Exhibit 10.12
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 20, 2002,
AMONG
APAC CUSTOMER SERVICES, INC.
THE BANKS PARTY HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
as Agent,
AND
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
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Credit Agreement
1566314
TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE REVOLVING CREDIT...................................................................1
Section 1.1. Revolving Credit Commitments...........................................................1
Section 1.2. Letters of Credit......................................................................2
Section 1.3. Applicable Interest Rates on Revolving Loans...........................................4
Section 1.4. Minimum Borrowing Amounts on Revolving Loans...........................................6
Section 1.5. Manner of Borrowing Revolving Loans and Designating Applicable Interest Rates..........6
Section 1.6. Default Rate on Revolving Loans........................................................8
Section 1.7. Swing Loans............................................................................9
Section 1.8. Interest Periods for All Loans........................................................11
Section 1.9. Maturity of Loans.....................................................................11
Section 1.10. Prepayments...........................................................................12
Section 1.11. The Notes.............................................................................12
Section 1.12. Funding Indemnity.....................................................................13
Section 1.13. Commitment Terminations...............................................................14
Section 1.14. Rate Determinations...................................................................16
SECTION 2. FEES, SUBSTITUTION OF BANKS AND ADDITIONAL BANKS......................................16
Section 2.1. Fees..................................................................................16
Section 2.2. Substitution of Banks.................................................................17
Section 2.3. Defaulting Bank.......................................................................17
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.....................................................17
SECTION 4. GUARANTIES............................................................................19
Section 4.1. Collateral............................................................................19
Section 4.2. Guaranties............................................................................19
Section 4.3. Further Assurances....................................................................20
SECTION 5. DEFINITIONS; INTERPRETATION...........................................................20
Section 5.1. Definitions...........................................................................20
Section 5.2. Interpretation........................................................................32
Section 5.3. Change in Accounting Principles.......................................................32
SECTION 6. REPRESENTATIONS AND WARRANTIES........................................................32
Section 6.1. Organization and Qualification........................................................32
Section 6.2. Subsidiaries..........................................................................33
Section 6.3. Authority and Validity of Obligations.................................................33
Section 6.4. Use of Proceeds; Margin Stock.........................................................34
Section 6.5. Financial Reports.....................................................................34
Section 6.6. No Material Adverse Change............................................................34
Section 6.7. Full Disclosure.......................................................................34
Section 6.8. Trademarks, Franchises, and Licenses..................................................35
Section 6.9. Governmental Authority and Licensing..................................................35
Section 6.10. Good Title............................................................................35
Section 6.11. Litigation and Other Controversies....................................................35
Section 6.12. Taxes.................................................................................35
Section 6.13. Approvals.............................................................................36
Section 6.14. Affiliate Transactions................................................................36
Section 6.15. Investment Company; Public Utility Holding Company....................................36
Section 6.16. ERISA.................................................................................36
Section 6.17. Compliance with Laws..................................................................36
Section 6.18. Other Agreements......................................................................37
Section 6.19. Solvency..............................................................................37
Section 6.20. No Default............................................................................37
SECTION 7. CONDITIONS PRECEDENT..................................................................37
Section 7.1. Initial Credit Event..................................................................37
Section 7.2. All Credit Events.....................................................................38
SECTION 8. COVENANTS.............................................................................39
Section 8.1. Maintenance of Business...............................................................39
Section 8.2. Maintenance of Properties.............................................................39
Section 8.3. Taxes and Assessments.................................................................40
Section 8.4. Insurance.............................................................................40
Section 8.5. Financial Reports.....................................................................40
Section 8.6. Inspection............................................................................42
Section 8.7. Indebtedness for Borrowed Money.......................................................42
Section 8.8. Liens.................................................................................43
Section 8.9. Investments, Acquisitions, Loans, Advances and Guaranties.............................45
Section 8.10. Mergers, Consolidations and Sales.....................................................47
Section 8.11. Maintenance of Subsidiaries...........................................................48
Section 8.12. Dividends and Certain Other Restricted Payments.......................................48
Section 8.13. ERISA.................................................................................49
Section 8.14. Compliance with Laws..................................................................49
Section 8.15. Burdensome Contracts With Affiliates..................................................49
Section 8.16. No Changes in Fiscal Year.............................................................49
Section 8.17. Formation of Subsidiaries.............................................................49
Section 8.18. Change in the Nature of Business......................................................50
Section 8.19. Use of Loan Proceeds..................................................................50
Section 8.20. No Restrictions on Subsidiary Distributions...........................................50
Section 8.21. Subordinated Debt.....................................................................50
Section 8.22. Fiscal Covenants......................................................................50
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SECTION 9. EVENTS OF DEFAULT AND REMEDIES........................................................51
Section 9.1. Events of Default.....................................................................51
Section 9.2. Non-Bankruptcy Defaults...............................................................53
Section 9.3. Bankruptcy Defaults...................................................................53
Section 9.4. Collateral for Undrawn Letters of Credit..............................................54
Section 9.5. Notice of Default.....................................................................54
Section 9.6. Expenses..............................................................................54
SECTION 10. CHANGE IN CIRCUMSTANCES...............................................................54
Section 10.1. Change of Law.........................................................................54
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR.........55
Section 10.3. Increased Cost and Reduced Return.....................................................55
Section 10.4. Lending Offices.......................................................................57
Section 10.5. Discretion of Bank as to Manner of Funding............................................57
Section 10.6. Bank's Duty to Mitigate...............................................................57
SECTION 11. THE AGENT AND ISSUING BANK............................................................58
Section 11.1. Appointment and Authorization of Agent................................................58
Section 11.2. Agent and its Affiliates..............................................................58
Section 11.3. Action by Agent.......................................................................58
Section 11.4. Consultation with Experts.............................................................59
Section 11.5. Liability of Agent; Credit Decision...................................................59
Section 11.6. Indemnity.............................................................................59
Section 11.7. Resignation of Agent and Successor Agent..............................................60
Section 11.8. Issuing Bank..........................................................................60
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements.......60
Section 11.10. Designation of Additional Agents......................................................61
Section 11.11. Agent's Relationship with Borrower....................................................61
SECTION 12. MISCELLANEOUS.........................................................................61
Section 12.1. Withholding Taxes.....................................................................61
Section 12.2. No Waiver, Cumulative Remedies........................................................62
Section 12.3. Non-Business Days.....................................................................62
Section 12.4. Documentary Taxes.....................................................................62
Section 12.5. Survival of Representations...........................................................63
Section 12.6. Survival of Indemnities...............................................................63
Section 12.7. Sharing of Set-Off....................................................................63
Section 12.8. Notices...............................................................................63
Section 12.9. Counterparts..........................................................................64
Section 12.10. Successors and Assigns................................................................64
Section 12.11. Participants..........................................................................64
Section 12.12. Assignment of Commitments by Banks....................................................65
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Section 12.13. Amendments............................................................................66
Section 12.14. Headings..............................................................................66
Section 12.15. Costs and Expenses....................................................................66
Section 12.16. Set-off...............................................................................67
Section 12.17. Entire Agreement......................................................................67
Section 12.18. Governing Law.........................................................................67
Section 12.19. Severability of Provisions............................................................67
Section 12.20. Excess Interest.......................................................................67
Section 12.21. Confidentiality.......................................................................68
Section 12.22. Construction..........................................................................68
Section 12.23. Lender's Obligations Several..........................................................68
Section 12.24. Submission to Jurisdiction; Waiver of Jury Trial......................................68
Section 12.25. Amendment and Restatement.............................................................69
Signature Page...............................................................................................1
EXHIBIT A -- Notice of Payment Request
EXHIBIT B -- Notice of Borrowing
EXHIBIT C -- Notice of Continuation/Conversion
EXHIBIT D -- Revolving Note
EXHIBIT E -- Swing Line Note
EXHIBIT F -- Compliance Certificate
EXHIBIT G -- Assignment and Acceptance
SCHEDULE 1.1 -- Commitments
SCHEDULE 6.2 -- Subsidiaries
SCHEDULE 8.7 -- Other Indebtedness
SCHEDULE 8.8 -- Other Liens
SCHEDULE 8.9 -- Present Investments in Subsidiaries
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AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated
Credit Agreement is entered into as of the 20th
day of December, 2002, by and among APAC Customer Services, Inc., an
Illinois
corporation (the "BORROWER"), Xxxxxx Trust and Savings Bank, individually as a
Bank and as an agent (in such capacity as agent being hereinafter referred to as
the "AGENT"), U.S. Bank, National Association, individually as a Bank and as
syndication agent, and the lending institutions which are or hereafter become
signatories hereto (collectively the "BANKS" and individually a "BANK"). All
capitalized terms used herein without definition shall have the same meanings
herein as such terms are defined in Section 5.1 hereof.
RECITALS
A. The Borrower has requested that the Banks extend credit to the
Borrower.
B. The Borrower, certain of the Banks, and the Agent are currently
party to that certain Amended and Restated
Credit Agreement dated as of
September 8, 1998, as amended (the "ORIGINAL
CREDIT AGREEMENT"). The Borrower
hereby requests that certain amendments be made to the Original
Credit Agreement
and, for the sake of clarity and convenience, that the Original
Credit Agreement
be restated as so amended. This Agreement shall become effective, and shall
amend and restate the Original
Credit Agreement, upon the execution of this
Agreement by each of the parties hereto and the satisfaction (or waiver by the
Required Banks) of the conditions precedent contained in Section 7.1 hereof (the
date of such effectiveness being hereinafter referred to as the "EFFECTIVE
DATE"); and from and after the Effective Date, all references made to the
Original
Credit Agreement in the Loan Documents or in any other instrument or
document shall, without more, be deemed to refer to this Agreement.
C. The Banks, upon acceptance of this Agreement in writing, will
continue to lend monies and/or make advances, extensions of credit or other
financial accommodations to, on behalf of or for the benefit of the Borrower
pursuant hereto and subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the recitals set forth above, which by
this reference are incorporated into the Agreement set forth below, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and subject to the terms and conditions hereof and on the
basis of the representations and warranties herein set forth, the Borrower, the
Agent and the Banks hereby agree to the following:
SECTION 1. THE REVOLVING CREDIT.
SECTION 1.1. REVOLVING CREDIT COMMITMENTS. Subject to the terms and
conditions hereof, each Bank, by its acceptance hereof, severally agrees to make
a loan or loans (individually a "REVOLVING LOAN" and collectively the "REVOLVING
LOANS") to the Borrower in U.S. Dollars from time to time on a revolving basis
up to the amount of such Bank's Revolving Credit Commitment, subject to any
reductions thereof pursuant to the terms hereof, before the
Revolving Credit Termination Date. The sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations at any time outstanding shall
not exceed the Revolving Credit Commitments in effect at such time. Each
Borrowing of Revolving Loans shall be made ratably from the Banks in proportion
to their respective Revolver Percentages. As provided in Section 1.5(a) hereof,
the Borrower may elect that each Borrowing of Revolving Loans be either Base
Rate Loans or Eurodollar Loans. Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Revolving Credit Termination Date, subject
to the terms and conditions hereof.
SECTION 1.2. LETTERS OF CREDIT. (a) GENERAL TERMS. Subject to the terms
and conditions hereof, as part of the Revolving Credit, the Issuing Bank shall
issue standby and commercial letters of credit (each a "LETTER OF CREDIT") for
the Borrower's account in U.S. Dollars in an aggregate undrawn face amount up to
the amount of the L/C Sublimit, provided that the aggregate L/C Obligations at
any time outstanding shall not exceed the difference between the Revolving
Credit Commitments in effect at such time and the aggregate principal amount of
Revolving Loans and Swing Loans then outstanding. Each Letter of Credit shall be
issued by the Issuing Bank, but each Bank shall be obligated to reimburse the
Issuing Bank for such Bank's Revolver Percentage of the amount of each drawing
thereunder and, accordingly, each Letter of Credit shall constitute usage of the
Revolving Credit Commitment of each Bank pro rata in accordance with its
Revolver Percentage. For purposes of this Agreement and the other Loan Documents
the letters of credit listed on Schedule 1.2 hereof issued by Xxxxxx Trust and
Savings Bank shall from and after the date of this Agreement be deemed Letters
of Credit issued under and subject to the terms of this Agreement. Xxxxxx Trust
and Savings Bank and the Borrower agree that from and after the date of this
Agreement the Borrower's obligations with respect to such letters of credit,
including all reimbursement obligations arising under or relating to the
relevant application therefor (which applications shall each be deemed an
Application as hereafter defined for all purposes of this Agreement and the
other Loan Documents) shall be deemed Obligations arising under this Agreement.
(b) APPLICATIONS. At any time before the Revolving Credit Termination
Date, the Issuing Bank shall, at the request of the Borrower, issue one or more
Letters of Credit, in a form satisfactory to the Issuing Bank, with expiration
dates no later than the earlier of 12 months from the date of issuance (or be
cancelable not later than 12 months from the date of issuance and each renewal)
or Revolving Credit Termination Date, in an aggregate face amount as set forth
above, upon the receipt of an application duly executed by the Borrower for the
relevant Letter of Credit in the form then customarily prescribed by the Issuing
Bank for the Letter of Credit requested (each an "APPLICATION"). Notwithstanding
anything contained in any Application to the contrary: (i) the Borrower shall
pay fees in connection with each Letter of Credit as set forth in Section 2.1
hereof, (ii) except as otherwise provided in Section 1.10 hereof, before the
occurrence of a Default or an Event of Default, the Issuing Bank will not call
for the funding by the Borrower of any amount under a Letter of Credit before
being presented with a drawing thereunder, and (iii) if the Issuing Bank is not
timely reimbursed for the amount of any drawing under a Letter of Credit on the
date such drawing is paid, the Borrower's obligation to reimburse the Issuing
Bank for the amount of such drawing shall bear interest (which the Borrower
hereby promises to pay) from and after the date such drawing is paid at a rate
per annum equal to the sum of 2% plus the Applicable Margin for Reimbursement
Obligations plus the Base Rate from
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time to time in effect (computed on the basis of a year of 360 days and actual
days elapsed). If the Issuing Bank issues any Letter of Credit with an
expiration date that is automatically extended unless the Issuing Bank gives
notice that the expiration date will not so extend beyond its then scheduled
expiration date, the Issuing Bank will give such notice of non-renewal before
the time necessary to prevent such automatic extension if before such required
notice date: (i) the expiration date of such Letter of Credit if so extended
would be after the Revolving Credit Termination Date, (ii) the Revolving Credit
Commitments have been terminated, or (iii) a Default or an Event of Default
exists and the Agent, at the direction of the Required Banks, has given the
Issuing Bank instructions not to so permit the extension of the expiration date
of such Letter of Credit. The Issuing Bank agrees to issue amendments to the
Letter(s) of Credit increasing the amount, or extending the expiration date,
thereof at the request of the Borrower subject to the conditions of Section 7.2
hereof and the other terms of this Section 1.2.
(c) THE REIMBURSEMENT OBLIGATIONS. Subject to Section 1.2(b) hereof, the
obligation of the Borrower to reimburse the Issuing Bank for all drawings under
a Letter of Credit (a "REIMBURSEMENT OBLIGATION") shall be governed by the
Application related to such Letter of Credit, except that reimbursement shall be
made by no later than 1:00 p.m. (Chicago time) on the date when each drawing is
paid in immediately available funds at the Issuing Bank's principal office in
Chicago,
Illinois, or such other office as the Issuing Bank may designate in
writing to the Borrower. If the Borrower does not make any such reimbursement
payment on the date due and the Participating Banks fund their participations
therein in the manner set forth in Section 1.2(d) below, then all payments
thereafter received by the Issuing Bank in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with Section 1.2(d)
below.
(d) THE PARTICIPATING INTERESTS. Each Bank, by its acceptance hereof,
severally agrees to purchase from the Issuing Bank, and the Issuing Bank hereby
agrees to sell to each such Bank (a "PARTICIPATING BANK"), an undivided
percentage participating interest (a "PARTICIPATING INTEREST"), to the extent of
its Revolver Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the Issuing Bank. Upon any failure by the
Borrower to pay any Reimbursement Obligation at the time required on the date
the related drawing is paid, as set forth in Section 1.2(c) above, or if the
Issuing Bank is required at any time to return to the Borrower or to a trustee,
receiver, liquidator, custodian, or other Person any portion of any payment of
any Reimbursement Obligation, each Participating Bank shall, not later than the
Business Day it receives a certificate in the form of Exhibit A hereto from the
Issuing Bank to such effect, if such certificate is received before 1:00 p.m.
(Chicago time), or not later than 1:00 p.m. (Chicago time) the following
Business Day, if such certificate is received after such time, pay to the
Issuing Bank an amount equal to such Participating Bank's Revolver Percentage of
such unpaid or recaptured Reimbursement Obligation together with interest on
such amount accrued from the date the related payment was made by the Issuing
Bank to the date of such payment by such Participating Bank at a rate per annum
equal to: (i) from the date the related payment was made by the Issuing Bank to
the date 2 Business Days after payment by such Participating Bank is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date 2
Business Days after the date such payment is due from such Participating Bank to
the date such payment is made by such Participating Bank, the Base Rate in
effect for each such day. Each such Participating Bank shall thereafter be
entitled to receive its Revolver Percentage of
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each payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the Issuing Bank retaining its Revolver Percentage
as a Bank hereunder.
The several obligations of the Participating Banks to the Issuing Bank
under this Section 1.2 shall be absolute, irrevocable, and unconditional under
any and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Participating Bank may have or have
had against the Borrower, the Agent, the Issuing Bank, any other Bank, or any
other Person whatsoever. Without limiting the generality of the foregoing, such
obligations shall not be affected by any Default or Event of Default or by any
reduction or termination of any Revolving Credit Commitment of any Bank, and
each payment by a Participating Bank under this Section 1.2 shall be made
without any offset, abatement, withholding or reduction whatsoever. The Issuing
Bank shall be entitled to offset amounts received for the account of a Bank
under this Agreement against unpaid amounts due from such Bank to the Issuing
Bank hereunder (whether as fundings of participations, indemnities, or
otherwise), but shall not be entitled to offset against amounts owed to the
Issuing Bank by any Bank arising outside of this Agreement.
(e) INDEMNIFICATION. The Participating Banks shall, to the extent of
their respective Revolver Percentages, indemnify the Issuing Bank (to the extent
not reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss, or liability
(except such as result from the Issuing Bank's gross negligence or willful
misconduct) that the Issuing Bank may suffer or incur in connection with any
Letter of Credit. The obligations of the Participating Banks under this Section
1.2(e) and all other provisions of this Section 1.2 shall survive termination of
this Agreement and of all Applications, Letters of Credit, and all drafts and
other documents presented in connection with drawings thereunder.
(f) MANNER OF REQUESTING A LETTER OF CREDIT. The Borrower shall provide
at least five (5) Business Days' advance written notice to the Agent (or such
shorter period of time then approved by the Agent) of each request for the
issuance of a Letter of Credit, such notice in each case to be accompanied by an
Application for such Letter of Credit properly completed and executed by the
Borrower and, in the case of an extension or an increase in the amount of a
Letter of Credit, a written request therefor, in a form reasonably acceptable to
the Agent and the Issuing Bank, in each case, together with the fees called for
by this Agreement then due and payable. The Agent shall promptly notify the
Issuing Bank of the Agent's receipt of each such notice and the Issuing Bank
shall promptly notify the Agent and the Banks of the issuance of the Letter of
Credit so requested.
SECTION 1.3. APPLICABLE INTEREST RATES ON REVOLVING LOANS. (a) BASE RATE
LOANS. Each Base Rate Loan made or maintained by a Bank shall bear interest
during each Interest Period it is outstanding (computed on the basis of a year
of 360 days and actual days elapsed) on the unpaid principal amount thereof from
the date such Loan is advanced, continued or created by conversion from a
Eurodollar Loan until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the sum of the Applicable Margin plus the Base Rate from time
to time in effect, payable on the last day of its Interest Period and at
maturity (whether by acceleration or otherwise).
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"BASE RATE" means for any day, the greater of (i) the rate of interest
announced or otherwise established by the Agent from time to time as its prime
commercial rate, as in effect on such day (it being acknowledged and agreed that
rate may not be the Agent's best or lowest rate); and (ii) the sum of (x) the
rate determined by the Agent to be the average (rounded upwards, if necessary,
to the next higher 1/100 of 1%) of the rates per annum quoted to the Agent at
approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Agent for the sale to the Agent at face value of Federal funds
in an amount equal or comparable to the principal amount owed to the Agent for
which such rate is being determined, PLUS (y) 1/2 of 1% (0.5%).
(b) EURODOLLAR LOANS. Each Eurodollar Loan made or maintained by a Bank
shall bear interest during each Interest Period it is outstanding (computed on
the basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued, or created by
conversion from a Base Rate Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Adjusted LIBOR applicable for such Interest Period, payable on the last day
of the Interest Period and at maturity (whether by acceleration or otherwise),
and, if the applicable Interest Period is longer than three months, on each day
occurring every three months after the commencement of such Interest Period.
"ADJUSTED LIBOR" means, for any Borrowing of Eurodollar Loans, a rate per
annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
---------------------------------
1 - Eurodollar Reserve Percentage
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars in immediately available funds
are offered to the Agent at 11:00 a.m. (London, England time) 2 Business Days
before the beginning of such Interest Period by major banks in the interbank
eurodollar market selected by the Agent for delivery on the first day of and for
a period equal to such Interest Period and in an amount equal or comparable to
the principal amount of the Eurodollar Loan scheduled to be made by the Agent as
part of such Borrowing.
"LIBOR INDEX RATE" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such
Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m.
(London, England time) on the day 2 Business Days before the commencement of
such Interest Period.
"TELERATE PAGE 3750" means the display designated as "PAGE 3750" on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as
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may be nominated by the British Bankers' Association as the information vendor
for the purpose of displaying British Bankers' Association Interest Settlement
Rates for U.S. Dollar deposits).
"EURODOLLAR RESERVE PERCENTAGE" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on "EUROCURRENCY LIABILITIES", as defined in such Board's Regulation
D (or in respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets that include loans by
non-United States offices of any Bank to United States residents), subject to
any amendments of such reserve requirement by such Board or its successor,
taking into account any transitional adjustments thereto. For purposes of this
definition, the Eurodollar Loans shall be deemed to be "EUROCURRENCY
LIABILITIES" as defined in Regulation D without benefit or credit for any
prorations, exemptions or offsets under Regulation D.
SECTION 1.4. MINIMUM BORROWING AMOUNTS ON REVOLVING LOANS. Each Borrowing
of Base Rate Loans advanced under the Revolving Credit Commitments shall be in
an amount not less than $1,000,000 or such greater amount which is an integral
multiple of $100,000. Each Borrowing of Eurodollar Loans advanced, continued, or
converted under the Revolving Credit Commitments shall be in an amount equal to
$2,000,000 or such greater amount which is an integral multiple of $100,000.
Without the Agent's consent, there shall not be more than ten (10) Borrowings of
Eurodollar Loans outstanding under the Revolving Credit Commitments at any one
time.
SECTION 1.5. MANNER OF BORROWING REVOLVING LOANS AND DESIGNATING
APPLICABLE INTEREST RATES. (a) NOTICE TO THE AGENT. The Borrower shall give
notice to the Agent by no later than 11:00 a.m. (Chicago time): (i) at least 3
Business Days before the date on which the Borrower requests the Banks to
advance a Borrowing of Eurodollar Loans under the Revolving Credit Commitments
and (ii) on the date the Borrower requests the Banks to advance a Borrowing of
Base Rate Loans under the Revolving Credit Commitments. The Loans included in
each such Borrowing shall bear interest initially at the type of rate specified
in such notice of a new Borrowing. Thereafter, the Borrower may from time to
time elect to change or continue the type of interest rate borne by each such
Borrowing or, subject to Section 1.4's minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such Borrowing is
of Eurodollar Loans, on the last day of the Interest Period applicable thereto,
the Borrower may continue part or all of such Borrowing as Eurodollar Loans or
convert part or all of such Borrowing into Base Rate Loans or (ii) if such
Borrowing is of Base Rate Loans, on any Business Day, the Borrower may convert
all or part of such Borrowing into Eurodollar Loans for an Interest Period or
Interest Periods specified by the Borrower. The Borrower shall give all such
notices requesting the advance, continuation, or conversion of a Borrowing under
the Revolving Credit Commitments in each case to the Agent by telephone or
telecopy (which notice shall be irrevocable once given and, if by telephone,
shall be promptly confirmed in writing) substantially in the form attached
hereto as Exhibit B (Notice of Borrowing) or Exhibit C (Notice of
Continuation/Conversion), as applicable, or in such other form acceptable to the
Agent under
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the Revolving Credit Commitments. Notices of the continuation of such a
Borrowing of Eurodollar Loans for an additional Interest Period or of the
conversion of part or all of such a Borrowing of Base Rate Loans into Eurodollar
Loans must be given by no later than 11:00 a.m. (Chicago time) at least 3
Business Days before the date of the requested continuation or conversion. All
such notices concerning the advance, continuation, or conversion of a Borrowing
under the Revolving Credit Commitments shall specify the date of the requested
advance, continuation, or conversion of a Borrowing (which shall be a Business
Day), the amount of the requested Borrowing to be advanced, continued, or
converted, the type of Loans to comprise such new, continued, or converted
Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the
Interest Period applicable thereto. The Borrower agrees that the Agent may rely
on any such telephonic or telecopy notice given by any person the Agent in good
faith believes is an Authorized Representative without the necessity of
independent investigation, and in the event any such notice by telephone
conflicts with any written confirmation, such telephonic notice shall govern if
the Agent has acted in good faith in reliance thereon.
(b) NOTICE TO THE BANKS. The Agent shall give prompt telephonic or
telecopy notice to each Bank of any notice from the Borrower received pursuant
to Section 1.5(a) above and, if such notice requests the Banks to make
Eurodollar Loans under the Revolving Credit Commitments, the Agent shall give
notice to the Borrower and each Bank by like means of the interest rate
applicable thereto promptly after the Agent has made such determination.
(c) BORROWER'S FAILURE TO NOTIFY; AUTOMATIC CONTINUATIONS AND
CONVERSIONS. Any outstanding Borrowing of Base Rate Loans under the Revolving
Credit Commitments shall automatically be continued for an additional Interest
Period on the last day of its then current Interest Period unless the Borrower
has notified the Agent within the period required by Section 1.5(a) that the
Borrower intends to convert such Borrowing, subject to Section 7.2 hereof, into
a Borrowing of Eurodollar Loans under the Revolving Credit Commitments or such
Borrowing is prepaid in accordance with Section 1.10(a). If the Borrower fails
to give notice pursuant to Section 1.5(a) above of the continuation or
conversion of any outstanding principal amount of a Borrowing of Eurodollar
Loans before the last day of its then current Interest Period within the period
required by Section 1.5(a) or, whether or not such notice has been given, one or
more of the conditions set forth in Section 7.2 for the continuation or
conversion of a Borrowing of Eurodollar Loans would not be satisfied and such
Borrowing is not prepaid in accordance with Section 1.10(a), such Borrowing
shall automatically be converted into a Borrowing of Base Rate Loans. In the
event the Borrower fails to give notice pursuant to Section 1.5(a) above of a
Borrowing equal to the amount of a Reimbursement Obligation and has not notified
the Agent by 1:00 p.m. (Chicago time) on the day such Reimbursement Obligation
becomes due that it intends to repay such Reimbursement Obligation through funds
not borrowed under this Agreement, the Borrower shall be deemed to have
requested a Borrowing of Base Rate Loans on such day in the amount of the
Reimbursement Obligation then due, subject to Section 7 hereof, which Borrowing
shall be applied to pay the Reimbursement Obligation then due.
