Indenture as they pertain to accounting matters and, if any Default or
Event of Default has come to their attention, specifying the nature and period
of existence thereof; provided that such independent certified public
accountants shall not be liable in respect of such statement by reason of any
failure to obtain knowledge of any such Default or Event of Default that would
not be disclosed in the course of an audit examination conducted in accordance
with generally accepted auditing standards in effect at the date of such
examination.
SECTION 4.18. Commission Reports and Reports to Holders. Whether or not
the Company is then required to file reports with the Commission, the Company
shall file with the Commission (unless the Commission will not accept such
filing) all such reports and other information as it would be required to file
with the Commission by Section 13(a) or 15(d) under the Exchange Act if it were
subject thereto. The Company shall supply the Trustee and each Holder or shall
supply to the Trustee for forwarding to each such Holder, without cost to such
Holder, copies of such reports and other information within 15 days after the
date it would have
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been required to file such reports or other information with the Commission had
it been subject to such Sections; provided, however, that the copies of such
reports and information supplied to Holders may omit exhibits. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.19. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.20. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Notes as of the end of such year and
(ii) such other specific information relating to such original issue discount as
may then be relevant under the Internal Revenue Code of 1986, as amended from
time to time and requested by the Trustee.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, Etc. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless: (i) the Company shall be the continuing Person, or the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or that acquired or leased such property and assets of the
Company shall be a corporation organized and validly existing under the laws of
the United States of America, the United Kingdom or, in each case, any
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of the Company on
all of the Notes and under this Indenture; (ii) immediately after giving effect
to such transaction, no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction on a pro
forma basis, the Company or any Person becoming the successor obligor of the
Notes, as the case may be, (A) could Incur $1.00 of Indebtedness under the first
paragraph of Section 4.03 or (B) would have a Consolidated Leverage Ratio that
is positive, but equal to or
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lower than the Consolidated Leverage Ratio of the Company immediately prior to
such transaction; and (iv) the Company delivers to the Trustee an Officers'
Certificate (attaching the arithmetic computations to demonstrate compliance
with clause (iii)) and Opinion of Counsel, in each case stating that such
consolidation, merger or transfer and such supplemental indenture complies with
this provision and that all conditions precedent provided for herein relating to
such transaction have been complied with; provided, however, that clause (iii)
above does not apply if, in the good faith determination of the Board of
Directors of the Company, whose determination shall be evidenced by a Board
Resolution, the principal purpose of such transaction is to change the state of
incorporation of the Company; and provided further that any such transaction
shall not have as one of its purposes the evasion of the foregoing limitations.
SECTION 5.02. Successor Substituted. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided that the Company shall not be released from its
obligation to pay the principal of, premium, if any, or interest on the Notes in
the case of a lease of all or substantially all of its property and assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default. Any of the following events shall
constitute an "Event of Default" hereunder:
(a) default in the payment of principal of (or premium, if any,
on) any Note when the same becomes due and payable at maturity, upon
acceleration, redemption or otherwise;
(b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;
(c) default in the performance or breach of Article Five or the
failure to make or consummate an Offer to Purchase in accordance with Section
4.11 or Section 4.12;
(d) the Company defaults in the performance of or breaches any
other covenant or agreement of the Company in this Indenture or under the Notes
(other than a default specified in clause
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(a), (b) or (c) above) and such default or breach continues for a
period of 30 consecutive days after written notice by the Trustee or the Holders
of 25% or more in aggregate principal amount of the Notes;
(e) there occurs with respect to any issue or issues of
Indebtedness of the Company or any Significant Subsidiary having an outstanding
principal amount of $5 million or more in the aggregate for all such issues of
all such Persons, whether such Indebtedness now exists or shall hereafter be
created,(I) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (II) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance) for
the payment of money in excess of $5 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any Significant Subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such Persons to
exceed $5 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree
or order for
(A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect,
(B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company or any Significant Subsidiary or
(C) the winding up or liquidation of the affairs of the Company
or any Significant Subsidiary and, in each case, such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(h) the Company or any Significant Subsidiary
(A) 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 under any such law,
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(B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or
(C) effects any general assignment for the benefit of creditors.
SECTION 6.02. Acceleration. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to the Company) occurs and is continuing under this Indenture, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, by written notice to the Company (and to the Trustee if
such notice is given by the Holders), may, and the Trustee at the request of
such Holders shall, declare the Accreted Value of, premium, if any, and accrued
interest on the Notes to be immediately due and payable. Upon a declaration of
acceleration, such Accreted Value, premium, if any, and accrued interest shall
be immediately due and payable. In the event of a declaration of acceleration
because an Event of Default set forth in clause (e) of Section 6.01 has occurred
and is continuing, such declaration of acceleration shall be automatically
rescinded and annulled if the event of default triggering such Event of Default
pursuant to clause (e) shall be remedied or cured by the Company or the relevant
Significant Subsidiary or waived by the holders of the relevant Indebtedness
within 60 days after the declaration of acceleration with respect thereto. If an
Event of Default specified in clause (g) or (h) of Section 6.01 occurs with
respect to the Company, the Accreted Value of, premium, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such declaration of acceleration, but before a
judgment or decree for the payment of the money due has been obtained by the
Trustee, the Holders of at least a majority in principal amount of the
outstanding Notes by written notice to the Company and to the Trustee, may waive
all past Defaults and rescind and annul a declaration of acceleration and its
consequences if (a) the Company has paid or deposited with the Trustee a sum
sufficient to pay (i) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest on all Notes, (iii) the
Accreted Value of and premium, if any, on any Notes that have become due
otherwise than by such declaration or occurrence of acceleration and interest
thereon at the rate prescribed therefor by such Notes, and (iv) to the extent
that payment of such interest is lawful, interest upon overdue interest, if any,
at the rate prescribed therefor by such Notes, (b) all existing Events of
Default, other than the non-payment of the Accreted Value of, premium, if any,
and accrued interest on the Notes that have become due solely by such
declaration of acceleration, have been cured or waived and (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction.
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SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least a
majority in principal amount of the outstanding Notes shall, pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
and 9.02, the Holders of at least a majority in principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium, if any, or interest on any Note as specified in clause
(a) or (b) of Section 6.01 or in respect of a covenant or provision of this
Indenture which cannot be modified or amended without the consent of the Holder
of each outstanding Note affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
SECTION 6.05. Control by Majority. The Holders of at least a majority in
aggregate principal amount of the outstanding Notes may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee; provided that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction; and provided
further that the Trustee may take any other action it deems proper that is not
inconsistent with any such direction received from Holders of Notes.
SECTION 6.06. Limitation on Suits. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) the Holder has previously given the Trustee written notice of
a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Notes shall have made a written request to the Trustee to
pursue such remedy;
(iii) such Holder or Holders offer the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, liability or
expense;
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(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the
Trustee a direction that is inconsistent with the request.
For purposes of Section 6.05 of this Indenture and this Section 6.06,
the Trustee shall comply with TIA Section 316(a) in making any determination of
whether the Holders of the required aggregate principal amount of outstanding
Notes have concurred in any request or direction of the Trustee to pursue any
remedy available to the Trustee or the Holders with respect to this Indenture or
the Notes or otherwise under the law.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the Accreted Value of, premium, if any, or interest on, such Note or
to bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor of the Notes for the whole amount of principal, premium, if any, and
accrued interest remaining unpaid, together with interest on overdue principal,
premium, if any, and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate specified
in the Notes, and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
the Company (or any other obligor of the Notes), its creditors or its property
and shall be entitled and empowered to collect and receive any monies,
securities or other property payable or deliverable upon conversion or exchange
of the Notes or upon any such claims and to distribute the same, and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any
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such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07. Nothing herein contained shall be deemed to empower
the Trustee to authorize or consent to, or accept or adopt on behalf of any
Holder, any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article Six, it shall pay out the money in the following order:
First: to the Trustee for all amounts due under Section 7.07;
Second: to Holders for amounts then due and unpaid for principal
of, premium, if any, and interest on the Notes in respect of which or
for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Notes for principal, premium, if any, and interest,
respectively; and
Third: to the Company or any other obligors of the Notes, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by Holders of more than 10% in principal amount of the
outstanding Notes.
SECTION 6.12. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively
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to their former positions hereunder and thereafter all rights and remedies of
the Company, Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. General. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.
SECTION 7.02. Certain Rights of Trustee. Subject to TIA Sections 315(a)
through (d):
(i) the Trustee may rely, and shall be protected in acting or
refraining from acting, upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document and may in good faith conclusively
rely as to the truth of the statements and the correctness of the
opinions therein;
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(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 10.04. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such certificate,
opinion and/or an accountants' certificate;
(iii) the Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any
attorney or agent appointed with due care by it hereunder;
(iv) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered
to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities that might be incurred by it
in compliance with such request or direction;
(v) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within
its rights or powers or for any action it takes or omits to take in
accordance with the direction of the Holders of a majority in principal
amount of the outstanding Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture, provided that the Trustee's conduct does not
constitute negligence or bad faith;
(vi) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company personally or by agent or attorney;
and
(viii) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by a Board
Resolution.
SECTION 7.03. Individual Rights of Trustee. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company
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or its Affiliates with the same rights it would have if it were not the Trustee.
Any Agent may do the same with like rights. However, the Trustee is subject to
TIA Sections 310(b) and 311.
SECTION 7.04. Trustee's Disclaimer. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for the Company's use or application of the
proceeds from the Notes and (iii) shall not be responsible for any statement in
the Notes other than its certificate of authentication.
SECTION 7.05. Notice of Default. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
45 days after it occurs, unless such Default or Event of Default has been cured;
provided, however, that, except in the case of a default in the payment of the
principal of, premium, if any, or interest on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
April 15, beginning with April 15, 1999, the Trustee shall mail to each Holder
as provided in TIA Section 313(c) a brief report dated as of such April 15, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of
Securities shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Securities are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Securities are
listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services
hereunder. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by the Trustee without negligence or bad faith on its part.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it without negligence or
bad faith on its part in connection with the acceptance or administration of
this Indenture and its duties under this Indenture and the Notes, including,
without limitation, the costs and expenses of enforcing this Indenture against
the Company and of defending itself against any claim or liability and of
complying with any process served upon it or any of its officers in connection
with the exercise or performance of any of its powers or duties under this
Indenture and the Notes.
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To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.
If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (g) or (h) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
The provisions of this Section 7.07 shall survive the termination of
this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign at any time by so notifying the Company in
writing at least 30 days prior to the date of the proposed resignation. The
Holders of a majority in principal amount at maturity of the outstanding Notes
may remove the Trustee by so notifying the Trustee in writing and may appoint a
successor Trustee with the consent of the Company. The Company may remove the
Trustee by Company Order given at least 30 days prior to the proposed date of
removal if: (i) the Trustee is no longer eligible under Section 7.10; (ii) the
Trustee is adjudged a bankrupt or an insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in principal amount at maturity of the outstanding Notes may, at
the expense of the Company, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall
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become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder. No successor Trustee shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
If the Trustee is no longer eligible under Section 7.10 or shall fail to
comply with TIA Section 310(b), any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.08, the Trustee shall resign immediately in the manner and with the
effect provided in this Section.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligation under Section 7.07 shall continue indefinitely
for the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein, provided such corporation shall be otherwise qualified and eligible
under this Article.
SECTION 7.10. Eligibility. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have
a combined capital and surplus of at least $25 million as set forth in its most
recent published annual report of condition that is subject to the requirements
of applicable Federal or state supervising or examining authority. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Trustee shall resign immediately in the manner and with the
effect specified in this Article.
SECTION 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article Eight of this Indenture.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced or Notes that
are paid pursuant to Section 4.01 or Notes for whose payment money or
securities have theretofore been held in trust and thereafter repaid to
the Company, as provided in Section 8.05) have been delivered to the
Trustee for cancellation and the Company has paid all sums payable by it
hereunder; or
(ii) (A) the Notes mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory
to the Trustee for giving the notice of redemption, (B) the Company
irrevocably deposits in trust with the Trustee during such one-year
period, under the terms of an irrevocable trust agreement in form and
substance satisfactory to the Trustee, as trust funds solely for the
benefit of the Holders for that purpose, money or U.S. Government
Obligations sufficient (in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee), without consideration of any
reinvestment of any interest thereon, to pay principal, premium, if,
any, and interest on the Notes to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder, (C) no
Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit, (D) such deposit
will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound and (E) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's obligations
under Section 7.07 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Notes are no
longer outstanding. Thereafter, only the Company's obligations in Sections 7.07,
8.04, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under the Notes and this Indenture except for those surviving
obligations specified above.
SECTION 8.02. Defeasance and Discharge of Indenture. The Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred to
in clause (A) of this Section 8.02, and the
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provisions of this Indenture will no longer be in effect with respect to the
Notes, and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same if:
(A) with reference to this Section 8.02, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (1) money in an amount, (2) U.S.
Government Obligations that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (A), money in an amount or (3) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge,
without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(B) the Company has delivered to the Trustee (1) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the
Company's exercise of its option under this Section 8.02 and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such option had not
been exercised, which Opinion of Counsel shall be based upon (and
accompanied by a copy of) a ruling of the Internal Revenue Service to
the same effect unless there has been a change in applicable federal
income tax law after the Closing Date such that a ruling is no longer
required or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned
Opinion of Counsel and (2) an Opinion of Counsel to the effect that the
creation of the defeasance trust does not violate the Investment Company
Act of 1940 and that after the passage of 123 days following the deposit
(except, with respect to any trust funds for the account of any Holder
who may be deemed to be an "insider" for purposes of the United States
Bankruptcy Code, after one year following the deposit), the trust funds
will not be subject to the effect of Section 547 of the United States
Bankruptcy Code or Section 15 of the New York Debtor and Creditor Law in
a case commenced by or against the Company under either such statute,
and either (I) the trust funds will no longer remain the property of the
Company (and therefore will
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not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally) or
(II) if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, (a)
assuming such trust funds remained in the possession of the Trustee
prior to such court ruling to the extent not paid to the Holders, the
Trustee will hold, for the benefit of the Holders, a valid and perfected
security interest in such trust funds that is not avoidable in
bankruptcy or otherwise except for the effect of Section 552(b) of the
United States Bankruptcy Code on interest on the trust funds accruing
after the commencement of a case under such statute, (b) the Holders
will be entitled to receive adequate protection of their interests in
such trust funds if such trust funds are used in such case or proceeding
and (c) no property, rights in property or other interests granted to
the Trustee or the Holders in exchange for, or with respect to, such
trust funds will be subject to any prior rights of holders of other
Indebtedness of the Company or any of its Subsidiaries;
(C) immediately after giving effect to such deposit, on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of such deposit, and such deposit shall
not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(D) if the Notes are then listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel
to the effect that the Notes will not be delisted as a result of such
deposit, defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(2) of this Section 8.02, none of the
Company's obligations under this Indenture shall be discharged. Subsequent to
the end of such 123-day (or one year) period with respect to this Section 8.02,
the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.11, 4.01,
4.02, 8.04, 8.05, 8.06 and the rights, powers, trusts, duties and immunities of
the Trustee hereunder shall survive until the Notes are no longer outstanding.
Thereafter, only the Company's obligations in Sections 7.07, 8.04, 8.05 and 8.06
shall survive. If and when a ruling from the Internal Revenue Service or an
Opinion of Counsel referred to in clause (B)(1) of this Section 8.02 is able to
be provided specifically without regard to, and not in reliance upon, the
continuance of the Company's obligations under Section 4.01, then the Company's
obligations under such Section 4.01 shall cease upon delivery to the Trustee of
such ruling or Opinion of Counsel and compliance with the other conditions
precedent provided for herein relating to the defeasance contemplated by this
Section 8.02.
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After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Notes and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
SECTION 8.03. Defeasance of Certain Obligations. The Company may omit to
comply with any term, provision or condition set forth in clauses (iii) and (iv)
of Section 5.01 and Sections 4.03 through 4.11 and clause (c) of Section 6.01
with respect to clauses (iii) and (iv) of Section 5.01, clause (d) of Section
6.01 with respect to Sections 4.01, 4.02 and 4.12 through 4.20 and clauses (e)
and (f) of Section 6.01 shall be deemed not to be Events of Default, in each
case with respect to the outstanding Notes if:
(i) with reference to this Section 8.03, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee (or another trustee satisfying the requirements of Section 7.10)
and conveyed all right, title and interest to the Trustee for the
benefit of the Holders, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee as trust
funds in trust, specifically pledged to the Trustee for the benefit of
the Holders as security for payment of the principal of, premium, if
any, and interest, if any, on the Notes, and dedicated solely to, the
benefit of the Holders, in and to (A) money in an amount, (B) U.S.
Government Obligations that, through the payment of interest, premium,
if any, and principal in respect thereof in accordance with their terms,
will provide, not later than one day before the due date of any payment
referred to in this clause (i), money in an amount or (C) a combination
thereof in an amount sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge,
without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, the principal of,
premium, if any, and interest on the outstanding Notes on the Stated
Maturity of such principal or interest; provided that the Trustee shall
have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to the payment of such principal,
premium, if any, and interest with respect to the Notes;
(ii) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, (B) after the passage of
123 days following the deposit (except, with respect to any trust funds
for the account of any Holder who may be deemed to be an "insider" for
purposes of the United States Bankruptcy Code, after one year following
the deposit), the trust funds will not be subject to the effect of
Section 547 of the United States Bankruptcy Code or Section 15 of the
New York Debtor and Creditor Law in a case commenced by or against the
Company under either such statute, and either (1) the trust funds will
no longer remain the property of the Company (and therefore will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws
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affecting creditors' rights generally) or (2) if a court were to rule
under any such law in any case or proceeding that the trust funds
remained property of the Company, (x) assuming such trust funds remained
in the possession of the Trustee prior to such court ruling to the
extent not paid to the Holders, the Trustee will hold, for the benefit
of the Holders, a valid and perfected security interest in such trust
funds that is not avoidable in bankruptcy or otherwise (except for the
effect of Section 552(b) of the United States Bankruptcy Code on
interest on the trust funds accruing after the commencement of a case
under such statute) and (y) the Holders will be entitled to receive
adequate protection of their interests in such trust funds if such trust
funds are used in such case or proceeding, (C) the Holders will not
recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of certain covenants and Events of
Default and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred and (D) the Trustee, for
the benefit of the Holders, has a valid first-priority security interest
in the trust funds;
(iii) immediately after giving effect to such deposit on a pro
forma basis, no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or during the period ending on
the 123rd day after such date of such deposit, and such deposit shall
not result in a breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(iv) if the Notes are then listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel
to the effect that the Notes will not be delisted as a result of such
deposit, defeasance and discharge; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.03 have been complied with.
SECTION 8.04. Application of Trust Money. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.
SECTION 8.05. Repayment to Company. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company
upon request set forth in an Officers' Certificate any excess money held by them
at any time and thereupon shall be relieved from all liability with respect to
such money. The Trustee and the Paying Agent shall pay to the
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Company upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or Paying Agent before being required to make any payment may cause
to be published at the expense of the Company once in a newspaper of general
circulation in The City of New York or mail to each Holder entitled to such
money at such Holder's address (as set forth in the Security Register) notice
that such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to the Company.
After payment to the Company, Holders entitled to such money must look to the
Company for payment as general creditors unless an applicable law designates
another Person, and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.01, 8.02 or
8.03, as the case may be; provided that, if the Company has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders. The Company, when authorized
by a resolution of its Board of Directors (as evidenced by a Board Resolution
delivered to the Trustee), and the Trustee may amend or supplement this
Indenture or the Notes without notice to or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency in this
Indenture; provided that such amendments or supplements shall not, in
the good faith opinion of the Board of Directors as evidenced by a Board
Resolution, adversely affect the interests of the Holders in any
material respect;
(2) to comply with Article Five;
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(3) to comply with any requirements of the Commission in
connection with the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(6) to add one or more subsidiary guarantees on the terms
required by this Indenture; or
(7) to make any change that, in the good faith opinion of the
Board of Directors as evidenced by a Board Resolution, does not
materially and adversely affect the rights of any Holder.
SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 and 6.07
and without prior notice to the Holders, the Company, when authorized by its
Board of Directors (as evidenced by a Board Resolution delivered to the
Trustee), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount at
maturity of the Notes then outstanding, and the Holders of a majority in
aggregate principal amount at maturity of the Notes then outstanding by written
notice to the Trustee may waive future compliance by the Company with any
provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 9.02, without the consent
of each Holder affected, an amendment or waiver, including a waiver pursuant to
Section 6.04, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, any Note;
(ii) reduce the principal amount or Accreted Value of, premium,
if any, or interest, on any Note;
(iii) change the place or currency of payment of principal of, or
premium, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of
redemption, on or after the Redemption Date) on any Note;
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend this Indenture;
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(vi) waive a default in the payment of principal of, premium, if
any, or interest on, the Notes;
(vii) reduce the percentage or aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver
of compliance with certain provisions of this Indenture or for waiver of
certain defaults; or
(viii) modify any of the provisions of this Section 9.02, except
to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
SECTION 9.03. Revocation and Effect of Consent. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in the second paragraph of
Section 9.02. In case of an amendment or waiver of the type described in the
second paragraph of Section 9.02, the amendment or waiver shall bind each Holder
who has consented to it and every subsequent Holder of a Note that evidences the
same indebtedness as the Note of the consenting Holder.
SECTION 9.04. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver such Note to the Trustee. At the Company's expense, the
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder and the Trustee may place an appropriate notation on
any Note thereafter authenticated. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation, or issue a new Note, shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture and that it will be valid and binding upon the Company. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.06. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.
ARTICLE TEN
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act of 1939. This Indenture shall be
subject to the provisions of the TIA that are required to be a part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 10.02. Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person, mailed by first-class
mail or sent by telecopier transmission addressed as follows:
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if to the Company:
IPC Information Systems, Inc.
88 Pine Street
New York, New York 10036
Telecopier No.: (212) 509-7888
Attention: Brian Reach, Chief Financial Officer
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Telecopier No.: (212) 852-1626
Attention: Louis Young, Corporate Trust Department
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to it at
its address as it appears on the Security Register by first-class mail and shall
be sufficiently given to him if so mailed within the time prescribed. Any notice
or communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Copies of any such communication or
notice to a Holder shall also be mailed to the Trustee and each Agent at the
same time.
Failure to mail notice or communication to a Holder as provided herein
or any defect in any such notice or communication shall not affect its
sufficiency with respect to other Holders. Except for a notice to the Trustee,
which is deemed given only when received, and except as otherwise provided in
this Indenture, if a notice or communication is mailed in the manner provided in
this Section 10.02, it is duly given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 10.03. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance satisfactory
to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with;
(ii) an Opinion of Counsel in form and substance satisfactory to
the Trustee stating that, in the opinion of such Counsel, all such
conditions precedent have been complied with; and
(iii) where applicable, a certificate or opinion by an
independent certified public accountant satisfactory to the Trustee that
complies with TIA Section 314(c).
SECTION 10.04. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion
contained in such certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each
such person, such condition or covenant has been complied with;
provided, however, that, with respect to matters of fact, an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 10.05. Rules by Trustee, Paying Agent or Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
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SECTION 10.06. Payment Date Other Than a Business Day. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.
SECTION 10.07. Governing Law. This Indenture and the Notes shall be
governed by the laws of the State of New York. The Trustee, the Company and the
Holders agree to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this Indenture or
the Notes.
SECTION 10.08. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 10.09. No Recourse Against Others. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company contained in this
Indenture or in any of the Notes, or because of the creation of any Indebtedness
represented thereby, shall be had against any incorporator or against any past,
present or future partner, stockholder, other equity holder, officer, director,
employee or controlling person, as such, of the Company or of any successor
Person, either directly or through the Company or any successor Person, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and as
a consideration for, the execution of this Indenture and the issue of the Notes.
SECTION 10.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 10.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 10.12. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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SECTION 10.13. Table of Contents, Headings, Etc. The Table of Contents,
Cross- Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
IPC INFORMATION SYSTEMS, INC.
By: /s/ Daniel Utevsky
---------------------------------------
Name: Daniel Utevsky
Title: General Counsel, Secretary
UNITED STATES TRUST COMPANY OF
NEW YORK
By: /s/ Louis Young
---------------------------------------
Name: Louis Young
Title: Vice President
<PAGE>
EXHIBIT A
[FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE REGISTERED FORM, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC
TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IPC Information Systems, Inc.
107/8% Senior Discount Note due 2008
CUSIP 44980KAA5
No. [ ] [$ ]
The following information is supplied for purposes of Sections 1273 and
1275 of the Internal Revenue Code:
Issue Date: April 30,1998 Original issue discount under Section 1273
of the Internal Revenue Code (for each
Yield to maturity for period from $1,000 principal amount): $1,033.64
Issue Date to May 1, 2008: 107/8%,
compounded semi-annually on May 1 Issue Price (for each $1,000 principal
and November 1, commencing amount): $727.61
April 30, 1998
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<PAGE>
IPC Information Systems, Inc., a Delaware corporation (the "Company",
which term includes any successor under the Indenture hereinafter referred to),
for value received, promises to pay to [ ], or its registered assigns, the
principal sum of [ ] dollars ($[ ]) on May 1, 2008.
Interest Payment Dates: May 1 and November 1, commencing November 1,
2001.
Regular Record Dates: April 15 and October 15.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
Date: IPC Information Systems, Inc.
By:
Name:
Title:
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<PAGE>
Trustee's Certificate of Authentication
This is one of the 107/8% Senior Discount Notes due 2008 described in the
within-mentioned Indenture.
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
----------------------------
Authorized Signatory
A-5
<PAGE>
[REVERSE SIDE OF NOTE]
IPC Information Systems, Inc.
107/8% Senior Discount Note due 2008
1. Principal and Interest.
The Company will pay the principal of this Note on May 1, 2008.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate per annum
shown above.
Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on the April 15 or October 15 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
November 1, 2001; provided that no interest shall accrue on the principal amount
of this Note prior to May 1, 2001
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from May 1, 2001;
provided that, if there is no existing default in the payment of interest and
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 2% in excess of the rate otherwise payable.
2. Method of Payment.
The Company will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each May 1 and November1,
commencing November 1, 2001 to the persons who are Holders (as reflected in the
Security Register at the close of business on the April 15 or October 15
immediately preceding the Interest Payment Date), in each case, even if the Note
is canceled on registration of transfer or registration of exchange after such
record date; provided that, with respect to the payment of principal, the
Company will make payment to the Holder that surrenders this Note to a Paying
Agent on or after May 1, 2008.
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<PAGE>
The Company will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day at a
place of payment, payment may be made at that place on the next succeeding day
that is a Business Day and no interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar without notice. The Company, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-Registrar.
4. Indenture; Limitations.
The Company issued the Notes under an Indenture dated as of April 30,
1998 (the "Indenture"), between the Company and United States Trust Company of
New York, as trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are general unsecured obligations of the Company.
The Company may, subject to Article Four of the Indenture and applicable
law, issue additional Notes under the Indenture.
5. Optional Redemption.
The Notes are redeemable, at the Company's option, in whole or in part,
at any time or from time to time, on or after May 1, 2003 and prior to maturity,
upon not less than 30 nor more than 60 days' prior notice mailed by first class
mail to each Holder's last address, as it appears in the Security Register, at
the following Redemption Prices (expressed in percentages of principal amount at
maturity), plus accrued and unpaid interest to the Redemption Date (subject to
the right of Holders of record on the relevant Regular Record Date that is prior
to the Redemption Date to receive interest due on an Interest Payment Date), if
redeemed during the 12-month period commencing May 1 of the years set forth
below:
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Year Redemption Price
---- ----------------
2003............. 105.438%
2004............. 103.625%
2005............. 101.813%
2006 and thereafter 100.000%
In addition, at any time and from time to time prior to May 1, 2001, the
Company may redeem up to 35% of the principal amount at maturity of the Notes
with the proceeds of one or more Equity Offerings, at any time or from time to
time in part, at a Redemption Price (expressed as a percentage of Accreted Value
on the Redemption Date) of 110.875%, plus accrued and unpaid interest to the
Redemption Date (subject to the rights of Holders of record on the relevant
Regular Record Date that is prior to the Redemption Date to receive interest due
on an Interest Payment Date); provided that (i) Notes representing 65% of the
principal amount of notes initially issued remain outstanding after each such
redemption and (ii) notice of such redemption is mailed within 60 days of the
related Equity Offering.
Notes in original denominations larger than $1,000 may be redeemed in
part. On and after the Redemption Date, interest ceases to accrue on Notes or
portions of Notes called for redemption, unless the Company defaults in the
payment of the Redemption Price.
6. Repurchase upon Change of Control.
Upon the occurrence of any Change of Control, each Holder shall have the
right to require the repurchase of its Notes by the Company in cash pursuant to
the offer described in the Indenture at a purchase price equal to 101% of the
Accreted Value thereof plus accrued and unpaid interest, if any, to the date of
purchase (the "Payment Date").
A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at its last address as it appears in
the Security Register. Notes in original denominations larger than $1,000 may be
sold to the Company in part. On and after the Payment Date, interest ceases to
accrue and original issue discount ceases to accrete on Notes or portions of
Notes surrendered for purchase by the Company, unless the Company defaults in
the payment of the purchase price.
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 of principal amount at maturity and multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer
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<PAGE>
or exchange of any Notes for a period of 15 days before the day of mailing of a
notice of redemption of Notes selected for redemption.
8. Persons Deemed Owners.
A Holder shall be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Company at its request. After that, Holders entitled to the
money must look to the Company for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, the
Company will be discharged from the Indenture and the Notes, except in certain
circumstances for certain provisions thereof, and (b) to the Stated Maturity,
the Company will be discharged from certain covenants set forth in the
Indenture.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be amended
or supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Restricted Subsidiaries, among other things, to Incur additional
Indebtedness, make Restricted Payments, suffer to exist restrictions on the
ability of Restricted Subsidiaries to make certain payments to the Company,
issue Capital Stock of Restricted Subsidiaries, Guarantee Indebtedness of the
Company, engage in transactions with Affiliates, suffer to exist or incur Liens,
enter into sale-leaseback transactions, use the proceeds from Asset Sales, or
merge, consolidate or transfer substantially all of its assets. Within 45 days
after the end of each fiscal quarter (90 days after the end of the last
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<PAGE>
fiscal quarter of each year), the Company shall deliver to the Trustee an
Officers' Certificate stating whether or not the signers thereof know of any
Default or Event of Default under such restrictive covenants.
13. Successor Persons.
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
14. Defaults and Remedies.
Any of the following events constitutes an "Event of Default" under the
Indenture: (a) default in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise; (b) default in the payment of interest on any Note when
the same becomes due and payable, and such default continues for a period of 30
days; (c) default in the performance or breach of the provisions of Article Five
or the failure to make or consummate an Offer to Purchase in accordance with
Section 4.11 or Section 4.12; (d) the Company defaults in the performance of or
breaches any other covenant or agreement of the Company in this Indenture or
under the Notes (other than a default specified in clause (a), (b) or (c) above)
and such default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes; (e) there occurs with respect to any issue or
issues of Indebtedness of the Company or any Significant Subsidiary having an
outstanding principal amount of $5 million or more in the aggregate for all such
issues of all such Persons, whether such Indebtedness now exists or shall
hereafter be created, (I) an event of default that has caused the holder thereof
to declare such Indebtedness to be due and payable prior to its Stated Maturity
and such Indebtedness has not been discharged in full or such acceleration has
not been rescinded or annulled within 30 days of such acceleration and/or (II)
the failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default; (f) any final judgment or order (not
covered by insurance) for the payment of money in excess of $5 million in the
aggregate for all such final judgments or orders against all such Persons
(treating any deductibles, self-insurance or retention as not so covered) shall
be rendered against the Company or any Significant Subsidiary and shall not be
paid or discharged, and there shall be any period of 30 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $5 million during which a stay of enforcement
of such final judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; (g) a court having jurisdiction in the premises enters a
decree or order for (A) relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (B) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company or any Significant Subsidiary or for all or
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<PAGE>
substantially all of the property and assets of the Company or any Significant
Subsidiary or (C) the winding up or liquidation of the affairs of the Company or
any Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (h) the Company
or any Significant Subsidiary (A) 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
under any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or (C) effects any general assignment for the benefit of creditors.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee may, and at the direction of the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding shall, declare all
the Notes to be due and payable. If a bankruptcy or insolvency default with
respect to the Company occurs and is continuing, the Notes automatically become
due and payable. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Notes. Subject to certain limitations,
Holders of at least a majority in principal amount of the Notes then outstanding
may direct the Trustee in its exercise of any trust or power.
15. Trustee Dealings with the Company.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for the
Company or its Affiliates and may otherwise deal with the Company or its
Affiliates as if it were not the Trustee.
16. No Recourse Against Others.
No incorporator or any past, present or future partner, stockholder,
other equity holder, officer, director, employee or controlling person, as such,
of the Company or of any successor Person shall have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for the issuance of the Notes.
17. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
18. Abbreviations.
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Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
The Company will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to IPC Information
Systems, Inc., 88 Pine Street, New York, New York 10005; Attention: Chief
Financial Officer.
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<PAGE>
ASSIGNMENT FORM
I or we assign and transfer this Note to:
Please insert social security or other identifying number of assignee
- -------------------------------------------
- -------------------------------------------
Print or type name, address and zip code of assignee and irrevocably
appoint , as agent, to transfer this Note on the books of the
Company.
The agent may substitute another to act for him.
Dated
--------------------------------------
Signed
------------------------------------
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee
------------------------
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, check the Box:
[ ]
If you wish to have a portion of this Note purchased by the
Company pursuant to Section 4.11 or Section 4.12 of the Indenture, as
applicable, state the amount to be purchased (in principal amount at maturity):
$
-----------------------------.
Date:
--------------------------------
Signed
------------------------------
(Sign exactly as name appears on the other side of this Note)
Signature Guarantee
---------------------------
Exhibit 10.15.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
INVESTORS AGREEMENT
DATED AS OF
APRIL 9, 1998
AMONG
IPC INFORMATION SYSTEMS, INC.
CABLE SYSTEMS HOLDING, LLC
CABLE SYSTEMS INTERNATIONAL, INC.
AND
CERTAIN OTHER PERSONS NAMED HEREIN
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
----------------
PAGE
----
ARTICLE 1 DEFINITIONS
Section 1.01. Definitions............................................. 1
ARTICLE 2 CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board................................ 5
Section 2.02. Removal................................................. 5
Section 2.03. Vacancies............................................... 5
Section 2.04. Action by the Board..................................... 5
Section 2.05. Conflicting Charter or Bylaw Provision.................. 6
Section 2.06. IXNET Board............................................. 6
ARTICLE 3 RESTRICTIONS ON TRANSFER
Section 3.01. General................................................. 6
Section 3.02. Legends................................................. 6
Section 3.03. Permitted Transferees................................... 6
Section 3.04. Restrictions on Transfers by Kleinknecht Shareholders... 6
Restrictions on Transfers by Walsh Shareholders and
Section 3.05. Servidio Shareholders................................... 7
ARTICLE 4 TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer....................... 7
Section 4.02. Right to Compel Participation in Certain Transfers...... 8
ARTICLE 5 REGISTRATION RIGHTS
Section 5.01. Demand Registration..................................... 10
Section 5.02. Piggyback Registration.................................. 11
Section 5.03. Holdback Agreements..................................... 12
Section 5.04. Registration Procedures................................. 12
Section 5.05. Indemnification by the Company.......................... 14
Section 5.06. Indemnification by Participating Shareholders........... 15
Section 5.07. Conduct of Indemnification Proceedings.................. 15
Section 5.08. Contribution............................................ 16
Section 5.09. Participation in Public Offering........................ 16
Section 5.10. Rule 144................................................ 17
Section 5.11. No Transfer of Registration Rights...................... 17
ARTICLE 6 CERTAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration.................. 17
Section 6.02. Limitation on Purchase of Common Stock.................. 17
ARTICLE 7 MISCELLANEOUS
Section 7.01. Entire Agreement........................................ 17
Section 7.02. Binding Effect; Benefit................................. 17
Section 7.03. Assignability........................................... 18
Section 7.04. Amendment; Waiver; Termination.......................... 18
Section 7.05. Notices................................................. 18
Section 7.06. Headings................................................ 20
Section 7.07. Counterparts............................................ 20
Section 7.08. Governing Law........................................... 20
Section 7.09. Specific Enforcement.................................... 20
Section 7.10. Certain Actions......................................... 20
Section 7.11. Consent to Jurisdiction; Expenses....................... 21
Section 7.12. Severability............................................ 21
Section 7.13. Schedule I.............................................. 21
Section 7.14. Effectiveness........................................... 21
i
<PAGE>
Schedule I Securities Ownership
Exhibit A Form of Joinder Agreement
ii
<PAGE>
AMENDED AND RESTATED INVESTORS AGREEMENT
AMENDED AND RESTATED INVESTORS AGREEMENT, dated as of April 9, 1998, among (i)
IPC Information Systems, Inc. (the "Company"), (ii) Cable Systems Holding, LLC,
a Delaware limited liability company ("CSH"), (iii) Cable Systems International,
Inc., a Delaware Corporation, (iv) Richard Kleinknecht, (v) David Walsh, (vi)
Anthony Servidio and (vii) Lawrence, Smith & Horey III, L.P., a Delaware limited
partnership.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Merger Agreement (as defined below),
Arizona Acquisition Corp. will be merged with and into the Company, with the
Company as the surviving corporation (the "Merger");
WHEREAS, at the Effective Time (as defined in the Merger Agreement) the
parties hereto will hold securities of the Company as set forth on Schedule I to
be attached hereto at the Effective Time;
WHEREAS, the parties hereto desire to enter into this Agreement to govern
certain of their rights, duties and obligations after consummation of the
transactions contemplated by the Merger Agreement;
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. (a) The following terms, as used herein, have the
following meanings:
"Adverse Person" means any Person whom the Board of Directors of the Company
may reasonably determine to be a competitor or a potential competitor of the
Company or its Subsidiaries.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person,
provided that no securityholder of the Company shall be deemed an Affiliate of
any other securityholder solely by reason of any investment in the Company. For
the purpose of this definition, the term "control" (including with correlative
meanings, the terms "controlling", "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
"beneficially own" shall have the meaning set forth in Rule 13d-3 of the
Exchange Act.
"Board" means the board of directors of the Company.
"Business Day" means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized by law to close.
"Change of Control" means such time as (a) the CSH Shareholders shall own less
than 20% of the outstanding shares of Common Stock, (b) the transfer of all or
substantially all of the assets of the Company to any Person or group shall have
been consummated, or (c) the Company shall have been liquidated.
"Closing Date" shall have the meaning ascribed thereto in the Merger
Agreement.
"Common Stock" shall mean the common stock, par value $.01 per share, of the
Company and any stock into which such Common Stock may thereafter be converted
or changed; provided, however, that in the event of a stock dividend, split-up,
recapitalization, combination, exchange of stock or the like in respect of such
Common Stock, the term "Common Stock" shall be deemed to refer to and include
the stock as well as all stock dividends and distributions and any stock into
which or for which any or all of such stock may be changed or exchanged.
<PAGE>
"CSH Entities" means (a) CSH and (b) Cable Systems International Inc., a
Delaware Corporation.
"CSH Shareholders" means the CSH Entities and their direct and indirect
Permitted Transferees so long as any such Person shall beneficially own any
Common Stock.
"Drag-Along Portion" means, with respect to any Kleinknecht Shareholder, any
Walsh Shareholder any Servidio Shareholder or any LSH Shareholder, the number of
Shares beneficially owned by such Kleinknecht Shareholder, Walsh Shareholder,
Servidio Shareholder or any LSH Shareholder multiplied by a fraction, the
numerator of which is the number of Shares to be sold by the CSH Shareholders on
behalf of the CSH Shareholders and the Kleinknecht Shareholders, the Walsh
Shareholders, the Servidio Shareholders and the LSH Shareholders and the
denominator of which is the total number of Shares then beneficially owned by
all of the Shareholders.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fully Diluted" means all outstanding shares of Common Stock and all shares
issuable in respect of securities convertible into or exchangeable or
exercisable for such Common Stock, stock appreciation rights or options,
warrants and other irrevocable rights to purchase or subscribe for such Common
Stock or securities convertible into or exchangeable or exercisable for such
Common Stock; provided that no Person shall be deemed to own such number of
Fully Diluted shares of any Common Stock as such Person has the right to acquire
from any Person other than the Company.
"Initial Ownership" means, with respect to any Shareholder, the number of
shares of Common Stock beneficially owned (and (without duplication) which such
Persons have the right to acquire from any Person) as of the Effective Time, or
in the case of any Person that shall become a party to this Agreement on a later
date, as of such date, taking into account any stock split, stock dividend,
reverse stock split or similar event.
"Kleinknecht Shareholders" means Richard Kleinknecht and his direct and
indirect Permitted Transferees so long as any such Person shall beneficially own
any Common Stock.
"LSH" means Lawrence, Smith & Horey III, L.P.
"LSH Shareholders" means LSH and its direct and indirect Permitted Transferee
so long as any such Person shall beneficially own any Common Stock.
"Merger Agreement" means the Agreement and Plan of Merger dated as of the date
hereof, as subsequently amended, between the Company and Arizona Acquisition
Corp.
"Permitted Transferee" means (i) in the case of any Shareholder who is a
natural person, (a) a spouse or lineal descendent (including by adoption and
stepchildren), heir, executor, testamentary trustee or legatee of such
Shareholder or (b) any trust or estate the beneficiaries of which, or any
corporation, limited liability company or partnership, the stockholders, members
or partners of which include only the Persons described in clause (a) above,
(ii) in the case of any CSH Shareholder, (a) Citicorp Venture Capital, Ltd., any
stockholder, member, partner or Affiliate of any such CSH Shareholder or of
Citicorp Venture Capital, Ltd. and any officer, director, or employee of any
such CSH Shareholder, Citicorp Venture Capital, Ltd. or of any such stockholder,
member, partner or Affiliate, (b) a spouse or lineal descendant (including by
adoption and stepchildren), heir, executor, testamentary trustee or legatee of
the officers, directors and employees referred to in clause (ii)(a) above, and
any trust or estate (where a majority in interest of the beneficiaries thereof
are any of the Persons described in this clause (b) and in clause (ii)(a)
above), corporation, limited liability company or partnership (where a majority
in interest of the stockholders, members or limited partners, or where the
managing general partner, is one of more of the Persons described in this clause
(b) or in clause (ii)(a) above and (iii) in the case of any LSH Shareholder, (a)
any shareholder, member, partner or Affiliate of such LSH Shareholder or (b) a
spouse or lineal descendant (including by adoption and stepchildren), heir,
executor, testamentary trustee or legatee of the shareholders, members and
partners referred to in clause (iii)(a) above, and any trust or estate (where a
majority
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in interest of the beneficiaries thereof are any of the Persons described in
this clause (b) and in clause (iii)(a) above), corporation, limited liability
company or partnership (where a majority in interest of the stockholders,
members or limited partners, or where the managing general partner, is one of
more of the Persons described in this clause (b) or in clause (iii)(a) above.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pro Rata Portion" means the number of Shares a Shareholder holds multiplied
by a fraction, the numerator of which is the number of Shares to be sold by the
CSH Shareholders, the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders and the LSH Shareholders in a Public Offering and the
denominator of which is the total number of Shares, on a Fully Diluted basis,
held in the aggregate by the CSH Shareholders, the Kleinknecht Shareholders, the
Walsh Shareholders, the Servidio Shareholders and the LSH Shareholders
immediately prior to such Public Offering.
"Public Offering" means any primary or secondary public offering of shares of
Common Stock pursuant to an effective registration statement under the
Securities Act other than pursuant to a registration statement filed in
connection with a transaction of the type described in Rule 145 of the
Securities Act or for the purpose of issuing securities pursuant to an employee
benefit plan.
"Registrable Securities" means at any time, with respect to any Shareholder,
any shares of Common Stock then owned by such Shareholder until (i) a
registration statement covering such securities has been declared effective by
the SEC and such securities have been disposed of pursuant to such effective
registration statement, (ii) such securities are sold to the public pursuant to
Rule 144 (or any similar provisions then in force) under the Securities Act or
(iii) such securities are otherwise transferred, the Company has delivered a new
certificate or other evidence of ownership for such securities not bearing the
legend required pursuant to this Agreement and such securities are freely
tradeable without restriction by the holder thereof under the Securities Act.
"Registration Expenses" means (i) all registration and filing fees, (ii) fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the securities registered), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) reasonable fees and disbursements of counsel for the Company and
customary fees and expenses for independent certified public accountants
retained by the Company (including expenses relating to any comfort letters or
costs associated with the delivery by independent certified public accountants
of a comfort letter or comfort letters requested pursuant to Section 5.04(g)
hereof), (vi) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, (vii) reasonable fees and
expenses of up to one counsel for the Shareholders participating in the
offering, (viii) fees and expenses in connection with any review of underwriting
arrangements by the National Association of Securities Dealers, Inc. (the
"NASD"), including fees and expenses of any "qualified independent underwriter"
and (ix) fees and disbursements of underwriters customarily paid by issuers or
sellers of securities, but shall not include any underwriting fees, discounts or
commissions attributable to the sale of Registrable Securities, or any
out-of-pocket expenses (except as set forth in clause (vii) above) of the
Shareholders.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Servidio Shareholders" means Anthony Servidio and his direct and indirect
Permitted Transferees so long as any such Person shall beneficially own any
Common Stock.
"Shareholder" means each Person (other than the Company) who shall be a party
to this Agreement, whether in connection with the execution and delivery hereof
as of the date hereof, pursuant to Section 7.03 or otherwise, so long as such
Person shall beneficially own any Common Stock.
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"Shares" means shares of Common Stock held by the Shareholders.
"Subject Securities" means the Common Stock beneficially owned by the
Kleinknecht Shareholders, the Walsh Shareholders and the Servidio Shareholders
and the LSH Shareholders to be transferred in a Section 4.02 Sale.
"Subsidiary" means, with respect to any Person, any entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person.
"Tag-Along Portion" means the number of Shares held by the Tagging Person or
the Selling Person, as the case may be, multiplied by a fraction, the numerator
of which is the number of Shares proposed to be sold by the Selling Person
pursuant to Section 4.01, and the denominator of which is the aggregate number
of Shares, on a Fully Diluted basis, then owned by the Selling Person.
"Third Party" means a prospective purchaser of Common Stock from a Shareholder
where such purchaser is not a Permitted Transferee of such Shareholder or an
entity in which such Shareholder or any of its Permitted Transferees directly or
indirectly owns any outstanding securities or other ownership interests having
ordinary voting power.
"Underwritten Public Offering" means a firmly underwritten public offering of
Registrable Securities of the Company pursuant to an effective registration
statement under the Securities Act.
"Walsh Shareholders" means Walsh and his direct and indirect Permitted
Transferees so long as any such Person shall beneficially own any Common Stock.
(b) Each of the following terms is defined in the Section set forth opposite
such term:
TERM SECTION
---- -----------
Cause......................................................... 2.02
Demand Registration........................................... 5.01(a)
Drag-Along Rights............................................. 4.02(a)
Free Percentage............................................... 4.01(a)
Holders....................................................... 5.01(a)(ii)
Indemnified Party............................................. 5.07
Indemnifying Party............................................ 5.07
Inspectors.................................................... 5.04(g)
Joinder Agreement............................................. 3.03
Maximum Offering Size......................................... 5.01(e)
Nominee....................................................... 2.03(a)
Piggyback Registration........................................ 5.02(a)
Records....................................................... 5.04(g)
Section 4.01 Response Notice.................................. 4.01(a)
Section 4.02 Sale............................................. 4.02(a)
Section 4.02 Notice........................................... 4.02(a)
Section 4.02 Sale Price....................................... 4.02(a)
Section 4.02 Notice Period.................................... 4.02(a)
Selling Person................................................ 4.01(a)
Selling Shareholder........................................... 5.01(a)
Tag-Along Notice.............................................. 4.01(a)
Tag-Along Notice Period....................................... 4.01(a)
Tag-Along Offer............................................... 4.01(a)
Tag-Along Right............................................... 4.01(a)
Tag-Along Sale................................................ 4.01(a)
Tagging Person................................................ 4.01(a)
Transfer...................................................... 3.01(a)
Walsh......................................................... Preamble
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ARTICLE 2
CORPORATE GOVERNANCE AND MANAGEMENT
Section 2.01. Composition of the Board. The Board shall consist of nine
members, of whom (i) three shall be nominated by the CSH Shareholders, (ii) two
shall be nominated by the CSH Shareholders and shall be individuals which are
not "Affiliates" or "Associates" (as those terms are used within the meaning of
Rule 12b-2 of the General Rules and Regulations under the Exchange Act) of any
Shareholder or its Affiliates, (iii) two shall be nominated by the CSH
Shareholders and shall be individuals who are executive officers of the Company
or its Subsidiaries and (iv) two shall be nominated by the Kleinknecht
Shareholders. Each Shareholder entitled to vote for the election of directors to
the Board agrees that it will vote its shares of Common Stock or execute
consents, as the case may be, and take all other necessary action (including
causing the Company to call a special meeting of shareholders) in order to
ensure that the composition of the Board is as set forth in this Section 2.01;
provided that, no Shareholder shall be required to vote for the CSH
Shareholders' or the Kleinknecht Shareholders' nominee(s) , as applicable, if
the number of Shares held by the group of Shareholders, as applicable, making
the nomination is, at the close of business on the day preceding such vote or
execution of consents, (x) less than 5% of the outstanding number of Shares of
Common Stock, in the case of the CSH Shareholders or (y) less than 50% of its
Initial Ownership of Common Stock, in the case of the Kleinknecht Shareholders.
Section 2.02. Removal. Subject to applicable law, each Shareholder agrees that
if, at any time, it is then entitled to vote for the removal of directors of the
Company, it will not vote any of its Shares in favor of the removal of any
director who shall have been designated or nominated pursuant to Section 2.01
unless such removal shall be for Cause or the Person(s) entitled to designate or
nominate such director shall have consented to such removal in writing, provided
that if the Persons entitled to designate or nominate any director pursuant to
Section 2.01 shall request the removal, with or without Cause, of such director
in writing, each such Shareholder shall vote its shares of Common Stock in favor
of such removal. Removal for "Cause" shall mean removal of a director because of
such director's (a) willful and continued failure substantially to perform his
duties with the Company in his established position, (b) willful conduct which
is injurious to the Company or any of its Subsidiaries, monetarily or otherwise,
(c) conviction for, or guilty plea to, a felony or a crime involving moral
turpitude, or (d) abuse of illegal drugs or other controlled substances or
habitual intoxication.
Section 2.03. Vacancies. If, as a result of death, disability, retirement,
resignation, removal (with or without Cause) or otherwise, there shall exist
or occur any vacancy on the Board:
(a) The Shareholder(s) entitled under Section 2.01 to nominate such director
whose death, disability, retirement, resignation or removal resulted in such
vacancy, may, subject to the provisions of Section 2.01, nominate another
individual (the "Nominee") to fill such vacancy and serve as a director of the
Company; and
(b) each Shareholder then entitled to vote for the election of the Nominee
as a director of the Company agrees that it will vote its Shares, or execute a
written consent, as the case may be, in order to ensure that the Nominee be
elected to the Board; provided that, no Shareholder shall be required to vote
for another party's Nominee(s) if the aggregate number of Shares held by the
Shareholder or group of Shareholders, as applicable, making the nomination is,
at the close of business of the day preceding such vote or execution of
consents, less than (x) 5% of the outstanding number of Shares of Common
Stock, in the case of the CSH Shareholders or (y) less than 50% of the Initial
Ownership of Common Stock, in the case of the Kleinknecht Shareholders.
Section 2.04. Action by the Board. (a) A quorum at any meeting of the Board
shall consist of five directors.
(b) All actions of the Board shall require the affirmative vote of at least a
majority of the directors present at a duly convened meeting of the Board at
which a quorum is present or the unanimous written consent of the Board;
provided that, in the event there is a vacancy on the Board and an individual
has been nominated to fill such vacancy, the first order of business shall be to
fill such vacancy.
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Section 2.05. Conflicting Charter or Bylaw Provision. Each Shareholder shall
vote its Shares, and shall take all other actions reasonably necessary, to
ensure that the Company's certificate of incorporation and bylaws are consistent
with, facilitate and do not at any time conflict with any provision of this
Agreement.
Section 2.06. IXNET Board. For so long as (a) International Exchange Network
Ltd, a Delaware corporation ("IXNET") is a wholly-owned Subsidiary of the
Company and (b) David Walsh is an employee of IXNET, the Company shall cause
David Walsh to be a member of the board of directors of IXNET.
ARTICLE 3
RESTRICTIONS ON TRANSFER
Section 3.01. General. (a) Each Shareholder agrees that it will not, directly
or indirectly, sell, assign, transfer, grant a participation in, pledge or
otherwise dispose of ("transfer") any Common Stock (or solicit any offers to buy
or otherwise acquire, or take a pledge of any Common Stock) except in compliance
with the Securities Act and the terms and conditions of this Agreement.
(b) Any attempt to transfer any Common Stock not in compliance with this
Agreement shall be null and void and the Company shall not, and shall cause any
transfer agent not to, give any effect in the Company's stock records to such
attempted transfer.
Section 3.02. Legends. (a) In addition to any other legend that may be
required, each certificate for shares of Common Stock that is issued to any
Shareholder shall bear a legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED. SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN THE INVESTORS AGREEMENT
DATED AS OF DECEMBER 18, 1997, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST
FROM IPC INFORMATION SYSTEMS, INC. OR ANY SUCCESSOR THERETO."
(b) If any Common Stock shall cease to be subject to any and all restrictions
on transfer set forth in this Agreement, the Company shall, upon the written
request of the holder thereof, issue to such holder a new certificate evidencing
such Common Stock without the legend required by Section 3.02(a) endorsed
thereon.
Section 3.03. Permitted Transferees. Any Shareholder may at any time transfer
any or all of its Shares to one or more of its Permitted Transferees without the
consent of the Company or any Shareholder or group of Shareholders and without
compliance with Sections 3.04 and 4.01 so long as (a) such Permitted Transferee
shall have executed a Joinder Agreement substantially in the form of Exhibit A
hereto ("Joinder Agreement") and thereby agreed to be bound by the terms of this
Agreement and (b) the transfer to such Permitted Transferee is not in violation
of applicable federal or state securities laws.
Section 3.04. Restrictions on Transfers by Kleinknecht Shareholders. (a)
Except as provided in Section 3.03, the Kleinknecht Shareholders may transfer
their Common Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 or Section 4.02;
(ii) in a Public Offering in connection with the exercise of their rights
under Article 5 hereof; or
(iii) following the earlier to occur of (i) the date on which the number of
Shares held by the Kleinknecht Shareholders is less than 5% of the outstanding
number of Shares of Common Stock and (ii) the fifth anniversary of the Closing
Date, to any Person other than any Adverse Person.
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(b) The restrictions set forth in Section 3.04 shall terminate at such time as
the aggregate number of Shares of Common stock held by the CSH Shareholders is
less than 50% of the CSH Shareholders' aggregate Initial Ownership of Common
Stock.
Section 3.05. Restrictions on Transfers by Walsh Shareholders and Servidio
Shareholders. Except as provided in Section 3.03, the Walsh Shareholders and the
Servidio Shareholders may transfer their Common Stock only as follows:
(i) in a transfer made in compliance with Section 4.01 of Section 4.02;
or
(ii) in any Public Offering; or
(iii) following the 30th month anniversary of the Closing Date, to any
Person other than any Adverse Person; or
(iv) to any Person, in a transfer through a broker or dealer in compliance
with Rule 144 (or any successor rule).
Section 3.06. Restrictions on Transfers by LSH Shareholders. Except as
provided in Section 3.03, the LSH Shareholders may transfer their Common Stock
only as follows:
(i) in a transfer made in compliance with Section 4.01 of Section 4.02;
or
(ii) in any Public Offering; or
(iii) to any Person, in a transfer through a broker or dealer in compliance
with Rule 144 (or any successor rule).
ARTICLE 4
TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS
Section 4.01. Rights to Participate in Transfer. (a) If CSH Shareholders (the
"Selling Person") propose to, directly or indirectly, transfer (other than
transfers of Shares (i) in a Public Offering, (ii) to any Permitted Transferee
of any of the CSH Shareholders, (iii) up to 3% in the aggregate of the
securities of such class outstanding on the date of the first transfer of any
Shares by any of the CSH Shareholders (such percentage, the "Free Percentage")
or (iv) that will indirectly result from a sale of all or substantially all of
the capital stock or assets of CSH, CSI, Cable Systems Holding Company, Citicorp
or any of its Subsidiaries) shares of Common Stock (a "Tag-Along Sale"), the
Kleinknecht Shareholders and/or the Walsh Shareholders and/or the Servidio
Shareholders and/or the LSH Shareholders may, at their option, elect to exercise
their rights under this Section 4.01 (each such Shareholder, a "Tagging
Person"). In the event of such a proposed transfer, the Selling Person shall
provide each Kleinknecht Shareholder, each Walsh Shareholder, each Servidio
Shareholder, each LSH Shareholder and the Company written notice of the material
terms and conditions of such proposed transfer ("Tag-Along Notice") and offer
each Tagging Person the opportunity to participate in such sale. The Tag-Along
Notice shall identify the number of shares of Common Stock subject to the offer
("Tag-Along Offer"), the consideration for which the transfer is proposed to be
made and all other material terms and conditions of the Tag-Along Offer. Each
Tagging Person shall have the right (a "Tag-Along Right"), exercisable by
irrevocable written notice (a "Section 4.01 Response Notice") given within 10
Business Days from receipt of the Tag-Along Notice (the "Tag-Along Notice
Period") to participate in such Tag-Along Sale on the same terms and conditions
as set forth in the Tag-Along Notice and to sell all or any portion of its
Tag-Along Portion. If the Tagging Persons exercise their Tag-Along Rights
hereunder, each Tagging Person shall deliver at least two business days prior to
the date scheduled for the closing of the Tag-Along Sale to the Selling Person
for delivery to the prospective transferee one or more certificates, in a proper
form for transfer, representing the Shares of such Tagging Person to be included
in the Tag-Along Sale. Such certificate or certificates that a Tagging Person
delivers to the Selling Person shall be delivered on the date scheduled for the
closing of the Tag-Along Sale to such transferee in consummation of the
Tag-Along Sale. Notwithstanding anything to the contrary contained in this
Section 4.01, except for the Selling Person's obligation to return to each
Tagging Person any certificates representing the Tagging Person's Shares there
shall be no liability on the part of the Selling Person to any Shareholder in
the event that the proposed Tag-Along Sale is not consummated for whatever
reason. Whether a Tag-Along Sale is effected pursuant to this Section 4.01 by
the Selling Person is in the sole and absolute discretion of the Selling Person.
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(b) Concurrently with the consummation of the Tag-Along Sale, the Selling
Person shall notify the Tagging Persons thereof, shall remit to the Tagging
Persons the total consideration (by bank or certified check) for the Shares of
the Tagging Persons transferred pursuant thereto, and shall, promptly after the
consummation of such Tag-Along Sale, furnish such other evidence of the
completion and time of completion of such transfer and the terms thereof as may
be reasonably requested by the Tagging Persons.
(c) If at the termination of the Tag-Along Notice Period any Tagging Person
shall not have elected to participate in the Tag-Along Sale, such Tagging Person
will be deemed to have waived its rights under Section 4.01(a) with respect to
the transfer of its securities pursuant to such Tag-Along Sale.
(d) If any Tagging Person declines to exercise its Tag-Along Rights or elects
to exercise its Tag-Along Rights with respect to less than such Tagging Person's
Tag-Along Portion, the CSH Shareholders shall be entitled to transfer, pursuant
to the Tag-Along Offer, a number of Shares held by the CSH Shareholders equal to
the number of Shares constituting the portion of such Tagging Person's Tag-Along
Portion with respect to which Tag-Along Rights were not exercised.
(e) The CSH Shareholders and any Tagging Person who exercises the Tag-Along
Rights pursuant to this Section 4.01 may consummate the Tag-Along Sale on
substantially the same terms and conditions set forth in the Tag-Along Notice
(provided, however, that the price payable in any such sale may exceed the price
specified in the Tag-Along Notice by up to 5%) within 120 days of the date on
which Tag-Along Rights shall have been waived, exercised or expire.
(f) The exercise or the non-exercise of the rights of the Tagging Persons to
participate in one or more Tag-Along Sales shall not adversely affect their
rights to participate in subsequent Tag-Along Sales subject to this Section
4.01.
(g) The sale of the Selling Person's Shares in any Tag-Along Sale shall be
effected on the same terms and conditions as the sale of any Tagging Person's
Shares and no Selling Person shall receive any form of special consideration or
control premium in addition to the price payable for the sold Shares.
(h) The right of the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders and the LSH Shareholders to participate in a Tag-Along
Sale shall terminate at such time as the aggregate number of Shares held by the
Kleinknecht Shareholders, the Walsh Shareholders, the Servidio Shareholders or
the LSH Shareholders, as the case may be, is less than 50% of
their aggregate Initial Ownership of Common Stock.
Section 4.02. Right to Compel Participation in Certain Transfers. (a) If (i)
the CSH Shareholders propose to transfer Shares representing not less than 50%
of their aggregate Initial Ownership of Common Stock to a Third Party in a bona
fide sale for cash negotiated on an arms-length basis, and (ii) the CSH
Shareholders propose a transfer in which the Shares to be transferred by the CSH
Shareholders, the Kleinknecht Shareholders, the Walsh Shareholders, the Servidio
Shareholders and the LSH Shareholders would constitute more than 50% of the
outstanding shares of Common Stock determined on a fully diluted basis (a
"Section 4.02 Sale"), the CSH Shareholders may at their option require all
Kleinknecht Shareholders, Walsh Shareholders, Servidio Shareholders and the LSH
Shareholders to sell the Subject Securities ("Drag-Along Rights") then held by
every Kleinknecht Shareholder, Walsh Shareholder, Servidio Shareholders and the
LSH Shareholders to such Third Party, for the same consideration per share of
Common Stock and otherwise on the same terms and conditions as the CSH
Shareholders. CSH shall provide written notice of such Section 4.02 Sale to the
Kleinknecht Shareholders, the Walsh Shareholders, the Servidio Shareholders, the
LSH Shareholders and the Company (a "Section 4.02 Notice") not later than the
30th day prior to the proposed Section 4.02 Sale. The Section 4.02 Notice shall
identify the transferee, the number of Subject Securities, the consideration for
which a transfer is proposed to be made (the "Section 4.02 Sale Price") and all
other material terms and conditions of the Section 4.02 Sale. The number of
shares of Common Stock to be sold by each Kleinknecht Shareholder, Walsh
Shareholder, Servidio Shareholder and LSH Shareholder shall not exceed the
Drag-Along Portion of the shares of Common Stock that such Kleinknecht
Shareholder, Walsh Shareholder, Servidio Shareholder and LSH
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Shareholder owns. Each Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder or LSH Shareholder shall be required to participate in the Section
4.02 Sale on the terms and conditions set forth in the Section 4.02 Notice and
to tender all its Subject Securities as set forth below. The price payable in
such transfer shall be the Section 4.02 Sale Price. Each of the Kleinknecht
Shareholders, Walsh Shareholders, Servidio Shareholders or LSH Shareholder shall
deliver not later than 2 Business Days prior to the date scheduled for the
Section 4.02 Sale to a representative of CSH designated in the Section 4.02
Notice certificates representing all Subject Securities held by such Kleinknecht
Shareholder, Walsh Shareholder, Servidio Shareholder and LSH Shareholder duly
endorsed, together with all other documents required to be executed in
connection with such Section 4.02 Sale or, if such delivery is not permitted by
applicable law, an unconditional agreement to deliver such Subject Securities
pursuant to this Section 4.02 at the closing for such Section 4.02 Sale against
delivery to such Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder and LSH Shareholder of the consideration therefor. If a Kleinknecht
Shareholder, Walsh Shareholder, Servidio Shareholder or LSH Shareholder should
fail to deliver such certificates to CSH, the Company shall cause the books and
records of the Company to show that such Subject Securities are bound by the
provisions of this Section 4.02 and that such Subject Securities shall be
transferred to the purchaser of the Subject Securities immediately upon
surrender for transfer by the holder thereof.
(b) The CSH Shareholders shall have a period of 120 days from the date of
receipt of the Section 4.02 Notice to consummate the Section 4.02 Sale on the
terms and conditions set forth in such Section 4.02 Sale Notice. If the Section
4.02 Sale shall not have been consummated during such period, CSH shall return
to each of the Kleinknecht Shareholders, each of the Walsh Shareholders, each of
the Servidio Shareholders and each of the LSH Shareholders all certificates
representing Shares that such Kleinknecht Shareholder, Walsh Shareholder,
Servidio Shareholder or LSH Shareholder, as the case may be, may have delivered
for transfer pursuant hereto, together with any documents in the possession of
CSH executed by the Kleinknecht Shareholder, the Walsh Shareholder, the Servidio
Shareholder or the LSH Shareholder, as the case may be, in connection with such
proposed transfer, and all the restrictions on transfer contained in this
Agreement or otherwise applicable at such time with respect to Common Stock
owned by the Kleinknecht Shareholders, the Walsh Shareholders, the Servidio
Shareholders and the LSH Shareholders shall again be in effect.
(c) Concurrently with the consummation of the transfer of Shares pursuant to
this Section 4.02, CSH or the Company, as applicable, shall remit to each of the
Shareholders who have surrendered their certificates the total consideration (by
bank or certified check) for the Shares transferred pursuant hereto and shall
furnish such other evidence of the completion and time of completion of such
transfer and the terms thereof as may be reasonably requested by such
Shareholders.
(d) In furtherance of, and not in limitation of the foregoing provisions of
this Section 4.02, in connection with a Section 4.02 Sale (which Section 4.02
Sale may be structured as a merger, recapitalization, reorganization, sale of
assets or otherwise) each Kleinknecht Shareholder, Walsh Shareholder, Servidio
Shareholder or LSH Shareholder will (i) consent to and raise no objection
against the Section 4.02 Sale or the process pursuant to which it was arranged,
(ii) waive any appraisal rights and other similar rights and (iii) execute all
documents containing such terms and conditions as those executed by other
Shareholders as directed by the CSH Shareholders.