(d) DISBURSEMENT OF LOANS. Not later than 1:00 p.m. (Chicago time) on
the date of any requested advance of a new Borrowing under the Revolving Credit
Commitments, subject to Section 7 hereof, each Bank shall make available its
Loan comprising part of such Borrowing in
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funds immediately available at the principal office of the Agent in Chicago,
Illinois. The Agent shall make the proceeds of each new Borrowing available to
the Borrower at the Agent's principal office in Chicago,
Illinois (or by wire
transfer of funds pursuant to the Borrower's written instructions to the Agent).
(e) AGENT RELIANCE ON BANK FUNDING. Unless the Agent shall have been
notified by a Bank prior to (or, in the case of a Borrowing of Base Rate Loans,
by 1:00 p.m. (Chicago time) on) the date on which such Bank is scheduled to make
payment to the Agent of the proceeds of a Loan (which notice shall be effective
upon receipt) that such Bank does not intend to make such payment, the Agent may
assume that such Bank has made such payment when due and the Agent may in
reliance upon such assumption (but shall not be required to) make available to
the Borrower the proceeds of the Loan to be made by such Bank and, if any Bank
has not in fact made such payment to the Agent, such Bank shall, on demand, pay
to the Agent the amount made available to the Borrower attributable to such Bank
together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to the Borrower and ending
on (but excluding) the date such Bank pays such amount to the Agent at a rate
per annum equal to (i) from the date the related advance was made by the Agent
to the date 2 Business Days after payment by such Bank is due hereunder, the
Federal Funds Rate for each such day and (ii) from the date 2 Business Days
after the date such payment is due from such Bank to the date such payment is
made by such Bank, the Base Rate in effect for each such day. If such amount is
not received from such Bank by the Agent immediately upon demand, the Borrower
will, on demand, repay to the Agent the proceeds of the Loan attributable to
such Bank with interest thereon at a rate per annum equal to the interest rate
applicable to the relevant Loan, but without such payment being considered a
payment or prepayment of a Loan under Section 1.12 hereof, so that the Borrower
will have no liability under such Section with respect to such payment.
SECTION 1.6. DEFAULT RATE ON REVOLVING LOANS. Notwithstanding anything to
the contrary contained in Section 1.3 hereof, while any Event of Default exists
and is continuing or after acceleration, the Borrower shall pay interest (after
as well as before entry of judgment thereon to the extent permitted by law) on
the principal amount of all Revolving Loans (computed on the basis of a year of
360 days and actual days elapsed) at a rate per annum equal to:
(a) for any Base Rate Loan, the sum of 2% plus the highest
Applicable Margin (regardless of the Total Leverage Ratio at such time)
plus the Base Rate from time to time in effect; and
(b) for any Eurodollar Loan, the sum of 2% plus the highest rate
of interest in effect thereon at the time of such default until the end of
the Interest Period applicable thereto and, thereafter at a rate per annum
equal to the sum of 2% plus the highest Applicable Margin (regardless of
the Total Leverage Ratio at such time) for Base Rate Loans plus the Base
Rate from time to time in effect;
PROVIDED, HOWEVER, that in the absence of acceleration, any adjustments pursuant
to this Section 1.6 shall be made at the election of the Required Banks with
written notice to the
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Borrower. While any Event of Default exists and is continuing or after
acceleration, interest shall be paid on demand of the Agent at the request or
with the consent of the Required Banks.
SECTION 1.7. SWING LOANS. (a) GENERALLY. Subject to all of the terms and
conditions hereof, Agent agrees to make loans in U.S. Dollars to the Borrower
under the Swing Line ("SWING LOANS") which shall not in the aggregate at any
time outstanding exceed the lesser of (i) $5,000,000 (as the same may be reduced
pursuant hereto, the "SWING LINE COMMITMENT") or (ii) the difference between the
Revolving Credit Commitments in effect at such time and the aggregate amount of
all Revolving Loans and L/C Obligations outstanding at the time of computation.
The Swing Line Commitment shall be available to the Borrower and may be availed
of by the Borrower from time to time and borrowings thereunder may be repaid and
used again during the period ending on the Revolving Credit Termination Date;
PROVIDED that each Swing Loan must be repaid on the last day of the Interest
Period applicable thereto. Each Swing Loan shall be in a minimum amount of
$100,000. Without regard to the face principal amount of the Swing Line Note,
the actual principal amount at any time outstanding and owing by the Borrower on
account of the Swing Line Note during the period ending on the Revolving Credit
Termination Date shall be the sum of all Swing Loans then or theretofore made
thereon less all payments actually received thereon during such period. The
Agent shall record on its books and records or on a schedule to the Swing Line
Note the amount of each Swing Loan made by it, all payments of principal and
interest and the principal balance from time to time outstanding thereon, and,
for any Swing Loan bearing interest at Agents' Quoted Rate, the Interest Period
and the interest rate applicable thereto. The record thereof, whether shown on
such books and records of the Agent or on a schedule to the Swing Line Note,
shall be PRIMA FACIE evidence as to all such matters; PROVIDED, HOWEVER, that
the Agent's failure to record any of the foregoing or any error in any such
record shall not limit or otherwise affect the obligation of the Borrower to
repay all Swing Loans made to it hereunder together with accrued interest
thereon.
(b) INTEREST ON SWING LOANS. Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal to (i)
the sum of the Base Rate plus the Applicable Margin for Base Rate Loans as from
time to time in effect or (ii) the Agent's Quoted Rate. Interest on each Swing
Loan shall be due and payable prior to such maturity on the last day of each
Interest Period applicable thereto. Notwithstanding anything to the contrary
contained in this Section 1.7(b) hereof, while any Event of Default exists or
after acceleration, the Borrower shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all Swing Loans (computed on the basis of a year of 365 or 366 days,
as the case may be, and the actual days elapsed) at a rate per annum equal to
(a) for any Swing Loan bearing interest with reference to the Base Rate, the sum
of 2% plus the highest Applicable Margin (regardless of the Total Leverage Ratio
at such time) for Base Rate Loans plus the Base Rate from time to time in
effect; and (b) for any Swing Loan bearing interest with reference to the
Agent's Quoted Rate, the sum of 2% plus the highest rate of interest in effect
thereon at the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the sum of 2%
plus the highest Applicable Margin (regardless of the Total Leverage Ratio at
such time) for Base Rate Loans plus the Base Rate from time to time in effect;
PROVIDED, HOWEVER, that in the absence of acceleration, any adjustments pursuant
to this Section 1.7(b) shall be made at the election of the Required Banks with
written notice to the Borrower. While any Event of Default exists and is
continuing or after
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acceleration, interest shall be paid on demand of the Agent at the request or
with the consent of the Required Banks.
(c) REQUESTS FOR SWING LOANS. The Borrower shall give the Agent prior
notice (which may be written or oral) no later than 2:00 p.m. (Chicago time) on
the date upon which the Borrower requests that any Swing Loan be made, of the
amount and date of such Swing Loan and the Interest Period selected therefor.
Within thirty (30) minutes after receiving such notice, Agent shall in its
discretion quote an interest rate to the Borrower at which the Agent would be
willing to make such Swing Loan available to the Borrower for a given Interest
Period (the rate so quoted for a given Interest Period being herein referred to
as "AGENT'S QUOTED RATE"). The Borrower acknowledges and agrees that the
interest rate quote is given for immediate and irrevocable acceptance, and if
the Borrower does not so immediately accept Agent's Quoted Rate for the full
amount requested by the Borrower for such Swing Loan, the Agent's Quoted Rate
shall be deemed immediately withdrawn and such Swing Loan shall bear interest at
the rate per annum determined by adding the Applicable Margin for Base Rate
Loans to the Base Rate as from time to time in effect. Subject to all of the
terms and conditions hereof, the proceeds of such Swing Loan shall be made
available to the Borrower on the date so requested at the offices of the Agent
in Chicago,
Illinois (or by wire transfer of funds pursuant to the Borrower's
written instructions to the Agent). Anything contained in the foregoing to the
contrary notwithstanding (i) the obligation of Agent to make Swing Loans shall
be subject to all of the terms and conditions of this Agreement and (ii) the
Agent shall not be obligated to make more than one Swing Loan during any one
day.
(d) REFUNDING LOANS. In its sole and absolute discretion, the Agent may
at any time, on behalf of the Borrower (which hereby irrevocably authorizes the
Agent to act on its behalf for such purpose) and with notice to the Borrower,
request each Bank to make a Revolving Loan in the form of a Base Rate Loan in an
amount equal to such Bank's Revolver Percentage of the amount of the Swing Loans
outstanding on the date such notice is given. Unless an Event of Default
described in Section 9.1(i) or 9.1(j) exists and is continuing with respect to
the Borrower, each Bank shall make the proceeds of its requested Revolving Loan
available to Agent, in immediately available funds, at the Agent's principal
office in Chicago,
Illinois, before 12:00 Noon (Chicago time) on the Business
Day following the day such notice is given. The proceeds of such Revolving Loans
shall be immediately applied to repay the outstanding Swing Loans.
(e) PARTICIPATIONS. If any Bank refuses or otherwise fails to make a
Revolving Loan when requested by the Agent pursuant to Section 1.7(d) above
(because an Event of Default described in Section 9.1(i) or 9.1(j) exists with
respect to the Borrower or otherwise), such Bank will, by the time and in the
manner such Revolving Loan was to have been funded to the Agent, purchase from
the Agent an undivided participating interest in the outstanding Swing Loans in
an amount equal to its Revolver Percentage of the aggregate principal amount of
Swing Loans that were to have been repaid with such Revolving Loans, PROVIDED no
purchase of a participation in a Swing Loan bearing interest at Agent's Quoted
Rate need be made until after expiration of the Interest Period applicable
thereto. Each Bank that so purchases a participation in a Swing Loan shall
thereafter be entitled to receive its Revolver Percentage of each payment of
principal received on the Swing Loan and of interest received thereon accruing
from the date such Bank funded to Agent its participation in such Loan. The
several obligations of the Banks under this
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Section 1.7(e) shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Bank may have or have had against
the Borrower, any other Bank or any other Person whatever. Without limiting the
generality of the foregoing, such obligations shall not be affected by any
Default or Event of Default or by any reduction or termination of the Revolving
Credit Commitments of any Bank, and each payment made by an Bank under this
Section 1.7(e) shall be made without any offset, abatement, withholding or
reduction whatsoever.
SECTION 1.8. INTEREST PERIODS FOR ALL LOANS. As provided in Section
1.5(a) or 1.7(c) hereof, at the time of each request to advance, continue, or
create by conversion a Borrowing of Eurodollar Loans or of a Swing Loan, the
Borrower shall select an Interest Period applicable to such Loans from among the
available options. The term "INTEREST PERIOD" means the period commencing on the
date a Borrowing of Loans is advanced, continued, or created by conversion and
ending: (a) in the case of Base Rate Loans, on the last day of the calendar
month in which such Borrowing is advanced, continued, or created by conversion
(or on the last day of the following calendar month if such Loan is advanced,
continued or created by conversion on the last day of a calendar month), (b) in
the case of a Eurodollar Loan, 1, 2, 3 or 6 months thereafter, and (c) in the
case of Swing Loans, on the date one (1) to ten (10) Business Days thereafter as
mutually agreed by the Agent and the Borrower; PROVIDED, HOWEVER, that:
(i) any Interest Period for a Borrowing of Revolving Loans or
Swing Loans consisting of Base Rate Loans that otherwise would end after
the Revolving Credit Termination Date shall end on the Revolving Credit
Termination Date;
(ii) no Interest Period with respect to any portion of the
Revolving Loans or Swing Loans shall extend beyond the Revolving Credit
Termination Date;
(iii) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, if such extension would cause the last day of an Interest
Period for a Borrowing of Eurodollar Loans to occur in the following
calendar month, the last day of such Interest Period shall be the
immediately preceding Business Day; and
(iv) for purposes of determining an Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on one day
in a calendar month and ending on the numerically corresponding day in the
next calendar month; PROVIDED, HOWEVER, that if there is no numerically
corresponding day in the month in which such an Interest Period is to end
or if such an Interest Period begins on the last Business Day of a
calendar month, then such Interest Period shall end on the last Business
Day of the calendar month in which such Interest Period is to end.
SECTION 1.9. MATURITY OF LOANS. Each Revolving Loan shall mature and
become due and payable by the Borrower on the Revolving Credit Termination Date.
Each Swing Loan shall mature and become due and payable by the Borrower on the
last day of the Interest Period applicable thereto.
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SECTION 1.10. PREPAYMENTS. (a) OPTIONAL. The Borrower shall have the right
of prepaying, without premium or penalty (except for amounts due the Banks under
Section 1.12 hereof), in whole or in part (but, if in part, then: (i) if such
Revolving Loan or Swing Loan Borrowing is of Base Rate Loans, in an amount not
less than $100,000, (ii) if such Revolving Loan Borrowing is of Eurodollar
Loans, in an amount not less than $1,000,000, and (iii) in each case, in an
amount such that the minimum amount required for a Borrowing pursuant to Section
1.4 and 1.7 hereof remains outstanding) any Borrowing of Eurodollar Loans at any
time upon 3 Business Days prior notice to the Agent or, in the case of a
Borrowing of Base Rate Loans or of Swing Loans, notice delivered to the Agent by
the Borrower no later than 11:00 a.m. (Chicago time) on the date of prepayment,
such prepayment to be made by the payment of the principal amount to be prepaid
and, with respect to any Fixed Rate Loan, accrued interest thereon to the date
fixed for prepayment plus any amounts due the Banks under Section 1.12 hereof.
Swing Loans bearing interest at Agent's Quoted Rate may only be voluntarily paid
on the last day of the Interest Period then applicable to such Loans. The Agent
will promptly advise each Bank of any such prepayment notice it receives from
the Borrower. Any amount of Revolving Loans or Swing Loans paid or prepaid
before the Revolving Credit Termination Date may, subject to the terms and
conditions of this Agreement, be borrowed, repaid and borrowed again.
(b) MANDATORY. (i) The Borrower shall, on each date the Revolving Credit
Commitments are reduced pursuant to Section 1.13 hereof, prepay the Revolving
Loans and Swing Loans and, if necessary, prefund the L/C Obligations by the
amount, if any, necessary to reduce the sum of the aggregate principal amount of
Revolving Loans, Swing Loans, and L/C Obligations then outstanding to the amount
to which the Revolving Credit Commitments have been so reduced.
(ii) Unless the Borrower otherwise directs, prepayments of Loans under
this Section 1.10(b) shall be applied first to Borrowings of Base Rate Loans and
Swing Loans until payment in full thereof with any balance applied to Borrowings
of Eurodollar Loans in the order in which their Interest Periods expire. Each
prepayment of Loans under this Section 1.10(b) shall be made by the payment of
the principal amount to be prepaid and accrued interest thereon to the date of
prepayment together with any amounts due the Banks under Section 1.12 hereof.
Each prefunding of L/C Obligations shall be made in accordance with Section 9.4
hereof.
SECTION 1.11. THE NOTES. (a) The Revolving Loans made to the Borrower by a
Bank shall be evidenced by a single promissory note of the Borrower issued to
such Bank in the form of Exhibit D hereto. Each such promissory note is
hereinafter referred to as a "REVOLVING NOTE" and collectively such promissory
notes are referred to as the "REVOLVING NOTES."
(b) The Swing Loans made to the Borrower by the Agent shall be evidenced
by a single promissory note of the Borrower issued to the Agent in the form of
Exhibit E hereto. This promissory note is hereinafter referred to as the "SWING
LINE NOTE."
(c) Each Bank shall record on its books and records or on a schedule to
its appropriate Note the amount of each Loan advanced, continued or converted by
it, all payments of principal and interest and the principal balance from time
to time outstanding thereon, the type of such Loan, and, for any Eurodollar Loan
or Swing Loan, the Interest Period and the interest rate
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applicable thereto. The record thereof, whether shown on such books and records
of a Bank or on a schedule to the relevant Note, shall be PRIMA FACIE evidence
as to all such matters; PROVIDED, HOWEVER, that the failure of any Bank to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrower to repay all Loans made to it
hereunder together with accrued interest thereon. At the request of any Bank and
upon such Bank tendering to the Borrower the appropriate Note to be replaced,
the Borrower shall furnish a new Note to such Bank to replace any outstanding
Note, and at such time the first notation appearing on a schedule on the reverse
side of, or attached to, such Note shall set forth the aggregate unpaid
principal amount of all Loans, if any, then outstanding thereon.
(d) As soon as practicable, but in no event later than one (1) Business
Day after prior written notice from the Borrower to a Bank, such Bank shall
provide to the Borrower a written payoff letter from such Bank setting forth the
amount required to pay the Notes in full as of the date or dates requested by
the Borrower and any other amounts due by the Borrower hereunder (with a per
diem amount owing thereafter).
SECTION 1.12. FUNDING INDEMNITY. If any Bank (including for such purposes,
the Agent in the case of a Swing Loan which is a Fixed Rate Loan) shall incur
any loss, cost or expense (including, without limitation, any loss of profit,
and any loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund or
maintain any Fixed Rate Loan or the relending or reinvesting of such deposits or
amounts paid or prepaid to such Bank) as a result of:
(a) any payment, prepayment or conversion of a Fixed Rate Loan
on a date other than the last day of its Interest Period for any reason,
whether before or after default, and whether or not such payment is
required by any provisions of this Agreement (other than any such
prepayment as a result of Section 10.1 hereof),
(b) any failure (because of a failure to meet the conditions of
Section 7 or otherwise) by the Borrower to borrow a Fixed Rate Loan on the
date specified in a notice given pursuant to Section 1.5(a) or 1.7(c), as
the case may be, or
(c) any failure (because of a failure to meet the conditions of
Section 7 or otherwise) by the Borrower to continue a Eurodollar Loan, or
to convert a Base Rate Loan into a Eurodollar Loan, in each case on the
date specified in a notice given pursuant to Section 1.5(a),
then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrower, with a
copy to the Agent, a certificate setting forth the amount of such loss, cost or
expense in reasonable detail (including an explanation of the basis for and the
computation of such loss, cost or expense) and the amounts shown on such
certificate shall be deemed prima facie correct if reasonably determined and
absent manifest error; PROVIDED, HOWEVER, that the Borrower shall not be
obligated to pay any such amount or amounts to the extent such loss, cost or
expense was incurred by such Bank (x) more than ninety (90) days prior to the
date of the delivery of such certificate (nothing herein to impair or
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otherwise affect the Borrower's liability hereunder for any subsequent loss,
cost or expense incurred by such Bank) or (y) to the extent such loss, cost or
expense was caused by such Bank's gross negligence or willful misconduct.
SECTION 1.13. COMMITMENT TERMINATIONS. (a) OPTIONAL TERMINATIONS. The
Borrower shall have the right at any time and from time to time, upon 3 Business
Days' prior written notice to the Agent, to terminate the Revolving Credit
Commitments without premium or penalty and in whole or in part, any partial
termination to be (i) in an amount not less than $1,000,000 and which is an
integral multiple of $1,000,000 and (ii) allocated ratably among the Banks in
proportion to their respective Revolver Percentages, provided that (x) the
Revolving Credit Commitments may not be reduced to an amount less than the sum
of the aggregate principal amount of Revolving Loans, Swing Loans, and L/C
Obligations then outstanding and (y) any reduction of the Revolving Credit
Commitments to an amount less than the Swing Line Commitment or L/C Sublimit
shall automatically reduce the Swing Line Commitment or L/C Sublimit, as the
case may be, to such amount as well. The Agent shall give prompt notice to each
Bank of any such termination of the Revolving Credit Commitments.
(b) MANDATORY TERMINATIONS. (i) CHANGE OF CONTROL. After the occurrence
of a Change of Control, the Required Banks may, by written notice to the
Borrower at any time on or before the date occurring 180 days after the date the
Borrower notifies the Banks of such Change of Control, terminate the remaining
Commitments and all other obligations of the Banks hereunder on the date stated
in such notice (which shall in no event be sooner than (A) three (3) days after
such notice is given or (B) the day on which the Borrower repays any other
Indebtedness for Borrowed Money). On the date the Commitments are so terminated,
all outstanding Obligations (including, without limitation, all principal of and
accrued interest on the Notes) shall forthwith be due and payable without
further demand, presentment, protest, or notice of any kind and the Borrower
shall immediately pay to the Banks the full amount then available for drawing
under each Letter of Credit, such amount to be held in the Collateral Account
referred to in Section 9.4 hereof (the Borrower agreeing to immediately make
such payment on the date the Commitments are so terminated and acknowledging and
agreeing that the Banks would not have an adequate remedy at law for the failure
by the Borrower to honor any such demand and that the Banks, and the Agent on
their behalf, shall have the right to require the Borrower to specifically
perform such undertaking whether or not any drawings or other demands for
payment have been made under any of the Letters of Credit).
(ii) DISPOSITIONS AND EVENTS OF LOSS. If after the date of this Agreement
the Borrower or any Subsidiary shall at any time or from time to time make or
agree to make a Disposition or shall suffer an Event of Loss resulting in Net
Cash Proceeds in excess of $2,000,000 on a cumulative basis in any fiscal year
of the Borrower, then (x) the Borrower shall promptly notify the Agent of such
proposed Disposition or Event of Loss (including the amount of the estimated Net
Cash Proceeds to be received by the Borrower or such Subsidiary in respect
thereof) and (y) on the Business Day of receipt by the Borrower or the
Subsidiary of the Net Cash Proceeds of such Disposition or Event of Loss, the
Revolving Credit Commitments shall ratably reduce by an amount equal to 100% of
such excess of the Net Cash Proceeds over such $2,000,000 cumulative amount;
PROVIDED that in the case of each Disposition and Event of Loss, if the Borrower
states in its notice of such event that the Borrower or the applicable
Subsidiary intends to reinvest, within
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180 days of the applicable Disposition or receipt of Net Cash Proceeds from an
Event of Loss, the Net Cash Proceeds thereof in assets to be used in their
business then, so long as no Event of Default then exists, no such reduction of
the Revolving Credit Commitments shall be required under this Section during
such 180-day reinvestment period. Promptly after the end of such 180-day period,
the Borrower shall notify the Agent whether the Borrower or such Subsidiary has
reinvested such Net Cash Proceeds in such business assets, and to the extent
such Net Cash Proceeds have not been so reinvested, such reduction of the
Revolving Credit Commitments in the amount of such Net Cash Proceeds not so
reinvested shall occur. The Borrower acknowledges that its performance hereunder
shall not limit the rights and remedies of the Banks for any breach of Section
8.10 hereof.
(iii) EQUITY ISSUANCE. If after the date of this Agreement the Borrower or
any Subsidiary shall issue new equity securities (whether common or preferred
stock or otherwise), other than common stock issued in connection with the
exercise of employee stock options or equity plans, equity securities issued as
consideration for any Acquisition permitted by Section 8.9(o) hereof, and equity
securities issued in connection with a Client Services Arrangement, or dispose
of any treasury stock, the Borrower shall promptly notify the Agent of the
estimated Net Cash Proceeds of such issuance or disposition, as the case may be,
to be received by or for the account of the Borrower or such Subsidiary in
respect thereof. On the Business Day of receipt by the Borrower or such
Subsidiary of Net Cash Proceeds of such issuance or disposition, the Revolving
Credit Commitments shall ratably reduce by an amount equal to 50% of the amount
of such Net Cash Proceeds. The Borrower acknowledges that its performance
hereunder shall not limit the rights and remedies of the Banks for any breach of
Section 8.11 hereof.
(iv) DEBT ISSUANCE. If after the date of this Agreement the Borrower or
any Subsidiary shall issue new debt securities by public offering or private
placement or in evidence of loans extended by banks or other institutional
investors, the Borrower shall promptly notify the Agent of the estimated Net
Cash Proceeds of such issuance to be received by or for the account of the
Borrower or such Subsidiary in respect thereof. Within one Business Day
following receipt by the Borrower or such Subsidiary of Net Cash Proceeds of
such issuance, the Revolving Credit Commitments shall ratably reduce by an
amount equal to 100% of the amount of such Net Cash Proceeds. The Borrower
acknowledges that its performance hereunder shall not limit the rights and
remedies of the Banks arising from any breach of Section 8.7 hereof.
(v) In the event the Revolving Credit Commitments at any time exceed
$55,000,000, the Revolving Credit Commitments shall thereafter be reduced by
$1,250,000 on the last day of each calendar quarter ending thereafter (in any
event not commencing prior to March 31, 2003), until the aggregate amount of the
Revolving Credit Commitments are reduced to $55,000,000.
(vi) The Revolving Credit Commitments shall ratably terminate by the
amounts and at the times required under Section 1.10(b) hereof.
(c) Any termination of the Commitments pursuant to this Section 1.13 may
not be reinstated.
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SECTION 1.14. RATE DETERMINATIONS. The Agent shall determine each interest
rate applicable to the Loans and the Reimbursement Obligations hereunder in
accordance with the provisions hereof, and its determination thereof shall be
conclusive and binding except in the case of manifest error.
SECTION 2. FEES, SUBSTITUTION OF BANKS AND ADDITIONAL BANKS.
SECTION 2.1. FEES. (a) REVOLVING CREDIT COMMITMENT FEE. The Borrower
shall pay to the Agent for the ratable account of the Banks in accordance with
their Revolver Percentages a commitment fee at the rate per annum equal to the
Applicable Margin (computed on the basis of a year of 365 or 366 days as the
case may be, and the actual number of days elapsed) on the average daily Unused
Revolving Credit Commitments. Such commitment fee shall be payable quarterly in
arrears on the last day of each calendar quarter in each year (commencing
December 31, 2002) and on the Revolving Credit Termination Date, unless the
Revolving Credit Commitments are terminated in whole on an earlier date, in
which event the commitment fee for the period to the date of such termination in
whole shall be paid on the date of such termination.