(e) The sale of the CSH Shareholders' Shares in any Section 4.02 Sale shall be
effected on the same terms and conditions as the sale of any Shares owned by the
Kleinknecht Shareholders, the Walsh Shareholders, the Servidio Shareholders and
the LSH Shareholders and no CSH Shareholder shall receive any form of special
consideration or control premium in addition to the price payable for the sold
Shares.
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ARTICLE 5
REGISTRATION RIGHTS
Section 5.01. Demand Registration. (a) If the Company shall receive a written
request by the CSH Shareholders (any such requesting Person, a "Selling
Shareholder") that the Company effect the registration under the Securities Act
of all or a portion of such Selling Shareholder's Registrable Securities, and
specifying the intended method of disposition thereof, then the Company shall
promptly give written notice of such requested registration (a "Demand
Registration") to the Kleinknecht Shareholders, the Walsh Shareholders, the
Servidio Shareholders and the LSH Shareholders, and thereupon will use its best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:
(i) the Registrable Securities which the Company has been so requested to
register by the Selling Shareholders, then held by the Selling Shareholders;
and
(ii) all other Registrable Securities of the same type as that to which the
request by the Selling Shareholders relates which any Kleinknecht Shareholder,
any Walsh Shareholder, any Servidio Shareholder or any LSH Shareholder (all
such Shareholders, together with the Selling Shareholders, the "Holders") has
requested the Company to register by written request received by the Company
within 10 days (one of which shall be a Business Day) after the receipt by
such Holders of such written notice given by the Company, all to the extent
necessary to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered;
provided that, subject to Section 5.01(d) hereof, the Company shall not be
obligated to effect more than five Demand Registrations for the CSH
Shareholders; and provided further that the Company shall not be obligated to
effect a Demand Registration unless the aggregate proceeds expected to be
received from the sale of the Common Stock requested to be included in such
Demand Registration, in the reasonable opinion of CSH exercised in good faith,
equals or exceeds $7,500,000. In no event will the Company be required to
effect more than one Demand Registration within any four-month period.
(b) Promptly after the expiration of the 10-day period referred to in Section
5.01(a)(ii) hereof, the Company will notify all the Holders to be included in
the Demand Registration of the other Holders and the number of Registrable
Securities requested to be included therein. The Selling Shareholders requesting
a registration under Section 5.01(a) may, at any time prior to the effective
date of the registration statement relating to such registration, revoke such
request, without liability to any of the other Holders, by providing a written
notice to the Company revoking such request, in which case such request, so
revoked, shall be considered a Demand Registration unless such revocation arose
out of the fault of the Company or unless the participating Shareholders
reimburse the Company for all costs incurred by the Company in connection with
such registration, in which case such request shall not be considered a Demand
Registration.
(c) The Company will pay all Registration Expenses in connection with any
Demand Registration.
(d) A registration requested pursuant to this Section 5.01 shall not be deemed
to have been effected unless the registration statement relating thereto (i) has
become effective under the Securities Act and (ii) all of the Registrable
Securities registered thereunder have been sold; provided that if, within 180
days after it has become effective, the offering of Registrable Securities
pursuant to such registration is interfered with by any stop order, injunction
or other order or requirement of the SEC or other governmental agency or court
such registration will be deemed not to have been effected.
(e) If a Demand Registration involves an Underwritten Public Offering and the
managing underwriter shall advise the Company and the Selling Shareholders that,
in its view, (i) the number of shares of Registrable Securities requested to be
included in such registration (including any securities which the Company
proposes to be included which are not Registrable Securities) or (ii) the
inclusion of some or all of the shares of Registrable Securities owned by the
Holders, in any such case, exceeds the largest number of shares which can be
sold without having an adverse effect on such offering, including the price at
which such shares can be sold (the
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"Maximum Offering Size"), the Company will include in such registration, in the
priority listed below, up to the Maximum Offering Size:
(A) first, all Registrable Securities requested to be registered by the
parties requesting such Demand Registration and all Registrable Securities
requested to be included in such registration by any other Holder (allocated,
if necessary for the offering not to exceed the Maximum Offering Size, pro
rata among such Holders on the basis of the relative number of Registrable
Securities so requested to be included in such registration); and
(B) second, any securities proposed to be registered by the Company.
(f) Upon written notice to each Selling Shareholder, the Company may postpone
effecting a registration pursuant to this Section 5.01 on one occasion during
any period of six consecutive months for a reasonable time specified in the
notice but not exceeding 90 days (which period may not be extended or renewed),
if (1) an investment banking firm of recognized national standing shall advise
the Company and the Selling Shareholders in writing that effecting the
registration would materially and adversely affect an offering of securities of
such Company the preparation of which had then been commenced or (2) the Company
is in possession of material non-public information the disclosure of which
during the period specified in such notice the Company believes, in its
reasonable judgment, would not be in the best interests of the Company.
(g) After the Company has effected one Demand Registration by the CSH
Shareholders pursuant to this Section 5.01 of Common Stock, the Kleinknecht
Shareholders, upon request of the Kleinknecht Shareholders owning a majority of
the Shares acquired by the Kleinknecht Shareholders on the Closing Date may
request that the Company register Common Stock which are Registrable Securities
then owned by such Kleinknecht Shareholders. In no event will the Company be
required to effect more than two such Demand Registrations by the Kleinknecht
Shareholders. The other provisions of this Article 5 applicable to Demand
Registrations requested by the CSH Shareholders shall apply, mutatis mutandis,
to any such Demand Registration by the Kleinknecht Shareholders.
(h) If any registration requested pursuant to this Section 5.01 which is
proposed by the Company to be effected by the filing of a registration statement
on form S-3 (or any successor or similar short-form registration statement)
shall be in connection with an Underwritten Public Offering, and if the managing
underwriter shall advise the Company in writing that, in its opinion, the use of
another form of registration statement is of material importance to the success
of such proposed offering, then such registration shall be effected on such
other form.
Section 5.02. Piggyback Registration. Piggyback Registration. (a) If the
Company proposes to register any of its Common Stock under the Securities Act
(other than pursuant to a Demand Registration), it will each such time,
subject to the provisions of Section 5.02(b) hereof, give prompt written
notice at least 15 days prior to the anticipated filing date of the
registration statement relating to such registration to all Shareholders which
notice shall set forth such Shareholders' rights under this Section 5.02 and
shall offer all Shareholders the opportunity to include in such registration
statement such number of shares of Common Stock as each such Shareholder may
request (a "Piggyback Registration"). Upon the written request of any such
Shareholder made within 10 days after the receipt of notice from the Company
(which request shall specify the number of shares of Common Stock intended to
be disposed of by such Shareholder), the Company will use its reasonable best
efforts to effect the registration under the Securities Act of all shares of
Common Stock which the Company has been so requested to register by such
Shareholders, to the extent requisite to permit the disposition of the shares
of Common Stock so to be registered; provided that (i) if such registration
involves an Underwritten Public Offering, all such Shareholders requesting to
be included in the Company's registration must sell their Registrable
Securities to the underwriters selected as provided in Section 5.04(f) on the
same terms and conditions as apply to the Company or the Selling Shareholder,
as applicable, and (ii) if, at any time after giving written notice of its
intention to register any stock pursuant to this Section 5.02(a) and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
stock, the Company shall give written notice to all such Shareholders and,
thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. No
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registration effected under this Section 5.02 shall relieve the Company of its
obligations to effect a Demand Registration to the extent required by Section
5.01 hereof. The Company will pay all Registration Expenses in connection with
each registration of Registrable Securities requested pursuant to this Section
5.02.
(b) If a registration pursuant to this Section 5.02 involves an Underwritten
Public Offering and the managing underwriter advises the Company that, in its
view, the number of shares of Common Stock which the Company and the selling
Shareholders intend to include in such registration exceeds the Maximum Offering
Size, the Company will include in such registration, in the following priority,
up to the Maximum Offering Size:
(i) first, so much of the Common Stock proposed to be registered for the
account of the Company as would not cause the offering to exceed the Maximum
Offering Size; and
(ii) second, all Registrable Securities requested to be included in such
registration by any Shareholder pursuant to Section 5.02 (allocated, if
necessary for the offering not to exceed the Maximum Offering Size, pro rata
among such Shareholders on the basis of the relative number of shares of
Registrable Securities so requested to be included in such registration).
Section 5.03. Holdback Agreements. With respect to each and every firmly
underwritten Public Offering, each Shareholder agrees not to offer or sell any
shares of Common Stock (except for shares of Common Stock, if any, sold in that
Public Offering) during the 14 days prior to the effective date of the
applicable registration statement for a public offering of shares of Common
Stock (except as part of such registration) and during the period after such
effective date equal to the lesser of: (i) 180 days or (ii) any such shorter
period as the Company and the lead managing underwriter of an Underwritten
Public Offering agree.
Section 5.04. Registration Procedures. Whenever Shareholders request that any
Registrable Securities be registered pursuant to Section 5.01 or 5.02 hereof,
the Company will, subject to the provisions of such Sections, use its reasonable
best efforts to effect the registration and the sale of such Registrable
Securities in accordance with the intended method of disposition thereof as
quickly as practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare and file with the
SEC a registration statement on any form selected by counsel for the Company
and which form shall be available for the sale of the Registrable Securities
to be registered thereunder in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause such filed
registration statement to become and remain effective for a period of not less
than 180 days (or such shorter period in which all of the Registrable
Securities of the Holders included in such registration statement shall have
actually been sold thereunder).
(b) The Company will, if requested, prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to each
Shareholder and each underwriter, if any, of the Registrable Securities
covered by such registration statement copies of such registration statement
as proposed to be filed, and thereafter the Company will furnish to such
Shareholder and underwriter, if any, such number of copies of such
registration statement, each amendment and supplement thereto (in each case
including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as such Shareholder or
underwriter may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such Shareholder. Each Shareholder shall
have the right to request that the Company modify any information contained in
such registration statement, amendment and supplement thereto pertaining to
such Shareholder and the Company shall use its reasonable best efforts to
comply with such request, provided, however, that the Company shall not have
any obligation to so modify any information if so doing would cause the
prospectus to contain an untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(c) After the filing of the registration statement, the Company will (i)
cause the related prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to
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Rule 424 under the Securities Act, (ii) comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement during the applicable period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement or supplement to such prospectus and
(iii) promptly notify each Shareholder holding Registrable Securities covered
by such registration statement of any stop order issued or threatened by the
SEC or any state securities commission under state blue sky laws and take all
reasonable actions required to prevent the entry of such stop order or to
remove it if entered.
(d) The Company will use its reasonable best efforts to (i) register or
qualify the Registrable Securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions in the
United States as any Shareholder holding such Registrable Securities
reasonably (in light of such Shareholder's intended plan of distribution)
requests and (ii) cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and do any
and all other acts and things that may be reasonably necessary or advisable to
enable such Shareholder to consummate the disposition of the Registrable
Securities owned by such Shareholder; provided that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (B)
subject itself to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Shareholder holding such
Registrable Securities covered by such registration statement, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and promptly prepare and make available to each such
Shareholder and file with the SEC any such supplement or amendment.
(f) In connection with any Demand Registration requested by the CSH
Shareholders, the Company shall appoint the underwriter or underwriters chosen
by CSH. The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities, including the engagement of a "qualified independent
underwriter" in connection with the qualification of the underwriting
arrangements with the NASD.
(g) Upon execution of confidentiality agreements in form and substance
reasonably satisfactory to the Company, the Company will make available for
inspection by any Shareholder and any underwriter participating in any
disposition pursuant to a registration statement being filed by the Company
pursuant to this Section 5.04 and any attorney, accountant or other
professional retained by any such Shareholder or underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as shall
be reasonably requested by any such Person, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(h) The Company will furnish to each such Shareholder (if requested by such
Shareholder) and to each such underwriter, if any, a signed counterpart,
addressed to such underwriter and the participating Shareholders, of (i) an
opinion or opinions of counsel to the Company and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters, as the case may be, as a majority of such
Shareholders or the managing underwriter therefor reasonably requests.
(i) The Company will otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and the relevant state
blue sky commissions, and make available to its securityholders, as soon as
reasonably practicable, an earnings statement covering a period of 12 months,
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beginning within three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act.
(j) The Company may require each such Shareholder to promptly furnish in
writing to the Company information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration.
(k) Each such Shareholder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 5.04(e)
hereof, such Shareholder will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Shareholder's receipt of the copies of the supplemented
or amended prospectus contemplated by Section 5.04(e) hereof, and, if so
directed by the Company, such Shareholder will deliver to the Company all
copies, other than any permanent file copies then in such Shareholder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event that the Company shall
give such notice, the Company shall extend the period during which such
registration statement shall be maintained effective (including the period
referred to in Section 5.04(a) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to Section
5.04(e) hereof to the date when the Company shall make available to such
Shareholder a prospectus supplemented or amended to conform with the
requirements of Section 5.04(e) hereof.
(l) The Company will use its reasonable best efforts to list such
Registrable Securities on any securities exchange on which the Common Stock is
then listed or on NASDAQ if the Common Stock is then quoted on NASDAQ not
later than the effective date of such registration statement.
Section 5.05. Indemnification by the Company. The Company agrees to indemnify
and hold harmless each Shareholder holding Registrable Securities covered by a
registration statement, its officers, directors, employees, members, partners
and agents, any affiliate of such Shareholder and each Person, if any, who
controls such Shareholder within the meaning of the Securities Act or Section 20
of the Exchange Act (and officers, directors, employees, members, partners and
agents of any such affiliate or controlling Persons) from and against any and
all losses, claims, damages and liabilities, joint or several, and expenses
(including reasonable attorneys fees and costs and expenses of investigation)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus relating to the
Registrable Securities (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission so made in strict conformity with information furnished in writing to
the Company by such Shareholder or on such Shareholder's behalf expressly for
use therein; provided that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, or in
any prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the prospectus
(or, in the case of a prospectus, the prospectus as amended or supplemented) was
not sent or given to the Person asserting any such loss, claim, damage,
liability or expense at or prior to the written confirmation of the sale of the
Registrable Securities concerned to such Person if it is determined that the
Company has provided such current copy of such prospectus (or such amended or
supplemented prospectus, as the case may be) to such Shareholder in a timely
manner prior to such sale and it was the responsibility of such Shareholder
under the Securities Act to provide such Person with a current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be) and
such current copy of the prospectus (or such amended or supplemented prospectus,
as the case may be) would have cured the defect giving rise to such loss, claim,
damage, liability or expense. The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each person who controls such underwriters on substantially the same basis as
that of the indemnification of the Shareholders provided in this Section 5.05.
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Section 5.06. Indemnification by Participating Shareholders. Each Shareholder
holding Registrable Securities included in any registration statement agrees,
severally but not jointly, to indemnify and hold harmless the Company, its
officers, directors and agents and each Person (other than such Shareholder) if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Shareholder, but only (i) with
respect to information furnished in writing by such Shareholder or on such
Shareholder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or (ii) to the extent that any
loss, claim, damage, liability or expense described in Section 5.05 results from
the fact that a current copy of the prospectus (or, in the case of a prospectus,
the prospectus as amended or supplemented) was not sent or given to the Person
asserting any such loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable Securities concerned to such
Person if it is determined that it was the responsibility of such Shareholder to
provide such Person with a current copy of the prospectus (or such amended or
supplemented prospectus, as the case may be) and such current copy of the
prospectus (or such amended or supplemented prospectus, as the case may be)
would have cured the defect giving rise to such loss, claim, damage, liability
or expense. Each such Shareholder shall be prepared, if required by the
underwriting agreement, to indemnify and hold harmless underwriters of the
Registrable Securities, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Company provided in this Section 5.06. As a condition to
including Registrable Securities in any registration statement filed in
accordance with Article 5 hereof, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.
No Shareholder shall be liable under Section 5.06 for any damage thereunder in
excess of the net proceeds realized by such Shareholder in the sale of the
Registrable Securities of such Shareholder.
Section 5.07. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Person in respect of which indemnity may be sought pursuant to this Article 5,
such Person (an "Indemnified Party") shall promptly notify the Person against
whom such indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Indemnified Party, and shall assume the
payment of all fees and expenses; provided that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is materially and actually prejudiced by such failure to notify. In any
such proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of such Indemnified Party representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall not,
in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent, or if there be a final judgment for the plaintiff, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any and all losses, claims, damages, liabilities and expenses or
liability (to the extent stated above) by reason of such settlement or judgment.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened proceeding
in respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
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Section 5.08. Contribution. If the indemnification provided for in this
Article 5 is held by a court of competent jurisdiction to be unavailable to the
Indemnified Parties in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) as between the Company and the Shareholders holding Registrable
Securities covered by a registration statement and their related Indemnified
Parties on the one hand and the underwriters and their related Indemnified
Parties on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and such Shareholders on the one hand
and the underwriters on the other, from the offering of the Shareholders'
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits but also the relative fault of the Company and such Shareholders on the
one hand and of such underwriters on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations and (ii) as between the
Company and their related Indemnified Parties on the one hand and each such
Shareholder and their related Indemnified Parties on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
each such Shareholder in connection with such statements or omissions, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and such Shareholders on the one hand and such underwriters on
the other shall be deemed to be in the same proportion as the total proceeds
from the offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Shareholders bear to the
total underwriting discounts and commissions received by such underwriters, in
each case as set forth in the table on the cover page of the prospectus. The
relative fault of the Company and such Shareholders on the one hand and of such
underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and such Shareholders or by such underwriters. The
relative fault of the Company on the one hand and of each such Shareholder on
the other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Shareholders agree that it would not be just and equitable
if contribution pursuant to this Section 5.08 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities or expenses referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.08 no underwriter shall be
required to contribute any amount in excess of the underwriting discount
applicable to securities purchased by such underwriter in such offering, less
the aggregate amount of any damages which such underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Shareholder shall be required to contribute any
amount in excess of the amount by which the net proceeds realized on the sale of
the Registrable Securities of such Shareholder exceeds the amount of any damages
which such Shareholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. Each Shareholder's obligation
to contribute pursuant to this Section 5.08 is several in the proportion that
the proceeds of the offering received by such Shareholder bears to the total
proceeds of the offering received by all such Shareholders and not joint.
Section 5.09. Participation in Public Offering. No Person may participate in
any Underwritten Public Offering hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
to be entered into in connection with such Underwritten Public Offering and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other
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documents reasonably required under the terms of such underwriting arrangements
and the provisions of this Agreement in respect of registration rights.
Section 5.10. Rule 144. The Company covenants that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available such information), and it will
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell shares of Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of any
holder of Registrable Securities, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.
Notwithstanding anything contained in this Section 5.10, the Company may
de-register under Section 12 of the Exchange Act if it then is permitted to do
so pursuant to the Exchange Act and the rules and regulations thereunder and, in
such circumstances, shall not be required hereby to file any reports which may
be necessary in order for Rule 144 or any similar rule or regulation to be
available.
Section 5.11. No Transfer of Registration Rights. None of the rights of
Shareholders under this Article 5 shall be assignable by any Shareholder to any
Person acquiring securities of such Shareholder in any Public Offering or
pursuant to a distribution to the public under Rule 144 under the Securities
Act.
ARTICLE 6
RETAIN COVENANTS AND AGREEMENTS
Section 6.01. Limitations on Subsequent Registration. Without the prior
written consent of Shareholders holding at least 51% of the Shares held by all
Shareholders, the Company shall not enter into any agreement with any holder or
prospective holder of any securities of the Company (a) that would allow such
holder or prospective holder to include such securities in any registration
filed pursuant to Section 5.01 or 5.02 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of such securities would
not reduce the amount of the Registrable Securities of the Shareholders included
therein or (b) on terms otherwise more favorable than this Agreement.
Section 6.02. Limitation on Purchase of Common Stock. Until the earlier to
occur of (i) the fifth anniversary of the Closing Date or (ii) the occurrence of
a Change in Control no Kleinknecht Shareholder shall acquire any shares of
Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock except (x) as a Permitted Transferee in a transfer from any other
Kleinknecht Shareholder which is otherwise permitted under the terms of Article
3 hereof or (y) pursuant to stock options granted by the Company.
ARTICLE 7
MISCELLANEOUS
Section 7.01. Entire Agreement. This Agreement, including all exhibits hereto,
constitutes the entire agreement and supersedes all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof and except as otherwise expressly provided
herein.
Section 7.02. Binding Effect; Benefit. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns. Except as expressly
provided in Sections 5.05 and 5.06, nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto, and
their respective heirs, successors, legal representatives and permitted assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
17
<PAGE>
Section 7.03. Assignability. (a) Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Company or any Shareholder; provided that (i) any Permitted
Transferee acquiring shares of Common Stock in a transfer permitted under this
Agreement shall execute and deliver to the Company a Joinder Agreement, and (ii)
with the prior written consent of Shareholders holding at least 50% of the
Shares held by all Shareholders, the rights and obligations of the Shareholders
under Article 5 shall be assignable by the Shareholders to any Third Party
acquiring Registrable Securities in a transfer permitted under this Agreement.
Section 7.04. Amendment; Waiver; Termination. (a) No provision of this
Agreement may be waived except by an instrument in writing executed by the party
against whom the waiver is to be effective. No provision of this Agreement may
be amended or otherwise modified except by an instrument in writing executed by
the Company and holders of at least 50% of the Shares held by the Shareholders
at the time of such proposed amendment or modification.
(b) In addition, any amendment or modification of any provision of this
Agreement that would adversely affect any (i) CSH Shareholder may be effected
only with the consent of CSH Shareholders holding at least 50% of the Shares
held by the CSH Shareholders, (ii) Kleinknecht Shareholder may be effected only
with the consent of Kleinknecht Shareholders holding at least 50% of the Shares
held by the Kleinknecht Shareholders, (iii) Walsh Shareholder may be effected
only with the consent of Walsh Shareholders holding at least 50% of the Shares
held by the Walsh Shareholders, (iv) Servidio Shareholder may be effected only
with the consent of Servidio Shareholders holding at least 50% of the Shares
held by the Servidio Shareholders or (v) LSH Shareholder may be effected only
with the consent of LSH Shareholders holding at least 50% of the Shares held by
the LSH Shareholders.
(c) This Agreement shall terminate on the tenth anniversary of the date hereof
unless earlier terminated.
Section 7.05. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
(i) if to the Company, to:
IPC Information Systems, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: General Counsel
Fax: (212) 858-7959
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue--14th Floor
New York, NY 10043
Attention: Richard M. Cashin, Jr.
Fax: (212) 888-2940
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner, Esq.
Fax: (212) 309-6273
18
<PAGE>
and
Thacher, Proffitt & Wood
Two World Trade Center
New York, NY 10048
Attention: Thomas N. Talley, Esq.
Fax: (212) 432-7152
(ii) if to any CSH Shareholder, to:
Cable Systems Holding, LLC
505 North 51st Avenue
Phoenix, Arizona 85043-2701
Attention: Peter Woog
Fax: (602) 233-5782
with copies to:
Citicorp Venture Capital, Ltd.
399 Park Avenue--14th Floor
New York, NY 10043
Attention: Richard M. Cashin, Jr.
Fax: (212) 888-2940
and
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attention: Philip H. Werner, Esq.
Fax: (212) 309-6273
and
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attn: Carmen Romano, Esq.
Fax: (215) 994-2222
(iii) If to any Kleinknecht Shareholder, to:
Richard P. Kleinknecht
15 Banbury Lane
Huntington, NY 11745
with a copy to:
White & Case
1155 Avenue of the Americas
New York, New York
Attention: Edward F. Rover, Esq.
Fax: (212) 354-8113
(iv) If to any Walsh Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
19
<PAGE>
88 Pine Street
New York, NY 10005
Attention: David Walsh
Fax: (212) 344-5106
(v) If to any Servidio Shareholder, to:
IPC Information Systems, Inc.
Wall Street Plaza
88 Pine Street
New York, NY 10005
Attention: Anthony Servidio
Fax: (212) 344-5106
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Attention: Jonathan Schaffzin, Esq.
Fax: (212) 269-5420
(vi) If to any LSH Shareholder, to:
Lawrence, Smith & Horey III, L.P.
515 Madison Avenue
New York, NY 10022-5403
Attention: Richard W. Smith
Fax: (212) 759-2561
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
Section 7.06. Headings. The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 7.07. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 7.08. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of New York,
except to the extent that the General Corporation Law of the State of Delaware
applies as a result of the Company being incorporated in the State of Delaware,
in which case such General Corporation Law shall apply.
Section 7.09. Specific Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is accordingly
agreed that the parties hereto shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
Section 7.10. Certain Actions. Unless otherwise expressly provided herein,
whenever any action is required under this Agreement by:
(a) the CSH Shareholders (as a group, as opposed to the exercise by a CSH
Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
CSH Shareholders as a group; or
20
<PAGE>
(b) the Kleinknecht Shareholders (as a group, as opposed to the exercise by
a Kleinknecht Shareholder of its individual rights hereunder), it shall be by
the affirmative vote of the holders of at least 51% of the Shares then held by
the Kleinknecht Shareholders as a group.
(c) the Walsh Shareholders (as a group, as opposed to the exercise by a
Walsh Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
Walsh Shareholders as a group.
(d) the Servidio Shareholders (as a group, as opposed to the exercise by a
Servidio Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
Servidio Shareholders as a group.
(e) the LSH Shareholders (as a group, as opposed to the exercise by a LSH
Shareholder of its individual rights hereunder), it shall be by the
affirmative vote of the holders of at least 51% of the Shares then held by the
LSH Shareholders as a group.
Section 7.11. Consent to Jurisdiction; Expenses. (a) Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought in any Federal Court sitting in New York, New York, or
any New York State court sitting in New York, New York, and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party by any method provided in Section 7.05 shall be
deemed effective service of process on such party and consents to the personal
jurisdiction of any Federal Court sitting in New York, New York, or any New York
State court sitting in New York, New York.
(b) In any dispute arising under this Agreement among any of the parties
hereto, the costs and expenses (including, without limitation, the reasonable
fees and expenses of counsel) incurred by the prevailing party shall be paid by
the party that does not prevail.
Section 7.12. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by the Merger Agreement is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner.
Section 7.13. Schedule I. The parties hereto shall cooperate in causing
Schedule I hereto to set forth the securities of the Company held by them.
Section 7.14. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the "Merger" under and as defined in the
Merger Agreement shall have been consummated.
[Signature Page to Follow]
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
IPC Information Systems Inc.
/s/ S.T. Clontz
By: -----------------------------------
Name: S. Terry Clontz
Title:President & C.E.O.
Cable Systems Holding, LLC
/s/ Peter A. Woog
By: -----------------------------------
Name: Peter A. Woog
Title:Manager
Cable Systems International, Inc.
/s/ Peter A. Woog
By: -----------------------------------
Name: Peter A. Woog
Title:President & C.E.O.
/s/ Richard Kleinknecht
By: -----------------------------------
Richard Kleinknecht
/s/ David Walsh
By: -----------------------------------
David Walsh
/s/ Anthony Servidio
By: -----------------------------------
Anthony Servidio
Lawrence, Smith & Horey III, L.P.
Its General Partner:
LSH Partners III, L.P.
/s/ Richard W. Smith
By: -----------------------------------
Name: Richard W. Smith
Title:General Partner
22
<PAGE>
SCHEDULE I
SECURITIES OWNERSHIP
<PAGE>
EXHIBIT A
FORM OF JOINDER AGREEMENT
IPC Information Systems, Inc.
88 Pine Street
New York, New York 10005
Attention: Chief Executive Officer
Gentlemen:
In consideration of the transfer to the undersigned of Shares of Common Stock,
par value $.01 per share, [Describe any other security being transferred] of IPC
Information Systems, Inc., a Delaware corporation (the "Company"), the
undersigned represents that it is a Permitted Transferee of [Insert name of
transferor] and agrees that, as of the date written below, [he] [she] [it] shall
become a party to, and a Permitted Transferee as defined in, that certain
Investors Agreement dated as of December 18, 1998, as such agreement may have
been or may be amended from time to time (the "Agreement"), among the Company
and the persons named therein, and as a Permitted transferee shall be fully
bound by, and subject to, all of the covenants, terms and conditions of the
Agreement that were applicable to the undersigned's transferor as though an
original party thereto and shall be deemed a [Kleinknecht Shareholder] [CSH
Shareholder] [Walsh Shareholder] [Servidio Shareholder] [LSH Shareholder] for
purposes thereof.
Executed as of the day of ,
TRANSFEREE:
Address:
A-1
Exhibit 10.22
EXECUTION COPY
$55,000,000
CREDIT AGREEMENT
Dated as of April 30, 1998
Among
IPC INFORMATION SYSTEMS, INC.
AS PARENT BORROWER
and
IPC FUNDING CORP.
AS SUB BORROWER
and
THE INITIAL LENDERS AND THE INITIAL ISSUING BANK
NAMED HEREIN
AS INITIAL LENDERS AND INITIAL ISSUING BANK
and
MORGAN STANLEY SENIOR FUNDING, INC.
AS ADMINISTRATIVE AGENT, SYNDICATION AGENT AND ARRANGER
and
GOLDMAN SACHS CREDIT PARTNERS L.P.
AS DOCUMENTATION AGENT
and
GENERAL ELECTRIC CAPITAL CORPORATION
AS COLLATERAL AGENT
<PAGE>
i
<TABLE>
<CAPTION>
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
<S> <C> <C>
1.01. CERTAIN DEFINED TERMS.............................................................................2
1.02. COMPUTATION OF TIME PERIODS......................................................................28
1.03. ACCOUNTING TERMS.................................................................................29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. THE ADVANCES AND LETTERS OF CREDIT...............................................................29
2.02. MAKING THE ADVANCES..............................................................................30
2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF CREDIT...............................31
2.04. REPAYMENT OF ADVANCES............................................................................32
2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS......................................................33
2.06. PREPAYMENTS......................................................................................34
2.07. INTEREST.........................................................................................35
2.08. FEES.............................................................................................36
2.09. CONVERSION OF ADVANCES...........................................................................37
2.10. INCREASED COSTS, ETC.............................................................................37
2.11. PAYMENTS AND COMPUTATIONS........................................................................39
2.12. TAXES............................................................................................40
2.13. SHARING OF PAYMENTS, ETC.........................................................................42
2.14. USE OF PROCEEDS..................................................................................43
2.15. DEFAULTING LENDERS...............................................................................43
ARTICLE III
CONDITIONS OF LENDING
3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT..............................................45
3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE..............................................52
3.03. DETERMINATIONS UNDER SECTION 3.01................................................................53
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS..................................................53
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ii
SECTION PAGE
ARTICLE V
COVENANTS OF THE BORROWERS
<S> <C> <C>
5.01. AFFIRMATIVE COVENANTS............................................................................60
5.02. NEGATIVE COVENANTS...............................................................................69
5.03. REPORTING REQUIREMENTS...........................................................................76
5.04. FINANCIAL COVENANTS..............................................................................81
ARTICLE VI
EVENTS OF DEFAULT
6.01. EVENTS OF DEFAULT................................................................................82
6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT.........................................85
ARTICLE VII
THE AGENTS
7.01. AUTHORIZATION AND ACTION.........................................................................85
7.02. AGENTS' RELIANCE, ETC............................................................................85
7.03. GOLDMAN SACHS, GE CAPITAL, MSSF AND AFFILIATES...................................................86
7.04. LENDER PARTY CREDIT DECISION.....................................................................86
7.05. INDEMNIFICATION..................................................................................86
7.06. SUCCESSOR AGENTS.................................................................................88
ARTICLE VIII
MISCELLANEOUS
8.01. AMENDMENTS, ETC..................................................................................88
8.02. NOTICES, ETC.....................................................................................89
8.03. NO WAIVER; REMEDIES..............................................................................89
8.04. COSTS AND EXPENSES...............................................................................90
8.05. RIGHT OF SETOFF..................................................................................91
8.06. BINDING EFFECT...................................................................................91
8.07. ASSIGNMENTS AND PARTICIPATIONS...................................................................92
8.08. EXECUTION IN COUNTERPARTS........................................................................94
8.09. NO LIABILITY OF THE ISSUING BANK.................................................................94
8.10. CONFIDENTIALITY..................................................................................95
8.11. RELEASE OF COLLATERAL............................................................................96
8.12. JURISDICTION, ETC................................................................................96
8.13. GOVERNING LAW....................................................................................96
8.14. WAIVER OF JURY TRIAL.............................................................................97
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
iii
SCHEDULES
<S> <C>
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Guarantors
Schedule III - Excluded Subsidiaries
Schedule 4.01(a) - Stock Ownership
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Approvals
Schedule 4.01(ff) - Existing Debt
Schedule 4.01(gg) - Surviving Debt
Schedule 4.01(hh) - Owned Real Property
Schedule 4.01(ii) - Material Contracts and Executive Employment Agreements
Schedule 4.01(jj) - Investments
Schedule 4.01(kk) - Intellectual Properties
Schedule 5.02(a) - Existing Liens
Schedule 5.02(g) - Sales of Stock to Equity Investors
EXHIBITS
Exhibit A-1 - Form of Working Capital Note of Parent Borrower
Exhibit A-2 - Form of Working Capital Note of Sub Borrower
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E-1 - Form of Domestic Guaranty
Exhibit E-2 - Form of Foreign Guaranty
Exhibit F-1 - Form of Opinion of Counsel to the Loan Parties
Exhibit F-2 - Form of Opinion of General Counsel of the Parent Borrower
Exhibit G-1 - Form of Solvency Certificate
Exhibit G-2 - Form of Solvency Opinion
Exhibit H - Form of Borrowing Base Certificate
Exhibit I-1 - Form of Specified Intercompany Note
Exhibit I-2 - Form of Loan Party Intercompany Note
Exhibit J - Form of Administrative Agency Agreement
</TABLE>
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 30, 1998 among IPC
INFORMATION SYSTEMS, INC., a Delaware corporation (the "PARENT BORROWER"), IPC
FUNDING CORP., a Delaware corporation (the "SUB BORROWER" and, together with the
Parent Borrower, the "BORROWERS"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the initial
lenders (the "INITIAL LENDERS"), the bank listed on the signature pages hereof,
as the initial issuing bank (the "INITIAL ISSUING BANK"), MORGAN STANLEY SENIOR
FUNDING, INC. ("MSSF"), as syndication agent and arranger (together with any
successor appointed pursuant to Article VII, the "SYNDICATION AGENT"), GOLDMAN
SACHS CREDIT PARTNERS L.P. ("GOLDMAN SACHS"), as documentation agent (together
with any successor appointed pursuant to Article VII, the "DOCUMENTATION
AGENT"), GENERAL ELECTRIC CAPITAL CORPORATION ("GE CAPITAL"), as collateral
agent (together with any successor appointed pursuant to Article VII, the
"COLLATERAL AGENT"), and MSSF, as administrative agent (together with any
successor appointed pursuant to Article VII, the "ADMINISTRATIVE AGENT", and,
together with the Syndication Agent, the Documentation Agent and the Collateral
Agent, the "AGENTS") for the Lender Parties (as hereinafter defined).
PRELIMINARY STATEMENTS:
(1) Pursuant to an Amended and Restated Agreement and Plan of
Merger dated as of December 18, 1997 (as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms, to the
extent permitted in accordance with the Loan Documents (as hereinafter defined),
the "MERGER AGREEMENT") between the Parent Borrower and Arizona Acquisition
Corp., a Delaware corporation ("AAC"), AAC is merging into the Parent Borrower
(the "MERGER").
(2) Simultaneously in connection therewith and to finance the
Merger in part, the Parent Borrower is issuing up to $180,000,000 in original
issue amount of 10-7/8% senior unsecured notes (as the same may be amended,
supplemented or otherwise modified from time to time, to the extent permitted in
accordance with the Loan Documents, the "SENIOR NOTES") pursuant to the Senior
Notes Indenture (as hereinafter defined).
(3) In connection with the Merger, Citicorp Venture Capital,
Ltd., a New York corporation ("CVC"), Cable Systems International, Inc., a
Delaware corporation ("CSI"), and Lawrence, Smith & Horey III, L.P. ("LSH" and,
together with CVC and CSI, the "EQUITY INVESTORS") are making a common equity
contribution to AAC of at least $43,200,000 and up to $72,000,000 in exchange
for between 2,057,143 and 3,428,572 shares of common stock of the Parent
Borrower (the "EQUITY INVESTMENT").
(4) Immediately following the consummation of the Merger, the
Parent Borrower will acquire all of the shares of common stock of International
Exchange Networks, Ltd., a Delaware corporation ("IXNET"), not already owned by
the Parent Borrower in exchange for common stock of the Parent Borrower (the
"SHARE EXCHANGE" and, together with the Merger, the Equity Investment, the
issuance of the Senior Notes and the other transactions contemplated by the Loan
Documents and the Related
<PAGE>
2
Documents (as hereinafter defined), the "TRANSACTION") pursuant to the Share
Exchange and Termination Agreement (as hereinafter defined).
(5) It is intended that the Sub Borrower act as a borrower
hereunder so as to be an agent for the Specified Subsidiaries.
(6) The Borrowers have requested that the Lender Parties make
available a $55,000,000 five-year secured revolving credit facility, which will
be used for general corporate purposes of the Parent Borrower and its
Subsidiaries (as hereinafter defined). The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"AAC" has the meaning specified in the Preliminary Statements.
"ADMINISTRATIVE AGENCY AGREEMENT" has the meaning specified in
Section 3.01(m)(ix).
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with IBJ
Schroder Bank & Trust Company at its office at 1 State Street, New
York, New York 10004, Account No. 66335900, ABA No. 026007825,
Attention: Dept 332; Reference IPC or such other account as the
Administrative Agent shall
specify in writing to the Lender Parties.
"ADMINISTRATIVE AGENT'S FEE LETTER" means a letter dated April
30, 1998 from the Administrative Agent to the Parent Borrower
regarding, among other things, the fees to be paid by the Parent
Borrower to the Administrative Agent in connection with the rendering
of services by the Administrative Agent pursuant to this Agreement, as
such letter may be amended, supplemented or otherwise modified or
replaced from time to time.
"ADVANCE" means a Working Capital Advance or a Letter of
Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such
<PAGE>
3
Person. For purposes of this definition, the term "control" (including
the terms "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 10% or
more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"AGENTS" has the meaning specified in the recital of parties
to this Agreement.
"AGREEMENT VALUE" means, for any Hedge Agreement on any date
of determination, an amount equal to the greater of (a) the amount, if
any, that would be payable by any Loan Party or any of its
Subsidiaries in respect of "agreement value" as though such Hedge
Agreement were terminated on such date, calculated as provided in the
International Swap Dealers Association Inc. Code of Standard Wording,
Assumptions and Provisions for Swaps, 1992 Edition, and (b)
mark-to-market, in which the unrealized gain (or loss) on such Hedge
Agreement is calculated as the amount by which the present value of
the future cash flows to be received exceeds (or is less than) the
present value of the future cash flows to be paid pursuant to such
Hedge Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means (a) during the period from the date
hereof until the date that is 6 months after the date hereof, 1.50% per
annum for Base Rate Advances and 2.50% per annum for Eurodollar Rate
Advances, and (b) thereafter, a percentage per annum determined by
reference to the Leverage Ratio as follows:
<TABLE>
<CAPTION>
Level Base Rate Advances Eurodollar Rate Advances
- ------------------------------------ ----------------------------------- -----------------------------------
<S> <C> <C>
Level I 1.50% 2.50%
Level II 1.50% 2.25%
Level III 1.50% 2.00%
Level IV 1.50% 1.75%
Level V 1.50% 1.50%
==================================== =================================== ===================================
</TABLE>
The Applicable Margin for each Base Rate Advance shall be determined by
reference to the Leverage Ratio in effect from time to time and the
Applicable Margin for each Eurodollar Rate Advance shall be determined
by reference to the Leverage Ratio in effect on the first day of each
Interest Period for such Advance; PROVIDED, HOWEVER, that (A)(x) no
change in the Applicable Margin shall be effective until three Business
Days after the date on which the Administrative Agent receives the
financial statements required to be delivered pursuant to Section
5.03(b) or (c) and a certificate of the chief financial officer of the
Parent Borrower demonstrating such ratio and (y) not more than one
decrease in the Applicable Margin shall occur in any three-month period
and (B) the Applicable Margin shall be at Level I for so long as the
Parent Borrower has not submitted
<PAGE>
4
to the Administrative Agent the information described in clause (A)(x)
of this proviso as and when required under Section 5.03(b) or (c), as
the case may be.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Administrative Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time
with all conditions to drawing).
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank at its head office in New York, from time to time, as
the base rate of Citibank; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BBA" means the British Bankers Association.
"BORROWERS" has the meaning specified in the recital of
parties to this Agreement.
"BORROWING" means a borrowing consisting of simultaneous
Advances of the same Type made by the Lenders.
"BORROWING BASE CERTIFICATE" means a certificate in
substantially the form of Exhibit H hereto, duly certified by the chief
financial officer of the Parent Borrower.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of (a) all expenditures made, directly or indirectly, by such
Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should
be, in accordance with GAAP, reflected as additions to property, plant
or equipment on a Consolidated balance sheet of such Person or have a
useful life of more than one year PLUS (b) the aggregate principal
amount of all Debt (including Obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
<PAGE>
5
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Parent Borrower or any of its Subsidiaries free and clear
of all Liens other than Liens created under the Collateral Documents
and having a maturity of not greater than 90 days from the date of
issuance thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates
of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause
(c), is organized under the laws of the United States or any State
thereof and has combined capital and surplus of at least $1,000,000,000
or (c) commercial paper issued by any corporation organized under the
laws of any State of the United States and rated at least "Prime-1" (or
the then equivalent grade) by Moody's Investors Service, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CITIBANK" means Citibank, N.A., a national banking
association.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Intercompany Notes, the Foreign Security Documents, the Local Pledges,
and any other agreement that creates or purports to create a Lien in
favor of the Administrative Agent for the benefit of the Secured
Parties.
"COMMITMENT" means a Working Capital Commitment or a Letter of
Credit Commitment.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"CORPORATE OPPORTUNITY AGREEMENT" means the Amended and
Restated Corporate Opportunity Agreement dated as of December 18, 1997
among Kleinknecht Electric Company, Inc. (NY), Kleinknecht Electric
Company, Inc. (NJ) and IPC Information Systems, Inc., as
<PAGE>
6
amended, supplemented or otherwise modified from time to time in
accordance with its terms, to the extent permitted in accordance with
the Loan Documents.
"CSI" has the meaning specified in the Preliminary Statements.
"CVC" has the meaning specified in the Preliminary Statements.
"DEBENTURE" means the debentures each dated as of April 30,
1998 made by each of the U.K. Subsidiaries and IPC Hong Kong in favor
of the Administrative Agent, in each case as amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"DEBT" of any Person means, without duplication for purposes
of calculating financial ratios, (a) all indebtedness of such Person
for borrowed money, (b) all Obligations of such Person for the deferred
purchase price of property or services (other than trade payables not
overdue by more than 60 days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all Obligations
of such Person as lessee under Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations, contingent or
otherwise, of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock of or other
ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, valued, in
the case of Redeemable Preferred Stock, at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, (i) all Debt of others referred to in clauses (a) through
(h) above or clause (j) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly
by such Person through an agreement (i) to pay or purchase such Debt or
to advance or supply funds for the payment or purchase of such Debt,
(ii) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the
debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (iii) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such
services are rendered) or (iv) otherwise to assure a creditor against
loss, and (j) all Debt referred to in clauses (a) through (i) above of
another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt.
"DEED OF CHARGE OVER SHARES" means the deed of charge over
shares dated April 30, 1998 made by HNG Corp., RIE Corp. and
International Exchange Networks, Ltd. in favor of the Administrative
Agent, as security agent, as amended, supplemented or otherwise
modified from time to time in accordance with its terms, to the extent
permitted in accordance with the Loan Documents.
<PAGE>
7
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULTED ADVANCE" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender
Party to either Borrower pursuant to Section 2.01 or 2.02 at or prior
to such time which has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(d) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 on the same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to any
Agent or any other Lender Party 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 Party to (a) the Issuing Bank pursuant to Section 2.03(c)
to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made
by the Administrative Agent for the account of such Lender Party, (c)
any other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (d) any
Agent or the Issuing Bank pursuant to Section 7.05 to reimburse such
Agent or the Issuing Bank for such Lender Party's ratable share of any
amount required to be paid by the Lender Parties to such Agent or the
Issuing Bank as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take any action or be the subject of any action or proceeding of
a type described in Section 6.01(f).
"DOCUMENTATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"DOMESTIC GUARANTORS" means the Parent Borrower and each of
the Subsidiaries of the Parent Borrower listed on Part A of Schedule II
hereto and all Domestic Subsidiaries that shall be required to deliver
a Domestic Guaranty pursuant to Section 5.01(o).
"DOMESTIC GUARANTY" has the meaning specified in Section
3.01(m)(x).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrowers and the
Administrative Agent.
<PAGE>
8
"DOMESTIC SUBSIDIARIES" means each of the Subsidiaries of the
Parent Borrower that are incorporated or organized under the laws of
any State of the United States of America or the District of Columbia.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), (b) interest
expense, (c) income tax expense, (d) depreciation expense and (e)
amortization expense and (f) all other non-cash items reducing net
income (other than items that will require cash payments and for which
an accrual or reserve is, or is required by GAAP to be, made), less all
non-cash items increasing net income, in each case of the Parent
Borrower and its Subsidiaries, determined in accordance with GAAP for
such period; PROVIDED, HOWEVER, that for purposes of calculating
EBITDA, such calculation shall be made without giving effect to, and
without duplication of, (i) the amortization or write-off of any
expense incurred in connection with the Transaction and (ii) the
amortization of any amounts required or permitted by Account Principles
Board Opinion Nos. 16 and 17.
"EFFECTIVE DATE" means the first date on which the conditions
set forth in Article III shall have been satisfied.
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; and (c) a commercial bank, insurance company, financial
institution, fund or other Person that regularly purchases interests in
loans or extensions of credit of the types made pursuant to this
Agreement, any other Person that would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933 as in effect on the date of the Initial
Extension of Credit or other "accredited investor" (as defined in
Regulation D of the Securities Act of 1933, as amended), in each case,
which bank, insurance company, financial institution, fund or other
Person is approved by the Administrative Agent and, so long as no
Default shall have occurred and be continuing at the time any
assignment is effected pursuant to Section 8.07, the Parent Borrower,
in each case such approval not to be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that neither any Loan Party nor any Affiliate of a
Loan Party shall qualify as an Eligible Assignee under this definition.
"ELIGIBLE COLLATERAL" means, collectively, Eligible Inventory
and Eligible Receivables.
"ELIGIBLE INVENTORY" means only such Inventory of the Parent
Borrower and the Domestic Guarantors, in the case of Advances made to
the Parent Borrower, and of the U.K. Subsidiaries, in the case of
Advances made to the Sub Borrower, as the Collateral Agent, in its
reasonable business judgment on the basis of standards customarily
applied by lenders in transactions of the type contemplated by the Loan
Documents, shall from time to time elect to consider Eligible Inventory
for purposes of this Agreement. The value of such Inventory shall be
determined by the Collateral Agent in its reasonable discretion taking
into consideration, among other factors, the lower of its cost and its
book value determined in accordance with GAAP. By way of example only,
and without limiting the discretion of the Collateral Agent as set
forth above to consider any Inventory not to be Eligible Inventory, the
Collateral Agent may consider any of the following classes of Inventory
not to be Eligible Inventory:
<PAGE>
9
(a) Inventory located on leaseholds as to which the
lessor has not entered into a consent and agreement providing
the Administrative Agent with the right to receive notice of
default, the right to repossess such Inventory at any time and
such other rights as may be acceptable to the Collateral
Agent;
(b) Inventory that is obsolete, unusable or otherwise
unavailable for sale;
(c) Inventory with respect to which the
representations and warranties set forth in Section 9 of the
Security Agreement applicable to Inventory are not true and
correct;
(d) Inventory consisting of promotional, marketing,
packaging or shipping materials and supplies;
(e) Inventory that fails to meet all standards
imposed by any governmental agency, or department or division
thereof, having regulatory authority over such Inventory
or its use or sale;
(f) Inventory that is subject to any licensing,
patent, royalty, trademark, trade name or copyright agreement
with any third party from whom the Parent Borrower, any
Domestic Guarantor or any U.K. Subsidiary, as applicable, has
received notice of a dispute in respect of any such agreement;
(g) Inventory located outside the United States or
outside the United Kingdom, as applicable;
(h) Inventory that is not in the possession of or
under the sole control of the Parent Borrower, any Domestic
Guarantor or any U.K. Subsidiary, as applicable;
(i) Inventory consisting of work in process; and
(j) Inventory in respect of which the Collateral
Documents, after giving effect to the related filings of
financing statements and the filing of the Debenture in the
Companies House that have then been made, if any, does not or
has ceased to create a valid and perfected first priority lien
or security interest in favor of the Administrative Agent for
the benefit of the Secured Parties securing the Secured
Obligations.
"ELIGIBLE RECEIVABLES" means only such Receivables of the
Parent Borrower and the Domestic Guarantors, in the case of Advances
made to the Parent Borrower, and of the U.K. Subsidiaries, in the case
of Advances made to the Sub Borrower, as the Collateral Agent, in its
reasonable business judgment on the basis of standards customarily
applied by lenders in transactions of the type contemplated by the Loan
Documents, shall from time to time elect to consider Eligible
Receivables for purposes of this Agreement. The value of such
Receivables shall be determined by the Collateral Agent in its
reasonable discretion taking into consideration, among other factors,
their book value determined in accordance with GAAP. By way of example
only, and without limiting the discretion of the Collateral Agent as
set forth above to consider any
<PAGE>
10
Receivables not to be Eligible Receivables, the Collateral Agent may
consider any of the following classes of Receivables not to be
Eligible Receivables:
(a) Receivables that do not arise out of sales of
goods or rendering of services in the ordinary course of the
business of the Parent Borrower, the Domestic Guarantors
and the U.K. Subsidiaries, as applicable;
(b) Receivables on terms other than those normal or
customary in the business of the Parent Borrower, the Domestic
Guarantors and the U.K. Subsidiaries, as applicable;
(c) Receivables owing from any Person that is an
Affiliate of the Parent Borrower, any Domestic Guarantor or
any U.K. Subsidiary or any of their respective Subsidiaries
unless such Person has waived any right of setoff in a manner
acceptable to the Collateral Agent, other than Citibank and
its Affiliates and Kleinknecht Electric Company, Inc. to the
extent that the aggregate amount of Receivables owing from
each such Affiliate does not exceed 10% of Eligible
Receivables;
(d) Receivables more than 120 days past original
invoice date or more than 60 days past the date due;
(e) Receivables owing from any Person from which an
aggregate amount of more than 30% of the Receivables owing is
more than 60 days past due;
(f) Receivables owing from any Person that (i) has
disputed liability for any Receivable owing from such Person,
PROVIDED, HOWEVER, that if such disputed liability represents
less than 10% of the value of all such Receivables owing from
such Person, such Receivables shall be excluded only to the
extent of such disputed liability, or (ii) has otherwise
asserted any claim, demand or liability, whether by action,
suit, counterclaim or otherwise;
(g) Receivables owing from any Person that shall take
or be the subject of any action or proceeding of a type
described in Section 6.01(f);
(h) Receivables (i) owing from any Person that is
also a supplier to or creditor of the Parent Borrower, any
Domestic Guarantor or any U.K. Subsidiary, as applicable, or
(ii) representing any manufacturer's or supplier's credits,
discounts, incentive plans or similar arrangements entitling
the Parent Borrower, any Domestic Guarantor or any U.K.
Subsidiary, as applicable, to discounts on future purchase
therefrom except to the extent that the value of such
Receivables exceeds the amount owing to the Parent Borrower,
such Domestic Guarantor or such U.K. Subsidiary, as
applicable, or the value of such credits, discounts, incentive
plans or other arrangements, as the case may be;
(i) Receivables arising out of sales to account
debtors located outside the United States or outside the
United Kingdom, as applicable;
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11
(j) Receivables arising out of sales on a
bill-and-hold, guaranteed sale, sale-or-return, sale on
approval or consignment basis or subject to any right of
return, setoff or charge-back;
(k) Receivables owing from an account debtor that is
an agency, department or instrumentality of the United States
or any State thereof or the United Kingdom or any other
foreign country unless the Parent Borrower, such Domestic
Guarantor or such U.K. Subsidiary, as the case may be, shall
have satisfied the requirements of the Assignment of Claims
Act of 1940, as amended, and any similar State or foreign
legislation and the Collateral Agent is satisfied as to the
absence of setoffs, counterclaims and other defenses on the
part of such account debtor;
(l) Receivables owing under any service contract for
which the services to be performed under such contract shall
not yet have been performed, PROVIDED that for purposes of
calculating the value of such Receivables, the related amount
contained in the applicable Loan Party's deferred revenue
account may be used (it being understood that the amount
contained in such deferred revenue account shall be greater
than or equal to the value of such Receivables);
(m) Receivables the full and timely payment of which
the Collateral Agent in its reasonable discretion believes
to be doubtful; and
(n) Receivables in respect of which the Collateral
Documents, after giving effect to the related filings of
financing statements and the filing of the Debenture in the
Companies House that have then been made, if any, does not or
has ceased to create a valid and perfected first priority lien
or security interest in favor of the Administrative Agent for
the benefit of the Secured Parties securing the Secured
Obligations.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance having the full force and effect of law relating to pollution
or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
<PAGE>
12
"EQUITY INVESTMENT" has the meaning specified in the
Preliminary Statements.
"EQUITY INVESTORS" has the meaning specified in the
Preliminary Statements.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, within
the meaning of Section 414 of the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event
has been waived by the PBGC, or (ii) the requirements of subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver
with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to Section
4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple
Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions
for imposition of a lien under Section 302(f) of ERISA shall have been
met with respect to any Plan; (g) the adoption of an amendment to a
Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of
a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrowers and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum obtained by dividing (a) the BBA Interest
Settlement Rate per annum at which deposits in U.S. dollars are offered
in London, England to prime banks in the London interbank market for
such Interest Period as displayed on Telerate Screen page 3750 as of
11:00 A.M. (London time) two Business Days before the first day
<PAGE>
13
of such Interest Period in an amount substantially equal to such
Eurodollar Rate Advances comprising part of such Borrowing to be
outstanding during such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period. Telerate Screen page 3750 means the display designated as page
3750 on the Dow Jones Telerate Service (or such other page as may
replace page 3750 on that service or such other service as may be
nominated by the BBA as the information vendor for the purpose of
displaying BBA Interest Settlement Rates for U.S. dollars). If such
rate does not appear on Telerate Screen page 3750 on any relevant date
for the determination of the Eurodollar Rate, the Eurodollar Rate shall
be an interest rate equal to the rate per annum obtained by dividing
(i) the average (rounded upward to the nearest whole multiple of 1/16
of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the
principal office of Citibank in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to the Administrative Agent's Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period
(or, if the Administrative Agent shall not have such a Eurodollar Rate
Advance, $1,000,000) and for a period equal to such Interest Period by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCLUDED SUBSIDIARY" means, at any time, each Subsidiary of
the Parent Borrower listed on Schedule III hereto, and any Subsidiary
of the Parent Borrower formed or acquired after the Effective Date that
does not engage in any material business of any kind, other than the
holding of licenses and/or acting as an agent for a Loan Party at such
time and that does not hold assets or have annual revenues or net
income in the aggregate in excess of $150,000 at such time, in each
case determined based on the most recent financial statements required
to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be, or if such information cannot be determined
based on such financial statements, in the case of a newly formed
Subsidiary, based on the Parent Borrower's good faith pro forma
estimate of such Subsidiary's assets, annual revenues and net income,
and in the case of a newly acquired Subsidiary, based on such
Subsidiary's assets, annual revenues and net income as of the end of
the most recently ended 12-
<PAGE>
14
month period for which financial statements are available, but
excluding, in each case, any such Subsidiary that is or becomes a Loan
Party.
"EXISTING DEBT" has the meaning specified in Section 4.01(ff)
hereof.
"FACILITY" means the Working Capital Facility or the Letter of
Credit Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FISCAL YEAR" means a fiscal year of the Parent Borrower and
its Consolidated Subsidiaries ending on September 30 in any calendar
year.
"FOREIGN GUARANTORS" means each of the Subsidiaries of the
Parent Borrower listed on Part B of Schedule II hereto and all Foreign
Subsidiaries that shall be required to deliver a Foreign Guaranty
pursuant to Section 5.01(o).
"FOREIGN GUARANTY" has the meaning specified in Section
3.01(m)(x).
"FOREIGN SECURITY DOCUMENTS" has the meaning specified in
Section 3.01(m)(ix).
"FOREIGN SUBSIDIARIES" means each of the Subsidiaries of the
Parent Borrower other than the Domestic Subsidiaries.
"FUNDED DEBT" of any Person means Debt in respect of the
Advances owing by either Borrower, in the case of such Borrower, and
all other Debt of such Person that by its terms matures more than one
year after the date of its creation or matures within one year from
such date but is renewable or extendible, at the option of such Person,
to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year after
such date, including, without limitation, all amounts of Funded Debt of
such Person required to be paid or prepaid within one year after the
date of its determination.
"GAAP" has the meaning specified in Section 1.03.
"GE CAPITAL" has the meaning specified in the recital of
parties to this Agreement.
"GOLDMAN SACHS" has the meaning specified in the recital of
parties to this Agreement.
"GUARANTIES" means the Domestic Guaranty and the Foreign
Guaranty.
"GUARANTORS" means the Domestic Guarantors and the Foreign
Guarantors.
<PAGE>
15
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, petroleum by-products or petroleum breakdown products,
radioactive materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or
substances designated, classified or regulated as hazardous or toxic or
as a pollutant or contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"HEDGE BANK" means any Lender Party or an Affiliate of a
Lender Party in its capacity as a party to a Secured Hedge Agreement.
"HONG KONG SUBSIDIARIES" means IPC Hong Kong and International
Exchange Networks (Hong Kong) Limited, a corporation organized under
the laws of Hong Kong and an indirect wholly owned Subsidiary of the
Parent Borrower.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"INITIAL ISSUING BANK" has the meaning specified in the
recital of parties to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of
parties to this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTERCOMPANY NOTES" means the Specified Intercompany Notes
and the Loan Party Intercompany Notes.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the applicable Borrower pursuant
to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by such Borrower
pursuant to the provisions below. The duration of each such Interest
Period shall be one, three, six, nine or twelve months (so long as an
Interest Period of any such duration is available to all of the
Lenders), as the applicable Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; PROVIDED, HOWEVER, that:
(a) neither Borrower may select any Interest Period
that ends after the Termination Date;
<PAGE>
16
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day; PROVIDED, HOWEVER, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of
the Security Agreement.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities or the assets comprising a substantial part or all of
the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including,
without limitation, any acquisition by way of a merger or consolidation
and any arrangement pursuant to which the investor incurs Debt of the
types referred to in clause (i) or (j) of the definition of "DEBT" in
respect of such Person.
"INVESTORS AGREEMENT" means the Investors Agreement dated as
of December 18, 1997 among IPC Information Systems, Inc., Cable Systems
Holding, LLC and certain other Persons named therein, as amended,
supplemented or otherwise modified from time to time in accordance with
its terms, to the extent permitted in accordance with the Loan
Documents.
"IPC BRIDGE" means IPC Bridge, Inc., a Delaware corporation.
"IPC CANADA" means IPC Information Systems Canada, Inc., a
corporation organized under the laws of Canada.
"IPC HONG KONG" means IPC Information Systems Asia Pacific,
Ltd., a corporation organized under the laws of Hong Kong.
"ISSUING BANK" means the Initial Issuing Bank (or any bank
designated by the Initial Issuing Bank to act as Issuing Bank
hereunder) and each Eligible Assignee to which the Letter of Credit
Commitment hereunder has been assigned pursuant to Section 8.07.
<PAGE>
17
"IXNET" has the meaning specified in the Preliminary
Statements.
"IXNET FRANCE" means International Exchange Networks, SAS, a
corporation organized under the laws of France and an indirect wholly
owned Subsidiary of the Parent Borrower.
"IXNET GERMANY" means International Exchange Networks, GmbH, a
corporation organized under the laws of Germany and an indirect wholly
owned Subsidiary of the Parent Borrower.
"LABOR POOL AGREEMENTS" means the Amended and Restated Labor
Pool Agreement dated as of December 18, 1997 between Kleinknecht
Electric Company, Inc. (NY) and IPC Information Systems, Inc., as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, to the extent permitted in accordance with
the Loan Documents, and the Amended and Restated Labor Pool Agreement
dated as of December 18, 1997 between Kleinknecht Electric Company,
Inc. (NJ) and IPC Information Systems, Inc., as amended, supplemented
or otherwise modified from time to time in accordance with its terms,
to the extent permitted in accordance with the Loan Documents.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(b)(ii)(A).
"LENDER PARTY" means any Lender or the Issuing Bank.
"LENDERS" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07.
"LETTER OF CREDIT ADVANCE" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to any
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or,
if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 8.07(d) as such Lender's
"Letter of Credit Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, the amount of
the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant
to Section 2.05.
"LETTER OF CREDIT FEE RATE" means (a) during the period from
the date hereof until the date that is 6 months after the date hereof,
2.25% per annum and (b) thereafter, a percentage per annum
determined by reference to the Leverage Ratio as follows:
<PAGE>
18
<TABLE>
<CAPTION>
Level Letter of Credit Fee Rate
- ----------------------------------------------------- -----------------------------------------------------
<S> <C>
Level I 2.25%
Level II 2.00%
Level III 1.75%
Level IV 1.50%
Level V 1.25%
===================================================== =====================================================
</TABLE>
PROVIDED, HOWEVER, that (A) (x) no change in the Letter of Credit Fee
Rate shall be effective until three Business Days after the date on
which the Administrative Agent receives the financial statements
required to be delivered pursuant to Section 5.03(b) or (c) and a
certificate of the chief financial officer of the Parent Borrower
demonstrating such ratio and (y) not more than one decrease in the
Letter of Credit Fee Rate shall occur in any three-month period and (B)
the Letter of Credit Fee Rate shall be at Level I for so long as the
Parent Borrower has not submitted to the Administrative Agent the
information described in clause (A)(x) of this proviso as and when
required under Section 5.03(b) or (c), as the case may be.
"LETTERS OF CREDIT" has the meaning specified in Section
2.01(b).
"LEVEL I" means a Leverage Ratio of 5.5:1.0 or greater.
"LEVEL II" means a Leverage Ratio of 5.0:1.0 or greater, but
less than 5.5:1.0.
"LEVEL III" means a Leverage Ratio of 4.5:1.0 or greater, but
less than 5.0:1.0.
"LEVEL IV" means a Leverage Ratio of 4.0:1.0 or greater, but
less than 4.5:1.0.
"LEVEL V" means a Leverage Ratio of less than 4.0:1.0.
"LEVERAGE RATIO" means, at any time of determination, the
ratio of the aggregate amount of Consolidated Debt of the Parent
Borrower and its Subsidiaries as of the end of the most recently ended
fiscal quarter of the Parent Borrower and its Subsidiaries for which
financial statements are required to be delivered to the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be, to Consolidated
EBITDA of the Parent Borrower and its Subsidiaries for such fiscal
quarter and for the preceding three fiscal quarters of the Parent
Borrower.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title
to real property.
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for
<PAGE>
19
purposes of the Foreign Guaranty, the Specified Intercompany Notes, the
Administrative Agency Agreement, the Security Agreement (solely with
respect to the Foreign Subsidiaries party thereto and their Obligations
thereunder) and the Foreign Security Documents and any amendment,
supplement or modification thereof, (i) this Agreement, (ii) the Notes,
(iii) each Guaranty, (iv) the Collateral Documents, (v) each Letter of
Credit Agreement, (vi) the Administrative Agent's Fee Letter, (vii) the
Administrative Agency Agreement and (viii) each Secured Hedge Agreement
and (b) for purposes of the Foreign Guaranty, the Specified
Intercompany Notes, the Administrative Agency Agreement, the Security
Agreement (solely with respect to the Foreign Subsidiaries party
thereto and their Obligations thereunder) and the Foreign Security
Documents, and any amendment, supplement or modification thereof, (i)
the Foreign Guaranty, (ii) each Specified Intercompany Note, (iii) the
Administrative Agency Agreement, (iv) the Security Agreement (solely
with respect to the Foreign Subsidiaries party thereto and their
Obligations thereunder), and (iv) each Foreign Security Document, in
each case as amended, supplemented or otherwise modified from time to
time.
"LOAN PARTIES" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for purposes of the
Foreign Guaranty, the Specified Intercompany Notes, the Administrative
Agency Agreement, the Security Agreement (solely with respect to the
Foreign Subsidiaries party thereto and their Obligations thereunder)
and the Foreign Security Documents and any amendment, supplement or
modification thereof, (i) each Borrower and (ii) each Guarantor and (b)
for purposes of the Foreign Guaranty, the Specified Intercompany Notes,
the Administrative Agency Agreement, the Security Agreement (solely
with respect to the Foreign Subsidiaries party thereto and their
Obligations thereunder) and the Foreign Security Documents, and any
amendment, supplement or modification thereof, (i) each Specified
Subsidiary and (ii) each Foreign Guarantor.
"LOAN PARTY INTERCOMPANY NOTE" means a promissory note of a
Loan Party payable to the order of any other Loan Party, in
substantially the form of Exhibit I-2 hereto, evidencing the aggregate
intercompany indebtedness of such Loan Party to such other Loan Party,
as amended, supplemented or otherwise modified from time to time, but
excluding, in any event, the Specified Intercompany Notes.