(b) LETTER OF CREDIT FEES. Quarterly in arrears, on the last day of each
calendar quarter, the Borrower shall pay to the Issuing Bank for its own account
a facing fee equal to .125% per annum (computed on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days elapsed) applied to
the daily average face amount of standby Letters of Credit outstanding during
such quarter. Quarterly in arrears, on the last day of each calendar quarter in
each year (commencing December 31, 2002) and on the Revolving Credit Termination
Date, unless the Revolving Credit Commitments are terminated in whole on an
earlier date, in which event the fee for the period to the date of such
termination in whole shall be paid on the date of such termination, the Borrower
shall pay to the Agent, for the ratable benefit of the Banks in accordance with
their Revolver Percentages, a letter of credit fee at a rate per annum equal to
the Applicable Margin (computed on the basis of a year of 365 or 366 days, as
the case may be, and the actual number of days elapsed) in effect during each
day of such quarter applied to the daily average face amount of Letters of
Credit which are outstanding during such quarter. In addition, the Borrower
shall pay to the Issuing Bank for its own account the Issuing Bank's standard
drawing, negotiation, amendment, and other administrative fees for each Letter
of Credit (whether a commercial Letter of Credit or a standby Letter of Credit).
Such standard fees referred to in the preceding sentence may be established by
the Agent from time to time.
(c) AGENT FEES. The Borrower shall pay to the Agent the fees set forth
in that certain fee letter dated November 12, 2002, by and among the Borrower
and Xxxxxx Trust and Savings Bank, or as otherwise agreed to by the Agent and
the Borrower.
(d) AUDIT FEES. The Borrower shall pay to the Agent for its own use and
benefit charges for audits of the Collateral performed by the Agent or its
agents or representatives in such amounts as the Agent may from time to time
request (the Agent acknowledging and agreeing that such charges shall be
computed in the same manner as it at the time customarily uses for the
assessment of charges for similar collateral audits); PROVIDED, HOWEVER, that in
the absence of any Default and Event of Default, the Borrower shall not be
required to pay the Agent for more than one such audit per calendar year.
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SECTION 2.2. SUBSTITUTION OF BANKS. Upon the receipt by the Borrower of
(a) a claim from any Bank for compensation under Section 10.3 or 12.1 hereof, or
(b) notice by any Bank to the Borrower of any illegality pursuant to Section
10.1 hereof, or (c) in the event any Bank is a Defaulting Bank (any such Bank
referred to in clause (a), (b), or (c) above being hereinafter referred to as an
"AFFECTED BANK"), the Borrower may, in addition to any other rights the Borrower
may have hereunder or under applicable law, require, at the Affected Bank's
expense, any such Affected Bank to assign, at par plus accrued interest and
fees, without recourse, all of its interest, rights and obligations hereunder
(including all of its Commitments and the Revolving Loans and participation
interests in Letters of Credit and other amounts at any time owing to it
hereunder and the other Loan Documents) to a bank or other institutional lender
specified by the Borrower, provided that (i) such assignment shall not conflict
with or violate any law, rule, or regulation or order of any court or other
governmental authority, (ii) the Borrower shall have received the written
consent of the Agent, which consent shall not be unreasonably withheld or
delayed, to such assignment, (iii) the Borrower shall have paid to the Affected
Bank all monies (together with amounts due such Affected Bank under Section 1.12
hereof as if the Revolving Loans owing to it were prepaid rather than assigned)
other than principal, and (iv) the assignment is entered into in accordance with
the other requirements of Section 12.12 hereof.
SECTION 2.3. DEFAULTING BANK. (a) COMMITMENT. Notwithstanding anything
herein to the contrary, any commitment fee accrued with respect to the Revolving
Credit Commitment of a Defaulting Bank during the period prior to the time such
Bank became a Defaulting Bank and unpaid at such time shall not be payable by
the Borrower so long as such Bank shall be a Defaulting Bank except to the
extent that such commitment fee shall otherwise have been due and payable by the
Borrower prior to such time; PROVIDED, HOWEVER, that no commitment fee shall
accrue on the Revolving Credit Commitment of a Defaulting Bank so long as such
Bank shall be a Defaulting Bank.
(b) BORROWER'S REMEDIES. The rights and remedies against a Defaulting
Bank under this Agreement, including without limitation this Section 2.3 and
Section 2.2 hereof, are in addition to other rights and remedies that the
Borrower may have against such Defaulting Bank with respect to any Loan or
unpaid Reimbursement Obligation which such Defaulting Bank has not funded, and
that the Agent or any Bank may have against such Defaulting Bank with respect to
any such Loan or Reimbursement Obligation.
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
All payments of principal of and interest on the Loans and the
Reimbursement Obligations, and of all other Obligations payable by the Borrower
under this Agreement and the other Loan Documents, shall be made by the Borrower
to the Agent by no later than 1:00 p.m. (Chicago time) on the due date thereof
at the office of the Agent in Chicago,
Illinois (or such other location in the
State of
Illinois as the Agent may designate to the Borrower), for the benefit
of the Bank or Banks entitled thereto. Any payments received after such time
shall be deemed to have been received by the Agent on the next Business Day. All
such payments shall be made in U.S. Dollars, in immediately available funds at
the place of payment, in each case without set-off or counterclaim. The Agent
will promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest on Loans and on Reimbursement Obligations in
which the
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Banks have purchased Participating Interests ratably to the Banks and like funds
relating to the payment of any other amount payable to any Bank to such Bank, in
each case to be applied in accordance with the terms of this Agreement.
Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Obligations or Hedging Liability and all
proceeds of the Collateral received, in each instance, by the Agent or any of
the Banks after the occurrence and during the continuation of an Event of
Default shall be remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
reasonably incurred by the Agent, and any security trustee therefor, in
monitoring, verifying, protecting, preserving or enforcing the Liens on the
Collateral by the Agent, and any security trustee therefor, in protecting,
preserving or enforcing rights under the Loan Documents, and in any event
all costs and expenses of a character which the Borrower has agreed to pay
the Agent under Section 12.15 hereof (such funds to be retained by the
Agent for its own account unless it has previously been reimbursed for such
costs and expenses by the Banks, in which event such amounts shall be
remitted to the Banks to reimburse them for payments theretofore made to
the Agent);
(b) second, to the payment of the principal of and interest on
the Swing Line Note;
(c) third, to the payment of any outstanding interest or other
fees or amounts due under the Notes and the other Loan Documents, in each
case other than for principal on the Loans or in reimbursement or
collateralization of L/C Obligations, pro rata as among the Agent and the
Banks in accord with the amount of such interest and other fees or amounts
owing each;
(d) fourth, to the payment of the principal of the Notes, unpaid
Reimbursement Obligations, together with amounts to be held by the Agent as
collateral security for any other L/C Obligations pursuant to Section 9.4
hereof (until the Agent is holding an amount of cash equal to the then
outstanding amount of all such L/C Obligations), and Hedging Liability, the
aggregate amount paid to or held as collateral security for the Banks or
their Affiliates to be allocated pro rata in accordance with the aggregate
unpaid amounts owing to each holder thereof;
(e) fifth, to the Agent, the Banks, and their Affiliates ratably
in accordance with any other indebtedness, obligations or liabilities of
the Borrower and its Subsidiaries owing to each of them and secured by the
Collateral Documents (including, without limitation, Funds Transfer and
Deposit Account Liability) to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof; and
(f) sixth, to the Borrower or whomever else applicable law shall
require.
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SECTION 4. GUARANTIES.
SECTION 4.1. COLLATERAL. The Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall be secured by (a) valid, perfected
and enforceable Liens on all right, title, and interest of the Borrower and each
Material Subsidiary in all capital stock and other equity interests held by such
Person in each of its direct Subsidiaries, whether now owned or hereafter formed
or acquired, and all proceeds thereof, and (b) valid, perfected, and enforceable
Liens on all right, title, and interest of the Borrower and each Material
Subsidiary in all personal property, fixtures, and real estate, whether now
owned or hereafter acquired or arising, and all proceeds thereof; PROVIDED,
HOWEVER, that: (i) unless otherwise required by the Agent or the Required Banks
during the existence of any Event of Default, Liens on deposit accounts
maintaining balances not exceeding $1,000,000 in the aggregate need not be
perfected and Liens on payroll accounts need not be perfected provided the total
amount on deposit at any time does not exceed the current or reasonably
anticipated amount of their payroll obligations, (ii) unless otherwise required
by the Agent or the Required Banks during the existence of any Event of Default,
Liens on vehicles which are subject to a certificate of title law need not be
perfected provided that the total value of such property at any one time not so
perfected shall not exceed $1,000,000 in the aggregate, (iii) unless otherwise
required by the Agent or the Required Banks during the existence of any Event of
Default, Liens on real estate and fixtures need not be perfected, (iv) unless
otherwise required by the Agent or the Required Banks during the existence of
any Event of Default, Liens on the Voting Stock of a Foreign Subsidiary which,
if granted, would result in an adverse effect on the Borrower's federal income
tax liability shall be limited to 65% of the total outstanding Voting Stock of
such Foreign Subsidiary, (v) unless otherwise required by the Agent or the
Required Banks during the existence of any Event of Default, Liens need not be
granted on the assets of a Material Subsidiary which is a Foreign Subsidiary
which, if granted, would result in an adverse effect on the Borrower's federal
income tax liability, and (vi) unless otherwise required by the Agent or the
Required Banks during the existence of any Event of Default, Liens on patents
and trademarks need not be filed in the United States Patent and Trademark
Office. The Borrower acknowledges and agrees that the Liens on the Collateral
(as set forth above) shall be granted to the Agent for the benefit of the holder
of the Obligations, the Hedging Liability, and the Funds Transfer and Deposit
Account Liability and shall be valid and perfected first priority Liens subject
only to Liens permitted by Section 8.8 hereof, in each case pursuant to one or
more Collateral Documents, each in form and substance satisfactory to the Agent.
SECTION 4.2. GUARANTIES. The payment and performance of the Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability shall at all
times be guaranteed by each existing or hereafter acquired Material Subsidiary
of the Borrower pursuant to one or more guaranty agreements in form and
substance acceptable to the Agent, as the same may be amended, modified or
supplemented from time to time (individually a "GUARANTY" and collectively the
"GUARANTIES") (each Subsidiary delivering a Guaranty being hereinafter referred
to as a "GUARANTOR" and collectively the "GUARANTORS"), PROVIDED that, unless
otherwise required by the Agent or the Required Banks during the existence of
any Event of Default, no Material Subsidiary which is a Foreign Subsidiary shall
be required to be a Guarantor if by doing so it would result in an adverse
effect on the Borrower's federal income tax liability.
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SECTION 4.3. FURTHER ASSURANCES. The Borrower agrees that it shall, and
shall cause each Material Subsidiary to, from time to time at the request of the
Agent or the Required Banks, execute and deliver such documents and do such acts
and things as the Agent or the Required Banks may reasonably request in order to
provide for or perfect or protect such Liens required by Section 4.1 above on
the Collateral. In the event the Borrower or any Material Subsidiary (a "PARENT
SUBSIDIARY") forms or acquires any other Subsidiary (a "NEW SUBSIDIARY") after
the date hereof, the Borrower shall within 10 Business Days of such formation or
acquisition cause such New Subsidiary to execute a Guaranty if such New
Subsidiary is a Material Subsidiary to the extent required by Section 4.2 above,
and cause such Parent Subsidiary and such New Subsidiary (if it is a Material
Subsidiary) to execute such Collateral Documents to the extent required by
Section 4.1 above, in each case as the Agent may then require to obtain the
Guaranties and perfect rights in the Collateral required by this Agreement, and
the Borrower shall also deliver to the Agent, or cause such Guarantor and Parent
Subsidiary to deliver to the Agent, at the Borrower's cost and expense, such
other instruments, documents, certificates and opinions reasonably required by
the Agent in connection therewith.
SECTION 5. DEFINITIONS; INTERPRETATION.
SECTION 5.1. DEFINITIONS. The following terms when used herein shall have
the following meanings:
"ACQUIRED BUSINESS" means the entity or assets acquired by the Borrower or
a Subsidiary in an Acquisition, whether before or after the date hereof.
"ACQUISITION " means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Borrower or the Subsidiary is the
surviving entity.
"ADJUSTED LIBOR" is defined in Section 1.3(b) hereof.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; PROVIDED THAT, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 15%
or more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 15% or more of the partnership
or other ownership interest of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.
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"AGENT" means Xxxxxx Trust and Savings Bank, and any successor pursuant to
Section 11.7 hereof.
"AGENT'S QUOTED RATE" is defined in Section 1.7(c) hereof.
"AGREEMENT" means this Amended and Restated Credit Agreement, as the same
may be amended, modified, restated or supplemented from time to time pursuant to
the terms hereof.
"APPLICABLE MARGIN" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof, until the first Pricing Date, the rates per annum shown
opposite Level II below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:
APPLICABLE MARGIN
FOR BASE RATE
LOANS UNDER APPLICABLE
REVOLVING CREDIT MARGIN FOR
AND EURODOLLAR
REIMBURSEMENT LOANS AND LETTER APPLICABLE MARGIN
TOTAL LEVERAGE RATIO OBLIGATIONS SHALL OF CREDIT FEE FOR COMMITMENT
LEVEL FOR SUCH PRICING DATE BE: SHALL BE: FEE SHALL BE:
IV Greater than or equal 1.00% 2.75% 0.50%
to 1.75 to 1.0
III Less than 1.75 to 1.0, 0.50% 2.25% 0.45%
but greater than or
equal to 1.25 to 1.0
II Less than 1.25 to 1.0, 0.25% 2.00% 0.40%
but greater than or
equal to 0.75 to 1.0
I Less than .75 to 1.0
0% 1.75% 0.35%
For purposes hereof, the term "PRICING DATE" means, for any fiscal quarter of
the Borrower ending on or after December 31, 2002, the date on which the
Administrative Agent is in receipt of the Borrower's most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Total Leverage Ratio for the
most recently completed fiscal quarter and the Applicable Margin established on
a Pricing Date shall remain in effect until the next Pricing Date. If the
Borrower has not delivered its financial statements by the date such financial
statements (and, in the case of the year-end financial statements, audit report)
are required to be delivered under Section 8.5 hereof, until such financial
statements and audit report are delivered, the Applicable Margin shall be the
highest Applicable Margin (i.e., the Total Leverage Ratio shall be deemed to be
greater than 1.75 to 1.0). If the Borrower subsequently delivers such financial
statements before the next Pricing Date, the Applicable Margin established by
such late delivered financial statements shall take effect from the date of
delivery until the next Pricing Date. In all other circumstances, the Applicable
Margin
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established by such financial statements shall be in effect from the Pricing
Date that occurs immediately after the end of the fiscal quarter covered by such
financial statements until the next Pricing Date. Each determination of the
Applicable Margin made by the Agent in accordance with the foregoing shall be
conclusive and binding on the Borrower and the Banks if reasonably determined.
"APPLICATION" is defined in Section 1.2(b) hereof.
"AUTHORIZED REPRESENTATIVE" means the Chairman of the Board, President,
Chief Executive Officer, Chief Financial Officer and Vice President & Controller
of the Borrower and those other persons (if any) shown on the list of officers
provided by the Borrower pursuant to Section 7.1(h) hereof or on any update of
any such list provided by the Borrower to the Agent, or any further or different
officer of the Borrower so named by the Chairman of the Board, President, Chief
Executive Officer, Chief Financial Officer or Vice President & Controller of the
Borrower in a written notice to the Agent.
"BANK" is defined in the introductory paragraph of this Agreement and
includes each assignee Bank pursuant to Section 12.12 hereof.
"BASE RATE" is defined in Section 1.3(a) hereof.
"BASE RATE LOAN" means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.
"BORROWER" is defined in the introductory paragraph of this Agreement.
"BORROWING" means the total of Loans of a single type advanced, continued
for an additional Interest Period, or converted from a different type into such
type by the Banks under a Credit on a single date and, in the case of Eurodollar
Loans, for a single Interest Period. Borrowings of Loans are made and maintained
ratably from each of the Banks under a Credit according to their Percentages of
such Credit. A Borrowing is "ADVANCED" on the day Banks advance funds comprising
such Borrowing to the Borrower, is "CONTINUED" on the date a new Interest Period
for the same type of Loans commences for such Borrowing, and is "CONVERTED" when
such Borrowing is changed from one type of Loans to the other, all as requested
by the Borrower pursuant to Section 1.5(a). Borrowings of Swing Loans are made
from the Agent in accordance with the procedures of Section 1.7 hereof.
"BUSINESS DAY" means any day (other than a Saturday or Sunday) on which
banks are not authorized or required to close in Chicago,
Illinois, and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar
deposits in the interbank eurodollar market in London, England.
"CAPITAL EXPENDITURES" means, with respect to any Person the aggregate
amount of all expenditures (whether paid in cash or accrued as a liability) by
such Person during any period which, in accordance with GAAP, are or should be
included as "additions to property, plant or equipment" or similar items
reflected in the statement of cash flows of such Person.
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"CAPITAL LEASE" means any lease of Property which in accordance with GAAP
is required to be capitalized on the balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATION" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"CHANGE OF CONTROL" means the occurrence of any one or more of the
following: (a) the acquisition by any "PERSON" or "GROUP" (as such terms are
used in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended), other than the Xxxxxxxx Group, at any time of beneficial ownership of
30% or more of the Voting Stock of the Borrower on a fully-diluted basis, (b)
the failure of the Xxxxxxxx Group at any time and for any reason to own both
legally and beneficially at least 30% or more of the Voting Stock of the
Borrower on a fully-diluted basis, or (c) the failure of individuals who are
members of the board of directors of the Borrower on the date of this Agreement
(together with any new or replacement directors whose nomination for election
was approved by a majority of the directors who were either directors on the
date of this Agreement or otherwise so approved) to constitute a majority of the
board of directors of the Borrower
"CLIENT SERVICES ARRANGEMENT" means any transaction pursuant to which the
Borrower or any Subsidiary (i) obtains the right to provide new or additional
outsourcing services to a new or existing client and (ii) (A) purchases from the
client or other predecessor provider of such services: facilities, equipment,
employment rights to employees or other assets previously used in providing such
services, or a controlling interest in any business entity owning such services,
or (B) pays the client a sum of money in exchange for a long-term commitment to
utilize the Borrower's or such Subsidiary's outservicing services.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"COLLATERAL" means all properties, rights, interests and privileges from
time to time subject to the Liens granted to the Agent, or any security trustee
therefor, by the Collateral Documents.
"COLLATERAL ACCOUNT" is defined in Section 9.4 hereof.
"COLLATERAL DOCUMENTS" means the Security Agreement, Pledge Agreement, and
all other security agreements, pledge agreements, assignments, financing
statements and other documents as shall from time to time secure or relate to
the Obligations, the Hedging Liability, and the Funds Transfer and Deposit
Account Liability, or any part thereof.
"COMMITMENTS" means the Revolving Credit Commitments and the Swing Line
Commitment.
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"CONTROLLED GROUP" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single
employer under Section 414 of the Code.
"CREDIT" means the Revolving Credit and the Swing Line.
"CREDIT EVENT" means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.
"DEFAULT" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"DEFAULTING BANK" means a Bank which has failed to fund as and when
required by the terms and conditions of this Agreement such Bank's ratable share
of any Loan or unpaid Reimbursement Obligation hereunder, if and so long as such
failure continues unremedied.
"DISPOSITION" means the sale, lease, conveyance, or other disposition of
Property, other than sales or other dispositions expressly permitted under
Section 8.10(a) or 8.10(b) hereof.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.
"EBITDA" means, with reference to any period, Net Income for such period
PLUS the sum (without duplication) of all amounts deducted in arriving at such
Net Income amount in respect of (a) Interest Expense for such period, (b)
federal, state and local income taxes for such period, (c) all amounts properly
charged for depreciation of fixed assets and amortization of intangible assets
(including, without limitation, goodwill, deferred expenses and organization
costs) for such period, and (d) for periods ending on or before September 30,
2003, the amount of non-cash charges not to exceed $5,000,000 during the
relevant period, and for periods ending thereafter, non-cash charges incurred
not to exceed $2,500,000 during the relevant period.
"ELIGIBLE LINE OF BUSINESS" means any one or more of the principal lines of
business in which the Borrower is engaged as of the date hereof and each line of
business related thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"EURODOLLAR LOAN" means a Loan bearing interest at the rate specified in
Section 1.3(b) hereof.
"EURODOLLAR RESERVE PERCENTAGE" is defined in Section 1.3(b) hereof.
"EVENT OF DEFAULT" means any event or condition identified as such in
Section 9.1 hereof.
-24-
"EVENT OF LOSS" means, with respect to any Property, any of the following:
(a) any loss, destruction or material damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property by a governmental authority having the force of law.
"EXCESS CASH" means the difference between (a) all cash and cash
equivalents as defined in accordance with GAAP which are unrestricted and freely
available to the Borrower or any Domestic Subsidiary (other than restrictions in
the form of early withdrawal penalties for time deposits and other similar
instruments) in one or more accounts maintained in the United States of America
with a Bank party hereto which are free and clear of any Liens other than Liens
granted in favor of the Agent and any unasserted rights of offset of the
relevant depositary financial institution minus (b) $5,000,000.
"FEDERAL FUNDS RATE" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate appearing in
Section 1.3(a) hereof.
"FIXED CHARGES" means, with reference to any period, the sum (without
duplication) of (a) the aggregate amount of payments required to be made by the
Borrower and its Subsidiaries during such period in respect of principal on all
Indebtedness for Borrowed Money (whether at maturity, as a result of mandatory
sinking fund redemption, mandatory prepayment, acceleration or otherwise, but
excluding payments made on the Revolving Credit except for the $1,250,000
quarterly reductions in the Revolving Credit Commitment required under Section
1.13(b)(v) hereof which shall be deemed to be included as a Fixed Charge
hereunder for the relevant period, plus (b) Interest Expense for such period
payable in cash, plus (c) federal, state, and local income taxes payable in cash
(net of any income tax refunds) during such period, plus (d) dividends payable
by the Borrower in cash during such period.
"FIXED CHARGE COVERAGE RATIO" means, at any time the same is to be
determined, the ratio of (a) EBITDA for the four (4) then most recently
completed fiscal quarters of the Borrower less, for all periods of four fiscal
quarters ending on or after December 31, 2003, Capital Expenditures made by the
Borrower and its Subsidiaries during such period, to (b) Fixed Charges for the
same period of four fiscal quarters then ended, PROVIDED that such ratio shall
be computed on March 31, 2003, for the fiscal quarter then ended; on June 30,
2003, for the two fiscal quarters then ended; and on September 30, 2003, for the
three fiscal quarters then ended.
"FIXED RATE LOAN" means any Eurodollar Loan and (to the extent bearing
interest with reference to the Agent's Quoted Rate) any Swing Loan.
"FOREIGN SUBSIDIARY" means any Subsidiary other than a Domestic Subsidiary.
"FUNDS TRANSFER AND DEPOSIT ACCOUNT LIABILITY" means the liability of the
Borrower or any of its Subsidiaries owing to any of the Banks, or any Affiliates
of such Banks, arising out of (a) the execution or processing of electronic
transfers of funds by automatic clearing house transfer, wire transfer or
otherwise to or from the deposit accounts of the Borrower and/or any Subsidiary
now or hereafter maintained with any of the Banks or their Affiliates, (b) the
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acceptance for deposit or the honoring for payment of any check, draft or other
item with respect to any such deposit accounts, and (c) any other deposit,
disbursement, and cash management services afforded to the Borrower or any such
Subsidiary by any of such Banks or their Affiliates.
"GAAP" means generally accepted accounting principles set forth and in
effect from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of any
date of determination from time to time.
"GUARANTORS" is defined in Section 4.2 hereof.
"GUARANTY" is defined in Section 4.2 hereof.
"HEDGING LIABILITY" means the liability of the Borrower or any Subsidiary
to any of the Banks or their Affiliates in respect of any interest rate or
foreign currency or commodity swaps, caps, collars, floors, options, or other
interest rate or foreign currency or commodity hedging arrangements as the
Borrower may from time to time enter into with any one or more of the Banks
party to this Agreement or their Affiliates. Unless and until the amount of the
Hedging Liability is fixed and determined, the Hedging Liability shall be deemed
to be the market value of the notional amount of the hedge from the date of
computation to the date the hedge expires.
"HOSTILE ACQUISITION" means (a) the acquisition of the capital stock or
other equity interests of a Person through a tender offer or similar
solicitation of the owners of such capital stock or other equity interests which
has not been approved (prior to such acquisition) by resolutions of the Board of
Directors of such Person or by similar action if such Person is not a
corporation, and (b) any such acquisition as to which such approval has been
withdrawn.
"INDEBTEDNESS FOR BORROWED MONEY" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable and deferred compensation
arrangements with officers and employees, in each case arising in the ordinary
course of business), (iii) all indebtedness secured by any Lien upon Property of
such Person, whether or not such Person has assumed or become liable for the
payment of such indebtedness, (iv) all Capitalized Lease Obligations of such
Person and (v) all obligations of such Person on or with respect to letters of
credit, bankers' acceptances and other extensions of credit whether or not
representing obligations for borrowed money (other than indebtedness in the form
of a provisional credit given by a depository bank secured by a Lien on items
deposited for collection, trade accounts payable and deferred compensation
arrangements with officers and employees, in each case arising in the ordinary
course of business).
"INTEREST EXPENSE" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all
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amortization of debt discount and expense) of the Borrower and its Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.
"INTEREST PERIOD" is defined in Section 1.8 hereof.
"ISSUING BANK" means Xxxxxx Trust and Savings Bank.
"L/C OBLIGATIONS" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"L/C SUBLIMIT" means $15,000,000, as reduced pursuant to the terms hereof.
"LENDING OFFICE" is defined in Section 10.4 hereof.
"LETTER OF CREDIT" is defined in Section 1.2(a) hereof.
"LIBOR" is defined in Section 1.3(b) hereof.
"LIEN" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"LOAN" means and includes Revolving Loans and Swing Loans, and each of them
singly, and the term "TYPE" of Loan refers to its status as a Revolving Loan or
Swing Loan, or, if a Revolving Loan, to its status as a Base Rate Loan or
Eurocurrency Loan.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Applications, the
Collateral Documents, the Guaranties, and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of the Borrower or the Borrower and its
Subsidiaries, taken as a whole; (b) a material impairment of the ability of the
Borrower or the Borrower and its Subsidiaries, taken as a whole, to perform its
monetary obligations under any Loan Document; or (c) a material adverse effect
upon the legality, validity, binding effect or enforceability against the
Borrower or the Borrower and its Subsidiaries, taken as a whole, of any Loan
Document.