"LOAN VALUE" means:
(a) in the case of the Parent Borrower, an amount
equal to the sum of: (i) with respect to Eligible Inventory of
the Parent Borrower and the Domestic Guarantors, 25% of the
value thereof, and (ii) with respect to Eligible Receivables
of the Parent Borrower and the Domestic Guarantors, 80% of the
value thereof LESS (iii) a reserve equal to the sum of (x) 3%
(or such different percentage as may be determined in
accordance with the following proviso) of Eligible Receivables
consisting of billed and outstanding progress payments
relating to turrets and (y) 35% (or such different percentage
as may be determined in accordance with the following proviso)
of Eligible Receivables consisting of billed and outstanding
progress payments relating to cabling systems, PROVIDED,
HOWEVER, in each case that if the actual labor costs
(calculated on a monthly basis) associated with performing the
services in connection with which such progress payments are
payable as a percentage of such Eligible Receivables vary from
the percentage set forth in clause (x) or (y) above, as the
case may be, then (1) if such costs vary by more than 25%, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be determined
<PAGE>
20
by the Collateral Agent in its reasonable discretion, and (2)
in all other cases, the percentage set forth in clause (x) or
(y) above, as applicable, shall be mutually agreed between the
Parent Borrower and the Collateral Agent, PROVIDED that until
the Parent Borrower and the Collateral Agent shall have agreed
to a different percentage pursuant to this subclause (2), the
percentage shall remain the percentage in effect immediately
prior to the occurrence of such variance; and
(b) in the case of the Sub Borrower, an amount equal
to the sum of: (i) with respect to Eligible Inventory of the
U.K. Subsidiaries, 25% of the value thereof, and (ii) with
respect to Eligible Receivables of the U.K. Subsidiaries, 80%
of the value thereof LESS (iii) a reserve equal to the sum of
(x) 3% (or such different percentage as may be determined in
accordance with the following proviso) of Eligible Receivables
consisting of billed and outstanding progress payments
relating to turrets and (y) 35% (or such different percentage
as may be determined in accordance with the following proviso)
of Eligible Receivables consisting of billed and outstanding
progress payments relating to cabling systems, PROVIDED,
HOWEVER, in each case that if the actual labor costs
(calculated on a monthly basis) associated with performing the
services in connection with which such progress payments are
payable as a percentage of such Eligible Receivables vary from
the percentage set forth in clause (x) or (y) above, as the
case may be, then (1) if such costs vary by more than 25%, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be determined by the Collateral Agent in its
reasonable discretion, and (2) in all other cases, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be mutually agreed between the Parent
Borrower and the Collateral Agent, PROVIDED that until the
Parent Borrower and the Collateral Agent shall have agreed to
a different percentage pursuant to this subclause (2), the
percentage shall remain the percentage in effect immediately
prior to the occurrence of such variance;
PROVIDED, HOWEVER, that during such periods when collections of
Eligible Receivables are less than 80%, the Collateral Agent may, in
its reasonable discretion, reduce the percentage in the foregoing
clauses (a)(ii) and (b)(ii) to a percentage below 80%.
"LOCAL PLEDGES" means the Deed of Charge over Shares and each
other pledge, charge and similar agreement pursuant to which the Parent
Borrower or a Domestic Subsidiary pledges the stock of, or other
ownership interest in, a Foreign Subsidiary to the Administrative
Agent, in each case as amended, supplemented or otherwise modified from
time to time.
"LSH" has the meaning specified in the Preliminary Statements.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
(a) the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities (including, without
limitation, tax, ERISA and environmental liabilities) or prospects of
the Parent Borrower and its Subsidiaries, taken as a whole, or (b) the
ability of either Borrower or any Specified Subsidiary to perform its
Obligations under any Loan Document or Related Document to which it is
or is to be a party.
<PAGE>
21
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities (including, without
limitation, tax, ERISA and environmental liabilities) or prospects of
the Parent Borrower and its Subsidiaries, taken as a whole, (b) the
rights and remedies of any Agent or any Lender Party under any Loan
Document or Related Document or (c) the ability of either Borrower or
any Specified Subsidiary to perform its Obligations under any Loan
Document or Related Document to which it is or is to be a party.
"MATERIAL CONTRACT" means, with respect to any Person, each
contract to which such Person is a party involving aggregate
consideration payable to or by such Person of $15,000,000 or more or
otherwise material to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities
(including, without limitation, tax, ERISA and environmental
liabilities) or prospects of such Person, but shall not include the
Related Documents.
"MERGER" has the meaning specified in the Preliminary
Statements.
"MERGER AGREEMENT" has the meaning specified in the
Preliminary Statements.
"MORTGAGE POLICIES" has the meaning specified in Section
5.01(q)(ii)(B).
"MORTGAGES" has the meaning specified in Section 5.01(q)(ii).
"MSSF" has the meaning specified in the recital of parties to
this Agreement.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"MXNET" means MXnet Inc., a Delaware corporation.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance of
any Debt or capital stock or other ownership or profit interest, any
securities convertible into or exchangeable for capital stock or other
ownership or profit interest or any warrants, rights, options or other
securities to acquire capital stock or other ownership or profit
interest by any Person, the aggregate amount of cash received from time
to time (whether as initial consideration or through payment or
disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees
and other similar fees and commissions, (b) the amount of taxes
<PAGE>
22
payable in connection with or as a result of such transaction and (c)
the amount of any Debt secured by a Lien on such asset that, by the
terms of the instrument evidencing such Debt, is required to be repaid
upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of
such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof.
"NON-HOSTILE ACQUISITION" means any acquisition by the Parent
Borrower or any of its Subsidiaries of a Person, so long as (a) the
board of directors (or other governing body) of such Person shall have
approved such acquisition at the time such acquisition is first
publicly announced, (b) if such Person shall have been soliciting bids
for its acquisition, the board of directors (or other governing body)
of such Person shall not have determined either to accept no offer or
to accept an offer other than an offer by the Parent Borrower or any of
its Subsidiaries or (c) such Person shall not have been soliciting bids
for its acquisition or if the board of directors (or other governing
body) of such Person shall have solicited bids for its acquisition but
shall have initially determined either to accept no offer or to accept
an offer other than an offer by the Parent Borrower or any of its
Subsidiaries, in each case the existence, amount and availability for
the acquisition of such Person of the Commitments hereunder shall not
have been disclosed, orally or in writing, until after such time as the
board of directors (or other governing body) of such Person shall have
approved such acquisition by the Parent Borrower or any of its
Subsidiaries and so long as, in any case, such acquisition is otherwise
permitted hereunder.
"NOTE" means a promissory note of either Borrower payable to
the order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of such Borrower to such Lender
resulting from the Working Capital Advances made by such Lender, as
amended, supplemented or otherwise modified from time to time.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
<PAGE>
23
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PARENT BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"PARENT BORROWER'S ACCOUNT" means the account of the Parent
Borrower maintained by the Parent Borrower with The Bank of New York at
its office at 1 Wall Street, 22nd Floor, New York, New York 10286,
Account No. 89-001-08037, Attention: Georgia M. Pan-Kita or such other
account as the Parent Borrower shall specify in writing to the
Administrative Agent (subject to the requirements of Section 5.01(n)).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ENCUMBRANCES" has the meaning specified in the
Mortgages.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b); (b) Liens imposed by law (whether statutory or
common law), such as landlords', materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in the
ordinary course of business securing obligations that are not overdue
for a period of more than 30 days; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or
to secure public or statutory obligations; and (d) easements, rights of
way and other encumbrances on title to real property that do not render
title to the property encumbered thereby unmarketable or materially
adversely affect the use of such property for its current present
purposes.
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer
Plan.
"PLEDGED DEBT" has the meaning specified in the Security
Agreement.
"PREFERRED STOCK" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets, whether
by dividend or upon liquidation.
"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of such amount TIMES a fraction the
numerator of which is the amount of such Lender's Working Capital
Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's Working
Capital Commitment as in effect immediately prior to such termination)
and the denominator of which is the Working Capital Facility at such
time (or, if the Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Working Capital Facility as in effect
immediately prior to such termination).
<PAGE>
24
"RECEIVABLES" means all Receivables referred to in Section
1(c) of the Security Agreement.
"REDEEMABLE" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any
such right or Obligation that (a) the issuer has undertaken to redeem
at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not
solely within the control of the issuer or (b) is redeemable at the
option of the holder.
"REDUCTION AMOUNT" has the meaning specified in Section
2.06(b)(iv).
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Merger Agreement, the Senior
Notes, the Senior Notes Indenture, the Share Exchange and Termination
Agreement, the Stock Option Plan, the Investors Agreement, the Labor
Pool Agreements and the Corporate Opportunity Agreement.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit are
outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Working Capital Commitments; PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at
such time (A) the aggregate principal amount of the Advances owing to
such Lender (in its capacity as a Lender) and outstanding at such time,
(B) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit outstanding at such time and (C) the aggregate
Unused Working Capital Commitments of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Letter
of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Lenders
ratably in accordance with their respective Working Capital
Commitments.
"RESPONSIBLE OFFICER" means any executive officer of any Loan
Party or any of its Subsidiaries.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement required
or permitted under Article V that is entered into by and between the
Parent Borrower and any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in Section 2
of the Security Agreement.
"SECURED PARTIES" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for purposes of the
Foreign Guaranty, the Specified Intercompany Notes, the Administrative
Agency Agreement, the Security Agreement (solely with respect to the
Foreign Subsidiaries party thereto
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25
and their Obligations thereunder) and the Foreign Security Documents
and any amendment, supplement or modification thereof, (i) the Agents,
(ii) the Lender Parties and (iii) the Hedge Banks and (b) for purposes
of the Foreign Guaranty, the Specified Intercompany Notes, the
Administrative Agency Agreement, the Security Agreement (solely with
respect to the Foreign Subsidiaries party thereto and their Obligations
thereunder) and the Foreign Security Documents, and any amendment,
supplement or modification thereof, the Administrative Agent; PROVIDED,
HOWEVER, that solely for purposes of the granting of Liens by the
Foreign Guarantors to the Administrative Agent for the benefit of the
Sub Borrower as required by Section 5.02(b)(ii)(A) and the
administrative agency appointment by the Sub Borrower pursuant to the
Administrative Agency Agreement, the term "Secured Parties" shall
include the Sub Borrower; PROVIDED FURTHER, HOWEVER, that
notwithstanding the immediately preceding proviso, the Sub Borrower
shall have no voting or other rights or remedies as a Secured Party
under the Loan Documents.
"SECURITY AGREEMENT" has the meaning specified in Section
3.01(m)(viii).
"SENIOR NOTES" has the meaning specified in the Preliminary
Statements.
"SENIOR NOTES INDENTURE" means the Indenture dated as of April
30, 1998, between the Parent Borrower, as issuer, and United States
Trust Company of New York, as trustee, pursuant to which the Senior
Notes were issued, as such Indenture may be amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"SHARE EXCHANGE" has the meaning specified in the Preliminary
Statements.
"SHARE EXCHANGE AND TERMINATION AGREEMENT" means the Share
Exchange and Termination Agreement dated as of December 18, 1997 among
the Parent Borrower, IXnet and certain other parties thereto, as such
Agreement may be amended, supplemented or otherwise modified from time
to time in accordance with its terms, to the extent permitted in
accordance with the Loan Documents.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
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26
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPECIFIED INTERCOMPANY NOTE" means a promissory note of a
Specified Subsidiary payable to the order of the Sub Borrower, in
substantially the form of Exhibit I-1 hereto, evidencing the aggregate
intercompany indebtedness of such Specified Subsidiary to the Sub
Borrower, as amended, supplemented or otherwise modified from time to
time.
"SPECIFIED SUBSIDIARIES" means IPC Canada, a direct wholly
owned Subsidiary of the Parent Borrower, and the U.K. Subsidiaries.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"STOCK OPTION PLAN" means the IPC Information Systems, Inc.
Stock Option Plan, a copy of which has been furnished to the Lender
Parties prior to the Effective Date, as amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"SUB BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"SUB BORROWER'S ACCOUNT" means such account of the Sub
Borrower as the Sub Borrower shall specify in writing to the
Administrative Agent (subject to the requirements of Section
5.01(n)).
"SUBORDINATED DEBT" means any Debt of either Borrower that is
subordinated to the Obligations of such Borrower under the Loan
Documents on, and that otherwise contains, terms
and conditions satisfactory to the Required Lenders.
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency), (b)
the interest in the capital or profits of such partnership, joint
venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries.
"SUPERMAJORITY LENDERS" means, at any time, Lenders owed or
holding at least 70% of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time and (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time, or,
if no such principal amount and no Letters of Credit are outstanding at
such time, Lenders holding at least 70% of the aggregate of the Working
Capital Commitments; PROVIDED, HOWEVER, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of
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27
Supermajority Lenders at such time (A) the aggregate principal amount
of the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit outstanding at such
time and (C) the aggregate Unused Working Capital Commitments of such
Lender at such time. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank
and the Available Amount of each Letter of Credit shall be considered
to be owed to the Lenders ratably in accordance with their respective
Working Capital Commitments.
"SURVIVING DEBT" has the meaning specified in Section 3.01(g).
"SYNDICATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"TAX CERTIFICATE" has the meaning specified in Section
5.03(o).
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of April 30, 2003 and the
date of termination in whole of the Letter of Credit Commitment and the
Working Capital Commitments pursuant to Section 2.05 or 6.01.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a
supplier of Inventory to the Parent Borrower or any of its Subsidiaries
to effect payment for such Inventory, the conditions to drawing under
which include the presentation to the Issuing Bank of negotiable bills
of lading, invoices and related documents sufficient, in the judgment
of the Issuing Bank, to create a valid and perfected lien on or
security interest in such Inventory, bills of lading, invoices and
related documents in favor of the Issuing Bank.
"TRANSACTION" has the meaning specified in the Preliminary
Statements.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"U.K. SUBSIDIARIES" means IXnet U.K., Limited (formerly known
as IXnet, Limited) and IPC Information Systems, each a corporation
organized under the laws of England and Wales and each an indirect
wholly owned Subsidiary of the Parent Borrower after giving effect to
the Transaction.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at
such time MINUS (b) the sum of (i) the aggregate principal amount of
all Working Capital Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time PLUS
(ii) such Lender's Pro Rata Share of (A) the aggregate Available Amount
of all Letters of Credit outstanding at such time and (B) the aggregate
principal amount of all Letter of Credit Advances made by the Issuing
Bank pursuant to Section 2.03(c) and outstanding at such time.
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28
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the
happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section
3(1) of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section
2.01(a).
"WORKING CAPITAL COMMITMENT" means, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital Commitment" or, if
such Lender has entered into one or more Assignments and Acceptances,
set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as such Lender's
"Working Capital Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate
amount of the Lenders' Working Capital Commitments at such time.
"YEAR 2000 COMPLIANT" means the ability of the software and
other processing capabilities of the Parent Borrower and its
Subsidiaries correctly to interpret and manipulate all data, in
whatever form, including printed form, screen displays, financial
records, calculations and loan-related data, so as to avoid errors in
processing that may otherwise occur because of the inability of the
software or other processing capabilities to recognize accurately the
year 2000 or subsequent dates.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(f) ("GAAP").
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29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. THE ADVANCES AND LETTERS OF CREDIT. (a) THE
WORKING CAPITAL ADVANCES. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "WORKING CAPITAL
ADVANCE") to either Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an amount for each
such Advance not to exceed (i) in the case of the Parent Borrower, the lesser of
(x) such Lender's Unused Working Capital Commitment at such time and (y) such
Lender's Pro Rata Share of the Loan Value of the applicable Eligible Collateral
at such time, and (ii) in the case of the Sub Borrower, the lesser of (x) such
Lender's Unused Working Capital Commitment at such time and (y) such Lender's
Pro Rata Share of the Loan Value of the applicable Eligible Collateral at such
time; PROVIDED, HOWEVER, that notwithstanding the foregoing, no Advances shall
be made hereunder until the condition set forth in Section 5.01(q)(vii) shall
have been satisfied in a manner reasonably acceptable to the Administrative
Agent. Each Borrowing shall be in an aggregate amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof and shall consist of Working
Capital Advances made simultaneously by the Lenders ratably according to their
Working Capital Commitments. Within the limits of each Lender's Unused Working
Capital Commitment in effect from time to time, the Borrowers may borrow under
this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(a).
(b) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "LETTERS
OF CREDIT") for the account of the Parent Borrower from time to time on any
Business Day during the period from the Effective Date until 60 days before the
Termination Date (i) in an aggregate Available Amount for all Letters of Credit
not to exceed at any time the Issuing Bank's Letter of Credit Commitment at such
time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the lesser of (x) the Unused Working Capital Commitments of the Lenders
at such time and (y) the Loan Value of the applicable Eligible Collateral at
such time. No Letter of Credit shall have an expiration date (including all
rights of the Parent Borrower or the beneficiary to require renewal) later than
the earlier of 30 days before the Termination Date and (A) in the case of
Standby Letters of Credit, one year after the date of issuance thereof and (B)
in the case of a Trade Letter of Credit, 60 days after the date of issuance
thereof; PROVIDED, HOWEVER, that notwithstanding the foregoing, (x) no Letters
of Credit shall be issued hereunder after the Effective Date until the condition
set forth in Section 5.01(q)(vii) shall have been satisfied in a manner
reasonably acceptable to the Administrative Agent and (y) no Letters of Credit
shall be issued hereunder after the Effective Date (unless the Initial Issuing
Bank otherwise agrees) until the Initial Issuing Bank shall have assigned its
Letter of Credit Commitment to an Eligible Assignee acceptable to it and the
Letters of Credit issued on the Effective Date shall have been replaced by
Letters of Credit issued by such Eligible Assignee or shall have otherwise
expired or terminated. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Parent Borrower may request the
issuance of Letters of Credit under this Section 2.01(b), repay any Letter of
Credit Advances resulting from drawings thereunder pursuant to Section 2.03(c)
and request the issuance of additional Letters of Credit under this Section
2.01(b).
SECTION 2.02. MAKING THE ADVANCES. (a) Except as
otherwise provided in Section 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the
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30
third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the first Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the applicable Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telex or telecopier. Each such notice of a Borrowing (a "NOTICE OF BORROWING")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
in substantially the form of Exhibit B hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in accordance
with the respective Working Capital Commitments of such Lender and the other
Lenders. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent shall make such funds available to such Borrower by
crediting the Parent Borrower's Account or the Sub Borrower's Account, as
applicable; PROVIDED, HOWEVER, that the Administrative Agent shall first make a
portion of such funds equal to the aggregate principal amount of any Letter of
Credit Advances made by the Issuing Bank and by any other Lender and outstanding
on the date of such Borrowing, plus interest accrued and unpaid thereon to and
as of such date, available to the Issuing Bank and such other Lenders for
repayment of such Letter of Credit Advances.
(b) Anything in subsection (a) of this Section 2.02 to the
contrary notwithstanding, (i) neither Borrower may select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $3,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) the
Working Capital Advances may not be outstanding as part of more than 12 separate
Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower giving such Notice of Borrowing. In the case of any Borrowing
that the related Notice of Borrowing specifies is to be comprised of Eurodollar
Rate Advances, the applicable Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Administrative Agent,
such Lender and such Borrower severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
such Borrower until the date such amount is repaid or paid to the Administrative
Agent, at
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(i) in the case of such Borrower, the interest rate applicable at such time
under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of
such Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender's Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER
LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Parent Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "NOTICE OF
ISSUANCE") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
the Issuing Bank may specify to the Parent Borrower for use in connection with
such requested Letter of Credit (a "LETTER OF CREDIT AGREEMENT"). If (x) the
requested form of such Letter of Credit is acceptable to the Issuing Bank in its
sole discretion and (y) the Issuing Bank has not received notice from the
Administrative Agent or the Required Lenders that the conditions to issuing such
Letter of Credit have not been satisfied or duly waived, the Issuing Bank shall,
upon fulfillment of the applicable conditions set forth in Article III, make
such Letter of Credit available to the Parent Borrower at its office referred to
in Section 8.02 or as otherwise agreed with the Parent Borrower in connection
with such issuance. In the event and to the extent that the provisions of any
Letter of Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern. At the Parent Borrower's request, the Issuing Bank
shall provide the Parent Borrower with a copy of the form of Letter of Credit to
be issued for the Parent Borrower's review and approval prior to issuance.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week and drawings during such week under all Letters of
Credit, (B) to each Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (C) to the Administrative Agent and each Lender on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter of all Letters
of Credit.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Lender shall purchase from the Issuing Bank, and the Issuing Bank
shall sell and assign to each such
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32
Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of the
Issuing Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Parent Borrower hereby agrees to each such sale and
assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank; PROVIDED that notice of such demand is given not later
than 11:00 A.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by the Issuing Bank to any Lender of a
portion of a Letter of Credit Advance, the Issuing Bank represents and warrants
to such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any Liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by the Issuing Bank until
the date such amount is paid to the Administrative Agent, at the Federal Funds
Rate for its account or the account of the Issuing Bank, as applicable. If such
Lender shall pay to the Administrative Agent such amount for the account of the
Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. REPAYMENT OF ADVANCES. (a) WORKING CAPITAL
ADVANCES. Each Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate outstanding
principal amount of the Working Capital Advances then outstanding and owing by
such Borrower.
(b) LETTER OF CREDIT ADVANCES. (i) The Parent Borrower shall
repay to the Administrative Agent for the account of the Issuing Bank and each
other Lender that has made a Letter of Credit Advance on the earlier of demand
and the Termination Date the outstanding principal amount of
each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Parent Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement or instrument
relating to any Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Parent Borrower is without
prejudice to, and does not constitute a waiver of, any rights that the Parent
Borrower might have
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33
or might acquire as a result of the payment by the Issuing Bank of any draft or
the reimbursement by the Parent Borrower thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the
foregoing being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Parent
Borrower in respect of any L/C Related Document or any other amendment
or waiver of or any consent to departure from all or any of the L/C
Related
Documents;
(C) the existence of any claim, setoff, defense or other right
that the Parent Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Domestic Guaranty or any other guarantee,
for all or any of the Obligations of the Parent Borrower in respect of
the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Parent Borrower or a Domestic Guarantor
or any other guarantor.
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Parent Borrower may, upon at least five Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part the unused
portions of the Letter of Credit Facility and the Unused Working Capital
Commitments; PROVIDED, HOWEVER, that each partial reduction of a Facility or a
Commitment (i) shall be in an aggregate amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof and (ii) shall be made ratably among the
Lenders in accordance with their Commitments with respect to such Facility or
such Commitments.
(b) MANDATORY. (i) The Working Capital Facility shall be
automatically and permanently reduced on a pro rata basis on each date on which
prepayment thereof is required to be made pursuant to Section 2.06(b)(i) in an
amount equal to the applicable Reduction Amount; PROVIDED that each
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34
such reduction of the Working Capital Facility shall be made ratably among the
Lenders in accordance with their Working Capital Commitments; PROVIDED FURTHER,
HOWEVER, that, notwithstanding the foregoing and Section 2.06(b)(iv), in no
event shall the Working Capital Facility be reduced, pursuant to this
Section 2.05(b)(i), to less than $20,000,000.
(ii) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Working Capital Facility after giving effect to such
reduction of the Working Capital Facility.
SECTION 2.06. PREPAYMENTS. (a) OPTIONAL. Either Borrower may,
upon at least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given such Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowing and owing by such
Borrower in whole or ratably in part, together with accrued interest to the date
of such prepayment on the aggregate principal amount prepaid; PROVIDED, HOWEVER,
that (x) each partial prepayment shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof and (y) no such
prepayment of a Eurodollar Rate Advance shall be made other than on the last day
of an Interest Period therefor.
(b) MANDATORY. (i) The Parent Borrower shall, on the date of
receipt (or such later date as may be specified in Section 5.02(e)) of the Net
Cash Proceeds by any Loan Party or any of their respective Subsidiaries from (A)
the sale, lease, transfer or other disposition of any assets of any Loan Party
or any of their respective Subsidiaries (other than any sale, lease, transfer or
other disposition of assets pursuant to clause (i), (ii) or (v) of Section
5.02(e) or, to the extent no prepayment is required under such clause, clause
(iv) of Section 5.02(e)), (B) the incurrence or issuance by any Loan Party or
any of their respective Subsidiaries of any Debt (other than Debt incurred or
issued pursuant to clause (i), (ii), (iii) or (iv) of Section 5.02(b) (other
than pursuant to subclause (iii)(C)(2) thereof)), and (C) the sale or issuance
by any Loan Party or any of their respective Subsidiaries of any capital stock
or other ownership or profit interest, any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights or options to acquire capital stock or other ownership or
profit interest (other than any such sale or issuance permitted under Section
5.02(g)), prepay an aggregate principal amount of the Advances comprising part
of the same Borrowings and deposit in the L/C Cash Collateral Account an amount
equal to the amount of such Net Cash Proceeds. Each such prepayment shall be
applied to the Working Capital Facility as set forth in clause (iv) of this
Section 2.06(b).
(ii) (A) The Sub Borrower shall, on each Business Day, prepay
an aggregate principal amount of the Working Capital Advances owing by the Sub
Borrower and comprising part of the same Borrowings in an amount equal to the
amount by which (x) the sum of the aggregate principal amount of the Working
Capital Advances owing by the Sub Borrower then outstanding exceeds (y) the
lesser of the Working Capital Facility and the Loan Value of the applicable
Eligible Collateral on such Business Day.
(B) The Parent Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Working Capital Advances owing by
the Parent Borrower and comprising part of the same Borrowings and the Letter of
Credit Advances and deposit in the L/C Cash Collateral Account
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35
an amount equal to the amount by which (x) the sum of the aggregate principal
amount of (I) the Working Capital Advances owing by the Parent Borrower and (II)
the Letter of Credit Advances then outstanding PLUS the aggregate Available
Amount of all Letters of Credit then outstanding exceeds (y) the lesser of the
Working Capital Facility and the Loan Value of the applicable Eligible
Collateral on such Business Day.
(iii) The Parent Borrower shall, on each Business Day, pay to
the Administrative Agent for deposit in the L/C Cash Collateral Account an
amount sufficient to cause the aggregate amount on deposit in such Account to
equal the amount by which the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.
(iv) Prepayments of the Working Capital Facility made pursuant
to clause (i) or (ii) of this Section 2.06(b) shall be FIRST applied to prepay
Letter of Credit Advances then outstanding until such Advances are paid in full,
SECOND applied to prepay Working Capital Advances then outstanding comprising
part of the same Borrowings until such Advances are paid in full and THIRD
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding; and, in the case of
prepayments of the Working Capital Facility required pursuant to clause (i)
above, the amount remaining (if any) after the prepayment in full of the
Advances then outstanding and the 100% cash collateralization of the aggregate
Available Amount of Letters of Credit then outstanding (the sum of such
prepayment amounts, cash collateralization amounts and remaining amount being
referred to herein as the "REDUCTION AMOUNT") may be retained by the Parent
Borrower and the Working Capital Facility shall be permanently reduced as set
forth in Section 2.05(b)(i). Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the Issuing Bank or Lenders, as applicable.
(v) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.07. INTEREST. (a) SCHEDULED INTEREST. Each
Borrower shall pay interest on the unpaid principal amount of each Advance owing
by such Borrower to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time PLUS (B) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance PLUS (B)
the Applicable Margin in effect on the first day of such Interest
Period, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
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36
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default, each Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing by such Borrower to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) of this
Section 2.07 and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance pursuant to
clause (a)(i) or (a)(ii) of this Section 2.07 and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant
to clause (a)(i) or (a)(ii) of this Section 2.07, and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) of this Section 2.07.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower giving such Notice of Borrowing and each Lender of
the applicable interest rate determined by the Administrative Agent for
purposes of Section 2.07(a)(i) or 2.07(a)(ii).
SECTION 2.08. FEES. (a) COMMITMENT FEE. The Parent
Borrower shall pay to the Administrative Agent for the account of the Lenders a
commitment fee, from the date hereof in the case of each Initial Lender and from
the effective date specified in the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender until the Termination Date,
payable in arrears on the date of the initial Borrowing hereunder, and
thereafter quarterly on the last Business Day of each March, June, September and
December, commencing June 30, 1998, and on the Termination Date, at the rate of
0.50% per annum on the daily aggregate Unused Working Capital Commitment of such
Lender; PROVIDED, HOWEVER, that any commitment fee accrued with respect to any
of the Commitments of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Parent Borrower so long as such Lender shall be a Defaulting
Lender except to the extent that such commitment fee shall otherwise have been
due and payable by the Parent Borrower prior to such time; and PROVIDED FURTHER
that no commitment fee shall accrue on any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender.
(b) LETTER OF CREDIT FEES, ETC. (i) The Parent Borrower shall
pay to the Administrative Agent for the account of each Lender a commission,
payable in arrears quarterly on the last Business Day of each March, June,
September and December, commencing June 30, 1998, and on the earliest to occur
of the full drawing, expiration, termination or cancellation of any Letter of
Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of all Letters of
Credit outstanding from time to time at the Letter of Credit Fee Rate in effect
from time to time.
(ii) The Parent Borrower shall pay to the Issuing Bank, for
its own account, (A) a fronting fee for each Letter of Credit in an amount equal
to 0.25% of the Available Amount of such Letter of Credit on the date of
issuance of such Letter of Credit, payable on such date and (B) such
commissions, issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit as the
Parent Borrower and the Issuing Bank shall agree.
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37
(c) AGENTS' FEES. The Parent Borrower shall pay to the
Administrative Agent for its account the fees described in the Administrative
Agent's Fee Letter.
SECTION 2.09. CONVERSION OF ADVANCES. (a) OPTIONAL. Either
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising
the same Borrowing and owing by such Borrower into Advances of the other Type;
PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount specified
in Section 2.02(b), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b) and each Conversion of Advances
comprising part of the same Borrowing shall be made ratably among the Lenders in
accordance with their Working Capital Commitments. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower giving such notice of Conversion.
(b) MANDATORY. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $3,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the applicable Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent shall forthwith so notify such Borrower and the
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. INCREASED COSTS, ETC. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding, for purposes of
this Section 2.10, any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political subdivision
thereof), then each Borrower hereby jointly and severally agrees from time to
time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), to pay to the Administrative Agent for the account of
such
<PAGE>
38
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrowers by such Lender Party, shall
be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then each Borrower hereby jointly
and severally agrees, upon demand by such Lender Party (with a copy of such
demand to the Administrative Agent), to pay to the Administrative Agent for the
account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrowers by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error. Each Lender Party shall use its
reasonable efforts to notify the Borrowers as to the existence of any change of
circumstance described in this Section 2.10(b) as promptly as practicable after
gaining knowledge thereof, but the failure to give notice required hereby shall
not affect the right of any Lender Party to any payment to which it would
otherwise be entitled hereunder.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon (i) each such Eurodollar Rate Advance shall
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to each Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance shall
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrowers that such Lender has determined that the circumstances causing such
suspension no longer exist.
(e) Any Lender Party claiming any additional amounts payable
pursuant to clause (a), (b) or (c) of this Section 2.10 agrees to use its
reasonable efforts (consistent with its internal policy and
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39
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased costs or additional amounts that may thereafter
accrue and would not, in the sole judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.
SECTION 2.11. PAYMENTS AND COMPUTATIONS. (a) Each Borrower
shall make each payment hereunder and under the Notes issued by such Borrower,
irrespective of any right of counterclaim or setoff (except as otherwise
provided in Section 2.15), not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent shall promptly
thereafter cause like funds to be distributed (i) if such payment by either
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes issued by such Borrower to
more than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lender Parties and (ii) if such
payment by either Borrower is in respect of any Obligation then payable
hereunder to one Lender Party, to such Lender Party for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note issued by such Borrower and held by
such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender Party any amount so due.
(c) The computation of interest on Base Rate Advances using an
interest rate determined pursuant to clause (a) of the definition of "Base Rate"
and the computation of the fees payable pursuant to Section 2.08(a) shall each
be made by the Administrative Agent on the basis of a year of 365 days or 366
days, as the case may be, in each case for the actual number of days (including
the first but excluding the last day) occurring in the period for which such
interest or commissions are payable. All other computations of interest, fees
and commissions shall be made by the Administrative Agent on the basis of a year
of 360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or commitment fee, as
the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
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(e) Unless the Administrative Agent shall have received notice
from the applicable Borrower prior to the date on which any payment is due to
any Lender Party hereunder that such Borrower will not make such payment in
full, the Administrative Agent may assume that such Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
such Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent such Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender Party shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender Party together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date such Lender Party
repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. TAXES. (a) Any and all payments by either
Borrower hereunder or under the Notes issued by such Borrower shall be made, in
accordance with Section 2.11, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, EXCLUDING, in the case
of each Lender Party and each Agent, taxes that are imposed on its net income by
the United States and taxes that are imposed on its net income (and franchise
taxes imposed in lieu thereof) by the state or foreign jurisdiction under the
laws of which such Lender Party or such Agent (as the case may be) is organized
or any political subdivision thereof and, in the case of each Lender Party,
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction of such Lender Party's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If either Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note issued by such Borrower to any Lender Party or any Agent, (i) the sum
payable by such Borrower shall be increased as may be necessary so that after
such Borrower and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or such Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower shall make all such deductions and (iii) such Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, each Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes issued by such Borrower
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes issued by such Borrower
(hereinafter referred to as "OTHER TAXES").
(c) The Borrowers shall jointly and severally indemnify each
Lender Party and each Agent for and hold them harmless against the full amount
of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed
by any jurisdiction on amounts payable under this Section 2.12, imposed on or
paid by such Lender Party or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or such Agent (as the case may be) makes written
demand therefor.