"MATERIAL SUBSIDIARY" means each Subsidiary other than a Non-Material
Subsidiary
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NET CASH PROCEEDS" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs (including, without
limitation, fees and expenses) relating to such Disposition, (ii) sale, use,
recordation, capital gains, or other transactional taxes or recapture of
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depreciation paid or payable by such Person as a direct result of such
Disposition, and (iii) amounts required to be applied to repay principal of,
premium, if any, and interest on any Indebtedness for Borrowed Money secured by
a Lien on the Property (or portion thereof) permitted by Section 8.8 hereof sold
or otherwise disposed of (other than the Obligations hereunder) which is
required to be and is repaid in connection with such Disposition; (b) with
respect to any Event of Loss of a Person, cash and cash equivalent proceeds
received by or for such Person's account (whether as a result of payments made
under any applicable insurance policy therefor or in connection with
condemnation proceedings or otherwise), net of (i) reasonable direct costs
(including, without limitation, fees and expenses) incurred in connection with
the collection of such proceeds, awards or other payments and (ii) amounts
required to be applied to repay principal of, premium or penalty, if any, and
interest on any Indebtedness for Borrowed Money secured by a Lien on the
Property (or portion thereof) permitted by Section 8.8 hereof so damaged or
taken (other than the Obligations hereunder) which is required to be and is
repaid in connection with such Event of Loss; and (c) with respect to any
offering of equity securities of a Person or the issuance of any Indebtedness
for Borrowed Money by a Person, cash and cash equivalent proceeds received by or
for such Person's account, net of reasonable legal, underwriting, and other fees
and expenses incurred as a direct result thereof.
"NET INCOME" means, with reference to any period, the net income (or net
loss) of the Borrower and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP.
"NET WORTH" means, as of any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in-capital and
retained earnings after deducting treasury stock, but excluding minority
interests in Subsidiaries) which would appear on the balance sheet of the
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, less the sum of (i) all notes receivable from officers and employees
of the Borrower and its Subsidiaries and (ii) the write-up of assets above cost.
"NON-MATERIAL SUBSIDIARY" means any Subsidiary (i) the revenues of which
(directly and together with its Subsidiaries) for the most recently completed
fiscal year of the Borrower were less than 7% of the Borrower's consolidated
revenues for such fiscal year and (ii) the consolidated total assets of which
(directly and together with its Subsidiaries) as of the date of such financial
statements were less than 3% of the Borrower's consolidated total assets as of
such date; PROVIDED, HOWEVER, that each Subsidiary which would (but for this
proviso) constitute a Non-Material Subsidiary with the greatest revenues shall
constitute a Material Subsidiary if (i) the revenues of such Subsidiary
(directly and together with its Subsidiaries), when together with the revenues
of Non-Material Subsidiaries (directly and together with their respective
Subsidiaries), in each case for the most recently completed fiscal year of the
Borrower equal or exceed 12% of the Borrower's consolidated revenues for such
fiscal year or (ii) the consolidated total assets of such Subsidiary (directly
and together with its Subsidiaries), when taken together with the consolidated
total assets of the Non-Material Subsidiaries (directly and together with their
respective Subsidiaries), in each case as the date of such financial statements
equal or exceed 7% of the Borrower's consolidated total assets as of such date.
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"NOTES" means and includes the Revolving Notes and Swing Line Note.
"OBLIGATIONS" means all fees payable hereunder, all obligations of the
Borrower to pay principal and interest on Loans and Reimbursement Obligations,
and all other payment obligations of the Borrower or any Subsidiary arising
under or in relation to any Loan Document, in each case whether now existing or
hereafter arising.
"ORIGINAL CREDIT AGREEMENT" is defined in Recital B above.
"PARTICIPATING BANK" is defined in Section 1.2(d) hereof.
"PARTICIPATING INTEREST" is defined in Section 1.2(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"PERCENTAGE" means for any Bank its Revolver Percentage.
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
"PLAN" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"PLEDGE AGREEMENT" means that certain Amended and Restated Pledge Agreement
dated as of December 20, 2002, by and among the Borrower, certain of its
Subsidiaries, and the Agent, as the same may be amended, modified or restated
from time to time.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"REIMBURSEMENT OBLIGATION" is defined in Section 1.2(c) hereof.
"REQUIRED BANKS" means, at any time, Banks whose outstanding Loans and
interests in Letters of Credit and Unused Revolving Credit Commitments
constitute more than 66-2/3% of the sum of the total outstanding Loans,
interests in Letters of Credit and Unused Revolving Credit Commitments of the
Banks; PROVIDED, HOWEVER, if at such time (i) any Bank shall be a Defaulting
Bank and (ii) no Event of Default shall have occurred and be continuing, there
shall be excluded from the determination of Required Banks the outstanding Loans
and interests in
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Letters of Credit and Unused Revolving Credit Commitments of such Defaulting
Bank at such time.
"RESPONSIBLE OFFICER" means the Chief Executive Officer, the Chief
Financial Officer or the General Counsel of the Borrower.
"RESTRICTED PAYMENTS" is defined in Section 8.12 hereof.
"REVOLVER PERCENTAGE" means, for each Bank, the percentage of the Revolving
Credit Commitments represented by such Bank's Revolving Credit Commitment or, if
the Revolving Credit Commitments have been terminated, the percentage held by
such Bank (including through participation interests in Reimbursement
Obligations) of the aggregate principal amount of all Revolving Loans and L/C
Obligations then outstanding.
"REVOLVING CREDIT" means the credit facility for making Revolving Loans and
issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.
"REVOLVING CREDIT COMMITMENT" means, as to any Bank, the obligation of such
Bank to make Revolving Loans and to participate in Swing Loans and Letters of
Credit issued for the account of the Borrower hereunder in an aggregate
principal or face amount at any one time outstanding not to exceed the amount
set forth opposite such Bank's name on Schedule 1.1 attached hereto and made a
part hereof, as the same may be modified at any time or from time to time
pursuant to the terms hereof. The Borrower and the Banks acknowledge and agree
that the Revolving Credit Commitments of the Banks aggregate $65,000,000 on the
date hereof.
"REVOLVING CREDIT TERMINATION DATE" means December 20, 2005, or such
earlier date on which the Revolving Credit Commitments are terminated in whole
pursuant to Section 1.13, 9.2 or 9.3 hereof.
"REVOLVING LOAN" is defined in Section 1.1 hereof and, as so defined,
includes a Base Rate Loan or a Eurodollar Loan, each of which is a "TYPE" of
Revolving Loan hereunder.
"REVOLVING NOTE" is defined in Section 1.11(a) hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of The
XxXxxx-Xxxx Companies, Inc.
"XXXXXXXX GROUP" means Xxxxxxxx X. Xxxxxxxx, members of his immediately
family and trust for the benefit of any one or more of the foregoing.
"SECURITY AGREEMENT" means that certain Amended and Restated Security
Agreement dated as of December 20, 2002, by and among the Borrower, certain of
its Subsidiaries and the Agent, as the same may be amended, modified or restated
from time to time.
"SUBORDINATED DEBT" means Indebtedness for Borrowed Money of the Borrower
or any Subsidiary owing to any Person on terms and conditions, and in such
amounts and with such
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interest rates, payment terms, maturities, covenants, defaults and other
material terms, acceptable to the Agent and the Required Banks in their sole
discretion and which is subordinated in right of payment to the prior payment in
full of the Obligations pursuant to written subordination provisions approved in
writing by the Agent and the Required Banks.
"SUBSIDIARY" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock or other equity interests of which is at the time
directly or indirectly owned by such parent corporation or organization or by
any one or more other entities which are themselves subsidiaries of such parent
corporation or organization. Unless otherwise expressly noted herein, the term
"SUBSIDIARY" means a subsidiary of the Borrower or of any of its direct or
indirect Subsidiaries.
"SWING LINE COMMITMENT" is defined in Section 1.7 hereof.
"SWING LINE" means the credit facility for making a Swing Line Loan
described in Section 1.7 hereof.
"SWING LINE NOTE" is defined in Section 1.7 hereof.
"SWING LOANS" is defined in Section 1.7 hereof.
"TOTAL CONSIDERATION" means, with respect to any Acquisition or Client
Services Arrangement, the total amount (but without duplication) of (a) cash
paid in connection with any Acquisition or Client Services Arrangement, plus (b)
indebtedness payable to the seller in connection with such Acquisition or Client
Services Arrangement, plus (c) the fair market value of any equity securities,
including any warrants or options therefor, delivered in connection with any
Acquisition or Client Services Arrangement (other than new equity securities
issued by the Borrower), plus (d) the present value of future payments which are
required to be made over a period of time and are not contingent upon the
Borrower or its Subsidiary meeting financial performance objectives (discounted
at the Base Rate), but only to the extent not included in clause (a), (b), or
(c) above, plus (e) the amount of indebtedness assumed in connection with such
Acquisition or Client Services Arrangement.
"TOTAL LEVERAGE RATIO" means, at any time the same is to be determined, the
ratio of (a) Total Funded Debt at such time less Excess Cash at such time, to
(b) EBITDA for the most recently completed period of four consecutive fiscal
quarters then ended.
"TOTAL FUNDED DEBT" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries at such time, including all Indebtedness for Borrowed Money of any
other Person which is directly or indirectly guaranteed by the Borrower or any
of its Subsidiaries or which the Borrower or any of its Subsidiaries has agreed
(contingently or otherwise) to purchase or otherwise acquire or in respect of
which the Borrower or any of its Subsidiaries has otherwise assured a creditor
against loss.
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"UNFUNDED VESTED LIABILITIES" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"U.S. DOLLARS" and "$" each means the lawful currency of the United States
of America.
"UNUSED REVOLVING CREDIT COMMITMENTS" means, at any time, the difference
between the Revolving Credit Commitments then in effect and the aggregate
outstanding principal amount of Revolving Loans and L/C Obligations, provided
that Swing Loans outstanding from time to time shall be deemed to reduce the
Unused Revolving Credit Commitment of the Agent for purposes of computing the
commitment fee under Section 2.1 hereof.
"VOTING STOCK" of any Person means capital stock or other equity interests
of any class or classes (however designated) having ordinary power for the
election of directors or other similar governing body of such Person, other than
stock or other equity interests having such power only by reason of the
happening of a contingency.
"WELFARE PLAN" means a "welfare plan" as defined in Section 3(1) of ERISA.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares or
other similar shares as required by law) or other equity interests are owned by
the Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of
this definition.
SECTION 5.2. INTERPRETATION. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"HEREOF", "HEREIN", and "HEREUNDER" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago,
Illinois, time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
SECTION 5.3. CHANGE IN ACCOUNTING PRINCIPLES. Financial covenants set
forth in Section 8.22 hereof shall be computed and determined in accordance with
GAAP in effect on the date hereof.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as follows:
SECTION 6.1. ORGANIZATION AND QUALIFICATION. The Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the state of its incorporation, has
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full and adequate corporate power to own its Property and conduct its business
as now conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the nature
of the Property owned or leased by it requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.
SECTION 6.2. SUBSIDIARIES. Each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect. Schedule 6.2 hereto (as the same may be
deemed amended pursuant to Section 8.9, 8.10, or 8.17 hereof) identifies each
Subsidiary, the jurisdiction of its incorporation or organization, as the case
may be, the percentage of issued and outstanding shares of each class of its
capital stock or other equity interests owned by the Borrower and the other
Subsidiaries and, if such percentage is not 100% (excluding directors'
qualifying shares or other similar shares as required by law), a description of
each class of its authorized capital stock and other equity interests and the
number of shares of each class issued and outstanding and whether such
Subsidiary is a Material or Non-Material Subsidiary. All of the outstanding
shares of capital stock and other equity interests of each Subsidiary are
validly issued and outstanding and fully paid and nonassessable and all such
shares and other equity interests indicated on Schedule 6.2 (as the same may be
deemed amended pursuant to Section 8.9, 8.10, or 8.17 hereof) as owned by the
Borrower or a Subsidiary are owned, beneficially and of record, by the Borrower
or such Subsidiary free and clear of all Liens other than the Liens granted in
favor of the Agent pursuant to the Collateral Documents. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary.
SECTION 6.3. AUTHORITY AND VALIDITY OF OBLIGATIONS. The Borrower has full
right and authority to enter into this Agreement and the other Loan Documents
executed by it, to make the borrowings herein provided for, to issue its Notes
in evidence thereof, to grant to the Agent the Liens described in the Collateral
Documents executed by the Borrower, and to perform all of its obligations
hereunder and under the other Loan Documents executed by it. Each Material
Subsidiary has full right and authority to enter into the Loan Documents
executed by it, to guarantee the Obligations, to grant to the Agent the Liens
described in the Collateral Documents executed by such Person, and to perform
all of its obligations under the Loan Documents executed by it. The Loan
Documents delivered by the Borrower and by each Material Subsidiary have been
duly authorized, executed and delivered by such Person and constitute valid and
binding obligations of such Person enforceable in accordance with their terms
except as enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally and general
principles of equity (regardless of whether the application of such principles
is considered in a proceeding in equity or at law); and this Agreement and the
other Loan Documents do not, nor does the performance or observance by the
Borrower or any Subsidiary of any of the matters and things herein or therein
provided for, (a) contravene or constitute a default under any provision of law
or any judgment, injunction,
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order or decree binding upon the Borrower or any Subsidiary or any provision of
the organizational documents (e.g., charter, certificate or articles of
incorporation and by-laws, certificate or articles of formation and operating
agreement, partnership agreement, or comparable organizational documents) of the
Borrower or any Subsidiary, (b) contravene or constitute a default under any
covenant, indenture or agreement of or affecting the Borrower or any Subsidiary
or any of its Property, in each case where such contravention or default is
reasonably likely to have a Material Adverse Effect, or (c) result in the
creation or imposition of any Lien on any Property of the Borrower or any
Subsidiary other than the Liens granted in favor of the Agent pursuant to the
Collateral Documents.
SECTION 6.4. USE OF PROCEEDS; MARGIN STOCK. The Borrower shall use the
proceeds of the Loans for the purpose of refinancing existing indebtedness and
for its general corporate purposes. Neither the Borrower nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of any
Loan or any other extension of credit made hereunder will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock. Margin stock (as hereinabove
defined) constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
SECTION 6.5. FINANCIAL REPORTS. The consolidated balance sheet of the
Borrower and its Subsidiaries as at December 31, 2001, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
Xxxxxx Xxxxxxxx LLP, independent public accountants, and the unaudited interim
consolidated balance sheet of the Borrower and its Subsidiaries as at September
30, 2002, and the related consolidated statements of income and retained
earnings of the Borrower and its Subsidiaries for the 9 months then ended,
heretofore furnished to the Banks, fairly present in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries as at said
dates and the consolidated results of their operations and cash flows for the
periods then ended in conformity with GAAP applied on a consistent basis (other
than changes then required by GAAP). Neither the Borrower nor any Subsidiary has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 8.5 hereof.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. Since September 30, 2002, there
has been no Material Adverse Effect.
SECTION 6.7. FULL DISCLOSURE. The statements and information furnished by
or on behalf of the Borrower to the Banks in connection with the negotiation of
this Agreement and the other Loan Documents and the commitments by the Banks to
provide all or part of the financing contemplated hereby do not (a) contain any
untrue statements of a fact or (b) omit a fact necessary to make the material
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading, in either case where the correct or
complete facts would, if they constituted a change from the facts as originally
disclosed or stated,
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have been reasonably likely to have a Material Adverse Effect; the Banks
acknowledging that, as to any projections and other forward-looking statements
regarding future expectations and the beliefs (the "STATEMENTS") furnished by
the Borrower to the Banks, the Borrower only represents that, at the time the
Statements were made by the Borrower to the Banks the Borrower did not know of
any material facts that would cause the Statements to be untrue.
SECTION 6.8. TRADEMARKS, FRANCHISES, AND LICENSES. The Borrower and each
of the Subsidiaries own, possess or have the right to use all necessary patents,
licenses, franchises, trademarks, trade names, trade styles, copyrights, trade
secrets, know how and confidential commercial and proprietary information to
conduct their businesses as now conducted, without known conflict with any
patent, license, franchise, trademark, trade name, trade style, copyright or
other proprietary right of any other Person, in each case where the failure to
own, possess or have the right to use such Property is reasonably likely to have
a Material Adverse Effect.
SECTION 6.9. GOVERNMENTAL AUTHORITY AND LICENSING. The Borrower and each
of the Subsidiaries have received all licenses, permits, and approvals of all
Federal, state, local, and foreign governmental authorities, if any, necessary
to conduct their business, in each case where the failure to obtain or maintain
the same is reasonably likely to have a Material Adverse Effect. No
investigation or proceeding which, if adversely determined, is reasonably likely
to result in revocation or denial of any material license, permit, or approval,
is pending or, to the knowledge of the Borrower, threatened.
SECTION 6.10. GOOD TITLE. The Borrower and each of the Subsidiaries have
good and defensible title (or valid leasehold interests) to their assets as
reflected on the most recent consolidated balance sheet of the Borrower and its
Subsidiaries furnished to the Banks (except for sales of assets in the ordinary
course of business), subject to no Liens other than such thereof as are
permitted by Section 8.8 hereof.
SECTION 6.11. LITIGATION AND OTHER CONTROVERSIES. There is no litigation
or governmental or arbitration proceeding or labor controversy pending, nor to
the knowledge of the Borrower threatened, against the Borrower or any Subsidiary
which is reasonably likely to have a Material Adverse Effect.
SECTION 6.12. TAXES. All tax returns required to be filed by the Borrower
or any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Borrower or any
Subsidiary or upon any of its respective Property, income or franchises, which
are shown to be due and payable in such returns, have been paid, except (a) such
taxes, assessments, fees and governmental charges, if any, as are being
contested in good faith and by appropriate proceedings which prevent enforcement
of any Lien relating thereto and as to which adequate reserves established in
accordance with GAAP have been provided and (b) those returns other than United
States federal income tax returns, the failure to file of which could not
reasonably be expected to have a Material Adverse Effect. The Borrower does not
know of any proposed material tax assessment against the Borrower or any
Subsidiary for which adequate provisions in accordance with GAAP have not been
made on their accounts. Adequate provisions in accordance with GAAP for taxes on
the books of the Borrower and each Subsidiary have been made for all open years,
and for its current fiscal period.
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SECTION 6.13. APPROVALS. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Borrower or any Subsidiary, or of any other Person, is or will be necessary
to the valid execution, delivery or performance by the Borrower or any
Subsidiary of this Agreement or any other Loan Document, except for such
approvals which have been obtained prior to the date of this Agreement and
remain in full force and effect.
SECTION 6.14. AFFILIATE TRANSACTIONS. Neither the Borrower nor any
Subsidiary is a party to any material contracts or agreements with any of its
Affiliates on terms and conditions which are less favorable to the Borrower or
such Subsidiary than would be usual and customary in similar contracts or
agreements between Persons not affiliated with each other.
SECTION 6.15. INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY. Neither
the Borrower nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "public utility holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.16. ERISA. The Borrower and each of its Subsidiaries, and each
member of its Controlled Group, have fulfilled their obligations under the
minimum funding standards of, and are in compliance in all material respects
with, ERISA and the Code to the extent applicable to any Plan maintained by any
one or more of them or for the benefit of their employees and have not incurred
any liability to the PBGC or a Plan under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA. Neither the
Borrower nor any Subsidiary has any material contingent liabilities with respect
to any post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in article 6 of Title I of ERISA.
SECTION 6.17. COMPLIANCE WITH LAWS. To the best knowledge of the Borrower,
the Borrower and each of its Subsidiaries are in compliance in all material
respects with the requirements of all federal, state and local laws, rules and
regulations applicable to or pertaining to their Properties or business
operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, laws and regulations
relating to the providing of health care services and products, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary has received notice to
the effect that its operations are not in compliance with any of the
requirements of applicable federal, state or local environmental, health and
safety statutes and regulations or are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, where
any such non-compliance or remedial action, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect.
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SECTION 6.18. OTHER AGREEMENTS. Neither the Borrower nor any Subsidiary is
in default under the terms of any covenant, indenture or agreement of or
affecting such Persons or any of their Properties, which default if uncured is
reasonably likely to have a Material Adverse Effect.
SECTION 6.19. SOLVENCY. The Borrower and its Material Subsidiaries are
able to pay their debts as they become due, have sufficient capital to carry on
their businesses and all businesses in which they are about to engage in; and
the amount that will be required to pay their probable liabilities as they
become absolute and mature is less than the sum of the present fair sale value
of their assets as a going concern.
SECTION 6.20. NO DEFAULT. No Default or Event of Default has occurred and
is continuing.
SECTION 7. CONDITIONS PRECEDENT.
The obligation of each Bank to advance, continue or convert any Loan
(whether a Revolving Loan or Swing Loan, but in any event other than the
continuation of, or conversion into, a Base Rate Loan) or of the Issuing Bank to
issue, extend the expiration date (including by not giving notice of
non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:
SECTION 7.1. INITIAL CREDIT EVENT. Before or concurrently with the
initial Credit Event:
(a) the Agent shall have received for each Bank this Agreement
duly executed by the Borrower and the Banks;
(b) the Agent shall have received for each Bank such Bank's duly
executed Notes of the Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 1.11 hereof;
(c) the Agent shall have received the Security Agreement duly
executed by the Borrower and each Material Subsidiary, the Pledge
Agreement duly executed by the Borrower and each Material Subsidiary, and
the Guaranty duly executed by each Material Subsidiary, together with (i)
original stock certificates or other similar instruments or securities
representing all of the issued and outstanding shares of capital stock or
other equity interest of each Subsidiary as of the date of this Agreement
(limited to 65% in the case of the Voting Stock of a Foreign Subsidiary
under Section 4.1 hereof), (ii) stock powers for the Collateral consisting
of the stock or other equity interest of each Subsidiary each to be
executed in blank and undated, and (iii) UCC financing statements or
amendments thereof to be filed against the Borrower and each Material
Subsidiary, as debtor, in favor of the Agent, as secured party;
(d) the Agent shall have received for each Bank copies of the
Borrower's and each Subsidiary's articles of incorporation and bylaws (or
comparable constituent documents) and any amendments thereto, certified in
each instance by its Secretary or Assistant Secretary;
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(e) the Agent shall have received for each Bank copies of
resolutions of the Borrower's and of each Subsidiary's Board of Directors
(or comparable governing body) authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is
a party and the consummation of the transactions contemplated hereby and
thereby, together with specimen signatures of the persons authorized to
execute such documents on the Borrower's and such Subsidiary's behalf, all
certified in each instance by its Secretary or Assistant Secretary;
(f) the Agent shall have received for each Bank copies of the
certificates of good standing for the Borrower and for each Material
Subsidiary (dated no earlier than 30 days prior to the date hereof) from
the office of the secretary of the state of organization and of each state
(other than any state in which it is not in good standing and such failure
to be in good standing would not have a Material Adverse Effect) in which
it is qualified to do business as a foreign organization;
(g) the Agent shall have received for each Bank a list of the
Borrower's Authorized Representatives;
(h) the Agent shall have received for itself and for the Banks
the initial fees called for by Section 2.1 hereof;
(i) each Bank shall have received such evaluations and
certifications as it may reasonably require in order to satisfy itself as
to the value of the Collateral, the financial condition of the Borrower
and its Subsidiaries, and the lack of material environmental and other
contingent liabilities of the Borrower and its Subsidiaries;
(j) the Agent shall have received for each Bank the favorable
written opinions of counsel to the Borrower and its Material Subsidiaries,
in form and substance reasonably satisfactory to the Agent;
(k) the Agent shall have received satisfactory assurances that
the Agent will have received and approved (both as to form and substance)
such UCC financing statements and other instruments and documents as it
shall deem necessary to perfect the Liens required hereunder and
satisfactory lien searches confirming the priority of such Liens; and
(l) all obligations owing to the lenders party to the Original
Credit Agreement shall be paid in full out of the initial Credit Event
hereunder (other than for Loans and Letters of Credit which remain
outstanding under, and owing to the Banks party to, this Agreement).
SECTION 7.2. ALL CREDIT EVENTS. As of the time of each Credit Event
hereunder:
(a) in the case of a Borrowing the Agent shall have received the
notice required by Section 1.5 hereof, in the case of a Swing Loan, Agent
shall have received the notice required in Section 1.7 hereof, in the case
of the issuance of any Letter of Credit
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the Agent shall have received a duly completed Application for such Letter
of Credit together with any fees called for by Section 2.1 hereof and, in
the case of an extension or increase in the amount of a Letter of Credit,
a written request therefor in a form acceptable to the Agent together with
fees called for by Section 2.1 hereof;
(b) each of the representations and warranties set forth in
Section 6 hereof shall be and remain true and correct as of such time,
except to the extent that any such representation or warranty relates
solely to an earlier time or that any change therein is not reasonably
likely to have a Material Adverse Effect;
(c) the Borrower shall be in compliance with all of the terms
and conditions hereof, and no Default or Event of Default shall have
occurred and be continuing hereunder or would occur as a result of such
Credit Event; and
(d) such Credit Event shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to any Bank (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System).
Each request for a Borrowing hereunder and each request for the issuance
of, increase in the amount of, or extension of the expiration date of, a Letter
of Credit shall be deemed to be a representation and warranty by the Borrower on
the date on such Credit Event as to the facts specified in subsections (a)
through (c), both inclusive, of this Section 7.2.
SECTION 8. COVENANTS.
The Borrower agrees that, so long as any Note or any L/C Obligation is
outstanding or any Commitment is available to or in use by the Borrower
hereunder, except to the extent compliance in any case or cases is waived in
writing pursuant to the terms of Section 12.13 hereof.
SECTION 8.1. MAINTENANCE OF BUSINESS. The Borrower shall, and shall cause
each Subsidiary to, preserve and maintain its existence, except as otherwise
provided in Section 8.10(c) hereof; PROVIDED, HOWEVER, that nothing in this
Section shall prevent the Borrower from discontinuing the corporate existence of
any Non-Material Subsidiary if discontinuance of such Non-Material Subsidiary is
desirable in the conduct of the Borrower's business or the business of any
Subsidiary and such discontinuance is not disadvantageous in any material
respect to the Banks. The Borrower shall, and shall cause each Subsidiary to,
preserve and keep in force and effect all licenses, permits, franchises,
approvals, patents, trademarks, trade names, trade styles, copyrights, and other
proprietary rights necessary to the proper conduct of its business where the
failure to do so is reasonably likely to have a Material Adverse Effect.
SECTION 8.2. MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each Subsidiary to, maintain, preserve and keep its property, plant and
equipment in good repair, working order and condition (ordinary wear and tear
excepted) and shall from time to time make all needful and proper repairs,
renewals, replacements, additions and betterments thereto so that
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at all times the efficiency thereof shall be fully preserved and maintained,
except to the extent that, in the reasonable business judgment of such Person,
any such Property is no longer necessary for or desirable in the proper conduct
of the business of such Person.
SECTION 8.3. TAXES AND ASSESSMENTS. The Borrower shall duly pay and
discharge, and shall cause each Subsidiary to duly pay and discharge, all
material taxes, rates, assessments, fees and governmental charges upon or
against it or its Properties, in each case before the same become delinquent and
before penalties accrue thereon, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings which prevent
enforcement of any Lien relating thereto and adequate reserves are provided
therefor.