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(d) Within 30 days after the date of any payment of Taxes, the
applicable Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing such payment.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as requested in writing by either
Borrower (but only so long thereafter as such Lender Party remains lawfully able
to do so), provide each of the Administrative Agent and such Borrower with two
original Internal Revenue Service forms 1001 or 4224 or (in the case of a Lender
that has certified in writing to the Administrative Agent and such Borrower that
it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue
Code) form W-8 (and, if such Lender delivers a form W-8, a certificate
representing that such Lender is not a "bank" for purposes of Section 881(c) of
the Internal Revenue Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of such Borrower and is
not a controlled foreign corporation related to such Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the
Notes issued by such Borrower or, in the case of a Lender providing a form W-8,
certifying that such Lender is a foreign corporation, partnership estate or
trust. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; PROVIDED, HOWEVER, that, if, at the date of the
Assignment and Acceptance pursuant to which a Lender Party becomes a party to
this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) of this Section 2.12 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee on such date.
For purposes of this subsection (e) and subsection (f) of this Section 2.12, the
terms "UNITED STATES" and "UNITED STATES PERSON" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(f) For any period with respect to which a Lender Party has
failed to provide the applicable Borrower with the appropriate form described in
subsection (e) above (OTHER THAN if such failure is due to a change in law
enacted or promulgated after the date on which a form originally was required to
be provided or if such form otherwise is not required under subsection (e) of
this Section 2.12), such Lender Party shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed
by the United States by reason of such failure; PROVIDED, HOWEVER, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, such Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) In the event that a Lender Party determines in its
reasonable discretion, that it has actually and finally realized a refund of or
credit for taxes withheld or paid pursuant to this Section 2.12,
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42
which credit or refund is identifiable by such Lender Party as being a result of
taxes withheld in connection with sums payable hereunder or under any other Loan
Document, such Lender Party shall promptly notify the Administrative Agent and
the Parent Borrower and shall remit to the Parent Borrower or the Sub Borrower,
as applicable, the amount of such refund or credit allocable to payments made
hereunder or under the other Loan Documents; PROVIDED, HOWEVER, that in the
event of any subsequent disallowance of any such refund or credit on account of
which such Lender Party has made a payment pursuant to this subsection (g), the
amount so disallowed shall be deemed to be a Tax (notwithstanding any exclusions
in the definition of "Taxes") for which such Lender Party shall be entitled to
indemnification under subsection (c) of this Section 2.12, but only to the
extent of any payment by such Lender Party pursuant to this subsection (g).
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such Lender
Party's ratable share (according to the proportion of (i) the purchase price
paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. Each Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender Party were the direct creditor of such Borrower in the amount of
such participation.
SECTION 2.14. USE OF PROCEEDS. The proceeds of the Advances
and issuances of Letters of Credit to the Parent Borrower shall be available
(and the Parent Borrower agrees that it shall use such proceeds and Letters of
Credit) solely to finance ongoing working capital requirements and for other
general corporate purposes, including, without limitation, Non-hostile
Acquisitions, of the Parent Borrower and its Subsidiaries. The proceeds of the
Advances to the Sub Borrower shall be available (and the Sub Borrower agrees
that it shall use such proceeds) solely to be lent to the Specified Subsidiaries
and to be used
<PAGE>
43
by the Specified Subsidiaries solely to finance ongoing working capital
requirements and for other general corporate purposes of the Specified
Subsidiaries.
SECTION 2.15. DEFAULTING LENDERS. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to either Borrower and (iii)
such Borrower shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then such
Borrower may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set off and otherwise
apply the Obligation of such Borrower to make such payment to or for the account
of such Defaulting Lender against the obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, such Borrower shall
so set off and otherwise apply its Obligation to make any such payment against
the obligation of such Defaulting Lender to make any such Defaulted Advance on
or prior to such date, the amount so set off and otherwise applied by such
Borrower shall constitute for all purposes of this Agreement and the other Loan
Documents an Advance by such Defaulting Lender made on the date under the
Facility pursuant to which such Defaulted Advance was originally required to
have been made pursuant to Section 2.01. Such Advance shall be a Base Rate
Advance and shall be considered, for all purposes of this Agreement, to comprise
part of the Borrowing in connection with which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01, even if the
other Advances comprising such Borrowing shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this subsection (a). Each
Borrower shall notify the Administrative Agent at any time such Borrower
exercises its right of setoff pursuant to this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set off
and otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made by
such Borrower to or for the account of such Defaulting Lender that is paid by
such Borrower, after giving effect to the amount set off and otherwise applied
by such Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to any Agent or any of the other Lender Parties and (iii) either Borrower
shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Agents or
such other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by such Borrower to or for the account of
such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such amount
so applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Agents or such
other Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
such Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, the other Agents and the other
Lender Parties, in the following order of priority:
<PAGE>
44
(i) FIRST, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent;
(ii) SECOND, to any other Agents for any Defaulted Amounts
then owing to such other Agents, ratably in accordance with such
respective Defaulted Amounts then owing to such other Agents; and
(iii) THIRD, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing
to such other Lender Parties.
Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) either Borrower, any Agent or
any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower, such Agent or such other Lender Party
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with IBJ Schroder Bank &
Trust Company, in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be IBJ Schroder Bank & Trust
Company's standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative Agent
from time to time in accordance with the provisions of, this subsection (c). The
Administrative Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent necessary to
make any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent, any other Agents or any other Lender
Party, as and when such Advances or amounts are required to be made or paid and,
if the amount so held in escrow shall at any time be insufficient to make and
pay all such Advances and amounts required to be made or paid at such time, in
the following order of priority:
(i) FIRST, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) SECOND, to any other Agents for any amount then due and
payable by such Defaulting Lender to such other Agents hereunder,
ratably in accordance with such respective amounts then due and payable
to such other Agents;
<PAGE>
45
(iii) THIRD, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iv) FOURTH, to the applicable Borrower for any Advance then
required to be made to such Borrower by such Defaulting Lender pursuant
to a Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the
Borrowers may have against such Defaulting Lender with respect to any Defaulted
Advance and that the Administrative Agent, any Agent or any Lender Party may
have against such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF
CREDIT. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Transaction, including all of the terms and conditions
thereof, shall have been duly approved by the board of directors and
(if required by applicable law) the shareholders of the parties
thereto, and all Related Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect.
The representations and warranties set forth in the Related Documents
shall be true and correct in all material respects as if made on and as
of the date of the Initial Extension of Credit, except to the extent
that such representations and warranties are stated to relate to a
specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date.
(b) The Merger shall have been consummated strictly in
accordance with the terms of the Merger Agreement, and the Share
Exchange shall have been consummated strictly in accordance with the
terms of the Share Exchange and Termination Agreement, in each case
without any waiver or amendment not consented to by the Agents and the
Lender Parties of any material term, provision or condition set forth
therein, and in compliance with all applicable laws.
(c) The Agents and the Lender Parties shall be satisfied with
the corporate and legal structure, ownership and capitalization of each
Loan Party and each of its Subsidiaries, including the terms and
conditions of the charter, bylaws and each class of capital stock of
each Loan Party
<PAGE>
46
and each such Subsidiary and of each agreement or instrument relating
to such structure, ownership or capitalization.
(d) The Parent Borrower shall have received at least
$149,935,000 (exclusive of any over funding amount) in Net Cash
Proceeds from the issuance of the Senior Notes.
(e) The Parent Borrower shall have received Net Cash Proceeds
from the issuance of common stock to the Equity Investors in an amount
at least equal to the product of $80,000,000 and the percentage of
common stock of the Parent Borrower to be owned, directly or
indirectly, by the Equity Investors after giving effect to the
Transaction, all on terms and conditions satisfactory to the Agents and
the Lender Parties.
(f) No Borrowings shall be required or made on the Effective
Date in connection with the consummation of the Transaction.
(g) The Agents and the Lender Parties shall be satisfied that
all Existing Debt, other than the Debt identified on Schedule 4.01(gg)
hereto (the "SURVIVING DEBT"), has been prepaid, redeemed or defeased
in full or otherwise satisfied and extinguished and that all such
Surviving Debt shall be on terms and conditions satisfactory to the
Agents and the Lender Parties.
(h) Before giving effect to the Transaction, there shall have
occurred no Material Adverse Change since September 30, 1997.
(i) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or, to the best of either Borrower's knowledge,
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of the
Transaction, any Loan Document, any Related Document or the
consummation of the Transaction.
(j) Nothing shall have come to the attention of the Lender
Parties during the course of their due diligence investigation to lead
them to believe (i) that the information relating to the Loan Parties
furnished to the Lender Parties prior to the Effective Date was or has
become misleading, incorrect or incomplete in any material respect,
(ii) that, following the consummation of the Transaction, the Parent
Borrower and its Subsidiaries would not have good and marketable title
to all material assets of the Parent Borrower and its Subsidiaries
reflected in the information relating to the Loan Parties furnished to
the Lender Parties prior to the Effective Date and (iii) that the
Transaction will have a Material Adverse Effect; without limiting the
generality of the foregoing, the Lender Parties shall have been given
such access to the management, records, books of account, contracts and
properties of the Parent Borrower and its Subsidiaries as they shall
have requested.
(k) All accrued costs, fees and expenses of the Agents and the
Lender Parties to the extent due shall have been paid (including the
accrued costs, fees and expenses of counsel to the
Agents and local counsel to the Lender Parties).
<PAGE>
47
(l) The Agents and the Lender Parties shall be satisfied that
(i) all requisite governmental and other third party licenses, permits,
approvals and consents necessary in connection with the Initial
Extension of Credit and for the consummation of the Transaction shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Agents and the Lender Parties) and remain in
effect, and all applicable appeal periods and all applicable waiting
periods (including, without limitation, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended) in connection with the
Transaction shall have expired without any action being taken by any
competent authority, and no law or regulation shall be applicable in
the judgment of the Lender Parties, in each case, that restrains,
prevents or imposes adverse conditions upon the consummation of the
Transaction or the rights of the Loan Parties or their Subsidiaries
freely to the transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them and
(ii) the Initial Extension of Credit, and all other financing for the
Transaction (including, without limitation, the issuance of common
stock of the Parent Borrower to AAC and the issuance of the Senior
Notes) shall be in full compliance with all legal and regulatory
requirements, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.
(m) The Administrative Agent shall have received on or before
the date of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Agents and the Lender Parties (unless otherwise
specified) and (except for the Notes) in sufficient copies for each
Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of (A) the resolutions of the
Board of Directors (or persons performing similar functions)
of each Loan Party approving the Transaction, each Loan
Document and each Related Document to which it is or is to be
a party, and (B) all documents evidencing other necessary
corporate action and governmental and other third party
approvals and consents, if any, with respect to the
Transaction, each Loan Document and each Related Document to
which it is or is to be a party.
(iii) A copy of a certificate of the Secretary of
State or other appropriate governmental official of the
jurisdiction of incorporation of each Loan Party other than
IPC Hong Kong, dated reasonably near the date of the Initial
Extension of Credit, certifying, where applicable, (A) as to a
true and correct copy of the charter or other constitutive
document of such Loan Party and each amendment thereto on file
in that office and (B) that (1) such amendments are the only
amendments to such Loan Party's charter or other constitutive
document on file in that office, (2) such Loan Party has paid
all franchise taxes to the date of such certificate and (3)
such Loan Party is duly incorporated and in good standing or
presently subsisting under the laws of the jurisdiction of its
incorporation and a copy of a certificate of the Hong Kong
Registrar of Companies dated reasonably near the date of the
Initial Extension of Credit, certifying that IPC Hong Kong is
presently on the Register.
(iv) A copy of a certificate of the Secretary of
State of the States of Connecticut and New York and, where
applicable, a certificate of such other appropriate
<PAGE>
48
governmental official in all other appropriate jurisdictions,
in each case, dated reasonably near the date of the Initial
Extension of Credit, stating that each Loan Party other than
IPC Hong Kong is duly qualified and in good standing as a
foreign corporation in such State or other jurisdiction and
has filed all annual reports required to be filed to the
date of such certificate.
(v) Certified copies of a certificate of merger or
other confirmation from the Secretary of State of the State of
Delaware satisfactory to the Agents and the Lender
Parties of the consummation of the Merger.
(vi) A certificate of each Loan Party, signed on
behalf of such Loan Party by its Chief Financial Officer or
any Vice President or, in the case of any Foreign
Subsidiary, a Director and its Secretary or any Assistant
Secretary, dated the date of the Initial Extension of Credit
(the statements made in which certificate shall be true on
and as of the date of the Initial Extension of Credit),
certifying as to (A) the absence of any amendments to the
charter of such Loan Party since the date of the Secretary
of State's certificate referred to in Section 3.01(m)(iii),
(B) a true and correct copy of the bylaws of such Loan Party
as in effect on the date on which the resolutions referred
to in Section 3.01(m)(ii) were adopted and on the date of
the Initial Extension of Credit, (C) the due incorporation
and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of
its incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (D) the truth
of the representations and warranties contained in the Loan
Documents and the Related Documents as though made on and as
of the date of the Initial Extension of Credit and (E) the
absence of any event occurring and continuing, or resulting
from the Initial Extension of Credit, that constitutes a
Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign each Loan Document and each Related Document to which it
is or is to be a party and the other documents to be delivered
hereunder and thereunder.
(viii) A security agreement in substantially the form
of Exhibit D hereto (together with each other security
agreement and security agreement supplement delivered pursuant
to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "SECURITY AGREEMENT"), duly executed by each
Borrower, each Domestic Guarantor and IPC Canada, together
with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank and instruments,
including, without limitation, the Intercompany
Notes, evidencing the Pledged Debt referred to
therein indorsed in blank,
(B) executed copies of Uniform Commercial
Code financing statements, to be filed under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable
in order to perfect
<PAGE>
49
and protect the first priority liens and security
interests created under the Security Agreement,
covering the Collateral described in the Security
Agreement,
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together
with copies of such other financing statements,
(D) duly executed copies of the Collateral
Assignments referred to in the Security Agreement and
evidence of the completion of all recordings and
filings of or with respect to the Intellectual
Property Collateral referred to in the Security
Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect and
protect the Liens created thereunder, except to the
extent that such recordings and filings are to be
made, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date,
(E) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement that the Administrative Agent may
deem necessary or desirable in order to perfect and
protect the Liens created thereby, except to the
extent that such recordings and filings are to be
made, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date.
(F) evidence of the insurance required by
the terms of the Security Agreement,
(G) copies of the Assigned Agreements
referred to in, and set forth on Schedule II to, the
Security Agreement, together with a consent to such
assignment, in substantially the form of Exhibit B to
the Security Agreement, duly executed by each party
to such Assigned Agreements other than the Loan
Parties, and
(H) evidence that all other action that the
Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority
liens and security interests created under the
Security Agreement has been taken (including, without
limitation, delivering the duly executed Deed of
Charge over Shares and the other Local Pledges to the
Administrative Agent), except to the extent that such
actions are to be taken, and such evidence is to be
delivered, pursuant to Section 5.01(q) as notified to
the Administrative Agent by the Parent Borrower on or
prior to the Effective Date.
(ix) The Debenture and such other security
agreements, pledges, mortgages, assignments, charges and other
agreements and documents (in each case, as amended,
supplemented or otherwise modified in accordance with its
terms, the "FOREIGN SECURITY DOCUMENTS"), in each case in form
and substance satisfactory to the Administrative Agent,
<PAGE>
50
as the Administrative Agent may request to secure payment of
all Obligations of the Specified Subsidiaries and the other
Foreign Guarantors under the Loan Documents, duly executed by
the applicable Foreign Guarantor, together with:
(A) an administrative agency agreement in
substantially the form of Exhibit J hereto (as
amended, supplemented or otherwise modified from time
to time in accordance with its terms, the
"ADMINISTRATIVE AGENCY AGREEMENT"), duly executed by
the Sub Borrower and the Administrative Agent, and
(B) evidence that all actions that may be
necessary or, in the reasonable discretion of the
Administrative Agent, desirable in order to perfect
and protect the first priority liens, security
interests, pledges and charges created by the Foreign
Security Documents under the laws of the jurisdiction
of the applicable Foreign Guarantor have been taken,
except to the extent that such actions are to be
taken, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date.
(x) A guaranty in substantially the form of Exhibit
E-1 hereto (together with each other guaranty and guaranty
supplement delivered by a Domestic Guarantor pursuant to
Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "DOMESTIC GUARANTY"), duly executed by each
Domestic Guarantor, and a guaranty in substantially the form
of Exhibit E-2 hereto (together with each other guaranty and
guaranty supplement delivered by a Foreign Guarantor pursuant
to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "FOREIGN GUARANTY"), duly executed by each Foreign
Guarantor.
(xi) Certified copies of each of the Related
Documents duly executed by each of the parties thereto and in
form and substance satisfactory to the Agents and the Lender
Parties, together with all agreements, instruments and other
documents delivered in
connection therewith.
(xii) Such financial, business and other information
regarding each Loan Party and each of its Subsidiaries as the
Lender Parties shall have requested, including, without
limitation, information as to possible contingent liabilities,
tax matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited
annual financial statements dated September 30, 1997, interim
financial statements dated the end of the most recent fiscal
quarter for which financial statements are available (or, in
the event the Lender Parties' due diligence review reveals
material changes since such financial statements, as of a
later date within 45 days of the day of the Initial Extension
of Credit), pro forma financial statements as to the Parent
Borrower and forecasts prepared by management of the Parent
Borrower, in form and substance satisfactory to the Agents and
the Lender Parties, of balance sheets, income statements and
cash flow statements on a
<PAGE>
51
monthly basis for the first year following the day of the
Initial Extension of Credit and on an annual basis for each
year thereafter until the Termination Date.
(xiii) Certificates, in substantially the form of
Exhibit G-1 hereto, attesting to the Solvency of each Loan
Party (other than IXnet, MXnet, IPC Bridge, IPC Hong Kong and
IPC Canada (as to which no certificates shall be delivered))
after giving effect to the Transaction, from its chief
financial officer or other authorized officer familiar with
the financial condition of such Loan Party and a letter, in
substantially the form of Exhibit G-2 hereto, attesting to the
solvency of the Parent Borrower and its Subsidiaries on a
Consolidated basis after giving effect to the Transaction,
from Houlihan Lokey Howard & Zukin.
(xiv) A copy of the Phase I EnviroAudit Environmental
Site Assessment, dated May 9, 1996 by EnviroAudit, Ltd.; the
Phase I Environmental Site Assessment Update, dated April 29,
1997, by NorthStar Environmental Management; the Contaminant
Assessment, dated June 27, 1997, by NorthStar Environmental
Management; and the Remedial Action and Post-Remediation
Groundwater Monitoring Report, dated December 3, 1997, as to
any hazards, costs or liabilities under Environmental Laws to
which any Loan Party or any of its Subsidiaries may be
subject, the amount and nature of which and the Parent
Borrower's plans with respect to which shall be acceptable to
the Agents and the Lender Parties, together with evidence, in
form and substance satisfactory to the Agents and the Lender
Parties, that all applicable Environmental Laws shall have
been complied with, except for such non-compliance that is not
reasonably likely to result in a Material Adverse Effect. To
the extent either the report or any other information that may
become available to the Agents and the Lender Parties shall
disclose any hazards, costs or liabilities under Environmental
Laws or otherwise that the Agents or the Lender Parties deem
material, the Agents and the Lender Parties shall be satisfied
that such hazards, costs or liabilities were adequately
reflected in the Parent Borrower's financial reserves shown on
the financial statements furnished to the Lender Parties prior
to the Effective Date or that, to the extent not so reflected,
the Parent Borrower has made adequate provision for such
hazards, costs or liabilities.
(xv) Evidence of insurance naming the Administrative
Agent as additional insured and loss payee with such
responsible and reputable insurance companies or associations,
and in such amounts and covering such risks, as is reasonably
satisfactory to
the Agents.
(xvi) Certified copies of each employment agreement
and other compensation arrangement with each executive officer
of each Loan Party and each of its Subsidiaries as the
Administrative Agent may request.
(xvii) Certified copies of all Material Contracts of
each Loan Party and each of its Subsidiaries as the
Administrative Agent may request.
(xviii) A Borrowing Base Certificate.
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52
(xix) A favorable opinion of Morgan, Lewis & Bockius
LLP, counsel for the Borrowers and the Domestic Guarantors, in
substantially the form of Exhibit F-1 hereto and as to such
other matters as any Lender Party through the Administrative
Agent may reasonably request.
(xx) A favorable opinion of Thacher Proffitt & Wood,
Morgan, Lewis & Bockius LLP, Wilde Sapte and Osler, Hoskin &
Harcourt, local counsel to the Loan Parties in Connecticut,
the United Kingdom, Hong Kong and Canada, respectively, in
form and substance satisfactory to the Lender Parties and as
to such other matters as any Lender Party through the
Administrative Agent may reasonably request.
(xxi) A favorable opinion of Daniel Utevsky, General
Counsel of the Parent Borrower, in substantially the form of
Exhibit F-2 hereto and as to such other matters as any Lender
Party through the Administrative Agent may reasonably request.
(xxii) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent and the Syndication
Agent, in form and substance reasonably satisfactory to the
Administrative Agent and the Syndication Agent.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND
ISSUANCE. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance made by the Issuing Bank or a Lender pursuant to Section
2.03(c)) on the occasion of each Borrowing (including the Initial Extension of
Credit), and the obligation of the Issuing Bank to issue a Letter of Credit
(including the initial issuance), shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance (a) the following
statements shall be true and each of the giving of the applicable Notice of
Borrowing or Notice of Issuance and the acceptance by the applicable Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by such Borrower that both on the date of such
notice and on the date of such Borrowing or issuance such statements are true:
(i) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, before and after
giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date other
than any such representations or warranties that, by their terms, refer
to a specific date other than the date of such Borrowing or issuance,
in which case as of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
(iii) (A) in the case of any Advance to be made to the Parent
Borrower or any issuance of a Letter of Credit for the account of the
Parent Borrower, the sum of the Loan Values of the applicable Eligible
Collateral exceeds the aggregate principal amount of the Working
Capital Advances owing by the Parent Borrower PLUS Letter of Credit
Advances to be outstanding PLUS the aggregate Available Amount of all
Letters of Credit to be outstanding, in each case after giving effect
to such Advance or issuance, respectively and (B) in the case of any
Advance to be made to the Sub Borrower, the sum of the Loan Values of
the applicable Eligible Collateral exceeds the
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53
aggregate principal amount of the Working Capital Advances owing by the
Sub Borrower after giving effect to such Advance;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender Party through the Administrative Agent may
reasonably request.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE
BORROWERS. Each Borrower represents and warrants as follows:
(a) Each Loan Party (other than the U.K. Subsidiaries and the
Hong Kong Subsidiaries) and each of its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and (ii) is duly
qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed could not have a
Material Adverse Effect, and IPC Information Systems is an unlimited
liability company and each other U.K. Subsidiary and each Hong Kong
Subsidiary is a limited liability company, in each case, incorporated
under the laws of England and Wales or Hong Kong, as the case may be.
Each Loan Party and each of its Subsidiaries has all requisite
corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted
and as proposed to be conducted. All of the outstanding capital stock
of each Loan Party has been validly issued, is fully paid and
non-assessable and is owned by those Persons listed on Schedule 4.01(a)
hereto in the amounts specified thereon free and clear of all Liens,
except those created under the Collateral Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of capital stock
authorized, and the number outstanding, on the date hereof and the
percentage of the outstanding shares of each such class owned (directly
or indirectly) by such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. All of the outstanding capital stock
of all of such Subsidiaries has been validly issued, is
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54
fully paid and non-assessable and is owned by such Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those
created under the Loan Documents.
(c) The execution, delivery and performance by each Loan Party
of each Loan Document and each Related Document to which it is or is to
be a party, and the consummation of the Transaction, are within such
Loan Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such Loan Party's
memorandum and articles of association, in the case of the U.K.
Subsidiaries and the Loan Parties organized under the laws of Hong Kong
and Canada, or charter or bylaws, in the case of each other Loan Party,
(ii) violate any law (including, without limitation, the Securities
Exchange Act of 1934 and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the
Board of Governors of the Federal Reserve System), order, writ,
judgment, injunction, decree, determination or award, (iii) conflict
with or result in the breach of, or constitute a default under, any
loan agreement, indenture, mortgage, deed of trust or other instrument
or material contract or material lease binding on or affecting any Loan
Party, any of its Subsidiaries or any of their respective properties or
(iv) except for the Liens created under the Loan Documents, result in
or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its Subsidiaries.
No Loan Party nor any of its Subsidiaries is in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material
Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Loan Document or any Related Document to which it is or is to be a
party, or for the consummation of the Transaction, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created by
the Collateral Documents (including the first priority nature thereof)
or (iv) the exercise by any of the Agents or any of the Lender Parties
of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting
periods in connection with the Transaction have expired without any
action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other
Loan Document and each Related Document when delivered hereunder will
have been, duly executed and delivered by each Loan Party thereto. This
Agreement is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such
Loan Party in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation,
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55
all laws relating to fraudulent transfers), reorganization, moratorium
or similar law affecting creditors' rights generally.
(f) The Consolidated balance sheet of the Parent Borrower and
its Subsidiaries as at September 30, 1997, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Parent Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an unqualified opinion of Coopers & Lybrand L.L.P.,
independent public accountants, and the consolidating balance sheet of
the Parent Borrower and its Subsidiaries as at September 30, 1997, and
the related consolidating statement of income of the Parent Borrower
and its Subsidiaries for the fiscal year then ended, duly certified by
the chief financial officer of the Parent Borrower, and the
Consolidated and consolidating balance sheets of the Parent Borrower
and its Subsidiaries as at December 31, 1997, and the related
Consolidated and consolidating statements of income and Consolidated
statement of cash flows of the Parent Borrower and its Subsidiaries for
the three months then ended, duly certified by the chief financial
officer of the Parent Borrower, copies of which have been furnished to
each Lender Party, fairly present, subject, in the case of said balance
sheets as at December 31, 1997, and said statements of income and cash
flows for the three months then ended, to year-end audit adjustments,
the Consolidated and consolidating financial condition of the Parent
Borrower and its Subsidiaries as at such dates and the Consolidated and
consolidating results of the operations of the Parent Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and, since September 30, 1997, there has been no Material
Adverse Change.
(g) The Consolidated pro forma balance sheet of the Parent
Borrower and its Subsidiaries as at March 31, 1998, and the related
Consolidated pro forma statements of income and cash flows of the
Parent Borrower and its Subsidiaries for the six months then ended,
certified by the chief financial officer of the Parent Borrower, copies
of which have been furnished to each Lender Party, fairly present the
Consolidated pro forma financial condition of the Parent Borrower and
its Subsidiaries as at such date and the Consolidated pro forma results
of operations of the Parent Borrower and its Subsidiaries for the
period ended on such date, in each case after giving effect to the
Transaction, all in accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income
statements and cash flows statements of the Parent Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(m)(xii) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Parent Borrower's best
estimate of its future financial performance.
(i) None of the information, exhibits or reports furnished by
or on behalf of any Loan Party to any Agent or any Lender Party in
connection with the negotiation of the Loan Documents or pursuant to
the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein not misleading.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or, to the best of
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56
either Borrower's knowledge, threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of the Transaction, this Agreement, any
Note, any other Loan Document or any Related Document or the
consummation of the Transaction.
(k) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of
1934 (other than, to the extent applicable, in connection with (i) the
transactions contemplated by the Merger Agreement or (ii) a Non-hostile
Acquisition).
(l) Neither Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, no
proceeds of any Advance made to the Sub Borrower will be used to
purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, and following
application of the proceeds of each Advance or drawing under each
Letter of Credit, not more than 25 percent of the value of the assets
(either of the Parent Borrower only or of the Parent Borrower and its
Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or 5.02(e) or subject to any restriction contained in
any agreement or instrument between the Parent Borrower and any Lender
Party or any Affiliate of any Lender Party relating to Debt within the
scope of Section 6.01(e) will be Margin Stock.
(m) With respect to each scheme or arrangement mandated by a
government other than the United States (a "FOREIGN GOVERNMENT SCHEME
OR ARRANGEMENT") and with respect to each employee benefit plan
maintained or contributed to by any Loan Party or any Subsidiary of any
Loan Party that is not subject to United States law (a "FOREIGN PLAN"),
except as could not be reasonably likely in the aggregate to have a
Material Adverse Effect:
(i) Any employer and employee contribution required
by law or by the terms of any Foreign Government Scheme or
Arrangement or any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal accounting
practices.
(ii) The fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for any
Foreign Plan funded through insurance or the book reserve
established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the date hereof, with
respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations
most recently used to account for such obligations in
accordance with applicable generally accepted accounting
principles.
(iii) Each Foreign Plan required to be registered has
been registered and has been maintained in good standing with
applicable regulatory authorities.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has had or could be reasonably
likely to have a Material Adverse Effect.
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57
(o) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and, with respect to any
Plan of the Loan Parties, furnished to the Agents and the Lender
Parties, is complete and accurate and fairly presents the funding
status of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(p) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan that has had or could be reasonably likely to
have a Material Adverse Effect.
(q) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, where such reorganization or termination has had or
could be reasonably likely to have a Material Adverse Effect, and no
such Multiemployer Plan is reasonably expected to be in reorganization
or to be terminated, within the meaning of Title IV of ERISA, where
such reorganization or termination could be reasonably likely to have a
Material Adverse Effect.
(r) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no liability with respect to "expected
post retirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106 that has had or could be
reasonably likely to have a Material
Adverse Effect.
(s) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could be reasonably
likely to have a Material Adverse Effect.
(t) The operations and properties of each Loan Party and each
of its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, except for any
noncompliance that is not reasonably likely to have a Material Adverse
Effect, all past noncompliance with such Environmental Laws and
Environmental Permits has been resolved without material ongoing
obligations or costs, and no circumstances exist that would be
reasonably likely to (i) form the basis of an Environmental Action
against any Loan Party or any of its Subsidiaries or any of their
properties that could be reasonably likely to have a Material Adverse
Effect or (ii) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(u) None of the properties currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries is listed or, to
the knowledge of any Loan Party, proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list; there are no
and never have been any underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by any Loan Party or any of
its Subsidiaries or, to the best of its knowledge, on any property
formerly owned or operated by any
<PAGE>
58
Loan Party or any of its Subsidiaries which could be reasonably likely
to have a Material Adverse Effect; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries which could be
reasonably likely to have a Material Adverse Effect; and Hazardous
Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries in a manner that could be reasonably likely to
result in a Material Adverse Effect.
(v) Neither any Loan Party nor any of its Subsidiaries is
undertaking or has completed, either individually or together with
other potentially responsible parties, any investigation or assessment
or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of
any governmental or regulatory authority or the requirements of any
Environmental Law which could be reasonably likely to have a Material
Adverse Effect; and all Hazardous Materials generated, used, treated,
handled or stored at, or transported to or from, any property currently
or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected
to result in a Material Adverse Effect.
(w) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that could be reasonably likely to have a Material Adverse
Effect.
(x) The Collateral Documents create a valid security interest
in the Collateral, securing the payment of the Secured Obligations; all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken or will have been duly
taken within the time period specified therefor in Section 5.01(q); and
upon making the filings and taking the other actions required under
Section 5.01(q), the Administrative Agent, for the benefit of the
Secured Parties, will have a perfected first priority security interest
in the Collateral. The Loan Parties are the legal and beneficial owners
of the Collateral free and clear of any Lien, except for the Liens and
security interests created or permitted under the Loan Documents.
(y) Each Loan Party and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns
(federal, state, local and foreign) required to be filed and has paid
all taxes shown thereon to be due, together with applicable interest
and penalties (except for
extensions that have been duly filed).
(z) [intentionally omitted].
(aa) There are no pending audits, examinations, investigations
or other proceedings in respect of federal, state, local or foreign
taxes relating to any Loan Party or any of its Subsidiaries which, if
determined adversely to such Loan Party or such Subsidiary, could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(bb) There are no deficiencies or claims in respect of
Federal, state, local or foreign taxes relating to any Loan Party or
any of its Subsidiary which, if such deficiencies or claims were
resolved against such Loan Party or such Subsidiary, could reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect.
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59
(cc) The Merger will not be taxable to the Parent Borrower or
any of its Subsidiaries.
(dd) Neither any Loan Party nor any of its Subsidiaries is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended. Neither the
making of any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by either
Borrower, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation
or order of the Securities and Exchange Commission thereunder.
(ee) Each Loan Party (other than IXnet, Mxnet, IPC Bridge, IPC
Hong Kong and IPC Canada, as to which no representation as to Solvency
is made) is, individually and together with its Subsidiaries, Solvent.
(ff) Set forth on Schedule 4.01(ff) hereto is a complete and
accurate list of all Debt (other than Surviving Debt) of the Parent
Borrower and its Subsidiaries (the "EXISTING DEBT"), showing as of the
date hereof the principal amount outstanding thereunder.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding thereunder, the maturity date thereof and
the amortization schedule therefor.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of
its Subsidiaries, showing as of the date hereof the street address,
county or other relevant jurisdiction, State, record owner and book and
fair value thereof. Each Loan Party or such Subsidiary has good,
marketable and insurable fee simple title to such real property, free
and clear of all Liens, other than Liens created or permitted by the
Loan Documents.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and each of
its Subsidiaries, showing as of the date hereof the parties, subject
matter and term thereof and a complete and accurate list of all
employment agreements with each executive officer of each Loan Party
and each of its Subsidiaries. Each such Material Contract has been duly
authorized, executed and delivered by all parties thereto, has not been
amended or otherwise modified, is in full force and effect and is
binding upon and enforceable against all parties thereto in accordance
with its terms, and there exists no default under any Material Contract
by any party thereto.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all Investments (other than equity Investments in
Subsidiaries) held by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and
accurate list of all trade names and all registered patents,
trademarks, service marks and copyrights, if any, and all applications
therefor and licenses thereof of each Loan Party and each of its
Subsidiaries, showing
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60
as of the date hereof the jurisdiction in which registered, the
registration number, the date of registration and the expiration date.
(ll) No Excluded Subsidiary holds assets or has annual
revenues or net income in the aggregate in excess of $150,000 and the
aggregate amount of assets, revenues or net income of all Excluded
Subsidiaries does not exceed $1,000,000, in each case, determined based
on the most recent financial statements required to be delivered to the
Lender Parties pursuant to Section 5.03(b) or (c), as the case may be.
No Excluded Subsidiary is engaged in any business of any kind, other
than the holding of licenses and/or acting as agent for a Loan Party.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, each Borrower shall:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA, federal, state, local and
foreign tax laws, rules, regulations and orders, and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
in excess of $1,000,000 in the aggregate that, if unpaid, might by law
become a Lien upon its property; PROVIDED, HOWEVER, that neither the
Parent Borrower nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, to the extent required
by Environmental Laws; PROVIDED, HOWEVER, that neither the Parent
Borrower nor any of its Subsidiaries shall be required to undertake any
such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
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61
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses
and owning similar properties in the same general areas in which the
Parent Borrower or such Subsidiary operates.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
PROVIDED, HOWEVER, that the Parent Borrower may consummate the Merger
and the Parent Borrower and its Subsidiaries may consummate any other
merger or consolidation permitted under Section 5.02(d) and the Parent
Borrower and its Subsidiaries may sell or otherwise dispose of assets
to the extent permitted under Section 5.02(e); and PROVIDED FURTHER
that neither the Parent Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Parent Borrower or such
Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Parent Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent Borrower, such
Subsidiary or the Lender Parties.
(f) VISITATION RIGHTS. Upon reasonable notice and during
regular business hours, from time to time, permit any of the Agents or
any of the Lender Parties or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Parent Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of
the Parent Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants; without limitation of the foregoing, the Collateral Agent
may conduct audits of the Collateral up to two times in each Fiscal
Year (unless an Event of Default shall have occurred and be continuing,
in which case the right of the Collateral Agent to perform audits of
the Collateral shall not be so limited), including, without limitation,
inspection, reviews, evaluation and performance of counts of the
Receivables, Inventory and other Collateral, PROVIDED that so long as
no Event of Default shall have occurred and be continuing, the
Collateral Agent shall coordinate its audits to coincide with the
Parent Borrower's regularly scheduled internal cycle counts, PROVIDED
FURTHER that in connection with any audit by the Collateral Agent, the
Parent Borrower shall reimburse each auditor of the Collateral Agent at
a rate of $650 per day plus actual out-of-pocket expenses (including,
without limitation, travel expenses), PROVIDED STILL FURTHER that the
Parent Borrower shall, at the request of the Collateral Agent, arrange
for Coopers & Lybrand or, if an Event of Default shall have occurred
and be continuing, permit the Collateral Agent to perform test
verifications of the Collateral at such times as the Collateral Agent
may request but in any event, so long as no Event of Default shall have
occurred and be continuing, not more than two times in any Fiscal Year.
(g) PREPARATION OF ENVIRONMENTAL REPORTS. At the request of
the Required Lenders from time to time (i) upon the occurrence and
during the continuance of a Default, (ii) in the case of the Parent
Borrower's or any of its Subsidiaries' acquisition of real property
that could be reasonably likely to result in a Material Adverse Effect,
and (iii) at any time when any Lender believes after reasonable inquiry
that a condition or event exists or has occurred on any real property
owned or operated by the Parent Borrower or any of its Subsidiaries
that could be reasonably likely to result in a Material Adverse Effect,
provide, or cause such Subsidiary to
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62
provide, to the Agents and the Lender Parties within 60 days after such
request, at the expense of the Parent Borrower or such Subsidiary, an
environmental site assessment report for any of its or its
Subsidiaries' properties described in such request, prepared by an
environmental consulting firm acceptable to the Required Lenders,
indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Required Lenders
determine at any time that a material risk exists that any such report
will not be provided within the time referred to above and the Required
Lenders will be materially prejudiced by any such delay, the Required
Lenders may retain an environmental consulting firm to prepare such
report at the expense of the Parent Borrower, and the Parent Borrower
hereby grants and agrees to cause any Subsidiary that owns any property
described in such request to grant to the Agents, the Lender Parties,
such firm and any agents or representatives thereof, subject to the
rights of tenants, access to enter onto their respective properties to
undertake such an assessment; PROVIDED, HOWEVER, that no such Persons
shall unreasonably interfere with the operations conducted at such
property and the Parent Borrower shall be given at least 2 Business
Days' notice prior to such undertaking.
(h) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Parent Borrower and each such Subsidiary in accordance
with generally accepted accounting principles in effect from time to
time.
(i) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(j) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Parent Borrower or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or canceled, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect.
(k) PERFORMANCE OF RELATED DOCUMENTS. Perform and observe all
of the terms and provisions of each Related Document to be performed or
observed by it, maintain each such Related Document in full force and
effect, enforce such Related Document in accordance with its terms,
take all such action to such end as may be from time to time requested
by the Administrative Agent and, upon request of the Administrative
Agent, make to each other party to each such Related Document such
demands and requests for information and reports or for action as any
Loan Party is entitled to make under such Related Document, except, in
any case, where the failure to do so, either individually or in the
aggregate, could not be reasonably expected to have a Material Adverse
Effect.
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63
(l) PERFORMANCE OF MATERIAL CONTRACTS. Perform and observe all
of the terms and provisions of each Material Contract to be performed
or observed by it, maintain each such Material Contract in full force
and effect, enforce each such Material Contract in accordance with its
terms, take all such action to such end as may be from time to time
requested by the Administrative Agent and, upon request of the
Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for
action as either Borrower is entitled to make under such Material
Contract, and cause each of its Subsidiaries to do so, except, in any
case, where the failure to do so, either individually or in the
aggregate, could not be reasonably expected to have a Material Adverse
Effect.
(m) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the applicable Borrower or such
Subsidiary than it would otherwise obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
(n) CASH CONCENTRATION ACCOUNTS. Maintain, and cause each of
its Domestic Subsidiaries and the U.K. Subsidiaries to maintain (to the
extent such Domestic Subsidiaries and U.K. Subsidiaries maintain any
deposit accounts), from and after the date specified therefor in
Section 5.01(q)(vii) cash concentration accounts and Pledged Accounts
(as defined in the Security Agreement) into which all proceeds of
Collateral are paid with one or more banks acceptable to the
Administrative Agent that shall have accepted the assignment of such
accounts to the Administrative Agent pursuant to the Security
Agreement.
(o) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon
(v) notice from the Parent Borrower to the Administrative Agent that it
intends to cause an Excluded Subsidiary to become a Loan Party, (w) the
request of the Administrative Agent or the Required Lenders following
the occurrence and during the continuance of a Default, (x) the
formation or acquisition of any new direct or indirect Subsidiaries by
any Loan Party, (y) the acquisition of any personal property by any
Loan Party, and such property, in the reasonable opinion of the
Administrative Agent, shall not be subject to a perfected first
priority security interest in favor of the Administrative Agent for the
benefit of the Secured Parties, or (z) the request of the
Administrative Agent or the Required Lenders at any time with respect
to any or all of the real property listed on Schedule 4.01(hh) hereto
or any other real or personal property owned or leased by any Loan
Party or any of its Subsidiaries from time to time, then each Loan
Party shall, in each case at such Loan Party's expense:
(i) in connection with an Excluded Subsidiary
becoming a Loan Party or the formation or acquisition of a
Subsidiary, within 10 days after such notice, request,
formation or acquisition, cause each such Subsidiary, and
cause each direct and indirect parent of such Subsidiary (if
it has not already done so), to duly execute and deliver to
the Administrative Agent, if such Subsidiary is a Domestic
Subsidiary, a Domestic Guaranty or guaranty supplement
guaranteeing the Obligations of the Borrowers and the other
Loan Parties under the Loan Documents and, if such Subsidiary
is Foreign Subsidiary, a Foreign Guaranty or guaranty
supplement guaranteeing the Obligations of the Specified
Subsidiaries and the other Foreign Subsidiaries under the Loan
Documents, in each case, in substantially
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64
the form of Exhibit E-1 or Exhibit E-2 hereto, as applicable,
or otherwise in form and substance satisfactory to the
Administrative Agent (except to the extent that any such
Guaranty by a Subsidiary of any Loan Party would result in
adverse tax consequences to such Loan Party or any of its
Subsidiaries),
(ii) within 10 days after such notice, request,
formation or acquisition, furnish to the Administrative Agent
a description of the real and personal properties of such Loan
Party and its Subsidiaries in detail satisfactory to the
Administrative Agent,
(iii) within 15 days after such notice, request,
formation or acquisition, duly execute and deliver, and cause
each such Subsidiary and each direct and indirect parent of
such Subsidiary (if it has not already done so) to duly
execute and deliver, to the Administrative Agent security
agreement supplements, mortgages, pledges, assignments,
debentures and other security agreements, as specified by and
in form and substance satisfactory to the Administrative
Agent, securing payment of all the obligations of the
applicable Loan Party, such Subsidiary or such parent, as the
case may be, under the Loan Documents and constituting Liens
on all such properties (except to the extent that any pledge
of the stock of a non-U.S. Subsidiary of a Loan Party would
result in adverse tax consequences to such Loan Party or any
of its Subsidiaries),
(iv) within 30 days after such notice, request,
formation or acquisition, take, and cause such Subsidiary or
such parent to take, whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) that may be
necessary or advisable in the opinion of the Administrative
Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it)
valid and perfected Liens on the properties purported to be
subject to the mortgages, pledges, assignments and security
agreements delivered pursuant to this Section 5.01(o)(iv),
enforceable against all third parties in accordance with their
terms,
(v) within 60 days after such notice, request,
formation or acquisition, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to
the Agents and the other Secured Parties, of counsel for the
Loan Parties acceptable to the Administrative Agent as to the
matters contained in clauses (i), (ii) and (iii) above, as to
such guaranties, mortgages, pledges, assignments and security
agreements being legal, valid and binding obligations of each
Loan Party party thereto enforceable in accordance with their
terms, as to the matters contained in clause (iv) above, as to
such recordings, filings, notices, endorsements and other
actions being sufficient to create valid and perfected first
priority Liens on such properties and as to such other matters
as the Administrative Agent may reasonably request,
(vi) as promptly as practicable after such notice,
request, formation or acquisition, deliver, upon the request
of the Administrative Agent in its sole discretion, to the
Administrative Agent with respect to each parcel of real
property owned or held by the entity that is the subject of
such request, formation or acquisition surveys and
engineering,
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65
soils and other reports, and environmental assessment reports,
title reports, each in scope, form and substance satisfactory
to the Administrative Agent; PROVIDED, HOWEVER, that to the
extent that any Loan Party or any of its Subsidiaries shall
have otherwise received any of the foregoing items with
respect to such real property, such items shall promptly after
the receipt thereof be delivered to the Administrative Agent,
(vii) upon the occurrence and during the continuance
of a Default, promptly cause to be deposited any and all cash
dividends paid or payable to it or any of its Subsidiaries
from any of its Subsidiaries from time to time into the L/C
Cash Collateral Account, and with respect to all other
dividends paid or payable to it or any of its Subsidiaries
from time to time, promptly execute and deliver, or cause such
Subsidiary to promptly execute and deliver, as the case may
be, any and all further instruments and take or cause such
Subsidiary to take, as the case may be, all such other action
as the Administrative Agent may deem necessary or desirable in
order to obtain and maintain from and after the time such
dividend is paid or payable a perfected, first priority lien
on and security interest in such dividends, and
(viii) at any time and from time to time, promptly
execute and deliver any and all further instruments and
documents and take all such other action as the Administrative
Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of,
such guaranties, mortgages, pledges, assignments and security
agreements.
(p) FURTHER ASSURANCES. (i) Promptly upon request by the
Administrative Agent, or by any Lender Party through the Administrative
Agent, correct any material defect or error that may be discovered in
any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) Promptly upon request by the Administrative Agent, or by
any Lender Party through the Administrative Agent, do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments,
financing statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and other
instruments as the Administrative Agent, or any Lender Party through
the Administrative Agent, may reasonably require from time to time in
order to (A) carry out more effectively the purposes of this Agreement,
the Notes or any other Loan Document, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now
or hereafter intended to be covered by any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and any of the Liens intended to be
created thereunder and (D) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively unto the Agents and the
Lender Parties the rights granted or now or hereafter intended to be
granted to the Agents and the Lender Parties under any Loan Document or
under any other instrument executed in connection with any Loan
Document to which any Loan Party or any of its Subsidiaries is or is to
be a party; without limitation of the foregoing, the Parent Borrower
shall, promptly upon the request of the Administrative Agent or the
Collateral Agent, (x) cause any unlimited liability
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66
company to be converted to a limited liability company and (y) deliver,
or cause to be delivered, to the Administrative Agent stock
certificates of the Excluded Subsidiaries to the extent that the stock
of such Subsidiaries shall have been pledged to the Administrative
Agent pursuant to the Loan Documents.
(q) CONDITIONS SUBSEQUENT. (i) Within 30 days after the
Initial Extension of Credit (or such later date as may be agreed by the
Parent Borrower and the Administrative Agent), furnish to the
Administrative Agent evidence that all filings and other actions
necessary or desirable under the laws of any jurisdiction (other than
any State of the United States) to perfect and protect the first
priority liens and security interests created under the Collateral
Documents shall have been taken (including, without limitation,
delivering appropriate Foreign Guaranties, Foreign Security Documents,
Local Pledges and legal opinions relating thereto to the Administrative
Agent, all in form and substance satisfactory to the Administrative
Agent), PROVIDED that stock certificates of the Excluded Subsidiaries
shall only be delivered upon the request of the Administrative Agent;
(ii) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish the Administrative Agent, in form and
substance satisfactory to the Agents and in sufficient copies for each
Lender Party, deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust and covering the properties
listed on Schedule 4.01(hh) hereto (together with the Assignments of
Leases and Rents referred to therein and each other mortgage delivered
pursuant to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with their terms,
the "MORTGAGES"), duly executed by the appropriate Loan Party, together
with:
(A) evidence that counterparts of the Mortgages have
been duly recorded in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order
to create a valid first and subsisting Lien on the property
described therein in favor of the Secured Parties and that all
filing and recording taxes and fees have been paid,
(B) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies (the
"MORTGAGE POLICIES") in form and substance, with endorsements
and in amount acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free
and clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements for future
advances under the Loan Documents and for mechanics' and
materialmen's Liens) and such coinsurance and direct access
reinsurance as the Administrative Agent may deem necessary or
desirable,
(C) American Land Title Association form surveys,
dated no more than 90 days after the date of the Initial
Extension of Credit, certified to the Administrative Agent and
the issuer of the Mortgage Policies in a manner satisfactory
to the Administrative Agent by a land surveyor duly registered
and licensed in the States in which the property described in
such surveys is located and acceptable to the Administrative
Agent, showing
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67
all buildings and other improvements, any off-site
improvements, the location of any easements, parking spaces,
rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or onto such property, and other defects, other
than encroachments and other defects acceptable to the
Administrative Agent,
(D) an appraisal of each of the properties described
in the Mortgages complying with the requirements of the
Federal Financial Institutions Reform, Recovery and
Enforcement Act of 1989, which appraisals shall be from a
Person acceptable to the Administrative Agent and otherwise in
form and substance satisfactory to the Agents and the Lender
Parties,
(E) engineering, soils and other reports as to the
properties described in the Mortgages, in form and substance
and from professional firms acceptable to the Administrative
Agent,
(F) the Assignments of Leases and Rents referred to
in the Mortgages, duly executed by the appropriate Loan Party,
(G) such consents and agreements of lessors and other
third parties, and such estoppel letters and other
confirmations, as the Administrative Agent may deem necessary
or desirable,
(H) evidence of the insurance required by the terms
of the Mortgages, and
(I) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to create valid first and subsisting Liens on the property
described in the Mortgages has been taken;
(iii) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative Agent evidence
that the Surviving Debt described on Part I of Schedule 4.01(gg) hereto
shall have been paid in full, and that all Liens securing such Existing
Debt shall have been released;
(iv) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative Agent a signed
copy of a favorable opinion, addressed to the Agents and the other
Secured Parties, of Connecticut counsel for the Loan Parties acceptable
to the Administrative Agent as to the Mortgages referred to in
subsection (ii) above being legal, valid and binding obligations of
each Loan Party party thereto enforceable in accordance with their
terms, with respect to the actions referred to in subsection (ii)
above, as to such actions being sufficient to create valid and
perfected first priority Liens on the properties covered by such
Mortgages, and as to such other matters as the Administrative Agent may
reasonably request;
(v) Within 45 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative
Agent:
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(A) completed requests for information, listing the
financing statements referred to in Section 3.01(m)(viii)(B)
and all other effective financing statements filed in all
jurisdictions that the Administrative Agent may deem necessary
or desirable that name any Loan Party as debtor, together with
copies of such financing statements;
(B) evidence of the completion of all recordings and
filings of or with respect to the Intellectual Property
Collateral referred to in the Security Agreement that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereunder;
(C) evidence of the completion of all other
recordings and filings of or with respect to the Collateral
Documents that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority
liens and security interests created thereunder; and
(D) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interest created under the Collateral Documents has been taken
(including, without limitation, delivery of such pledge,
charge or other similar agreements as the Administrative Agent
may request pursuant to which the Parent Borrower or a
Domestic Subsidiary pledges the stock of, or other ownership
interest in, a Foreign Subsidiary to the Administrative
Agent);
(vi) As soon as practicable and in any event within
10 days after the Initial Extension of Credit, furnish to the
Administrative Agent evidence of the filing of the Debenture
in the Companies House and such other filings in connection
with the Foreign Security Documents as the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Foreign Security Documents, covering the
Collateral described in the Foreign Security Documents, and
acknowledgment copies of proper financing statements, duly
filed under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority liens and
security interests created under the Security Agreement,
covering the Collateral described in the Security Agreement;
(vii) As soon as practicable and in any event within
60 days after the Initial Extension of Credit (or such later
date as may be agreed by the Parent Borrower and the
Administrative Agent), establish and thereafter maintain a
cash management system for the Loan Parties satisfactory to
the Administrative Agent and in connection therewith, enter
into such Pledged Account Letters (as defined in the Security
Agreement) with one or more commercial banks satisfactory to
the Administrative Agent as the Administrative Agent may deem
reasonably necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the applicable
Collateral described in the Security Agreement; and
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69
(viii) Within 60 days after the Initial Extension of
Credit (or such later date as may be agreed by the Parent
Borrower and the Administrative Agent), liquidate or cause
the liquidation of IXnet France and IXnet Germany.
(r) YEAR 2000 COMPLIANCE. Be, and cause each of its
Subsidiaries to be, Year 2000 Compliant on or before December 31, 1998
and at all times thereafter.
(s) INVENTORY CYCLE COUNTS. Perform, and cause its
Subsidiaries to perform, monthly Inventory cycle counts (in which the
Collateral Agent may participate upon request).
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, neither Borrower shall, at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned
or hereafter acquired, or sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names the Parent Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer
to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income; EXCLUDING, HOWEVER, from the operation of the foregoing
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) purchase money Liens upon equipment acquired or
held by the Parent Borrower or any of its Subsidiaries (other
than the Sub Borrower) in the ordinary course of business to
secure the purchase price of such equipment or to secure Debt
incurred solely for the purpose of financing the acquisition
of any such equipment to be subject to such Liens, or Liens
existing on any such equipment at the time of acquisition
(other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; PROVIDED, HOWEVER, that no
such Lien shall extend to or cover any property other than the
equipment being acquired, and no such extension, renewal or
replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and PROVIDED FURTHER that the aggregate principal
amount of the Debt secured by Liens permitted by this clause
(iii) shall not exceed the amount permitted under Section
5.02(b)(iii)(B) at any time outstanding and that any such Debt
shall not otherwise be prohibited by the terms of the Loan
Documents;
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(iv) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iii)(C); PROVIDED that
no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(v) Liens existing on the date hereof and described
on Schedule 5.02(a) hereto; and
(vi) the replacement, extension or renewal of any
Lien permitted by clause (v) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change
in any direct or contingent obligor) of the Debt secured
thereby.
(b) DEBT. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) in the case of the Parent Borrower,
(A) Debt in respect of Hedge Agreements with
one or more Secured Parties designed to hedge against
fluctuations in interest rates or foreign exchange
rates incurred in the ordinary course of business and
consistent with prudent business practice with the
aggregate Agreement Value thereof not to exceed
$1,000,000 at any time outstanding,
(B) Subordinated Debt in an aggregate amount
not to exceed $20,000,000 at any time outstanding
issued or incurred to finance, in whole or in part,
any acquisition under Section 5.02(f)(viii) which
Debt has been issued to the seller of the company or
business being acquired at the time of such
acquisition; PROVIDED, HOWEVER, that such Debt shall
be subordinated to the Obligations of the Loan
Parties under the Loan Documents on terms and
conditions satisfactory to the Required Lenders,
(C) Debt owed to a wholly owned Subsidiary
of the Parent Borrower (other than the Sub Borrower),
so long as no Default shall have occurred and be
continuing at the time of issuance or incurrence of
such Debt or would result therefrom and which Debt
(x) shall, in the case of Debt owed to a Loan Party,
constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall
be evidenced by promissory notes in form and
substance satisfactory to the Administrative Agent
and such promissory notes, in the case of Debt owed
to a Loan Party, shall be pledged as security for the
Obligations of the holder thereof under the Loan
Documents and delivered to the Administrative Agent
pursuant to the terms of the Security Agreement,
(D) Debt under the Senior Notes Indenture in
an aggregate principal amount not to exceed
$180,000,000 in original issue amount, and
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(E) unsecured Debt incurred in the ordinary
course of business and aggregating not more than
$5,000,000 at any one time outstanding,
(ii) in the case of the Parent Borrower's
Subsidiaries,
(A) in the case of the Specified
Subsidiaries, Debt owed to the Sub Borrower; PROVIDED
that, in each case, such Debt (w) shall constitute
Pledged Debt, (x) shall be on terms acceptable to the
Administrative Agent, (y) shall be evidenced by
promissory notes in substantially the form of Exhibit
I-1 hereto, such promissory notes shall be secured by
the personal property, and such other property as the
Administrative Agent shall require from time to time,
of the makers thereof and such promissory notes shall
be pledged as security for the Obligations of the Sub
Borrower under the Loan Documents and delivered to
the Administrative Agent pursuant to the terms of the
Security Agreement and Section 5.01(o) and (z) the
Obligations of the Specified Subsidiaries under such
promissory notes shall be guaranteed by the Foreign
Guarantors pursuant to the Foreign Guaranty, PROVIDED
FURTHER, HOWEVER, that no such Debt may be incurred
by any such Specified Subsidiary unless and until the
requirements of Section 5.01(q) and of clauses (w)
through (z) above, in each case relating to such
Specified Subsidiary, shall, in the judgment of the
Administrative Agent, have been satisfied, and
(B) in the case of any of the Subsidiaries
of the Parent Borrower (other than the Sub Borrower
and any Excluded Subsidiary), Debt owed to the Parent
Borrower; PROVIDED that, in each case, such Debt (x)
shall constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall
be evidenced by promissory notes in substantially the
form of Exhibit I-2 hereto or otherwise in form and
substance satisfactory to the Administrative Agent
and such promissory notes shall be pledged as
security for the Obligations of the holder thereof
under the Loan Documents and delivered to the
Administrative Agent pursuant to the terms of the
Security Agreement and Section 5.01(o),
(iii) in the case of the Parent Borrower and its
Subsidiaries (other than the Sub
Borrower and the Excluded Subsidiaries),
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iii) not to exceed in the aggregate
$5,000,000 at any time outstanding,
(C) Debt consisting of Capitalized Leases
not to exceed in the aggregate at any time
outstanding the sum of (1) $5,000,000 and (2) an
amount equal to the amount by which the aggregate
Working Capital Commitments in effect immediately
prior to giving effect to the incurrence of such Debt
pursuant to this subclause (2) exceeds $20,000,000,
PROVIDED, HOWEVER, that immediately upon the
incurrence of any Debt pursuant to this subclause
(2), an amount equal
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72
to the amount of such Debt shall be applied to prepay
the Advances pursuant to Section 2.06(b)(i) and the
Facilities shall be permanently reduced by the amount
of such Debt pursuant to Section 2.05(b)(i),
(D) the Surviving Debt, and any Debt
extending the maturity of, or refunding or
refinancing, in whole or in part, any Surviving Debt;
PROVIDED that the terms of any such extending,
refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in
connection therewith, are on substantially the same
terms as the Debt being extended, refunded or
refinanced otherwise permitted by the Loan Documents;
and PROVIDED FURTHER that the principal amount of
such Surviving Debt shall not be increased above the
principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing,
and the direct and contingent obligors therefor shall
not be changed, as a result of or in connection with
such extension, refunding or refinancing, and
(E) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business, and
(iv) in the case of the Sub Borrower,
(A) Debt under the Loan Documents, and
(B) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business.
(c) LEASE OBLIGATIONS. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any obligations as lessee (i) for the rental or hire
of real or personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of other real or personal
property of any kind under leases or agreements to lease, excluding
Capitalized Leases, having an original term of one year or more other
than, in the case of the Parent Borrower and its Subsidiaries (other
than the Sub Borrower), such obligations as would not cause the direct
and contingent liabilities of the Parent Borrower and its Subsidiaries,
on a Consolidated basis, in respect of all such obligations to exceed
$7,500,000 payable in any period of 12 consecutive months.
(d) MERGERS, ETC. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that (i) the Parent Borrower may consummate the Merger
and (ii) any Subsidiary of the Parent Borrower (other than the Sub
Borrower) may merge into or consolidate with any other Subsidiary of
the Parent Borrower (other than the Sub Borrower); PROVIDED that, in
the case of any such merger or consolidation, the Person formed by such
merger or consolidation (A) shall be a wholly-owned Subsidiary of the
Parent Borrower and (B) shall, if either Subsidiary party to such
merger or consolidation is a Guarantor, be a Guarantor; and PROVIDED
FURTHER that in each case, immediately after giving effect thereto, no
event shall occur and be continuing that constitutes a Default.
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73
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any of its assets, or grant any option or
other right to purchase, lease or otherwise acquire any Collateral
other than Inventory to be sold in the ordinary course of its business,
EXCEPT, with respect to the Parent Borrower and its Subsidiaries (other
than the Sub Borrower):
(i) sales of Inventory in the ordinary course of its
business;
(ii) in a transaction authorized by subsection (d) of
this Section 5.02;
(iii) sales of assets for cash and for fair value in
an aggregate amount not to exceed $10,000,000 in any Fiscal
Year; PROVIDED, HOWEVER, that the Net Cash Proceeds of such
sales shall be applied on the date of receipt thereof to
prepay the Advances pursuant to Section 2.06(b)(i);
(iv) in addition to sales of assets permitted under
clause (iii) above, sales of assets for cash and for fair
value in an aggregate amount not to exceed $10,000,000 in any
Fiscal Year; PROVIDED, HOWEVER, that, except to the extent
that the Net Cash Proceeds of such sale shall be reinvested in
like assets within 180 days after such sale, any Net Cash
Proceeds of such sales not so reinvested shall be applied on
the 180th day after receipt thereof to prepay the Advances
pursuant to Section 2.06(b)(i); and
(v) IXnet Germany and IXnet France may be dissolved.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) Investments by the Parent Borrower and its
Subsidiaries (other than the Sub Borrower) in their respective
Subsidiaries outstanding on the date hereof and additional
Investments in their respective wholly-owned Subsidiaries
(other than the Excluded Subsidiaries) in an aggregate amount
invested from the date hereof not to exceed
$2,000,000;
(ii) loans and advances to employees of the Parent
Borrower and its Subsidiaries (other than the Sub Borrower) in
the ordinary course of business as presently conducted in an
aggregate principal amount not to exceed $2,000,000 at any
time outstanding;
(iii) Investments by the Parent Borrower and its
Subsidiaries (other than the Sub Borrower) in Cash
Equivalents;
(iv) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(i)(C) or (ii);
(v) Investments existing on the date hereof and
described on Schedule 4.01(jj) hereto;
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74
(vi) Investments by the Parent Borrower in Hedge
Agreements permitted under Section 5.02(b)(i)(A); and
(vii) other Investments by the Parent Borrower and
its Subsidiaries (other than the Sub Borrower) in an aggregate
amount invested not to exceed $25,000,000; PROVIDED that with
respect to Investments made under this clause (vii), (1) any
newly acquired or created Subsidiary of the Parent Borrower or
any of its Subsidiaries shall be a wholly owned Subsidiary
thereof; (2) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or
would result therefrom; (3) any company or business acquired
or invested in pursuant to this clause (vii) shall be in the
same line of business as the business of the Parent Borrower
or any of its Subsidiaries; and (4) immediately before and
after giving effect to the acquisition of a company or
business pursuant to this clause (vii), the Parent Borrower
shall be in pro forma compliance with the covenants contained
in Section 5.04, calculated based on the financial statements
most recently delivered to the Lender Parties pursuant to
Section 5.03, as though such acquisition had occurred at the
beginning of the four quarter period covered thereby, as
evidenced by a certificate of the chief financial officer of
the Parent Borrower furnished to the Lender Parties
demonstrating such compliance.
(g) DIVIDENDS, ETC. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to its
stockholders as such, make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, or permit
any of its Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of either Borrower or any warrants, rights
or options to acquire such capital stock or to issue or sell any
capital stock or any warrants, rights or options to acquire such
capital stock; EXCEPT that, so long as no Default shall have occurred
and be continuing at the time of any action described in clauses (i)
and (ii) below or would result therefrom, (i) the Parent Borrower may
(A) declare and pay dividends and distributions payable only in common
stock of the Parent Borrower, (B) issue and sell shares of its capital
stock to the Equity Investors in the amounts and for the prices set
forth on Schedule 5.02(g), (C) the Parent Borrower may issue and sell
shares of its common stock to its management and employees pursuant to
and in accordance with the terms of the Stock Option Plan, and (D)
except to the extent the Net Cash Proceeds thereof are required to be
applied to the prepayment of the Advances pursuant to Section
2.06(b)(i), purchase, redeem, retire, defease or otherwise acquire
shares of its capital stock with the proceeds received from the issue
of new shares of its capital stock with equal or inferior voting
powers, designations, preferences and rights, and (ii) in the case of
the Parent Borrower's Subsidiaries (other than the Sub Borrower), (A)
any Subsidiary of the Parent Borrower may declare and pay cash
dividends to its parent or the Parent Borrower and (B) IXnet Germany
and IXnet France may be liquidated.
(h) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof. In the case of the Sub Borrower,
engage in any business other than the making of loans to the Specified
Subsidiaries from time to time to the extent permitted by Section
5.02(f)(iv).
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75
(i) CHARTER AMENDMENTS. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws in
any manner that would in any material respect impair the ability of any
Loan Party to perform its obligations under the Loan Documents or that
would impair in any material respect the rights or interests of any of
the Agents or any of the Lender
Parties.
(j) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) its accounting
policies or reporting practices, except as required by generally
accepted accounting principles or (ii) its Fiscal Year.
(k) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, or make any payment in violation of any subordination terms
of, any Debt, other than (i) the prepayment of the Advances in
accordance with the terms of this Agreement, (ii) the prepayment of the
Surviving Debt described on Part I of Schedule 4.01(gg) hereto in
accordance with the terms hereof and thereof, and (iii) regularly
scheduled or required repayments or redemptions of Surviving Debt, or
amend, modify or change in any manner any term or condition of any
Surviving Debt or Subordinated Debt, or permit any of its Subsidiaries
to do any of the foregoing other than to prepay any Debt payable to
either Borrower.
(l) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate
any Related Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or
condition of any Related Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Related Document, agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document or take any other action in connection with any
Related Document that would impair in any material respect the value of
the interest or rights of the Parent Borrower thereunder or that would
impair in any material respect the ability of any Loan Party to perform
its obligations under the Loan Documents or that would impair in any
material respect the rights or interests any of the Agents or any of
the Lender Parties, or permit any of its Subsidiaries to do any of the
foregoing.