SECTION 8.4. INSURANCE. The Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with good and
responsible insurance companies, all insurable Property owned by it which is of
a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and the Borrower shall insure, and shall cause each Subsidiary to
insure, such other hazards and risks (including professional liability,
employers' and public liability risks) with good and responsible insurance
companies as and to the extent usually insured by Persons similarly situated and
conducting similar businesses. The Borrower shall in any event maintain, and
cause each Subsidiary to maintain, insurance on the Collateral to the extent
required by the Collateral Documents. The Borrower shall, upon the request of
the Agent, furnish to the Agent and each Bank a certificate setting forth in
summary form the nature and extent of the insurance maintained pursuant to this
Section.
SECTION 8.5. FINANCIAL REPORTS. The Borrower shall, and shall cause each
Subsidiary to, maintain a standard system of accounting in accordance with GAAP
and shall furnish to the Agent, each Bank and each of their duly authorized
representatives such information respecting the business and financial condition
of the Borrower and each Subsidiary as the Agent or such Bank may reasonably
request; and without any request, shall furnish to the Agent and the Banks:
(a) as soon as available, and in any event within 45 days after
the close of each fiscal quarter of each fiscal year of the Borrower, a
copy of the consolidated and consolidating balance sheet of the Borrower
and its Subsidiaries as of the last day of such period and the
consolidated and consolidating statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the fiscal quarter and
for the fiscal year-to-date period then ended, each in reasonable detail
showing in comparative form the figures for the corresponding date and
period in the previous fiscal year and the current year's operating
budget, prepared by the Borrower in accordance with GAAP (in the case of
the fourth fiscal quarter financial statements, subject to being in draft
form pending delivery of the final year-end financial statements as
provided in subsection (j) below) and certified to by the Borrower's chief
financial officer, or another officer of the Borrower reasonably
acceptable to the Agent;
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(b) within forty-five (45) days after the end of each of the
first three quarterly fiscal periods of the Borrower, a copy of the
Borrower's Form 10-Q Report filed with the Securities and Exchange
Commission;
(c) within ninety (90) days after the end of each fiscal year of
the Borrower, a copy of the Borrower's Form 10-K Report filed with the
Securities and Exchange Commission, including a copy of the audited
financial statements of the Borrower and the Subsidiaries for such year
with the accompanying report of independent public accountants;
(d) as soon as available, and in any event within 90 days after
the close of each fiscal year of the Borrower, to the extent not contained
in the Borrower's Form 10-K Report filed with the Securities and Exchange
Commission for such year, a copy of the consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the last day of
the period then ended and the consolidated and consolidating statements of
income, retained earnings and cash flows of the Borrower and its
Subsidiaries for the period then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous fiscal year and performance against its operating budget for the
fiscal year then ended, accompanied in the case of the Borrower's
consolidated financial statements by an unqualified opinion of Deloitte &
Touche LLC or another firm of independent public accountants of recognized
national standing, selected by the Borrower and reasonably satisfactory to
the Required Banks, to the effect that the consolidated financial
statements have been prepared in accordance with GAAP and present fairly,
in all material respects, in accordance with GAAP the consolidated
financial condition of the Borrower and its Subsidiaries as of the close
of such fiscal year and the results of their operations and cash flows for
the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such audit
provided a reasonable basis for their opinion;
(e) promptly after the sending or filing thereof, copies of each
financial statement, report, notice or proxy statement sent by the
Borrower or any Subsidiary to its stockholders, and copies of each
regular, periodic or special report, registration statement or prospectus
(including all Form 10-K, Form 10-Q, and Form 8-K reports and proxy
statements) filed by the Borrower or any Subsidiary with any securities
exchange or the Securities and Exchange Commission or any successor
agency;
(f) promptly after receipt thereof, a copy of each audit made by
any regulatory agency of the books and records of the Borrower or any
Subsidiary or of any notice of material noncompliance with any applicable
law, regulation, or guideline relating to the Borrower or any Subsidiary
or any of their respective businesses if the facts and circumstances
related to such audit or if such noncompliance asserted by any such
regulatory agency are reasonably likely to have a Material Adverse Effect;
(g) as soon as available, and in any event no later than 15 days
prior to the end of each fiscal year of the Borrower, a copy of the
Borrower's consolidated and
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consolidating business plan for the following fiscal year, such business
plan to show the Borrower's projected consolidated and consolidating
revenues, expenses, and balance sheet on a quarterly basis, such business
plan to be in reasonable detail prepared by the Borrower and in form
reasonably satisfactory to the Agent;
(h) notice of any Change of Control;
(i) promptly after knowledge thereof shall have come to the
attention of any Responsible Officer of the Borrower, written notice of
any threatened or pending litigation or governmental or arbitration
proceeding or labor controversy against the Borrower or any Subsidiary
which is reasonably likely to have a Material Adverse Effect or of the
occurrence of any Default or Event of Default hereunder; and
(j) with each of the financial statements furnished to the Banks
pursuant to subsections (a) and (d) above, a written certificate in the
form attached hereto as Exhibit F signed by the chief financial officer of
the Borrower or another officer of the Borrower reasonably acceptable to
the Agent to the effect that to the best of such officer's knowledge and
belief no Default or Event of Default has occurred during the period
covered by such statements or, if any such Default or Event of Default has
occurred during such period, setting forth a description of such Default
or Event of Default and specifying the action, if any, taken by the
Borrower or any Subsidiary to remedy the same. With respect to the fourth
fiscal quarter financial statements delivered pursuant to subsection (a)
above, the Borrower may submit such written certificate in draft form,
with a final form to be delivered within ninety days after the end of such
fiscal year together with the year-end financial statements delivered
pursuant to subsection (d) above. Such certificate shall also set forth
the calculations supporting such statements in respect of Section 8.22
hereof.
SECTION 8.6. INSPECTION. The Borrower shall, and shall cause each
Subsidiary to, permit the Agent, each Bank (at the Agent's or such Bank's own
expense except as provided in Section 2.1(d) above), and each of their duly
authorized representatives and agents to visit and inspect any of its
Properties, corporate books and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision the Borrower
hereby authorizes such accountants to discuss with the Agent and such Banks the
finances and affairs of the Borrower and each Subsidiary, provided the Borrower
shall have the right to be present at any such discussions) at such reasonable
times and intervals as the Agent may designate with reasonable prior written
notice to the Borrower (the Banks agreeing to request such inspections and
visitations through the Agent).
SECTION 8.7. INDEBTEDNESS FOR BORROWED MONEY. The Borrower shall not, nor
shall it permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money; PROVIDED, HOWEVER, that the
foregoing shall not restrict nor operate to prevent:
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(a) the Obligations of the Borrower or any Subsidiary owing to
the Agent and the Banks hereunder or under the other Collateral Documents;
(b) purchase money indebtedness (including, for purposes hereof,
indebtedness assumed by the Borrower or any Subsidiary in an Acquisition
or Client Services Arrangement permitted by this Agreement secured by
fixed assets being acquired) and Capitalized Lease Obligations of the
Borrower and of its Subsidiaries in an aggregate amount not to exceed
$10,000,000 at any one time outstanding;
(c) obligations of the Borrower arising out of interest rate and
foreign currency and commodity hedging agreements entered into with
financial institutions in the ordinary course of business;
(d) guaranties expressly permitted by Section 8.9 hereof;
(e) indebtedness from time to time owing by the Borrower to any
Subsidiary or by any Subsidiary to the Borrower or any other Subsidiary,
in each case arising as a result of intercompany loans and advances
permitted by Section 8.9 hereof;
(f) indebtedness outstanding under the Original Credit Agreement
which is owing to lenders other than the Banks party hereto, which is paid
and satisfied in full out of proceeds of the initial Credit Event
hereunder;
(g) other indebtedness existing on the date of this Agreement
and described on Schedule 8.7 attached hereto and made a part hereof, as
reduced from time to time by repayments thereof, and any refinancing of
any of the same that does not increase the principal amount thereof; and
(h) additional indebtedness of the Borrower and its Subsidiaries
in an aggregate amount not to exceed $10,000,000 at any one time
outstanding (of which, not more than $5,000,000 at any one time
outstanding may be secured and, to the extent secured, secured only by
unencumbered fixed assets of the Borrower or the relevant Subsidiary).
SECTION 8.8. LIENS. The Borrower shall not, nor shall it permit any other
Subsidiary to, create, incur or permit to exist any Lien of any kind on any
Property owned by any such Person; PROVIDED, HOWEVER, that the foregoing shall
not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, governmental charges and levies,
statutory obligations or other similar charges (other than Liens arising
under ERISA), good faith cash deposits in connection with tenders,
contracts or leases to which the Borrower or any Subsidiary is a party or
other cash deposits required to be made in the ordinary course of
business, provided in each case that the obligation is not for borrowed
money and that the obligation secured is not overdue or, if overdue, is
being contested in good faith by appropriate proceedings which
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prevent enforcement of any Lien relating thereto and adequate reserves
have been established therefor;
(b) mechanics', workmen's, materialmen's, warehousemen's,
landlords', carriers', or other similar Liens arising in the ordinary
course of business with respect to obligations which are not due or which
are being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an appeal,
stay or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the Borrower and its Subsidiaries
secured by a pledge of assets permitted under this subsection, including
interest and penalties thereon, if any, shall not be in excess of
$2,500,000 at any one time outstanding;
(d) the Liens granted in favor of the Agent for the benefit of
the Agent and the Banks pursuant to the Collateral Documents;
(e) Liens on property of the Borrower or any Subsidiary created
solely for the purpose of securing indebtedness permitted by Section
8.7(b) hereof, representing or incurred to finance, refinance or refund
the purchase price of Property, provided that no such Lien shall extend to
or cover other Property of the Borrower or such Subsidiary other than the
respective Property so acquired, and the principal amount of indebtedness
secured by any such Lien shall at no time exceed the purchase price of
such Property as reduced by repayments of principal thereon;
(f) easements, rights-of-way, restrictions, reservations and
other similar encumbrances or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other restrictions as
to the use of owned or leased real property, which, in the aggregate, are
not substantial in amount and which do not materially detract from the
value of the Property subject thereto or materially interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary;
(g) Liens described on Schedule 8.8 hereof and any replacement
or renewal of such Liens in connection with the refinancing of the
underlying obligations;
(h) any interest or title of a lessor under any operating lease;
(i) Liens of a collection bank arising under Section 4-210 of
the Uniform Commercial Code on items in the course of collection;
(j) Liens arising by virtue of statutory or common law
provisions relating to banker's liens or rights of set-off as to deposit
accounts maintained in the ordinary course of business, provided that such
deposit accounts are not dedicated cash collateral accounts or otherwise
intended to provide collateral security to the depository institution and
is not subject to restrictions on access by the Borrower or the relevant
Subsidiary;
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(k) Liens of sellers of goods to the Borrower or any of its
Subsidiaries arising under Article 2 of the Uniform Commercial Code or
similar provisions of applicable law in the ordinary course of business;
and
(l) Liens on fixed assets securing indebtedness permitted by
Section 8.7(h) hereof.
SECTION 8.9. INVESTMENTS, ACQUISITIONS, LOANS, ADVANCES AND GUARANTIES.
The Borrower shall not, nor shall it permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances (other
than for travel advances and other similar cash advances made to employees in
the ordinary course of business) to, any other Person, or make any Acquisition
or enter into any Client Services Arrangement, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; PROVIDED, HOWEVER, that the foregoing shall not apply to nor operate to
prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one year
of the date of issuance thereof;
(b) investments in commercial paper rated at least P-1 by
Xxxxx'x and at least A-1 by S&P maturing within one year of the date of
issuance thereof;
(c) investments in certificates of deposit issued by any Bank or
by any United States commercial bank having capital and surplus of not
less than $100,000,000 which have a maturity of one year or less;
(d) investments in repurchase obligations with a term of not
more than 7 days for underlying securities of the types described in
subsection (a) above entered into with any bank meeting the qualifications
specified in subsection (c) above, provided all such agreements require
physical delivery of the securities securing such repurchase agreement,
except those delivered through the Federal Reserve Book Entry System;
(e) marketable general obligations of a state or municipality of
the United States, or any political subdivision of any of the foregoing,
unconditionally secured by the full faith and credit of such state or
municipality or political subdivision;
(f) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections
(a), (b), (c), (d) and (e) above;
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(g) endorsement of items for deposit or collection of commercial
paper received in the ordinary course of business;
(h) guaranties issued by the Borrower guaranteeing or otherwise
supporting the repayment of indebtedness of a Subsidiary otherwise
permitted by Section 8.7 hereof;
(i) trade receivables from time to time owing to the Borrower or
any Subsidiary created or acquired in the ordinary course of its business;
(j) guaranties by the Borrower or any Subsidiary of the
obligations of any other Subsidiary, as lessee, under any real estate
leases entered into in the ordinary course of its business;
(k) approximate present equity investments in Subsidiaries
described on Schedule 8.9 hereof;
(l) loans by the Borrower to, or other investments by the
Borrower in, any one or more Subsidiaries in the ordinary course of the
Borrower's business not otherwise permitted by this Section aggregating
not more than $25,000,000 at any one time outstanding, PROVIDED THAT, in
the case of loans to or investments in Subsidiaries who are not Guarantors
hereunder, the aggregate amount of such loans and investments shall not
exceed $10,000,000 at any one time outstanding;
(m) loans by any one or more Subsidiaries to the Borrower in the
ordinary course of such Subsidiaries' business not otherwise permitted by
this Section aggregating not more than $10,000,000 at any one time
outstanding;
(n) loans by any one or more Subsidiaries to, or other
investments by any one or more Subsidiaries in, any one or more other
Subsidiaries in the ordinary course of such lending or investing
Subsidiaries' business not otherwise permitted by this Section aggregating
not more than $500,000 at any one time outstanding;
(o) Acquisitions and Client Services Arrangements, so long as
(i) no Default or Event of Default exists or would exist after giving
effect to such Acquisition or Client Services Arrangement, (ii) it is not
a Hostile Acquisition, (iii) the Acquired Business is in or related to an
Eligible Line of Business, (iv) the Borrower shall have delivered to the
Banks an updated Schedule 6.2 to reflect any new Subsidiary resulting from
any such Acquisition or Client Services Arrangement (which Schedule 6.2
shall be deemed to automatically amend Schedule 6.2 without any further
action), (iv) the Total Consideration expended by the Borrower and its
Subsidiaries as consideration for such Acquisition or Client Services
Arrangement (A) does not aggregate more than $5,000,000 unless consented
to in writing by the Required Banks (which consent shall not be
unreasonably withheld or delayed), and (B) when taken together with the
aggregate Total Consideration expended on a cumulative basis after the
date hereof for all other Acquisitions and Client Services Arrangements
permitted under this Section 8.9(o) does not aggregate more than
$20,000,000 unless consented to in writing by the Required
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Banks (which consent shall not be unreasonably withheld or delayed), (v)
the Borrower can demonstrate that on a PRO FORMA basis (including
financial projections for the twelve months following the subject
Acquisition or Client Services Arrangement) after giving effect thereto it
will continue to comply with all the terms and conditions of the Loan
Documents, and (vi) the Borrower has provided to the Banks financial
statements of the Person whose assets or equity interests are being so
acquired, including historical financial statements, and a description of
such Person and its business;
(p) investments in joint ventures with other Persons formed to
provide goods or services in an Eligible Line of Business, and loans and
guaranties to such joint ventures, in an aggregate amount not to exceed
$5,000,000 at any one time outstanding;
(q) the Guaranties; and
(r) other investments, loans, advances and guaranties not
otherwise permitted by this Section aggregating not more than $3,000,000
at any one time outstanding.
In determining the amount of investments, acquisitions, loans, advances and
guaranties permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guaranties shall be taken at
the amount of the obligations guaranteed thereby.
SECTION 8.10. MERGERS, CONSOLIDATIONS AND SALES. The Borrower shall not,
nor shall it permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of its Property,
including any disposition of Property as part of a sale and leaseback
transaction, or in any event sell or discount (with or without recourse) any of
its notes or accounts receivable; PROVIDED, HOWEVER, that this Section shall not
apply to nor operate to prevent:
(a) the sale or lease of inventory in the ordinary course of
business;
(b) the sale, transfer, lease, or other disposition of Property
of the Borrower or any Material Subsidiary who is a Guarantor hereunder to
one another in the ordinary course of its business;
(c) any Domestic Subsidiary (including any corporation which
immediately after giving effect to an Acquisition permitted by Section
8.9(o) hereof becomes a Subsidiary) may merge or consolidate with or into
the Borrower or any other Domestic Subsidiary and any Foreign Subsidiary
(including any corporation which immediately after giving effect to an
Acquisition permitted by Section 8.9(o) hereof becomes a Subsidiary) may
merge or consolidate with or into the Borrower or any other Foreign
Subsidiary; PROVIDED that in the case of any merger or consolidation
involving the Borrower, the Borrower is the corporation surviving the
merger and in the case of any other merger involving a Wholly-owned
Subsidiary, such Wholly-owned Subsidiary is the corporation surviving such
merger;
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(d) the sale of delinquent notes or accounts receivable in the
ordinary course of business for purposes of collection only (and not for
the purpose of any bulk sale or securitization transaction);
(e) the sale, transfer, or other disposition of any tangible
personal property that, in the reasonable business judgment of the
Borrower or its Subsidiary, has become uneconomical, obsolete, or worn
out, and which is disposed of in the ordinary course of business or the
leasing or subleasing of real property, if such real property is no longer
necessary or useful for the efficient operation of its business; and
(f) in addition to any of the foregoing, the sale, transfer,
lease, or other disposition of Property of the Borrower or any Subsidiary
aggregating for the Borrower and its Subsidiaries of not more than
$5,000,000 during any fiscal year of the Borrower;
In the event of any merger permitted by Section 8.10(c) above, the Borrower
shall give the Agent and the Banks prior written notice of any such event and,
immediately after giving effect to any such merger, Schedule 6.2 of this
Agreement shall be deemed automatically amended with no further action on the
part of any Person, to exclude reference to any such Subsidiary merged out of
existence. So long as no Default or Event of Default has occurred and is
continuing or would arise as a result thereof, upon the written request of the
Borrower, the Agent shall release its Lien on any Property sold, transferred or
conveyed pursuant to the provisions of subsections (a), (d), (e) or (f) above.
SECTION 8.11. MAINTENANCE OF SUBSIDIARIES. The Borrower shall not assign,
sell or transfer, nor shall it permit any Subsidiary to issue, assign, sell or
transfer, any shares of capital stock of a Material Subsidiary; PROVIDED,
HOWEVER, that the foregoing shall not operate to prevent (a) the Lien on the
capital stock of each Subsidiary granted to the Agent pursuant to the Collateral
Documents, (b) the issuance, sale and transfer to any person of any shares of
capital stock of a Subsidiary solely for the purpose of qualifying, and to the
extent legally necessary to qualify, such person as a director of such
Subsidiary (or other similar issuance of shares as required by applicable law),
and (c) any transaction permitted by Section 8.10(c) above.
SECTION 8.12. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS. The
Borrower shall not, nor shall it permit any Subsidiary to, (a) declare or pay
any dividends on or make any other distributions in respect of any class or
series of its capital stock or other equity interests (other than dividends
payable solely in its capital stock) or (b) directly or indirectly purchase,
redeem or otherwise acquire or retire any of its capital stock or other equity
interests or any warrants, options, or similar instruments to acquire the same
(except out of the proceeds of, or in exchange for, a substantially concurrent
issue and sale of capital stock) or (c) prepay any Indebtedness for Borrowed
Money aggregating in excess of $2,000,000 (other than the prepayment of the
Loans and L/C Obligations) (collectively, "RESTRICTED PAYMENTS"); PROVIDED,
HOWEVER, that the foregoing shall not apply to or operate to prevent (i)
dividends and redemptions by the Borrower in respect of its capital stock
(collectively, "PERMITTED PAYMENTS" and individually a "PERMITTED PAYMENT") if
(x) the Agent and Banks have received the audit report and accompanying
financial statements and compliance certificate required by Section 8.5 hereof
for the Borrower's most recently completed fiscal year, (y) at the time each
such Permitted Payment is made and
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immediately after giving effect thereto, (1) the aggregate amount of all
Permitted Payments made on and after December 31, 2002, on a cumulative basis,
does not exceed $15,000,000, and (2) in the case of any redemption of the
Borrower's capital stock, the aggregate amount being redeemed by the Borrower,
when taken together with the aggregate amount of all redemptions made during the
prior 12-month period, does not exceed $5,000,000 unless, in the case of
redemptions which aggregate more than $5,000,000 but less than or equal to
$10,000,000, the Borrower's Total Leverage Ratio determined after giving effect
to such redemption is not greater than 1.75 to 1.0 and in the case of
redemptions aggregating more than $10,000,000 the Borrower's Total Leverage
Ratio determined after giving effect to such redemption is not greater than 1.5
to 1.0, and (z) no Default or Event of Default shall occur or be continuing at
the time of declaring any such dividend or making any such redemption and (ii)
dividends paid to the Borrower by its Subsidiaries.
SECTION 8.13. ERISA. The Borrower shall, and shall cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising under
ERISA pertaining to a Plan of a character which if unpaid or unperformed is
reasonably likely to result in the imposition of a Lien against any of its
Properties. The Borrower shall, and shall cause each Subsidiary to, promptly
notify the Agent of (a) the occurrence of any reportable event (as defined in
ERISA) with respect to a Plan, (b) receipt of any notice from the PBGC of its
intention to seek termination of any Plan or appointment of a trustee therefor,
(c) its intention to terminate or withdraw from any Plan, and (d) the occurrence
of any event with respect to any Plan which would result in the incurrence by
the Borrower or any Subsidiary of any material liability, fine or penalty, or
any material increase in the contingent liability of the Borrower or any
Subsidiary with respect to any post-retirement Welfare Plan benefit.
SECTION 8.14. COMPLIANCE WITH LAWS. The Borrower shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to its Properties or business operations, where any such
non-compliance, individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect or is reasonably likely to result in a Lien upon any of
their Property.
SECTION 8.15. BURDENSOME CONTRACTS WITH AFFILIATES. The Borrower shall
not, nor shall it permit any Subsidiary to, enter into any material contract,
agreement or business arrangement with any of its Affiliates on terms and
conditions which are less favorable to the Borrower or such Subsidiary than
would be usual and customary in similar contracts, agreements or business
arrangements between Persons not affiliated with each other (it being agreed
that any such arrangement with an Affiliate determined to be on an arms-length
basis by the Borrower's independent audit committee shall not be prohibited by
this Section if reasonably determined).
SECTION 8.16. NO CHANGES IN FISCAL YEAR. The Borrower shall not change its
fiscal year from its present basis without the prior written consent of the
Required Banks.
SECTION 8.17. FORMATION OF SUBSIDIARIES. Promptly upon the formation or
acquisition of any Subsidiary, the Borrower shall provide the Agent and the
Banks written notice thereof and shall do such acts and things as are required
of it to comply with Section 4 hereof, and then and
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thereafter Schedule 6.2 of this Agreement shall be deemed automatically amended,
without any further action by any Person, from and after such date to include
reference to any such Subsidiary.
SECTION 8.18. CHANGE IN THE NATURE OF BUSINESS. The Borrower shall not,
nor shall it permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of the Borrower and its
Subsidiaries, taken as a whole, would be changed in any material respect from
the general nature of the business engaged in by it as of the date of this
Agreement or as of the date such Person becomes a Subsidiary hereunder.
SECTION 8.19. USE OF LOAN PROCEEDS. The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.
SECTION 8.20. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as
provided herein, the Borrower shall not, nor shall it permit any Subsidiary to,
directly or indirectly create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of the Borrower or any Subsidiary to: (a) guarantee the Obligations, Hedging
Liability and Funds Transfer and Deposit Account Liability and grant Liens on
its assets to the Agent for the benefit of the Banks as required by Section 4
hereof; (b) in the case of any Subsidiary, pay dividends or make any other
distribution on any of such Subsidiary's capital stock or other equity interests
owned by the Borrower or any Subsidiary; (c) pay any indebtedness owed to the
Borrower or any Subsidiary; (d) make loans or advances to the Borrower or any
Subsidiary; or (e) transfer any of its property or assets to the Borrower or any
Subsidiary.
SECTION 8.21. SUBORDINATED DEBT. The Borrower shall not, nor shall it
permit any Subsidiary to, amend or modify any of the terms and conditions
relating to any Subordinated Debt or make any voluntary prepayment or
acquisition thereof or effect any voluntary redemption thereof or make any
payment on account of Subordinated Debt which is prohibited under the terms of
any instrument or agreement subordinating the same to the Obligations.
SECTION 8.22. FISCAL COVENANTS. (a) TOTAL LEVERAGE RATIO. The Borrower
shall not at any time permit the Total Leverage Ratio to be greater than 2.50 to
1.0.
(b) NET WORTH. The Borrower shall at all times maintain Net Worth of not
less than the sum of (a) $61,000,000 plus (b) 50% of Net Income for each fiscal
quarter of the Borrower ending on or after December 31, 2002, for which such Net
Income is a positive amount (i.e., there shall be no reduction to the amount of
Net Worth required to be maintained hereunder for any fiscal quarter in which
Net Income for such fiscal quarter then ended is less than zero).
(c) FIXED CHARGE COVERAGE RATIO. As of the last day of each fiscal
quarter of the Borrower, the Borrower shall maintain a Fixed Charge Coverage
Ratio for the four fiscal quarters of the Borrower then ended of not less than
(i) 1.5 to 1.0 for the period ending Xxxxx 00, 0000, (xx) 1.75 to 1.0 for the
periods ending June 30, 2003, and September 30, 2003, and (iii) 1.25 to 1.0 for
any periods ending on or after December 31, 2003; PROVIDED, HOWEVER, that at or
prior to the time of any such calculation there have not been any reductions in
the Revolving Credit
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Commitments pursuant to Section 1.13(b)(v), the Borrower shall maintain a Fixed
Charge Coverage Ratio for the four fiscal quarters of the Borrower then ended of
not less than 2.0 to 1.0.
(d) CAPITAL EXPENDITURES. The Borrower shall not, nor shall it permit
any Subsidiary to, expend or become obligated for Capital Expenditures in an
aggregate amount in excess of $15,000,000 during the fiscal year of the Borrower
ending December 31, 2003.
(e) OPERATING LEASES. The Borrower shall not, nor shall it permit any
Subsidiary to, acquire the use or possession of any Property under a lease or
similar arrangement, whether or not the Borrower or any Subsidiary has the
express or implied right to acquire title to or purchase such Property, at any
time if, after giving effect thereto, the aggregate amount of fixed rentals and
other consideration payable by the Borrower and its Subsidiaries under all such
leases and similar arrangements would exceed $25,000,000 during any fiscal year
of the Borrower. Capital Leases shall not be included in computing compliance
with this Section to the extent the Borrower's and its Subsidiaries' liability
in respect of the same is permitted by this Section 8.
SECTION 9. EVENTS OF DEFAULT AND REMEDIES.
SECTION 9.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "EVENT OF DEFAULT" hereunder:
(a) (i) default in the payment when due of all or any part of
the principal of any Note or Reimbursement Obligation (whether at the
stated maturity thereof or at any other time provided for in this
Agreement), or (ii) default for 3 days in the payment when due of all or
any part of the interest on any Note (whether at the stated maturity
thereof or at any other time provided for in this Agreement) of any
Reimbursement Obligation or of any fee or other Obligation payable
hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant set
forth in Sections 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.19, 8.21 or 8.22
hereof or of any provision in any Loan Document dealing with the use,
disposition or remittance of the proceeds of Collateral or requiring the
maintenance of insurance thereon;
(c) default in the observance or performance of any other
provision hereof or of any other Loan Document which is not remedied
within 30 days after the earlier of (i) the date on which such failure
shall first become known to any Responsible Officer of the Borrower or
(ii) written notice thereof is given to the Borrower by the Agent;
(d) any representation or warranty made herein or in any other
Loan Document or in any certificate furnished to the Agent or the Banks
pursuant hereto or thereto or in connection with any transaction
contemplated hereby or thereby proves untrue in any material respect as of
the date of the issuance or making or deemed making thereof;
(e) any event occurs or condition exists (other than those
described in subsections (a) through (d) above) which is specified as an
event of default under any of
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the other Loan Documents, or any of the Loan Documents shall for any
reason not be or shall cease to be in full force and effect or is declared
to be null and void, or any of the Collateral Documents shall for any
reason fail to create a valid and perfected Liens in favor of the Agent in
any Collateral required to be provided by Section 4.1 hereof (except as
expressly permitted by the terms thereof or an inadvertent failure to
maintain such a Lien on Collateral aggregating less than $500,000 in
value), or any Subsidiary takes any action for the purpose of terminating,
repudiating or rescinding any Loan Document executed by it or any of its
obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed
Money aggregating in excess of $1,000,000 issued, assumed or guaranteed by
the Borrower or any Subsidiary, or under any indenture, agreement or other
instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated, but after giving effect to any notice or
cure periods or waivers thereof), or any such Indebtedness for Borrowed
Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise, but after giving effect to any notice or cure
periods or waivers thereof);
(g) any judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $2,500,000 in excess of any applicable
insurance coverage shall be entered or filed against the Borrower or any
Subsidiary, or against any of its Property, and which remains
undischarged, unvacated, unbonded or unstayed for a period of 45 days;
(h) the Borrower or any Subsidiary, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $1,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent
to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities
in excess of $1,000,000 (collectively, a "MATERIAL PLAN") shall be filed
under Title IV of ERISA by the Borrower or any Subsidiary, or any other
member of its Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to administer
any Material Plan or a proceeding shall be instituted by a fiduciary of
any Material Plan against the Borrower or any Subsidiary, or any member of
its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed within 30 days thereafter;
or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated;
(i) the Borrower or any Material Subsidiary shall (i) have
entered involuntarily against it an order for relief under the United
States Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any
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proceeding seeking to have entered against it an order for relief under
the United States Bankruptcy Code, as amended, to adjudicate it insolvent,
or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors
or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) take any
corporate action in furtherance of any matter described in parts (i)
through (v) above, or (vii) fail to contest in good faith any appointment
or proceeding described in Section 9.1(j) hereof; or
(j) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any Material
Subsidiary or any substantial part of any of its Property, or a proceeding
described in Section 9.1(i) (v) shall be instituted against the Borrower
or any Material Subsidiary, and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of 60 days.
SECTION 9.2. NON-BANKRUPTCY DEFAULTS. When any Event of Default other
than those described in subsection (i) or (j) of Section 9.1 hereof has occurred
and is continuing, the Agent shall, by written notice to the Borrower: (a) if so
directed by the Required Banks, terminate the remaining Commitments and all
other obligations of the Banks hereunder on the date stated in such notice
(which may be the date thereof); (b) if so directed by the Required Banks,
declare the principal of and the accrued interest on all outstanding Notes to be
forthwith due and payable and thereupon all outstanding Notes, including both
principal and interest thereon, shall be and become immediately due and payable
together with all other amounts payable under the Loan Documents without further
demand, presentment, protest or notice of any kind; and (c) if so directed by
the Required Banks, demand that the Borrower immediately pay to the Agent the
full amount then available for drawing under each or any Letter of Credit, and
the Borrower agrees to immediately make such payment and acknowledges and agrees
that the Banks would not have an adequate remedy at law for failure by the
Borrower to honor any such demand and that the Agent, for the benefit of the
Banks, shall have the right to require the Borrower to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any Letter of Credit. The Agent, after giving notice to the Borrower
pursuant to Section 9.1(c) or this Section 9.2, shall also promptly send a copy
of such notice to the other Banks, but the failure to do so shall not impair or
annul the effect of such notice.
SECTION 9.3. BANKRUPTCY DEFAULTS. When any Event of Default described in
subsections (i) or (j) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Banks to extend
further credit pursuant to any of the terms hereof shall immediately terminate,
and the Borrower shall immediately pay to the Agent the full amount then
available for drawing under all outstanding Letters of Credit, the Borrower
acknowledging and agreeing that the Banks would not have an adequate remedy at
law for failure by the Borrower to honor any such demand and that the Banks, and
the Agent on their behalf, shall have the right to require the Borrower to
specifically perform such undertaking whether or not any draws or other demands
for payment have been made under any of the Letters of Credit.
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SECTION 9.4. COLLATERAL FOR UNDRAWN LETTERS OF CREDIT. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.10(b) or under Section 9.2 or 9.3
above, the Borrower shall forthwith pay the amount required to be so prepaid, to
be held by the Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) shall be held by the
Agent in a separate collateral account (such account, and the credit balances,
properties and any investments from time to time held therein, and any
substitutions for such account, any certificate of deposit or other instrument
evidencing any of the foregoing and all proceeds of and earnings on any of the
foregoing being collectively called the "COLLATERAL ACCOUNT") as security for,
and for application by the Agent (to the extent available) to, the reimbursement
of any payment under any Letter of Credit then or thereafter made by the Agent,
and to the payment of the unpaid balance of any Loans and all other obligations
secured by the Collateral Documents. The Collateral Account shall be held in the
name of and subject to the exclusive dominion and control of the Agent for the
benefit of the Agent and the Banks. If and when requested by the Borrower, the
Agent shall invest funds held in the Collateral Account from time to time in
direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America with a remaining
maturity of one year or less, PROVIDED that the Agent is irrevocably authorized
to sell investments held in the Collateral Account when and as required to make
payments out of the Collateral Account for application to amounts due and owing
from the Borrower to the Agent or Banks; PROVIDED, HOWEVER, that if (i) the
Borrower shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) no Letters of
Credit, Commitments, Loans or other obligations secured by the Collateral
Documents remain outstanding hereunder, then the Agent shall release to the
Borrower any remaining amounts held in the Collateral Account.
SECTION 9.5. NOTICE OF DEFAULT. The Agent shall give notice to the
Borrower under Section 9.1(c) hereof promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
SECTION 9.6. EXPENSES. The Borrower agrees to pay to the Agent and each
Bank, and any other holder of any Note outstanding hereunder, all expenses
reasonably incurred or paid by the Agent and such Bank or any such holder,
including reasonable attorneys' fees and court costs, in connection with any
Default or Event of Default by the Borrower hereunder or in connection with the
enforcement of any of the Loan Documents (including all such costs and expenses
incurred in connection with any proceeding under the United States Bankruptcy
Code involving the Borrower or any Subsidiary as a debtor thereunder).
SECTION 10. CHANGE IN CIRCUMSTANCES.
SECTION 10.1. CHANGE OF LAW. Notwithstanding any other provisions of this
Agreement or any Note, if at any time any change after the date hereof in
applicable law or any change after the date hereof in the interpretation or
administration thereof of any of the foregoing by any governmental authority,
central bank or comparable agency having jurisdiction, over such Bank or its
lending branch or the Eurodollar Loans contemplated by this Agreement (whether
or not
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having the force of law) makes it unlawful for any Bank to make or continue to
maintain any Eurodollar Loans or to perform its obligations as contemplated
hereby, such Bank shall promptly give notice thereof to the Borrower describing
in reasonable detail the basis for such Bank's determination and such Bank's
obligations to make or maintain Eurodollar Loans under this Agreement shall be
suspended until it is no longer unlawful for such Bank to make or maintain
Eurodollar Loans. The Borrower shall, within 5 days (or sooner if applicable law
so requires) after written demand from the affected Bank or the Agent, prepay on
demand the outstanding principal amount of any such affected Eurodollar Loans,
together with all interest accrued thereon and all other amounts then due and
payable to such Bank under this Agreement; PROVIDED, HOWEVER, subject to all of
the terms and conditions of this Agreement, the Borrower may then elect to
borrow the principal amount of the affected Eurodollar Loans from such Bank by
means of Base Rate Loans from such Bank, which Base Rate Loans shall not be made
ratably by the Banks but only from such affected Bank and PROVIDED, FURTHER,
that the Borrower shall have no obligation under Section 1.12 with respect to
any such prepayment.
SECTION 10.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN, OR
INADEQUACY OF, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Eurodollar Loans:
(a) the Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the interbank
eurodollar market by reason of circumstances affecting the interbank
Eurodollar market generally for such Interest Period, or that by reason of
circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or
(b) the Required Banks advise the Agent that (i) LIBOR as
determined by the Agent will not adequately and fairly reflect the cost to
such Banks of funding their Eurodollar Loans for such Interest Period or
(ii) that the making or funding of Eurodollar Loans become impracticable,
then the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make Eurodollar Loans shall be suspended.
SECTION 10.3. INCREASED COST AND REDUCED RETURN. (a) If, on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Fixed Rate Loans, its Notes,
its Letter(s) of Credit, or its participation in any thereof, any
Reimbursement Obligations owed to it or its obligation to make Fixed Rate
Loans, issue a Letter of Credit, or to participate therein, or shall
change the basis of taxation of payments to any Bank (or its Lending
Office) of the
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principal of or interest on its Fixed Rate Loans, Letter(s) of Credit, or
participations therein or any other amounts due under this Agreement or
any other Loan Document in respect of its Fixed Rate Loans, Letter(s) of
Credit, any participation therein, any Reimbursement Obligations owed to
it, or its obligation to make Fixed Rate Loans, or issue a Letter of
Credit, or acquire participations therein (except for such taxes as may be
measured on the overall net income of such Bank or its Lending Office
imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which such Bank's principal executive office or
Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any
such requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Fixed Rate Loans any such
requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, any Bank (or its Lending Office) or shall impose on any Bank (or its
Lending Office) or on the interbank market any other condition affecting
its Fixed Rate Loans, its Notes, its Letter(s) of Credit, or its
participation in any thereof, any Reimbursement Obligation owed to it, or
its obligation to make Fixed Rate Loans, or to issue a Letter of Credit,
or to participate therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Fixed Rate Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Bank to be material, then, within 60 days after written
demand by such Bank (with a copy to the Agent), the Borrower shall be obligated
to pay to such Bank such additional amount or amounts as will compensate such
Bank for such increased cost or reduction; PROVIDED, HOWEVER, that the Borrower
shall not be obligated to pay any such amount or amounts to the extent such
additional cost or payment was incurred or paid by such Bank more than ninety
(90) days prior to the date of the delivery of the certificate referred to in
the immediately following sentence (nothing herein to impair or otherwise affect
the Borrower's liability hereunder for costs or payments subsequently incurred
or paid by such Bank). If a Bank makes such a claim for compensation, it shall
provide to the Borrower (with a copy to the Agent) substantially concurrently
with such demand a certificate setting forth the computation of the increased
cost or reduced amount as a result of any event mentioned herein in reasonable
detail and such certificate shall be conclusive if reasonably determined absent
manifest error.
(b) If, after the date hereof, any Bank or the Agent shall have determined
that the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Lending Office) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has had the effect of reducing the rate of
return on such Bank's capital as a consequence of its obligations hereunder to a
level below that which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such
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Bank's policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within 30 days after written demand
by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction; PROVIDED, HOWEVER, that the Borrower shall not be obligated to
compensate such Bank to the extent its rate of return was so reduced more than
ninety (90) days prior to the date of such demand (nothing herein to impair or
otherwise affect the Borrower's liability hereunder to compensate for subsequent
reductions in such Bank's rate of return).
(c) A certificate of a Bank claiming compensation under this Section 10.3
and setting forth the additional amount or amounts to be paid to it hereunder
shall be PRIMA FACIE correct. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
SECTION 10.4. LENDING OFFICES. Each Bank may, at its option, elect to make
its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "LENDING OFFICE") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Agent.
SECTION 10.5. DISCRETION OF BANK AS TO MANNER OF FUNDING. Notwithstanding
any other provision of this Agreement, each Bank shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder with respect to Eurodollar Loans shall be made as if
each Bank had actually funded and maintained each Eurodollar Loan through the
purchase of deposits in the interbank eurodollar market having a maturity
corresponding to such Loan's Interest Period and bearing an interest rate equal
to LIBOR for such Interest Period.
SECTION 10.6. BANK'S DUTY TO MITIGATE. Each Bank agrees that, as promptly
as practicable after it becomes aware of the occurrence of an event or the
existence of a condition that would cause it to be affected under Section 10.1,
10.2 or 10.3 hereof, such Bank will, after notice to the Borrower, to the extent
not inconsistent with such Bank's internal policies and customary business
practices, use its reasonable best efforts to make, fund or maintain the
affected Fixed Rate Loan through another lending office of such Bank if as a
result thereof the unlawfulness which would otherwise require payment of such
Loan pursuant to Section 10.1 hereof would cease to exist or the circumstances
which would otherwise terminate such Bank's obligation to make such Loan under
Section 10.2 hereof would cease to exist or the increased costs which would
otherwise be required to be paid in respect of such Loan pursuant to Section
10.3 hereof would be materially reduced, and if, as determined by such Bank, in
its sole discretion, the making, funding or maintaining of such Loan through
such other lending office would not otherwise adversely affect such Loan or such
Bank. The Borrower hereby agrees to pay all reasonable expenses incurred by each
such Bank in utilizing another lending office pursuant to this Section 10.6.
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SECTION 11. THE AGENT AND ISSUING BANK.
SECTION 11.1. APPOINTMENT AND AUTHORIZATION OF AGENT. Each Bank hereby
appoints Xxxxxx Trust and Savings Bank as the Agent under the Loan Documents and
hereby authorizes the Agent to take such action as Agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. The Banks expressly agree that the Agent is not acting as a fiduciary
of the Banks in respect of the Loan Documents, the Borrower or otherwise, and
nothing herein or in any of the other Loan Documents shall result in any duties
or obligations on the Agent or any of the Banks except as expressly set forth
herein.
SECTION 11.2. AGENT AND ITS AFFILIATES. The Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any other
Bank and may exercise or refrain from exercising such rights and power as though
it were not the Agent, and the Agent and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with the
Borrower or any Affiliate of the Borrower as if it were not the Agent under the
Loan Documents. The term "BANK" as used herein and in all other Loan Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank. References in Section 1 hereof to the Agent's
Loans, or to the amount owing to the Agent for which an interest rate is being
determined, refer to the Agent in its individual capacity as a Bank.
SECTION 11.3. ACTION BY AGENT. If the Agent receives from the Borrower a
written notice of an Event of Default pursuant to Section 8.5 hereof, the Agent
shall promptly give each of the Banks written notice thereof. The obligations of
the Agent under the Loan Documents are only those expressly set forth therein.
Without limiting the generality of the foregoing, the Agent shall not be
required to take any action hereunder with respect to any Default or Event of
Default, except as expressly provided in Sections 9.2, 9.3 and 9.5. Upon the
occurrence of an Event of Default, the Agent shall take such action to enforce
its Lien on the Collateral and to preserve and protect the Collateral as may be
directed by the Required Banks. Unless and until the Required Banks give such
direction, the Agent may (but shall not be obligated to) take or refrain from
taking such actions as it deems appropriate and in the best interest of all the
Banks. In no event, however, shall the Agent be required to take any action in
violation of applicable law or of any provision of any Loan Document, and the
Agent shall in all cases be fully justified in failing or refusing to act
hereunder or under any other Loan Document unless it first receives any further
assurances of its indemnification from the Banks that it may require, including
prepayment of any related expenses and any other protection it requires against
any and all costs, expense, and liability which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall be entitled to
assume that no Default or Event of Default exists unless notified in writing to
the contrary by a Bank or the Borrower. In all cases in which the Loan Documents
do not require the Agent to take specific action, the Agent shall be fully
justified in using its discretion in failing to take or in taking any action
thereunder. Any instructions of the Required Banks, or of any other group of
Banks called for under the specific provisions of the Loan Documents, shall be
binding upon all the Banks and the holders of the Obligations.
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SECTION 11.4. CONSULTATION WITH EXPERTS. The Agent may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 11.5. LIABILITY OF AGENT; CREDIT DECISION. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for any
action taken or not taken by it in connection with the Loan Documents: (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrower or any Subsidiary contained herein or in any other
Loan Document; (iii) the satisfaction of any condition specified in Section 7
hereof, except receipt of items required to be delivered to the Agent; or (iv)
the validity, effectiveness, genuineness, enforceability, perfection, value,
worth or collectibility hereof or of any other Loan Document or of any other
documents or writing furnished in connection with any Loan Document or of any
Collateral; and the Agent makes no representation of any kind or character with
respect to any such matter mentioned in this sentence. The Agent may execute any
of its duties under any of the Loan Documents by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Banks, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, other
document or statement (whether written or oral) believed by it to be genuine or
to be sent by the proper party or parties. In particular and without limiting
any of the foregoing, the Agent shall have no responsibility for confirming the
accuracy of any compliance certificate or other document or instrument received
by it under the Loan Documents. The Agent may treat the payee of any Note as the
holder thereof until written notice of transfer shall have been filed with the
Agent signed by such payee in form satisfactory to the Agent. Each Bank
acknowledges that it has independently and without reliance on the Agent or any
other Bank, and based upon such information, investigations and inquiries as it
deems appropriate, made its own credit analysis and decision to extend credit to
the Borrower in the manner set forth in the Loan Documents. It shall be the
responsibility of each Bank to keep itself informed as to the creditworthiness
of the Borrower and its Subsidiaries, and the Agent shall have no liability to
any Bank with respect thereto.
SECTION 11.6. INDEMNITY. The Banks shall ratably, in accordance with their
respective Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by it under any Loan
Document or in connection with the transactions contemplated thereby, regardless
of when asserted or arising, except to the extent they are promptly reimbursed
for the same by the Borrower and except to the extent that any event giving rise
to a claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. The obligations of the Banks under this Section shall
survive termination of this Agreement. The Agent shall be entitled to offset
amounts received for the account of a Bank under this Agreement against unpaid
amounts due from such Bank to the Agent hereunder (whether as
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fundings of participations, indemnities or otherwise), but shall not be entitled
to offset against amounts owed to the Agent by any Bank arising outside of this
Agreement and the other Loan Documents.
SECTION 11.7. RESIGNATION OF AGENT AND SUCCESSOR AGENT. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of the Agent, the Required Banks shall have
the right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation then
the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be any Bank hereunder or any commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of its
appointment as the Agent hereunder, such successor Agent shall thereupon succeed
to and become vested with all the rights and duties of the retiring Agent under
the Loan Documents, and the retiring Agent shall be discharged from its duties
and obligations thereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 11 and all protective provisions of the
other Loan Documents shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent, but no successor Agent shall in
any event be liable or responsible for any actions of its predecessor. If the
Agent resigns and no successor is appointed, the rights and obligations of such
Agent shall be automatically assumed by the Required Banks and (i) the Borrower
shall be directed to make all payments due each Bank hereunder directly to such
Bank and (ii) the Agent's rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Banks as their interests may
appear.
SECTION 11.8. ISSUING BANK. The Issuing Bank shall act on behalf of the
Banks with respect to any Letters of Credit issued by it and the documents
associated therewith. The Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this Section 11 with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and the Applications
pertaining to such Letters of Credit as fully as if the term "Agent", as used in
this Section 11, included Issuing Bank with respect to such acts or omissions
and (ii) as additionally provided in this Agreement with respect to such Issuing
Bank.
SECTION 11.9. HEDGING LIABILITY AND FUNDS TRANSFER AND DEPOSIT ACCOUNT
LIABILITY ARRANGEMENTS. By virtue of a Bank's execution of this Agreement or an
assignment agreement pursuant to Section 12.12 hereof, as the case may be, any
Affiliate of such Bank with whom the Borrower or any Subsidiary has entered into
an agreement creating Hedging Liability or Funds Transfer and Deposit Account
Liability shall be deemed a Bank party hereto for purposes of any reference in a
Loan Document to the parties for whom the Agent is acting, it being understood
and agreed that the rights and benefits of such Affiliate under the Loan
Documents consist exclusively of such Affiliate's right to share in payments and
collections out of the Collateral and the Guaranties as more fully set forth in
Section 3 hereof. In connection with any such distribution of payments and
collections, the Agent shall be entitled to assume no amounts are due to any
Bank or its Affiliate with respect to Hedging Liability or Funds Transfer and
Deposit
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Account Liability unless such Bank or its Affiliate has notified the Agent in
writing of the amount of any such liability owed to it or its Affiliate prior to
such distribution.
SECTION 11.10. DESIGNATION OF ADDITIONAL AGENTS. The Agent shall have the
continuing right, for purposes hereof, at any time and from time to time to
designate one or more of the Banks (and/or its or their Affiliates) as
"syndication agents," "documentation agents," "arrangers" or other designations
for purposes hereto, but such designation shall have no substantive effect, and
such Banks and their Affiliates shall have no additional powers, duties or
responsibilities as a result thereof.
SECTION 11.11. AGENT'S RELATIONSHIP WITH BORROWER. The provisions of this
Section 11 shall be binding upon and sets forth agreements by and among each
Bank and the Agent. The provisions of this Section 11 (except as contemplated by
Section 11.7 hereof) shall in no way amend, alter, modify, restrict or otherwise
affect the agreements of the Borrower with the Agent and with the Banks
otherwise set forth in this Agreement.
SECTION 12. MISCELLANEOUS.
SECTION 12.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING. Except
as otherwise required by law and subject to Section 12.1(b) hereof, each payment
by the Borrower under this Agreement or the other Loan Documents shall be made
without withholding for or on account of any present or future taxes (other than
overall net income taxes on the recipient) imposed by or within the jurisdiction
in which the Borrower is domiciled, any jurisdiction from which the Borrower
makes any payment, or (in each case) any political subdivision or taxing
authority thereof or therein. If any such withholding is so required, the
Borrower shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues
thereon and forthwith pay such additional amount as may be necessary to ensure
that the net amount actually received by each Bank and the Agent free and clear
of such taxes (including such taxes on such additional amount) is equal to the
amount which that Bank or the Agent (as the case may be) would have received had
such withholding not been made. If the Agent or any Bank pays any amount in
respect of any such taxes, penalties or interest, the Borrower shall reimburse
the Agent or such Bank for that payment on demand in the currency in which such
payment was made. If the Borrower pays any such taxes, penalties or interest, it
shall deliver official tax receipts evidencing that payment or certified copies
thereof to the Bank or Agent on whose account such withholding was made (with a
copy to the Agent if not the recipient of the original) on or before the
thirtieth day after payment.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Bank that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrower and the Agent on or before the date the initial Credit
Event is made hereunder or, if later, the date such financial institution
becomes a Bank hereunder, two duly completed and signed copies of (i) either
Form W-8 BEN (relating to such Bank and entitling it to a complete exemption
from withholding under the Code on all amounts to be received by such Bank,
including fees, pursuant to the Loan Documents and the Obligations) or Form W-8
ECI (relating to all amounts to be received by such Bank, including fees,
pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Bank is claiming exemption from
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United States withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of "portfolio interest", a Form W-8 BEN, or any successor
form prescribed by the Internal Revenue Service, and a certificate representing
that such Bank is not a bank for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code). Thereafter and
from time to time, each Bank shall submit to the Borrower and the Agent such
additional duly completed and signed copies of one or the other of such Forms
(or such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) and such other certificates as may be (i)
requested by the Borrower in a written notice, directly or through the Agent, to
such Bank and (ii) required under then-current United States law or regulations
to avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Bank, including fees, pursuant to the Loan
Documents or the Obligations. Upon the request of the Borrower or the Agent,
each Bank that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrower and the Agent a
certificate to the effect that it is such a United States person.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Bank determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or the Agent any form or certificate that such Bank is obligated to
submit pursuant to subsection (b) of this Section 12.1 or that such Bank is
required to withdraw or cancel any such form or certificate previously submitted
or any such form or certificate otherwise becomes ineffective or inaccurate,
such Bank shall promptly notify the Borrower and Agent of such fact and the Bank
shall to that extent not be obligated to provide any such form or certificate
and will be entitled to withdraw or cancel any affected form or certificate, as
applicable.
SECTION 12.2. NO WAIVER, CUMULATIVE REMEDIES. No delay or failure on the
part of the Agent or any Bank or on the part of the holder or holders of any of
the Obligations in the exercise of any power or right under any Loan Document
shall operate as a waiver thereof or as an acquiescence in any default, nor
shall any single or partial exercise of any power or right preclude any other or
further exercise thereof or the exercise of any other power or right. The rights
and remedies hereunder of the Agent, the Banks and of the holder or holders of
any of the Obligations are cumulative to, and not exclusive of, any rights or
remedies which any of them would otherwise have.
SECTION 12.3. NON-BUSINESS DAYS. Subject to Section 1.8 hereof, if any
payment hereunder becomes due and payable on a day which is not a Business Day,
the due date of such payment shall be extended to the next succeeding Business
Day on which date such payment shall be due and payable. In the case of any
payment of principal falling due on a day which is not a Business Day, interest
on such principal amount shall continue to accrue during such extension at the
rate per annum then in effect, which accrued amount shall be due and payable on
the next scheduled date for the payment of interest.
SECTION 12.4. DOCUMENTARY TAXES. The Borrower agrees to pay on demand any
documentary, stamp or similar taxes payable in respect of this Agreement or any
other Loan
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Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
SECTION 12.5. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.
SECTION 12.6. SURVIVAL OF INDEMNITIES. All indemnities and other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans and Letters of Credit,
including, but not limited to, Sections 1.12, 10.3 and 12.15 hereof, shall
survive in accordance with their terms the termination of this Agreement and the
other Loan Documents and the payment of the Obligations.
SECTION 12.7. SHARING OF SET-OFF. Each Bank agrees with each other Bank a
party hereto that if such Bank shall receive and retain any payment, whether by
set-off or application of deposit balances or otherwise, on any of the Loans or
Reimbursement Obligations in excess of its ratable share of payments on all such
Obligations then outstanding to the Banks, then such Bank shall purchase for
cash at face value, but without recourse, ratably from each of the other Banks
such amount of the Loans or Reimbursement Obligations, or participations
therein, held by each such other Banks (or interest therein) as shall be
necessary to cause such Bank to share such excess payment ratably with all the
other Banks; PROVIDED, HOWEVER, that if any such purchase is made by any Bank,
and if such excess payment or part thereof is thereafter recovered from such
purchasing Bank, the related purchases from the other Banks shall be rescinded
ratably and the purchase price restored as to the portion of such excess payment
so recovered, but without interest. For purposes of this Section, amounts owed
to or recovered by the Issuing Bank in connection with Reimbursement Obligations
in which Banks have been required to fund their participation shall be treated
as amounts owed to or recovered by the Issuing Bank as a Bank hereunder.