(m) AMENDMENT, ETC., OF MATERIAL CONTRACTS. Without the
consent of the Required Lenders, cancel or terminate any Material
Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any
consent, waiver or approval thereunder, waive any default under or
breach of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any
Material Contract or take any other action in connection with any
Material Contract that would impair in any material respect the value
of the interest or rights of either Borrower thereunder or that would
impair in any material respect the ability of any Loan Party to perform
its obligations under the Loan Documents or that would impair in any
material respect the interest or rights of any of the Agents or any of
the Lender Parties, or permit any of its Subsidiaries to do any of the
foregoing.
(n) OWNERSHIP CHANGE. Take, or permit any of its Subsidiaries
to take, any action that would result in an "ownership change" (as
defined in Section 382 of the Internal Revenue Code) with respect to
the Parent Borrower or any of its Subsidiaries or the application of
the "separate
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76
return limitation year" or "consolidated return change of ownership"
limitations under the federal income tax consolidated return
regulations with respect to the Parent Borrower or any of its
Subsidiaries.
(o) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with any Surviving Debt.
(p) PARTNERSHIPS, ETC. Become a general partner in any general
or limited partnership or joint venture, or permit any of its
Subsidiaries to do so.
(q) SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions other than
Hedge Agreements permitted under Section 5.02(b).
(r) CAPITAL EXPENDITURES. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures other than, in the case
of the Parent Borrower and its Subsidiaries (other than the Sub
Borrower), such Capital Expenditures as would not cause the aggregate
of all such Capital Expenditures made by the Parent Borrower and its
Subsidiaries in any Fiscal Year to exceed $35,000,000.
(s) EXCLUDED SUBSIDIARIES. Permit any Excluded Subsidiary to
individually hold assets in excess of $10,000 or collectively with all
other Excluded Subsidiaries hold assets in excess of $1,000,000 or
engage in any business of any kind, other than the holding of licenses
and/or acting
as agent for a Loan Party.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Parent Borrower shall furnish to
the Lender Parties and the Agents:
(a) DEFAULT NOTICE. As soon as possible and in any event
within two Business Days after any Responsible Officer knows or should
know of any Default or any event, development or occurrence reasonably
likely to have a Material Adverse Effect continuing on the date of such
statement, a statement of a Responsible Officer of the Parent Borrower
setting forth the details of such Default and the action that the
Parent Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year, Consolidated and consolidating balance sheets of
the Parent Borrower and its Subsidiaries as of the end of such quarter
and Consolidated and consolidating statements of income and a
Consolidated statement of cash flows of the Parent Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flows of the Parent Borrower and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending
with the
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77
end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer of the
Parent Borrower as having been prepared in accordance with GAAP,
together with (i) a certificate of said officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Parent Borrower has taken and proposes to take with respect thereto
and (ii) a schedule in form satisfactory to the Administrative Agent of
the computations used by the Parent Borrower in determining compliance
with the covenants contained in Section 5.04; PROVIDED that in the
event of any change in GAAP used in the preparation of such financial
statements, the Parent Borrower shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP.
(c) ANNUAL FINANCIALS. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the
Consolidated annual statements for such year of the Parent Borrower and
its Subsidiaries in the form provided to the Lender Parties pursuant to
Section 4.01(f) or in a form otherwise acceptable to the Lender
Parties, including the report of Coopers & Lybrand L.L.P. or other
independent public accountants of recognized standing acceptable to the
Required Lenders, and a consolidating balance sheet of the Parent
Borrower and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of income of the Parent Borrower and its
Subsidiaries for such Fiscal Year, prepared by management of the Parent
Borrower together with (i) a report of such accounting firm to the
Agents and the Lender Parties stating that in the course of the regular
audit of the Consolidated financial statements of the Parent Borrower
and its Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, nothing has
come to the attention of such accounting firm that caused it to believe
that the Parent Borrower failed to comply with the terms of Section
5.04, in so far they relate to accounting matters; (ii) a schedule
prepared by the Parent Borrower in form satisfactory to the
Administrative Agent of the computations used by the Parent Borrower in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Section 5.04; PROVIDED that in the event of any
change in GAAP used in the preparation of such financial statements,
the Parent Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP and (iii) a
certificate of the chief financial officer of the Parent Borrower
stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that the Parent Borrower has taken and proposes to take
with respect thereto.
(d) ANNUAL FORECASTS. As soon as available and in any event no
later than 15 days before the end of each Fiscal Year, forecasts
prepared by management of the Parent Borrower, in form satisfactory to
the Agents and the Lender Parties, of balance sheets, income statements
and cash flow statements on a monthly basis for the Fiscal Year
following such Fiscal Year and on an annual basis for each Fiscal Year
thereafter until the Termination Date.
(e) ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate knows
or has reason to know that any ERISA Event that could be reasonably
likely to have a Material Adverse Effect has occurred, a statement of
the
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78
chief financial officer of the Parent Borrower describing such ERISA
Event and the action, if any, that such Loan Party or such ERISA
Affiliate has taken and proposes to take with respect thereto and (ii)
on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section
4010 of ERISA, a copy of such records, documents and information.
(f) PLAN TERMINATIONS. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan, PROVIDED, HOWEVER, that there shall be no obligation to furnish
copies of any such notice received by an ERISA Affiliate that is not
received by a Loan Party unless such termination or appointment could
be reasonably likely to have a Material Adverse Effect.
(g) ACTUARIAL REPORTS. Promptly upon receipt thereof by any
Loan Party or any ERISA Affiliate, a copy of the annual actuarial
valuation report for each Plan of any Loan Party the funded current
liability percentage (as defined in Section 302(d)(8) of ERISA) of
which is less than 90% and the unfunded current liability of which
exceeds $5,000,000.
(h) PLAN ANNUAL REPORTS. Upon the request of any Lender Party,
copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan.
(i) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (i) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (ii) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (iii) the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any event
described in clause (i) or (ii) of this Section 5.03(i), where such
Withdrawal Liability, reorganization or termination could be reasonably
likely to have a Material Adverse Effect.
(j) LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(j).
(k) SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(l) CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished generally to other holders
of the securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar
agreement and not
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79
otherwise required to be furnished to the Lender Parties pursuant to
any other subsection of this Section 5.03.
(m) AGREEMENT NOTICES, ETC. Promptly upon receipt thereof,
copies of all notices, requests and other documents received by any
Loan Party or any of its Subsidiaries under or pursuant to any Related
Document or Material Contract (except executive employment agreements
(other than those described in items 5 and 6 of Schedule 4.01(ii)
hereto)) or indenture, loan or credit or similar agreement regarding or
related to any breach or default by any party thereto or any other
event that could impair in any material respect the value of the
interests or the rights of any Loan Party or that otherwise could be
reasonably likely to have a Material Adverse Effect and copies of any
amendment, modification or waiver of any provision of any Related
Document or Material Contract or indenture, loan or credit or similar
agreement and of any amendment to the certificate of incorporation or
bylaws or other constitutive documents of any Loan Party and, from time
to time upon request by the Administrative Agent, such information and
reports regarding the Related Documents and the Material Contracts as
the Administrative Agent may reasonably request.
(n) REVENUE AGENT REPORTS. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive adjustments to the
federal income tax liability of the affiliated group (within the
meaning of Section 1504(a)(1) of the Internal Revenue Code) of which
the Parent Borrower is a member aggregating $500,000 or more.
(o) TAX CERTIFICATES. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
federal income tax return in respect of each taxable year, a
certificate (a "TAX CERTIFICATE"), signed by the President or the chief
financial officer of the Parent Borrower, stating that the Parent
Borrower has paid to the Internal Revenue Service or other taxing
authority, or to the Parent Borrower, the full amount that such
affiliated group is required to pay in respect of federal income tax
for such year.
(p) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any real
property owned or leased by any Loan Party or any of its Subsidiaries
to be subject to any material restrictions on ownership, occupancy, use
or transferability under any Environmental Law.
(q) REAL PROPERTY. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report
supplementing Schedule 4.01(hh) hereto, including an identification of
all real and leased property disposed of by the Parent Borrower or any
of its Subsidiaries during such Fiscal Year, a list and description
(including the street address, county or other relevant jurisdiction,
State, record owner, book value thereof, and in the case of leases of
property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal
Year and a description of such other changes in the information
included in such Schedule as may be necessary for such Schedule to be
accurate and complete.
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(r) INSURANCE. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
each Loan Party and each of its Subsidiaries and containing such
additional information as any Lender Party, through the Administrative
Agent, may reasonably specify.
(s) BORROWING BASE CERTIFICATE. As soon as available and in
any event, in the case of the Collateral Agent (and the Collateral
Agent shall promptly deliver a copy thereof to the Administrative Agent
after the Collateral Agent shall have approved such Borrowing Base
Certificate), within 20 days after the end of each month, and in all
other cases, promptly following the Collateral Agent's approval of such
Borrowing Base Certificate, a Borrowing Base Certificate, as at the end
of the previous month, accompanied by, in the case of the Borrowing
Base Certificate being delivered to the Collateral Agent, the related
accounts receivable aging (setting forth domestic and foreign accounts
receivable), the related monthly trial balance showing Receivables
outstanding aged from invoice due date from 1 to 30 days, 31 to 60
days, 61 to 90 days, and 91 days or more, and the related perpetual
Inventory report, in each case in form and scope satisfactory to the
Collateral Agent, certified by the chief financial officer, the chief
accounting officer, the controller or the treasurer of the Parent
Borrower and the U.K. Subsidiaries.
(t) COLLATERAL REPORTS. Promptly after the preparation
thereof, copies (to the Collateral Agent only) of the results of each
physical verification, if any, which the Parent Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their
Inventory (and if an Event of Default shall have occurred and be
continuing, the Parent Borrower shall, upon the request of the
Collateral Agent, conduct, and the deliver the result of, such physical
verifications as the Collateral Agent may require), and promptly after
the request therefor, such other information (to the Collateral Agent
only) respecting the borrowing base and the Collateral as the
Collateral Agent may from time to time reasonably request.
(u) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
assets, nature of assets, liabilities (including, without limitation,
tax, ERISA and environmental liabilities) or prospects of any Loan
Party or any of its Subsidiaries as any Lender Party, through the
Administrative Agent, may from time to time reasonably request.
SECTION 5.04. FINANCIAL COVENANTS . So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Parent Borrower shall:
(a) MINIMUM EBITDA. Maintain at the end of each fiscal quarter
of the Parent Borrower, EBITDA of not less than the amount set forth
below for each four consecutive fiscal quarter period set forth below:
FOUR FISCAL QUARTERS ENDING RATIO
September 30, 1998 $24,000,000
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81
FOUR FISCAL QUARTERS ENDING RATIO
December 31, 1998 $26,000,000
March 31, 1999 $28,600,000
June 30, 1999 $31,000,000
September 30, 1999 $36,000,000
December 31, 1999 $39,600,000
March 31, 2000 $44,000,000
June 30, 2000 $49,000,000
September 30, 2000 $54,000,000
December 31, 2000 $60,000,000
March 31, 2001 $63,000,000
June 30, 2001 $67,000,000
September 30, 2001 $71,000,000
December 31, 2001 $75,000,000
March 31, 2002 $81,000,000
June 30, 2002 $87,000,000
September 30, 2002 $93,000,000
December 31, 2002 $100,000,000
March 31, 2003
and thereafter $107,000,000
(b) INTEREST COVERAGE RATIO. Maintain at the end of each
fiscal quarter of the Parent Borrower a ratio of Consolidated EBITDA to
cash interest payable on all Debt of the Parent Borrower and its
Subsidiaries, in each case for the four quarter period then ending, of
not less than 4.00:1.00, except for the four quarter period ending
September 30, 2001, in which case such ratio shall be not less than
3.5:1.0.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following
events ("EVENTS OF Default") shall occur and be continuing:
(a) (i) either Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) either
Borrower shall fail to pay any interest on any Advance, or any Loan
Party shall fail to make any other payment under any Loan Document, in
each case under this clause (ii) within 5 Business Days after the same
becomes due and payable; or
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(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) either Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 2.14, 5.01(e), (f), (m), (o)
or (q), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in any Loan Document on its part
to be performed or observed if such failure shall remain unremedied for
15 days after the earlier of the date on which (A) a Responsible
Officer becomes aware of such failure or (B) written notice thereof
shall have been given to the Parent Borrower by any of the Agents or
any of the Lender Parties; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or
notional amount of at least $5,000,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party
or such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
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83
(g) any judgment or order for the payment of money in excess
of $5,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there
shall be any period of 15 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably expected to have a Material Adverse Effect, and there shall
be any period of 15 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(o) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(o) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
Lien on and security interest in the Collateral purported to be covered
thereby; or
(k) (i) the Equity Investors, collectively, shall cease to
beneficially own and control at least 50% of the Voting Stock of the
Parent Borrower; or (ii) any Person or two or more Persons acting in
concert other than the Equity Investors shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Parent Borrower (or
other securities convertible into such Voting Stock) representing 40%
or more of the combined voting power of all Voting Stock of the Parent
Borrower; or (iii) individuals who on the Effective Date constitute the
board of directors of the Parent Borrower (together with any new
directors whose election by the board of directors or whose nomination
by the board of directors for election by the Parent Borrower's
stockholders was approved by a vote of at least two-thirds of the
members of the board of directors then in office who either were
members of the board of directors on the Effective Date or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the members of the board of
directors of the Parent Borrower then in office; or (iv) any Person or
two or more Persons acting in concert other than the Equity Investors
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of control over Voting Stock of the Parent
Borrower (or other securities convertible into such securities)
representing 40% or more of the combined voting power of all Voting
Stock of the Parent Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan
that, when aggregated with any liability under Sections 6.01(m) and (n)
has had or could be reasonably likely to have a Material Adverse
Effect; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan and such liability,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as
Withdrawal Liability (determined as of the date
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of such notification) and with any liability under Sections 6.01(l) and
(n), has had or could be reasonably likely to have a Material Adverse
Effect; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and such reorganization or termination, when
aggregated with any liability under Sections 6.01(l) and (m), has had
or could be reasonably likely to have a Material Adverse Effect; or
(o) there shall occur in the judgment of the Required Lenders
any Material Adverse Change;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the obligation of each Lender to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and
of the Issuing Bank to issue Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the Notes,
all interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each Borrower; PROVIDED, HOWEVER, that
in the event of an actual or deemed entry of an order for relief with respect to
any Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x)
the obligation of each Lender to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and of the
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by each Borrower.
SECTION 6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON
DEFAULT. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Parent Borrower to, and forthwith upon
such demand the Parent Borrower shall, pay to the Administrative Agent on behalf
of the Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Administrative Agent and the Lender Parties or that the
total amount of such funds is less than the aggregate Available Amount of all
Letters of Credit, the Parent Borrower shall, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such right and
claim.
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ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender Party (in
its capacities as a Lender, the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes each Agent to take such action as
agents on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; PROVIDED, HOWEVER, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender Party prompt notice of each notice given to it by
either Borrower pursuant to the terms of this Agreement.
SECTION 7.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent: (a)
may treat the payee of any Note as the holder thereof until, in the case of the
Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of the
Syndication Agent and the Documentation Agent, such Agent has received notice
from the Administrative Agent that it has received and accepted such Assignment
and Acceptance, in each case as provided in Section 8.07; (b) may consult with
legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) make no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan
Party; (e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. GOLDMAN SACHS, GE CAPITAL, MSSF AND AFFILIATES.
With respect to its Commitments, the Advances made by it and the Notes issued to
it, Goldman Sachs, GE Capital and MSSF shall have the same rights and powers
under the Loan Documents as any other Lender Party and may exercise the same as
though it were not the Documentation Agent, the Collateral Agent, the
Administrative
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Agent or the Syndication Agent, as the case may be; and the term "Lender Party"
or "Lender Parties" shall, unless otherwise expressly indicated, include Goldman
Sachs, GE Capital and MSSF in their respective individual capacities. Goldman
Sachs, GE Capital and MSSF and their respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Goldman
Sachs, GE Capital and MSSF were not the Documentation Agent, the Collateral
Agent, the Administrative Agent or the Syndication Agent, as the case may be,
and without any duty to account therefor to the Lender Parties.
SECTION 7.04. LENDER PARTY CREDIT DECISION. Each Lender Party
acknowledges that it has, independently and without reliance upon any of the
Agents or any of the other Lender Parties and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any of the Agents or any of the other Lender Parties and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.
SECTION 7.05. INDEMNIFICATION. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender Party agrees to
reimburse each Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by either Borrower under Section 8.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by such Borrower. For purposes
of this subsection (a), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (x) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (y) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time and
(z) their respective Unused Working Capital Commitments at such time; PROVIDED
that the aggregate principal amount of Letter of Credit Advances owing to the
Issuing Bank shall be considered to be owed to the Lenders ratably in accordance
with their respective Working Capital Commitments. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this subsection (a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse an Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Party to such Agent as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse such Agent for its ratable
share of such amount, but no Lender Party shall be responsible for the failure
of any other Lender Party to reimburse such Agent for such other Lender Party's
ratable share of such amount.
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(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrowers) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Issuing Bank under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Issuing Bank's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
Party agrees to reimburse the Issuing Bank promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by either Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by such Borrower. For purposes of this subsection (b), the Lender
Parties' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (b) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (c) their respective Unused Working Capital
Commitments at such time; PROVIDED that the aggregate principal amount of Letter
of Credit Advances owing to the Issuing Bank shall be considered to be owed to
the Lenders ratably in accordance with their respective Working Capital
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been made
shall be considered to be unused for purposes of this subsection (b) to the
extent of the amount of such Defaulted Advance. The failure of any Lender Party
to reimburse the Issuing Bank promptly upon demand for its ratable share of any
amount required to be paid by the Lender Parties to the Issuing Bank as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Issuing Bank for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse the Issuing Bank for such other Lender Party's ratable share of such
amount.
(c) Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. SUCCESSOR AGENTS. Any Agent may resign at any
time and, if at any time the Administrative Agent shall cease to be a Lender,
the Administrative Agent shall promptly thereafter resign by giving written
notice thereof to the Lender Parties and the Borrowers and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent,
subject, so long as no Default shall have occurred and be continuing, to the
consent of the Parent Borrower, such consent not to be unreasonably withheld or
delayed, PROVIDED, HOWEVER, that, notwithstanding the foregoing, MSSF shall have
the right to resign as Administrative Agent and appoint a successor
Administrative Agent without the consent of the Lenders but subject, so long as
no Default shall have occurred and be continuing, to the consent of the Parent
Borrower, such consent not be unreasonably withheld. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent,
which shall be,
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in the case of the Administrative Agent, a Lender that is a financial
institution organized under the laws of the United States or of any State
thereof. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent and upon the execution and filing or recording of such financing
statements, or amendments thereto and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, 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 or
removal hereunder as an Agent, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified in Section 3.02
or, in the case of the Initial Extension of Credit, Section 3.01, (ii) change
the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) to the extent
that a Guarantor has not been fully released from the Guaranty issued by such
Guarantor pursuant to Section 14 of such Guaranty, reduce or limit the
obligations of such Guarantor under Section 1 of the Guaranty issued by it or
otherwise limit the liability of such Guarantor with respect to the Obligations
owing to the Agents and the Lender Parties, (iv) release any material portion of
the Collateral in any transaction or series of related transactions or permit
the creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral in any transaction or series of related transactions
to secure any Obligations other than Obligations owing to the Secured Parties
under the Loan Documents, (v) amend this Section 8.01, (vi) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(vii) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (viii) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder or amend Section 2.06, or (ix) limit the liability of any Loan Party
under any of the Loan Documents; PROVIDED FURTHER that no amendment, waiver or
consent shall, unless in writing and signed by the Supermajority Lenders, waive
or amend Section 5.04(a); PROVIDED STILL FURTHER that no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Bank in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Issuing Bank under this Agreement; and PROVIDED FURTHER that no
amendment, waiver or consent shall, unless in writing and signed by each of the
Agents in addition to the Lenders required above to take such action, affect the
rights or duties of the Agents under this Agreement.
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SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to either Borrower, at its address at Wall
Street Plaza, 15th Floor, 88 Pine Street, New York, New York 10005, facsimile
number: 212-344-5106, Attention: Chief Financial Officer with a copy to General
Counsel; if to any Initial Lender or the Initial Issuing Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender Party, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender Party; if to the Administrative
Agent, at its address at One State Street, New York, New York 10004, Attention:
Dept. 332, Reference IPC; if to the Syndication Agent, at its address at 1585
Broadway, New York, New York 10036, Attention: Dept. 332, Reference IPC; if to
the Collateral Agent, at its address at 201 High Ridge Road, Stamford,
Connecticut 06927, Attention: Michael Lustbader; and, if to the Documentation
Agent, at its address at One New York Plaza, New York, New York 10004,
Attention: Walt Jackson; or, as to either Borrower or the Administrative Agent,
at such other address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrowers and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. COSTS AND EXPENSES. (a) Each Borrower agrees
jointly and severally to pay on demand (i) all reasonable out-of-pocket costs
and expenses of the Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Agents with respect thereto,
with respect to advising the Agents as to their respective rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agents and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agents and each Lender Party with respect thereto).
<PAGE>
90
(b) Each Borrower agrees jointly and severally to indemnify
and hold harmless each Agent, each Lender Party and each of their respective
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against any and all claims,
damages, losses, liabilities and expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of
the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition (including, without limitation, the
Transaction) by the Equity Investors or any of their respective Subsidiaries or
Affiliates of all or any portion of the stock or substantially all the assets of
the Parent Borrower or any of its Subsidiaries or by the Parent Borrower or any
of its Subsidiaries or Affiliates or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted directly and primarily from such Indemnified
Party's bad faith, gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
subsection (b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Each Borrower also agrees not to assert any
claim against any Agent, any Lender Party or any of their Affiliates, or any of
their respective officers, directors, employees, attorneys or agents, on any
theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facilities, the actual or proposed
use of the proceeds of the Advances or the Letters of Credit, the Loan Documents
or any of the transactions contemplated thereby.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by either Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Parent Borrower pursuant to Section 8.07(a), such Borrower
shall, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
<PAGE>
91
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.10 and 2.12 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. RIGHT OF SETOFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender Party or such Affiliate to or for
the credit or the account of either Borrower against any and all of the
Obligations of such Borrower now or hereafter existing under this Agreement and
the Note or Notes (if any) held by such Lender Party, irrespective of whether
such Lender Party shall have made any demand under this Agreement or such Note
or Notes and although such obligations may be unmatured. Each Lender Party
agrees promptly to notify the applicable Borrower after any such setoff and
application; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
Party and its respective Affiliates under this Section 8.05 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) that such Lender Party and its Affiliates may have.
SECTION 8.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by each Borrower, the Administrative
Agent, the Documentation Agent and the Syndication Agent and when the
Administrative Agent shall have been notified by each Initial Lender and the
Initial Issuing Bank that such Initial Lender and the Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of
each Borrower, each Agent and each Lender Party and their respective successors
and assigns, except that neither Borrower shall have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
Lender Parties.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may and, so long as no Default shall have occurred and be continuing, if
demanded by the Parent Borrower (following a demand by such Lender pursuant to
Section 2.10) upon at least five Business Days' notice to such Lender and the
Administrative Agent, will assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); PROVIDED, HOWEVER, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of all of the Facilities, (ii)
except in the case of an assignment of all of a Lender's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, (iv) each such assignment made as a result of a demand by the Parent
Borrower pursuant to this Section 8.07(a) shall be arranged by the Parent
Borrower after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
<PAGE>
92
a result of a demand by the Parent Borrower pursuant to this Section 8.07(a)
unless and until such Lender shall have received one or more payments from
either the Parent Borrower or one or more Eligible Assignees in an aggregate
amount at least equal to the aggregate outstanding principal amount of the
Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, (vi) no such assignments shall be permitted without
the consent of the Syndication Agent until the Syndication Agent shall have
notified the Lender Parties that syndication of the Commitments hereunder has
been completed, and (vii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of (A) $1,500 if such
assignment is to an existing Lender Party, (B) $0 if such assignment is to an
Affiliate of the assigning Lender Party and (C) $3,000 in all other cases.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any Lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of either Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agents, such assigning Lender Party or any other
Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agents on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations
<PAGE>
93
which by the terms of this Agreement are required to be performed by it as a
Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but
only for this purpose) as the agent of the Borrowers, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment of, and principal amount
of the Advances owing to, each Lender Party from time to time (the "REGISTER").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agents and the Lender Parties
shall treat each Person whose name is recorded in the Register as a Lender Party
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by either Borrower or any Lender Party at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and the other Agents. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, each Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto.
(f) The Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under its Letter of Credit Commitment at any time;
PROVIDED, HOWEVER, that (i) each such assignment shall be to an Eligible
Assignee and (ii) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with a processing and recordation fee of
(A) $1,500 if such assignment is to an existing Lender Party, (B) $0 if such
assignment is to an Affiliate of the assigning Lender Party and (C) $3,000 in
all other cases.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); PROVIDED, HOWEVER, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any
<PAGE>
94
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to either Borrower furnished to such
Lender Party by or on behalf of such Borrower; PROVIDED, HOWEVER, that, prior to
any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve in accordance with Section 8.10 the
confidentiality of any confidential information relating to any Loan Party
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 8.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. NO LIABILITY OF THE ISSUING BANK. The Parent
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit;
EXCEPT that the Parent Borrower shall have a claim against the Issuing Bank, and
the Issuing Bank shall be liable to the Parent Borrower, to the extent of any
direct, but not consequential, damages suffered by the Parent Borrower that the
Parent Borrower proves were caused by (i) the Issuing Bank's willful misconduct
or gross negligence in determining whether documents presented under any Letter
of Credit comply with the terms of the Letter of Credit or (ii) the Issuing
Bank's willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.
<PAGE>
95
SECTION 8.10. CONFIDENTIALITY. Each of the Lender Parties and
each of the Agents understands that some of the information furnished to it
pursuant to this Agreement may be received by it prior to the time that such
information shall have been made public, and each of the Lender Parties and each
of the Agents hereby agrees that it will keep, and will direct its officers and
employees to keep, all the information provided to it pursuant to this Agreement
confidential prior to its becoming public (through publication other than as a
result of action by one of the Lender Parties or the Agents in violation of this
Section 8.10), subject, however, to (a) disclosure to officers, directors,
employees, representatives, agents, auditors, consultants, advisors, lawyers and
Affiliates of such Lender Party or such Agent, as the case may be, in the
ordinary course of business, (b) disclosure to such officers, directors,
employees, representatives, agents and lawyers of a prospective assignee or
participant on a need-to-know basis in connection with the evaluation of a
possible assignment of, or participation in, the Advances hereunder (who will be
informed of the confidential nature of the material); (c) the obligations of the
Lender Parties or the Agents or a participant under applicable law, or pursuant
to subpoenas or other legal process, to make information available to
governmental agencies and examiners or to others and the right of the Lender
Parties and the Agents and participants to use such information in proceedings
to enforce their rights and remedies hereunder or under any other Loan Document
or in any proceeding against any Lender Party or any Agent or any participant in
connection with this Agreement or under any other Loan Document or the
transactions contemplated thereby; (d) disclosure to the extent such information
(i) becomes publicly available other than as a result of a breach of this
Agreement or (ii) becomes available to a Lender Party, an Agent or a participant
on a non-confidential basis, not, to the knowledge of such Lender Party, Agent
or participant, in breach of any agreement or other obligation to either
Borrower, from a source other than such Borrower; (e) disclosure to the extent
the applicable Borrower shall have consented to such disclosure in writing; or
(f) each Lender Party's or Agent's or participant's right to make information
available (i) to any corporation controlled by such Lender Party, Agent or
participant or under common control with such Lender Party, Agent or participant
in connection with an assignment or the sale of a participation by such Lender
Party or participant, or the assignment by such Agent of its rights and
obligations as an Agent, to such other corporation, PROVIDED that such
transferee agrees to be bound by confidentiality or (ii) in accordance with
Section 8.07(h).
SECTION 8.11. RELEASE OF COLLATERAL. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party in
accordance with the terms of the Loan Documents, the Administrative Agent shall,
at the Parent Borrower's expense, execute and deliver to such Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents in accordance with the terms of the Loan Documents.
SECTION 8.12. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party
<PAGE>
96
may otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents in the courts of any other jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.13. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
<PAGE>
97
SECTION 8.14. WAIVER OF JURY TRIAL. Each of the Borrowers, the
Agents and the Lender Parties irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of any Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
IPC INFORMATION SYSTEMS, INC.
By /s/ Brian Reach
---------------------------------------
Name: Brian Reach
Title: Vice President
IPC FUNDING CORP.
By /s/ Brian Reach
---------------------------------------
Name: Brian Reach
Title: Vice President
<PAGE>
MORGAN STANLEY SENIOR FUNDING, INC., as
Administrative Agent, Syndication Agent
and Arranger
By /s/ Michael A. Hart
---------------------------------------
Name: Michael A. Hart
Title: Principal
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Documentation Agent
By /s/ Stephen McGuiness
---------------------------------------
Name: Stephen McGuiness
Title: Managing Director
<PAGE>
GENERAL ELECTRIC CAPITAL CORPORATION
as Collateral Agent
By /s/ Michael Lustbader
---------------------------------------
Name: Michael Lustbader
Title: Duly Authorized Signatory
<PAGE>
MORGAN STANLEY SENIOR FUNDING, INC.
as Initial Issuing Bank
By /s/ Michael A. Hart
---------------------------------------
Name: Michael A. Hart
Title: Principal
<PAGE>
INITIAL LENDERS
MORGAN STANLEY SENIOR FUNDING, INC.
By /s/ Michael A. Hart
---------------------------------------
Name: Michael A. Hart
Title: Principal
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS L.P.
By /s/ Ed Forst
---------------------------------------
Name: Ed Forst
Title: Managing Director
<PAGE>
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Michael Lustbader
---------------------------------------
Name: Michael Lustbader
Title: Duly Authorized Signatory
PRESS RELEASE
IPC Information Systems Closes Merger With Cable Systems
Holding - Intends To Effect 3 For 2 Stock Split
NEW YORK, MAY 1, 1998 - IPC Information Systems, Inc. (formerly,
NASDAQ:IPCI, now IPCX), a leading provider of financial trading services
worldwide, today announced that it has closed its recapitalization merger with
Cable Systems Holding, LLC (CSH LLC).
As previously announced, IPC stockholders had the option to receive $21
per share in cash, or to retain a portion of their equity, not to exceed 46
percent in total, in the recapitalized company. Richard P. Kleinknecht, who,
prior to the merger, served as Chairman of IPC, and after the merger, will serve
as Vice Chairman of IPC, retained 380,952 shares of common stock in the
surviving entity (equal to 10%). Other IPC stockholders elected to retain
822,828 shares of common stock in the surviving entity, which, together with the
shares retained by Richard P. Kleinknecht, represent approximately 32% of the
common stock in the surviving entity.
IPC issued $247,400,000 aggregate principal amount at maturity
($180,010,714 initial proceeds upon issuance) of its 10-7/8% senior discount
notes, the proceeds of which, together with the $54,720,000 of capital provided
by CSH LLC, its indirect subsidiary Cable Systems International, Inc. and the
investment fund Lawrence Smith & Horey III, L.P., were used to repurchase shares
of IPC common stock from IPC stockholders who chose to receive cash in exchange
for their shares. Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.
arranged the debt financing. IPC also entered into a $55 million revolving
credit facility with Morgan Stanley Senior Funding, Inc., as syndication agent,
to be used by IPC for working capital and other purposes.
Commencing today, May 1, 1998, IPC will be listed on the NASDAQ
SmallCap Market. IPC intends, with the approval of IPC's new controlling
stockholders, to effect a 3 for 2 stock split as soon as practicable.
CSH LLC is headquartered in Phoenix, Arizona. CSH LLC has one direct
operating subsidiary, Cable Systems Holding Company (CSH), a manufacturer of
telecommunications products for outside plant, customer premises, broadband
networks, specialized cable assemblies and contract assembly services.
IPC Information Systems, Inc. is a world leader in the delivery of
integrated multimedia communications solutions to the financial trading
industry. IPC serves customers in more than 35 countries. Its patented digital
TRADENET MX(R) turret is the most widely installed voice trading system in the
world. With its subsidiary, IXnet, IPC has created the first global virtual
private network, connecting trading companies with customers and counterparts
around the world. In addition, IPC installs and maintains communications cable
infrastructure, video and call logging systems, communication integration
services, and complete customer care programs.
<PAGE>
This press release may include information presented which contains
forward-looking information, including statements regarding the strategic
direction of the Company. These comments constitute forward-looking statements
(within the meaning of the Private Securities Litigation Reform Act of 1995),
which involve significant risks and uncertainties. Actual results may differ
materially from the information discussed in these forward-looking statements.
Among the factors that could cause actual results, performance or achievement to
differ materially from those described or implied in the forward-looking
statements are general economic conditions, competition, potential technology
changes, changes in or the lack of anticipated changes in the regulatory
environment in various countries, the ability to secure partnership or
joint-venture relationships with other entities, the ability to raise additional
capital to finance expansion, and the risks inherent in new product and service
introductions and the entry into new geographic markets.
Contact
[email protected]
Voice: (212) 825-9060
Please Note: IPC Information Systems designs, manufactures and markets
specialized telecommunications systems used on financial trading floors.
Copyright (C) 1997, 1998 by IPC Information Systems, Inc. Specifications
contained herein are accurate as of posting date.