SECTION 12.8. NOTICES. Except as otherwise specified herein, all notices
hereunder and under the other Loan Documents shall be in writing (including,
without limitation, notice by telecopy) and shall be given to the relevant party
at its address or telecopier number set forth below, or such other address or
telecopier number as such party may hereafter specify by notice to the Agent and
the Borrower given by courier, by United States certified or registered mail, by
telecopy or by other telecommunication device capable of creating a written
record of such notice and its receipt. Notices under the Loan Documents to the
Banks and the Agent shall be addressed to their respective addresses or
telecopier numbers set forth on the signature pages hereof, and to the Borrower
to:
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APAC Customer Services, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies (in case of notices of default) to:
APAC Customer Services, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illlinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, 5 days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.
SECTION 12.9. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 12.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the Borrower and its successors and assigns, and shall inure to the benefit of
the Agent and each of the Banks and the benefit of their respective successors
and assigns, including any subsequent holder of any of the Obligations. The
Borrower may not assign any of its rights or obligations under any Loan Document
without the written consent of all of the Banks.
SECTION 12.11. PARTICIPANTS. Each Bank shall have the right at its own cost
to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments and/or participations in Swing Loans held by such Bank at any
time and from time to time to one or more other Persons;
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provided that no such participation shall relieve any Bank of any of its
obligations under this Agreement, and, provided, further that no such
participant shall have any rights under this Agreement except as provided in
this Section, and the Agent shall have no obligation or responsibility to such
participant. Any agreement pursuant to which such participation is granted shall
provide that the granting Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower under this Agreement and the other Loan
Documents including, without limitation, the right to approve any amendment,
modification or waiver of any provision of the Loan Documents, except that such
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of the Loan Documents that would reduce the amount of or
postpone any fixed date for payment of any Obligation in which such participant
has an interest. Any party to which such a participation has been granted shall
have the benefits of Section 1.12 and Section 10.3 hereof. The Borrower
authorizes each Bank to disclose to any participant or prospective participant
under this Section any financial or other information pertaining to the Borrower
so long as such purchaser or prospective purchaser agrees to be bound by Section
12.21 hereof.
SECTION 12.12. ASSIGNMENT OF COMMITMENTS BY BANKS. Each Bank shall have the
right at any time, with the prior consent of the Agent (which consent of the
Agent shall not be unreasonably withheld) and, so long as no Event of Default
then exists, the Borrower (which consent of the Borrower shall not be
unreasonably withheld) to sell, assign, transfer or negotiate all or any part of
its Commitments (including the same percentage of its Notes, outstanding Loans
and Reimbursement Obligations owed to it) to one or more commercial banks or
other financial institutions or investors; PROVIDED, HOWEVER, that in order to
make any such assignment (i) unless the assigning Bank is assigning all of its
Commitments, the assigning Bank shall retain at least $5,000,000 in outstanding
Loans, interests in Letters of Credit and unused Commitments, (ii) the assignee
bank shall have outstanding Loans, interests in Letters of Credit and unused
Commitments of at least $5,000,000, (iii) the assignment of a Revolving Note
shall cover the same percentage of such Bank's Revolving Credit Commitment,
Revolving Loans and interests in Letters of Credit, (iv) the Swing Loans and
Swing Line Commitment shall only be assigned (if at all) in total, (v) each such
assignment shall be evidenced by a written agreement (substantially in the form
attached hereto as Exhibit G or in such other form acceptable to the Agent)
executed by such assigning Bank, such assignee bank or banks, the Agent and, if
required as provided above, the Borrower, which agreement shall specify in each
instance the portion of the Obligations which are to be assigned to the assignee
bank and the portion of the Commitments of the assigning Bank to be assumed by
the assignee bank or banks, and (vi) the assigning Bank shall pay to the Agent a
processing fee of $3,500 and any out-of-pocket attorneys' fees and expenses
incurred by the Agent in connection with any such assignment agreement. Any such
assignee shall become a Bank for all purposes hereunder to the extent of the
Commitments it assumes and the assigning Bank shall be released from its
obligations, and will have released its rights, under the Loan Documents to the
extent of such assignment. The Borrower authorizes each Bank to disclose to any
purchaser or prospective purchaser of an interest in the Loans and Reimbursement
Obligations owed to it or its Commitments under this Section any financial or
other information pertaining to the Borrower so long as such purchaser or
prospective purchaser agrees to be bound by Section 12.21 hereof.
Notwithstanding anything herein to the contrary, (i) any assigning Bank may,
without obtaining the Borrower's consent, assign all or a portion of its
Commitments (and related outstanding Obligations hereunder) to its parent entity
and/or any
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affiliate of such Bank which is at least 80% owned by such Bank or its parent
entity or to any one or more Banks and (ii) nothing in this Agreement shall
prevent or prohibit any Bank from pledging its Loans and Notes to a Federal
Reserve Bank in support of borrowings made by such Bank from such Federal
Reserve Bank.
SECTION 12.13. AMENDMENTS. Any provision of this Agreement or the other
Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrower, (b) the Required Banks,
(c) if the rights or duties of the Agent are affected thereby, the Agent, and
(d) if the rights or duties of the Issuing Bank are affected thereby, the
Issuing Bank; provided that:
(i) no amendment or waiver pursuant to this Section 12.13
shall (A) increase any Commitment of any Bank without the consent of such
Bank or (B) reduce the amount of or postpone the due date for any
scheduled payment of any principal of or interest on any Loan or of any
Reimbursement Obligation or of any fee payable hereunder without the
consent of the Bank to which such payment is owing or which has committed
to make such Loan or Letter of Credit (or participate therein) hereunder
or (c) reduce the amount of or postpone the due date for any Commitment
reduction required by Section 1.13(b) hereof; and
(ii) no amendment or waiver pursuant to this Section 12.13
shall, unless signed by each Bank, change the definitions of Revolving
Credit Termination Date, or Required Banks, change the provisions of this
Section 12.13, release any material Guarantor or all or any substantial
part of the Collateral (except as otherwise provided for in the Loan
Documents), or affect the number of Banks required to take any action
hereunder or under any other Loan Document.
SECTION 12.14. HEADINGS. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
SECTION 12.15. COSTS AND EXPENSES. The Borrower agrees to pay all
reasonable costs and expenses of the Agent in connection with the preparation,
negotiation, and administration of the Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent, in
connection with the preparation and execution of the Loan Documents, and any
amendment, waiver or consent related thereto, whether or not the transactions
contemplated herein are consummated, together with any fees and charges suffered
or incurred by the Agent in connection with periodic environmental audits, fixed
asset appraisals, title insurance policies, collateral filing fees and lien
searches. The Borrower further agrees to indemnify the Agent, each Bank, and
their respective directors, officers and employees, against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor,
whether or not the indemnified Person is a party thereto, or any settlement
arrangement arising from or relating to any such litigation) which any of them
may pay or incur arising out of or relating to any Loan Document or any of the
transactions contemplated thereby or the direct or indirect application or
proposed application of the proceeds of any Loan or Letter of Credit, other than
those which arise (i) from the gross negligence or willful misconduct of, or
material breach of the Loan Documents by, the party
-66-
claiming indemnification or (ii) solely in connection with litigation solely
between the Banks. The Borrower, upon demand by the Agent or a Bank at any time,
shall reimburse the Agent or such Bank for any reasonable legal or other
expenses incurred in connection with investigating or defending against any of
the foregoing (including any settlement costs relating to the foregoing) except
if the same is directly due to the gross negligence or willful misconduct of the
party to be indemnified. The obligations of the Borrower under this Section
shall survive the termination of this Agreement.
SECTION 12.16. SET-OFF. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, each Bank and each subsequent holder of any
Obligation is hereby authorized by the Borrower at any time or from time to
time, without notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set-off and to appropriate and to apply any
and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts, and in whatever currency denominated) and any
other indebtedness at any time held or owing by that Bank or that subsequent
holder to or for the credit or the account of the Borrower, whether or not
matured, against and on account of the Obligations of the Borrower to that Bank
or that subsequent holder under the Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with the
Loan Documents, irrespective of whether or not (a) that Bank or that subsequent
holder shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or Notes and other amounts due hereunder shall have become
due and payable pursuant to Section 9 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
SECTION 12.17. ENTIRE AGREEMENT. The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.
SECTION 12.18. GOVERNING LAW. This Agreement and the other Loan Documents,
and the rights and duties of the parties hereto, shall be construed and
determined in accordance with the laws of the State of Illinois.
SECTION 12.19. SEVERABILITY OF PROVISIONS. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 12.20. EXCESS INTEREST. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount in excess of the
maximum amount of interest permitted by applicable law to be charged for the use
or detention, or the forbearance in the collection, of all or any portion of the
Loans or other obligations outstanding under this Agreement or any other Loan
Document ("EXCESS INTEREST"). If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section 12.20 shall govern and control;
(b) neither the Borrower nor any guarantor or endorser
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shall be obligated to pay any Excess Interest; (c) any Excess Interest that the
Agent or any Bank may have received hereunder shall, at the option of the Agent,
be (i) applied as a credit against the then outstanding principal amount of
Loans hereunder, accrued and unpaid interest thereon (not to exceed the maximum
amount permitted by applicable law) and any other obligations, or all of the
foregoing; (ii) refunded to the Borrower, or (iii) any combination of the
foregoing; (d) the interest rate payable hereunder or under any other Loan
Document shall be automatically subject to reduction to the maximum lawful
contract rate allowed under applicable usury laws, and this Agreement and the
other Loan Documents shall be deemed to have been, and shall be, reformed and
modified to reflect such reduction in the relevant interest rate; and (e)
neither the Borrower nor any guarantor or endorser shall have any action against
the Agent or any Bank for any damages whatsoever arising out of the payment or
collection of any Excess Interest.
SECTION 12.21. CONFIDENTIALITY. Any information disclosed by the Borrower
or any of its Subsidiaries to the Agent or any Bank which was designated
proprietary or confidential at the time of its receipt by the Agent or such
Bank, and which it is not otherwise in the public domain, shall not be disclosed
by the Agent or such Bank to any other Person except (i) to its independent
accountants and legal counsel (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential), (ii) pursuant
to statutory and regulatory requirements, (iii) pursuant to any mandatory court
order, subpoena or other legal process, (iv) to the Agent or any other Bank, (v)
pursuant to any agreement heretofore or hereafter made between such Bank and the
Borrower which permits such disclosure, (vi) in connection with the exercise of
any remedy under the Loan Documents, or (vii) subject to an agreement containing
provisions substantially the same as those of this Section, to any participant
in or assignee of, or prospective participant in or assignee of, any Obligation
or Commitments.
SECTION 12.22. CONSTRUCTION. Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
Collateral Document, the covenants and agreements contained herein being in
addition to and not in substitution for the covenants and agreements contained
in the Collateral Documents (provided that, in the case of any provisions of the
Collateral Documents irreconciably inconsistent with this Agreement, this
Agreement shall govern and control).
SECTION 12.23. LENDER'S OBLIGATIONS SEVERAL. The obligations of the Banks
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks a partnership, association, joint venture or other entity.
SECTION 12.24. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. The
Borrower hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois state
court sitting in the Xxxx County, Illinois, for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby and hereby submits
to the personal jurisdiction of such courts. The Borrower 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 proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been
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brought in an inconvenient forum. THE BORROWER, THE AGENT AND EACH BANK HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
SECTION 12.25. AMENDMENT AND RESTATEMENT. This Agreement shall become
effective on the Effective Date and shall supersede all provisions of the
Original Credit Agreement as of such date. From and after the Effective Date all
references made to the Original Credit Agreement in any Loan Document or in any
other instrument or document shall, without more, be deemed to refer to this
Agreement. The Borrower heretofore executed and delivered to the Agent certain
Collateral Documents. The Borrower hereby acknowledges and agrees that the Liens
created and provided for by the Collateral Documents continue to secure, among
other things, the Obligations arising under this Agreement; and the Collateral
Documents and the rights and remedies of the Agent thereunder, the obligations
of the Borrower thereunder, and the Liens created and provided for thereunder
remain in full force and effect and shall not be affected, impaired or
discharged hereby. Nothing herein contained shall in any manner affect or impair
the priority of the liens and security interests created and provided for by the
Collateral Documents as to the indebtedness which would be secured thereby prior
to giving effect to this Agreement. Without limiting the foregoing, the parties
to this Agreement hereby acknowledge and agree that the "Credit Agreement" and
"Notes" referred to in any Collateral Documents shall from and after the date
hereof be deemed a reference to this Agreement and the Notes issued hereunder.
[SIGNATURE PAGES TO FOLLOW]
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 20th day of December, 2002.
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
S-1
Accepted and agreed to as of the day and year last above written.
XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and as
Agent
By
Name: Xxx Xxxxx
Title: Vice President
Address:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with notices of Borrowing requests to:
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-2
U.S. BANK NATIONAL ASSOCIATION
By
Name
-----------------------------------
Title
----------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Attention:
-----------------------------
Telecopy: (312)_________________________
Telephone: (312)_________________________
S-3
BANK OF AMERICA, N.A.
By
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
Address:
Bank of America
IL1-231-06-33
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
S-4
LASALLE BANK NATIONAL ASSOCIATION
By
Name
-----------------------------------
Title
----------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Attention:
-----------------------------
Telecopy: (312)_________________________
Telephone: (312)_________________________
S-5
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Bank]
[Address]
Attention:
Reference is made to the Amended and Restated Credit Agreement, dated as of
December 20, 2002, among APAC Customer Services, Inc., the Banks party thereto,
and Xxxxxx Trust and Savings Bank, as Agent (the "CREDIT AGREEMENT").
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Credit Agreement. [The Borrower has failed to pay its
Reimbursement Obligation in the amount of $_________. Your Bank's Percentage of
the unpaid Reimbursement Obligation is $_________] or [The undersigned has been
required to return a payment by the Borrower of a Reimbursement Obligation in
the amount of $________. Your Bank's Percentage of the returned Reimbursement
Obligation is $_________.]
Very truly yours,
XXXXXX TRUST AND SAVINGS BANK, as Issuing
Bank
By
Name
-----------------------------------
Title
----------------------------------
EXHIBIT B
NOTICE OF BORROWING
Date: ______________, ____
To: Xxxxxx Trust and Savings Bank, as Agent
for the Banks parties to the Amended and
Restated Credit Agreement dated as of
December 20, 2002 (as extended, renewed,
amended or restated from time to time,
the "CREDIT AGREEMENT") among APAC
Customer Services, Inc., certain Banks
which are signatories thereto, and
Xxxxxx Trust and Savings Bank, as Agent
Ladies and Gentlemen:
The undersigned, APAC Customer Services, Inc. (the "BORROWER"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.5 of the
Credit Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is ___________, ____.
2. The aggregate amount of the proposed Borrowing is $______________.
3. The Borrowing is being advanced under the Revolving Credit.
4. The Borrowing is to be comprised of $___________ of [BASE RATE]
[EURODOLLAR] Loans.
[5. THE DURATION OF THE INTEREST PERIOD FOR THE EURODOLLAR LOANS
INCLUDED IN THE BORROWING SHALL BE ____________ MONTHS.]
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:
(a) the representations and warranties of the Borrower contained in
Section 6 of the Credit Agreement are true and correct as though made on
and as of such date (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and
correct as of such date); and
(b) no Default or Event of Default has occurred and is continuing or
would result from such proposed Borrowing.
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
S-2
EXHIBIT C
NOTICE OF CONVERSION/CONTINUATION
Date: ____________, ____
To: Xxxxxx Trust and Savings Bank, as Agent
for the Banks parties to the Amended and
Restated Credit Agreement dated as of
December 20, 2002 (as extended, renewed,
amended or restated from time to time,
the "CREDIT AGREEMENT") among APAC
Customer Services, Inc., certain Banks
which are signatories thereto and Xxxxxx
Trust and Savings Bank, as Agent
Ladies and Gentlemen:
The undersigned, APAC Customer Services, Inc. (the "BORROWER"), refers to
the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives you notice irrevocably, pursuant to Section 1.5 of the
Credit Agreement, of the [CONVERSION] [CONTINUATION] of the Loans specified
herein, that:
1. The conversion/continuation Date is __________, ____.
2. The aggregate amount of the Revolving Loans to be
[CONVERTED] [CONTINUED] is $--------------.
3. The Loans are to be [CONVERTED INTO] [CONTINUED AS] [EURODOLLAR]
[BASE RATE] Loans.
4. [IF APPLICABLE:] The duration of the Interest Period for the
Revolving Loans included in the [CONVERSION] [CONTINUATION] shall be
_________ months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed conversion/continuation date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) the representations and warranties of the Borrower contained in
Section 6 of the Credit Agreement are true and correct as though made on
and as of such date (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and
correct as of such date); PROVIDED, HOWEVER, that this condition shall not
apply to the conversion of an outstanding Eurodollar Loan to a Base Rate
Loan; and
(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed [CONVERSION] [CONTINUATION].
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
S-2
EXHIBIT D
REVOLVING NOTE
U.S. $_______________ December 20, 2002
FOR VALUE RECEIVED, the undersigned, APAC CUSTOMER SERVICES, INC., an
Illinois corporation (the "BORROWER"), hereby promises to pay to the order of
______________________ (the "BANK") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office of Xxxxxx
Trust and Savings Bank, as Agent, in Chicago, Illinois, in immediately available
funds, the principal sum of ___________________ Dollars ($__________) or, if
less, the aggregate unpaid principal amount of all Revolving Loans made by the
Bank to the Borrower pursuant to the Credit Agreement, together with interest on
the principal amount of each Revolving Loan from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates, specified in
the Credit Agreement.
This Note is one of the Revolving Notes referred to in the Amended and
Restated Credit Agreement dated as of December 20, 2002, among the Borrower,
Xxxxxx Trust and Savings Bank, as Agent, and the Banks party thereto (the
"CREDIT AGREEMENT"), and this Note and the holder hereof are entitled to all the
benefits and security provided for thereby or referred to therein, to which
Credit Agreement reference is hereby made for a statement thereof. All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as in the Credit Agreement. This Note is subject to the terms and
provisions of the Credit Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are required
to be made hereon, and this Note may be declared due prior to the expressed
maturity hereof, all in the events, on the terms and in the manner as provided
for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of any
kind hereunder.
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
EXHIBIT E
SWING LINE NOTE
U.S. $5,000,000 December 20, 2002
FOR VALUE RECEIVED, the undersigned, APAC CUSTOMER SERVICES, INC., an
Illinois corporation (the "BORROWER"), hereby promises to pay to the order of
______________________ (the "BANK") on the Revolving Credit Termination Date of
the hereinafter defined Credit Agreement, at the principal office of Xxxxxx
Trust and Savings Bank, as Agent, in Chicago, Illinois, in immediately available
funds, the principal sum of Five Million Dollars ($5,000,000) or, if less, the
aggregate unpaid principal amount of all Swing Loans made by the Bank to the
Borrower pursuant to the Credit Agreement, together with interest on the
principal amount of each Swing Loan from time to time outstanding hereunder at
the rates, and payable in the manner and on the dates, specified in the Credit
Agreement.
This Note is the Swing Line Note referred to in the Amended and Restated
Credit Agreement dated as of December 20, 2002, among the Borrower, Xxxxxx Trust
and Savings Bank, as Agent, and the Banks party thereto (the "CREDIT
AGREEMENT"), and this Note and the holder hereof are entitled to all the
benefits and security provided for thereby or referred to therein, to which
Credit Agreement reference is hereby made for a statement thereof. All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as in the Credit Agreement. This Note is subject to the terms and
provisions of the Credit Agreement. This Note shall be governed by and construed
in accordance with the laws of the State of Illinois.
Voluntary prepayments may be made hereon, certain prepayments are required
to be made hereon, and this Note may be declared due prior to the expressed
maturity hereof, all in the events, on the terms and in the manner as provided
for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of any
kind hereunder.
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
EXHIBIT F
COMPLIANCE CERTIFICATE
FOR
APAC CUSTOMER SERVICES, INC.
This Compliance Certificate is furnished to Xxxxxx Trust and Savings Bank,
as Agent (the "AGENT") pursuant to that certain Amended and Restated Credit
Agreement dated as of December 20, 2002 among APAC Customer Services, Inc. (the
"BORROWER"), Xxxxxx Trust and Savings Bank, as Agent, and the Banks party
thereto (the "CREDIT AGREEMENT"). Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________________________ of
the Borrower;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries during
the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of
any event which constitutes a Default or Event of Default during or at the
end of the accounting period covered by the attached financial statements
or as of the date of this Certificate, except as set forth below; and
4. The Attachment hereto sets forth financial data and computations
evidencing the Borrower's compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my
knowledge, true, complete and correct and have been made in accordance with
the relevant Sections of the Credit Agreement.
5. The delivery of this Compliance Certificate in connection with
the Borrower's fourth fiscal quarter unaudited financial statements is a
draft and is subject to the Borrower's ability to update this Compliance
Certificate in accordance with the terms of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
The foregoing certifications, together with the computations set forth in
the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 200__.
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
-2-
ATTACHMENT TO COMPLIANCE CERTIFICATE
FOR
APAC CUSTOMER SERVICES, INC.
Compliance Calculations for Amended and Restated Credit Agreement
Dated as of December 20, 2002
Calculations as of _____________, 200__
================================================================================
SECTION 8.22 OF THE AGREEMENT
A. TOTAL LEVERAGE RATIO
1. Total Funded Debt (as defined) _________
A1
2. Excess Cash (as defined) _________
A2
3. Subtract Line A2 from A1 _________
A3
4. Net Income (as defined) _________
for the four fiscal quarters then ended A4
5 Interest Expense (as defined) _________
for the same period A5
6. Federal, State and Local Income Taxes _________
for the same period A6
7. Depreciation of fixed assets _________
for the same period A7
8. Amortization _________
for the same period A8
9. Non-Cash Charges _________
for the same period A9
10. Add Lines A4 through A9 (EBITDA) __________
A10
11. Ratio of Line A3 to A10 _______: 1.0
12. Line A11 Ratio must be less than or equal to 2.50 to 1.00
13. Is Borrower in Compliance (Circle Yes or No) Yes / No
B. NET WORTH
1. Shareholders' Equity minus _________
(i) Notes from Officers and Employees (_________)
(ii) Write-up of Assets (_________)
Net Worth _________
B1
2. Net Income (as defined) _________
cumulative total beginning quarter ending 12/30/02 B2
3. Line B2 x .50 _________
B3
4. Add Line B3 + $61,000,000 _________
B4
5. Line B1 must be greater than or equal to Line B4
6. Is Borrower in Compliance (Circle Yes or No) Yes / No
C. FIXED CHARGE COVERAGE RATIO (WAIVED FOR QUARTER ENDING 12/30/02)
1. EBITDA __________
C1
EBITDA EBITDA
For the for the Period For the Period
Fiscal Quarter Ending From and Including To and Including
--------------------- ------------------ ----------------
3/30/03 12/30/02 3/30/03
6/29/03 12/30/02 6/29/03
9/28/03 12/30/02 9/28/03
12/28/03 and thereafter rolling 4 quarters rolling 4 quarters
-2-
2. Capital Expenditures ___________
for the same period C2
For the Capital Expenditures
Fiscal Quarter Ending Equal to
--------------------- --------
3/30/03 0
6/29/03 0
9/28/03 0
12/28/03 and thereafter actual rolling 4 quarters
3. Subtract Line C2 from C1 __________
C3
4. Principal Payments Required on Indebtedness
for the same period (excluding payments made on the
Revolving Credit, except for the $1,250,000 quarterly __________
Reductions in the Revolving Credit) C4
5. Cash Interest Expense __________
for the same period C5
6. Cash Federal, State and Local Income Taxes ___________
for the same period (net of any refunds) C6
7. Cash Dividends ____________
for the same period C7
8. Add Lines C4 through C7 _____________
C8
9. Ratio of Line C3 to C8 ______ : 1.00
10. Line C9 Ratio must be greater than or equal:
Fixed Charge
For the Coverage Ratio
Fiscal Quarter(s) Ending Shall Not Be Less Than:
------------------------ -----------------------
3/30/03 1.50 to 1.00
6/29/03 and 9/28/03 1.75 to 1.00
12/30/03 and thereafter 1.25 to 1.00
-3-
11. Is Borrower in Compliance (Circle Yes or No) Yes / No
D. CAPITAL EXPENDITURES
1. Capital Expenditures _________
year-to-date for Fiscal 2003 D1
2. Line D1 must be less than or equal to $15,000,000
3. Is Borrower in Compliance (Circle Yes or No) Yes / No
E. OPERATING LEASES
1. Operating Leases
aggregate amount of fixed rentals for current fiscal __________
year E1
2. Line E1 must be less than or equal to $25,000,000
3. Is Borrower in Compliance (Circle Yes or No) Yes / No
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EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated ______________, 20__
Reference is made to the Amended and Restated Credit Agreement dated as of
December 20, 2002 (the "CREDIT AGREEMENT") among APAC Customer Services, Inc.,
an Illinois corporation, the Banks (as defined in the Credit Agreement) and
Xxxxxx Trust and Savings Bank, as Agent for the Banks (the "AGENT"). Terms
defined in the Credit Agreement are used herein with the same meaning.
_____________________________________________________ (the "ASSIGNOR")
and _________________________ (the "ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse to the Assignor, and the Assignee hereby purchases and assumes
from the Assignor without recourse to the Assignor, a ___% interest in and
to all of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date (as defined below), including, without limitation,
such percentage interest in the Assignor's Commitments as in effect on the
Effective Date and the Loans, if any, owing to the Assignor on the
Effective Date and a pro rata share of any outstanding L/C Obligations.
2. The Assignor (i) represents and warrants that as of the date
hereof (A) its Revolving Credit Commitment is $_____________, (B) the
aggregate outstanding principal amount of Loans made by it under the Credit
Agreement that have not been repaid is $____________ and a description of
the interest rates and interest periods of such Loans is attached as Annex
1 hereto, (C) the aggregate principal amount of Assignor's Percentage of
outstanding L/C Obligations is $____________, and (D) the aggregate amount
of Assignor's participations (whether or not funded) in outstanding Swing
Loans is $____________; (ii) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim, lien, or
encumbrance of any kind; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto; and (iv) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
or any Subsidiary or performance or observance by the Borrower or any
Subsidiary of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred
to in Section 8.5 thereof and such other documents and information as it
has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance
upon the Agent, the Assignor or any other Bank 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 the Credit
Agreement; (iii) appoints and authorizes the Agent to take such action as
Agent on its behalf and to exercise such powers under the Credit Agreement
and the other Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank; and (v) specifies as its lending office (and
address for notices) the offices set forth beneath its name on the
signature pages hereof.
4. As consideration for the assignment and sale contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective
Date in Federal funds an amount equal to $________________*. It is
understood that commitment and/or facility fees accrued to the Effective
Date with respect to the interest assigned hereby are for the account of
the Assignor and such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and the Assignee
hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the
same for the account of such other party to the extent of such other
party's interest therein and shall promptly pay the same to such other
party.
5. The effective date for this Assignment and Acceptance shall be
_____________, 20____ (the "EFFECTIVE DATE"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for
acceptance and recording by the Agent and, if required, the Borrower.
6. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations
of a Bank thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect thereto)
to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
----------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
-2-
8. In accordance with Section 12.12 of the Credit Agreement, the
Assignor and the Assignee request and direct that the Agent prepare and
cause the Borrower to execute and deliver to the Assignee the relevant
Notes payable to the Assignee in the amount of its Commitments and new
Notes to the Assignor in the amount of its Commitments after giving effect
to this assignment.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[ASSIGNOR BANK]
By
Name
-----------------------------------
Title
----------------------------------
[ASSIGNEE BANK]
By
Name
-----------------------------------
Title
----------------------------------
Lending office (and address for notices):
Accepted and consented this
____ day of ___________, 20__
APAC CUSTOMER SERVICES, INC.
By
Name
-----------------------------------
Title
----------------------------------
Accepted and consented to by the Agent this
_______ day of ___________, 20___
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
-----------------------------------
Title
----------------------------------
-3-
ANNEX I
TO ASSIGNMENT AND ACCEPTANCE
PRINCIPAL AMOUNT TYPE OF LOAN INTEREST RATE MATURITY DATE
AMENDED AND RESTATED SECURITY AGREEMENT
This Amended and Restated Security Agreement (the "AGREEMENT") is dated as
of December 20, 2002, by and among APAC Customer Services, Inc., an Illinois
corporation (the "BORROWER"), and the other parties executing this Agreement
under the heading "Debtors" (the Borrower and such other parties, along with any
parties who execute and deliver to the Agent an agreement substantially in the
form attached hereto as SCHEDULE H, being hereinafter referred to collectively
as the "DEBTORS" and individually as a "DEBTOR"), and Xxxxxx Trust and Savings
Bank ("HTSB"), acting as agent hereunder for the Secured Creditors hereinafter
identified and defined (HTSB acting as such agent and any successor or
successors to HTSB acting in such capacity being hereinafter referred to as the
"AGENT").
P R E L I M I N A R Y S T A T E M E N T S
A. The Borrower and HTSB, individually and as agent, are currently
parties to an Amended and Restated Credit Agreement dated as of September 8,
1998, as amended (such Amended and Restated Credit Agreement, as amended, being
referred to herein as the "ORIGINAL CREDIT AGREEMENT").
B. Indebtedness, obligations, and liabilities of the Borrower under the
Original Credit Agreement and certain other obligations relating to Hedging
Liability hereinafter referred to are currently secured by, among other things,
that certain Security Agreement dated as of May 29, 1999, as amended and
supplemented, by and among the Debtors and the Agent, and the personal property
of the Debtors described therein (the "ORIGINAL SECURITY AGREEMENT").
C. The Borrower and HTSB, individually and as Agent, have entered into an
Amended and Restated Credit Agreement dated as of December 20, 2002 (such
Amended and Restated Credit Agreement, as the same may be amended or modified
from time to time, including further amendments and restatements thereof in its
entirety, being referred to herein as the "CREDIT AGREEMENT") pursuant to which
HTSB and other banks and financial institutions from time to time parties
thereto (HTSB, in its individual capacity, and such other banks and financial
institutions being hereinafter referred to collectively as the "BANKS" and
individually as a "BANK") have agreed to amend and restate the Original Credit
Agreement and, subject to certain terms and conditions, extend credit and make
certain other financial accommodations available to the Borrower (the Agent and
the Banks, together with affiliates of the Banks with respect to Hedging
Liability and Funds Transfer and Deposit Account Liability referred to below,
being hereinafter referred to collectively as the "SECURED CREDITORS" and
individually as a "SECURED CREDITOR").
D. In addition, the Debtors, or any one or more of them, may from time to
time be liable to the Banks and/or their affiliates with respect to Hedging
Liability and Funds Transfer and Deposit Account Liability (as such terms are
defined in the Credit Agreement).
E. As a condition to amending and restating the Original Credit Agreement
and extending credit to the Borrower under the Credit Agreement, the Secured
Creditors have
required, among other things, that each Debtor grant to the Agent for the
benefit of the Secured Creditors a lien on and security interest in certain
personal property of such Debtor described herein subject to the terms and
conditions hereof and, in connection therewith, that the Original Security
Agreement be amended and restated in its entirety to read as set forth in this
Agreement.
F. The Borrower owns, directly or indirectly, equity interests in each of
the other Debtors and the Debtors provides each other with financial,
management, administrative, and technical support which enables the Debtors to
conduct their businesses in an orderly and efficient manner in the ordinary
course.
G. Each Debtor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors under the
Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency whereof is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Debtor" and "Debtors" as used herein
shall mean and include the Debtors collectively and also each individually, with
all grants, representations, warranties and covenants of and by the Debtors, or
any of them, herein contained to constitute joint and several grants,
representations, warranties and covenants of and by the Debtors; PROVIDED,
HOWEVER, that unless the context in which the same is used shall otherwise
require, any grant, representation, warranty or covenant contained herein
related to the Collateral shall be made by each Debtor only with respect to the
Collateral owned by it or represented by such Debtor as owned by it.
SECTION 2. GRANT OF SECURITY INTEREST IN THE COLLATERAL; OBLIGATIONS
SECURED. (a) Each Debtor hereby grants to the Agent for the benefit of the
Secured Creditors a lien on and security interest in, and right of set-off
against, and acknowledges and agrees that the Agent has and shall continue to
have for the benefit of the Secured Creditors a continuing lien on and security
interest in, and right of set-off against, any and all right, title and interest
of each Debtor, whether now owned or existing or hereafter created, acquired or
arising, in and to all personal property and fixtures of each Debtor, including
the following:
(a) Accounts;
(b) Chattel Paper;
(c) Instruments (including Promissory Notes);
(d) Documents;
(e) General Intangibles (including Payment Intangibles,
Software, patents, trademarks, copyrights and other intellectual property
rights, and all application and registrations therefor, and tax refunds);
-2-
(f) Letter-of-Credit Rights;
(g) Supporting Obligations;
(h) Deposit Accounts;
(i) Investment Property (including certificated and
uncertificated Securities, Securities Accounts, Security Entitlements,
Commodity Accounts, and Commodity Contracts);
(j) Inventory;
(k) Equipment (including all software, whether or not the same
constitutes embedded software, used in the operation thereof);
(l) Fixtures;
(m) Commercial Tort Claims (as described on SCHEDULE F hereto or
on one or more supplements to this Agreement);
(n) All rights to merchandise and other Goods (including rights
to returned or repossessed Goods and rights of stoppage in transit) which
is represented by, arises from, or relates to any of the foregoing;
(o) All personal property and interests in personal property of
such Debtor of any kind or description now held by any Secured Creditor or
at any time hereafter transferred or delivered to, or coming into the
possession, custody or control of, any Secured Creditor, or any agent or
affiliate of any Secured Creditor, whether expressly as collateral
security or for any other purpose (whether for safekeeping, custody,
collection or otherwise), and all dividends and distributions on or other
rights in connection with any such property;
(p) All supporting evidence and documents relating to any of the
above-described property, including, without limitation, computer
programs, disks, tapes and related electronic data processing media, and
all rights of such Debtor to retrieve the same from third parties, written
applications, credit information, account cards, payment records,
correspondence, delivery and installation certificates, invoice copies,
delivery receipts, notes and other evidences of indebtedness, insurance
certificates and the like, together with all books of account, ledgers,
and cabinets in which the same are reflected or maintained;
(q) All Accessions and additions to, and substitutions and
replacements of, any and all of the foregoing; and
(r) All Proceeds and products of the foregoing, and all
insurance of the foregoing and proceeds thereof;
-3-
all of the foregoing being herein sometimes referred to as the "COLLATERAL;"
PROVIDED THAT, notwithstanding the foregoing, the Collateral as defined herein
shall not include:
(a) any general intangible or other right arising under any
contract, instrument, license or other document to the extent that the
grant of a security interest would (x) result in a breach of the terms of,
or constitute a default under, such contract, instrument, license or other
document (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407 or 9-408 or any successor
provision of the Uniform Commercial Code of the relevant jurisdiction or
any other applicable law) unless and until any required consent shall have
been obtained (PROVIDED that each Debtor agrees, upon the written request
of Agent, to use commercially reasonable efforts to obtain any such
required consent) or (y) give any other party to such contract,
instrument, license or other document the right to terminate its
obligations thereunder pursuant to a valid and enforceable provision
(PROVIDED that each Debtor agrees, upon the written request of Agent, to
use commercially reasonable efforts to obtain the waiver of each such
right);
(b) tangible personal property subject to a lien permitted by
Section 8.8(e) or Section 8.8(h) of the Credit Agreement to the extent the
granting of a Lien thereon is prohibited by the terms of the permitted
indebtedness secured thereby; and
(c) Investment Property and General Intangibles consisting of
equity interests issued by a Subsidiary of any Debtor, which instead shall
be governed by and subject to the terms and conditions and, in the case of
the percentage of equity interests of a Foreign Subsidiary subject to the
Agent's lien, the limitations of the Pledge Agreement.
All terms which are used herein which are defined in the Uniform Commercial Code
of the State of Illinois as in effect from time to time ("UCC") shall have the
same meanings herein as such terms are defined in the UCC, unless this Agreement
shall otherwise specifically provide. For purposes of this Agreement, the term
"RECEIVABLES" means all rights to the payment of a monetary obligation, whether
or not earned by performance, and whether evidenced by an Account, Chattel
Paper, Instrument, General Intangible, or otherwise.
Notwithstanding anything in this Agreement to the contrary, (a) this
Agreement shall not operate as a sale, transfer, conveyance or other assignment
to the Agent of any applications by a Debtor for a trademark based on an intent
to use the same if and so long as such application is pending and not matured
into a registered trademark (such pending, applications which are based on
intent to use being hereinafter referred to collectively as "INTENT-TO-USE
APPLICATIONS"), but rather, if and so long as such Debtor's Intent-To-Use
Application is pending, this Agreement shall operate only to create a security
interest for collateral purposes in favor of the Agent for the benefit of the
Secured Creditors, on such Intent-To-Use Application as collateral security for
the Secured Obligations and (b) the lien of this Agreement on any Collateral
sold or otherwise disposed of to the extent permitted by Section 3(f) hereof
shall be released by the Agent (acting on behalf of the Secured Creditors) upon
the written request of the Borrower, if (A) at the time of such sale or other
disposition and immediately after giving effect thereto, no Default or Event of
Default shall occur or be continuing and (B) the proceeds of such sale or other
disposition are
-4-
paid to the Agent for application in reduction of the Secured Obligations if and
to the extent required by the Credit Agreement. The Agent shall, at the
Borrower's expense, execute and deliver such instruments (including UCC
termination statements) as the Borrower may from time to time reasonably request
to confirm or evidence such release made pursuant to the immediately preceding
sentence.
(b) This Agreement is made and given to secure, and shall secure, the
prompt payment and performance when due of (i) any and all indebtedness,
obligations and liabilities of the Debtors, and of any of them individually, to
the Secured Creditors, and to any of them individually, under or in connection
with or evidenced by the Credit Agreement or any other Loan Document, including,
without limitation, all obligations evidenced by the Notes of the Borrower
heretofore or hereafter issued under the Credit Agreement, all obligations of
the Borrower to reimburse the Secured Creditors for the amount of all drawings
on all Letters of Credit issued pursuant to the Credit Agreement and all other
obligations of the Borrower under any and all Applications for Letters of Credit
delivered thereunder, all obligations of the Debtors, and of any of them
individually, respect to any Hedging Liability, all obligations of the Debtors,
and of any of them individually, with respect to any Funds Transfer and Deposit
Account Liability, and all obligations of the Debtors, and of any of them
individually, arising under any guaranty issued by any of them relating to the
foregoing or any part thereof, in each case whether now existing or hereafter
arising (and whether arising before or after the filing of a petition in
bankruptcy and including all interest accrued after the petition date), due or
to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired and (ii) any and all expenses and charges, legal or
otherwise, suffered or incurred by the Secured Creditors, and any of them
individually, in collecting or enforcing any of such indebtedness, obligations
and liabilities or in realizing on or protecting or preserving any security
therefor, including, without limitation, the lien and security interest granted
hereby (all of the indebtedness, obligations, liabilities, expenses and charges
described above being hereinafter referred to as the "SECURED OBLIGATIONS").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Debtor under this Agreement (other than the Borrower to
which this limitation shall not apply) shall not exceed $1.00 less than the
lowest amount which would render such Debtor's obligations under this Agreement
void or voidable under applicable law, including fraudulent conveyance law.
SECTION 3. COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES. The
Debtors hereby covenant and agree with, and represent and warrant to, the
Secured Creditors that:
(a) Each Debtor is a duly organized and validly existing in good
standing under the laws of the state of its organization. Each Debtor is
the owner of, or has rights in, its Collateral, and has full right, power,
and authority to enter into this Agreement and to perform each and all of
the matters and things herein provided for. The execution and delivery of
this Agreement, and the observance and performance of each of the matters
and things herein set forth, will not (i) contravene or constitute a
default under any provision of law or any judgment, injunction, order or
decree binding upon any Debtor or any provision of any Debtor's
organizational agreements (e.g., charter, certificate or articles of
incorporation or by-laws, certificate or articles of formation or operating
agreement, partnership agreement, or other comparable organizational
documents) or any
-5-
covenant, indenture or agreement of or affecting any Debtor or any of its
property or (ii) result in the creation or imposition of any lien or
encumbrance on any property of any Debtor except for the lien and security
interest granted to the Agent hereunder.
(b) Each Debtor's respective chief executive office is at the
location listed under Column 2 on SCHEDULE A attached hereto opposite such
Debtor's name; and such Debtor currently has no other executive offices or
places of business other than those listed under Column 3 on SCHEDULE A
attached hereto opposite such Debtor's name. The tangible Collateral owned
or leased by each Debtor is and shall remain in such Debtor's possession or
control at, or is in transit to, the locations listed under Columns 2 and 3
on SCHEDULE A attached hereto opposite such Debtor's name (as such
information is supplemented as provided below) (collectively for each
Debtor, the "PERMITTED COLLATERAL LOCATIONS"), except as to (i) any
Collateral sold or otherwise disposed of in accordance with Section 8.10 of
the Credit Agreement, (ii) items delivered to third parties for repair in
the ordinary course, and (iii) any other Collateral at all times
aggregating not more than $250,000. If for any reason any Collateral is at
any time kept or located at a location other than a Permitted Collateral
Location, the Agent shall nevertheless have and retain a lien on and
security interest therein. No Debtor shall move its chief executive office
or maintain a place of business (it being understood and agreed by the
parties hereto that a location which functions exclusively as an "employee
call center" is not a chief executive office or a place of business for the
purposes of this sentence) at a location other than those specified under
Columns 2 or 3 on SCHEDULE A or permit any Collateral to be located at a
location other than a Permitted Collateral Location (other than as
specified in the second sentence of this paragraph), in each case without
first providing the Agent at least 30 days prior written notice of the
Debtor's intent to do so; PROVIDED that each Debtor shall at all times
maintain its chief executive office, places of business, and Permitted
Collateral Locations in the United States of America and, with respect to
any new chief executive office or place of business or location of
Collateral, such Debtor shall have taken all action reasonably requested by
the Agent to maintain the lien and security interest of the Agent in the
Collateral at all times fully perfected and in full force and effect.
(c) Each Debtor's legal name, state of organization and
organizational number (if any) are correctly set forth under Column 1 on
SCHEDULE A of this Agreement. No Debtor has transacted business at any time
during the immediately preceding five-year period, and does not currently
transact business, under any other legal names or trade names other than
the prior legal names and trade names (if any) set forth on SCHEDULE B
attached hereto. No Debtor shall change its state of organization without
the Agent's prior written consent. No Debtor shall change its legal name or
transact business under any other trade name without first giving thirty
(30) days' prior written notice of its intent to do so to the Agent.
(d) The Collateral and every part thereof is and shall be free
and clear of all security interests, liens (including, without limitation,
mechanics', laborers' and statutory liens), attachments, levies and
encumbrances of every kind, nature and description and whether voluntary or
involuntary, except for the lien and security interest of the Agent
-6-
therein and other Liens permitted by Section 8.8 of the Credit Agreement
(herein, the "PERMITTED LIENS"). Each Debtor shall warrant and defend the
Collateral against any claims and demands of all Persons at any time
claiming the same or any interest in the Collateral adverse to any of the
Secured Creditors.
(e) Each Debtor agrees it will not waste or destroy the
Collateral or any material part thereof and will not be negligent in the
care or use of any material part of the Collateral, except to the extent
that, in the reasonable business judgment of such Debtor, any such
Collateral is no longer necessary for or desirable in the proper conduct of
the business of such Debtor. Each Debtor agrees it will not use,
manufacture, sell or distribute any Collateral in violation of any statute,
ordinance or other governmental requirement which is reasonably likely to
have a Material Adverse Effect. Each Debtor will perform in all material
respects its obligations under any contract or other agreement constituting
part of the Collateral, it being understood and agreed that the Secured
Creditors have no responsibility to perform such obligations.
(f) Subject to Sections 4(d), 5(a), 6(b), 6(c), and 7(c) hereof,
and except for sales, transfers or other dispositions permitted Section
8.10 of the Credit Agreement, each Debtor agrees it will not, without the
Agent's prior written consent, sell, assign, mortgage, lease or otherwise
dispose of the Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable
against such risks and hazards as other companies similarly situated insure
against, and including in any event loss or damage by fire, theft,
burglary, pilferage, and loss in transit, in amounts and under policies
containing loss payable clauses to the Agent as its interest may appear
(and, if the Agent requests, naming the Agent as additional insureds
therein) by insurers reasonably acceptable to the Agent. All premiums on
such insurance shall be paid by the Debtors and the policies of such
insurance (or certificates therefor) delivered to the Agent. All insurance
required hereby shall provide that any loss shall be payable
notwithstanding any act or negligence of the relevant Debtor, shall provide
that no cancellation thereof shall be effective until at least 30 days
after receipt by the relevant Debtor and the Agent of written notice
thereof, and shall be reasonably satisfactory to the Agent in all other
respects. In case of any material loss, damage to or destruction of the
Collateral or any part thereof, the relevant Debtor shall promptly give
written notice thereof to the Agent generally describing the nature and
extent of such damage or destruction. In case of any loss, damage to or
destruction of the Collateral or any part thereof, the relevant Debtor,
whether or not the insurance proceeds, if any, received on account of such
damage or destruction shall be sufficient for that purpose, at such
Debtor's cost and expense, will promptly repair or replace the Collateral
so lost, damaged or destroyed, except to the extent such Collateral is not
necessary to or desirable in the conduct of such Debtor's business in the
ordinary course. In the event any Debtor shall receive any proceeds of such
insurance after the occurrence and during the continuation of any Event of
Default, such Debtor will immediately pay over such proceeds to the Agent
for application in reduction of the Secured Obligations. In the absence of
any such Event of Default, such Debtor shall be entitled to retain such
insurance proceeds to reinvest in its business in accordance with the
Credit Agreement. Each Debtor hereby
-7-
authorizes the Agent, at the Agent's option, to adjust, compromise and
settle any losses under any insurance afforded at any time after the
occurrence and during the continuation of any Event of Default, and such
Debtor does hereby irrevocably constitute the Agent, its officers, agents
and attorneys, as such Debtor's attorneys-in-fact, with full power and
authority after the occurrence and during the continuation of any Event of
Default to effect such adjustment, compromise and/or settlement and to
endorse any drafts drawn by an insurer of the Collateral or any part
thereof and to do everything necessary to carry out such purposes and to
receive and receipt for any unearned premiums due under policies of such
insurance. Unless the Agent elects to adjust, compromise or settle losses
as aforesaid, any adjustment, compromise and/or settlement of any losses
under any insurance shall be made by the relevant Debtor subject to final
approval of the Agent (regardless of whether or not an Event of Default
shall have occurred) in the case of losses exceeding $500,000. Net
insurance proceeds received by the Agent under the provisions hereof or
under any policy or policies of insurance covering the Collateral or any
part thereof pursuant to the terms hereof shall be applied to the reduction
of, or otherwise held as security for, the Secured Obligations (whether or
not then due); PROVIDED that in the absence of any Event of Default, the
Agent shall release such insurance proceeds to the relevant Debtor. All
insurance proceeds shall be subject to the lien and security interest of
the Agent hereunder.
UNLESS THE DEBTORS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE
COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY, AFTER GIVING NOTICE TO
THE DEBTORS, PURCHASE INSURANCE AT THE DEBTORS' EXPENSE TO PROTECT THE
AGENT'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT,
PROTECT ANY DEBTOR'S INTERESTS IN THE COLLATERAL. THE COVERAGE PURCHASED BY
THE AGENT MAY NOT PAY ANY CLAIMS THAT ANY DEBTOR MAKES OR ANY CLAIM THAT IS
MADE AGAINST SUCH DEBTOR IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY
LATER CANCEL ANY SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER
PROVIDING THE AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE
AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE
COLLATERAL, THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING INTEREST AND ANY OTHER REASONABLE CHARGES THAT THE
AGENT MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL
THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
COSTS OF THE INSURANCE MAY BE ADDED TO THE SECURED OBLIGATIONS. THE COSTS
OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE THE DEBTORS MAY BE
ABLE TO OBTAIN ON THEIR OWN.
(h) If any material portion of the Collateral is in the
possession or control of any agents or processors of a Debtor and the Agent
so requests, such Debtor agrees to notify such agents or processors in
writing of the Agent's security interest therein and instruct them to hold
all such Collateral for the Agent's account and subject to the Agent's
instructions. Each Debtor will, upon the request of the Agent, authorize
and instruct all bailees and any other parties, if any, at any time
processing, labeling, packaging, holding, storing, shipping or transferring
all or any part of the Collateral to permit the Secured Creditors and their
respective representatives to examine and inspect
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any of the Collateral then in such party's possession and to verify from
such party's own books and records any information concerning the
Collateral or any part thereof which the Secured Creditors or their
respective representatives may seek to verify. As to any premises not owned
by a Debtor wherein any of the Collateral is located, if any, such Debtor
shall, upon the Agent's request, use commercially reasonable efforts to
cause each party having any right, title or interest in, or lien on, any of
such premises to enter into an agreement (any such agreement to contain a
legal description of such premises) whereby such party disclaims any right,
title and interest in, and lien on, the Collateral, allowing the removal of
such Collateral by the Agent or its agents or representatives and otherwise
in form and substance reasonably acceptable to the Agent; PROVIDED,
HOWEVER, that no such agreement need be obtained with respect to any
location owned by a party not affiliated with the Debtors if the value of
the Collateral at all locations for all Debtors as to which such agreements
have not been obtained aggregates less than $250,000 at any one time.
(i) Upon the Agent's reasonable request, each Debtor agrees from
time to time to deliver to the Agent such evidence of the existence,
identity and location of its Collateral and of its availability as
collateral security pursuant hereto (including, without limitation,
schedules describing all Receivables created or acquired by such Debtor,
copies of customer invoices or the equivalent and original shipping or
delivery receipts for all merchandise and other goods sold or leased or
services rendered by it, together with such Debtor's warranty of the
genuineness thereof, and reports stating the book value of its Inventory
and Equipment by major category and location), in each case as the Agent
may reasonably request. The Agent shall have the right to verify all or any
part of the Collateral in any manner, and through any medium, which the
Agent considers appropriate and reasonable, and each Debtor agrees to
furnish all reasonable assistance and information, and perform any
reasonable acts, which the Agent may reasonably require in connection
therewith.
(j) Each Debtor will comply in all material respects with the
terms and conditions of any and all leases, easements, right-of-way
agreements and other agreements binding upon such Debtor or affecting the
Collateral, in each case which (i) cover the premises wherein the
Collateral is located, and any orders, ordinances, laws or statutes of any
city, state or other governmental entity, department or agency having
jurisdiction with respect to such premises or the conduct of business
thereon and (ii) where any such non-compliance is reasonably likely to have
a Material Adverse Effect or is reasonably likely to result in a Lien upon
any of their Property not otherwise permitted by the Credit Agreement.
(k) SCHEDULE C attached hereto contains a true, complete, and
current listing of all copyrights, copyright applications, trademarks,
trademark applications, tradenames, patents, patent applications and other
intellectual property rights owned by each of the Debtors as of the date
hereof that are registered with any governmental authority. At the Agent's
written request, the Debtors shall notify the Agent in writing of any
additional intellectual property rights acquired or arising after the date
hereof, and shall submit to the Agent a supplement to SCHEDULE C to reflect
such additional rights (provided the
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Debtor's failure to do so shall not impair the Agent's security interest
therein). Each Debtor owns or possesses rights to use all franchises,
licenses, copyrights, patents, trademarks, trade names, and similar rights
which are required to conduct its business. No event has occurred which
permits, or after notice or lapse of time or both would permit, the
revocation or termination of any such rights, and the Debtors are not
liable to any Person for infringement under applicable law with respect to
any such rights as a result of its business operations.
(l) SCHEDULE F attached hereto contains a true, complete and
current listing of all known Commercial Tort Claims in excess of $50,000
held or maintained by the Debtors as of the date hereof, each described by
reference to the specific incident given rise to the claim. Each Debtor
agrees to execute and deliver to the Agent a supplement to this Agreement
in the form attached hereto as SCHEDULE G, or in such other form reasonably
acceptable to the Agent, promptly upon becoming aware of any other
Commercial Tort Claims in excess of $50,000 arising after the date hereof
(provided a Debtor's failure to do so shall not impair the Agent's security
interest therein).
(m) Subject to Section 4 of the Credit Agreement, each Debtor
agrees to execute and deliver to the Agent such further agreements,
assignments, instruments and documents, and to do all such other things, as
the Agent may reasonably deem necessary or appropriate to assure the Agent
its lien and security interest hereunder, including without limitation, (i)
executing such instruments and documents as the Agent may from time to time
reasonably require to comply with the UCC or other applicable law or to
obtain a security interest in any Property of each Debtor not subject to
the terms and conditions hereof, (ii) executing such patent, trademark, and
copyright agreements as the Agent may from time to time reasonably require
to comply with the filing requirements of the United States Patent and
Trademark Office and the United States Copyright Office, and (iii)
executing such control agreements with respect to Deposit Accounts,
Securities Accounts, Letter-of-Credit Rights, and electronic Chattel Paper
as the Agent may from time to time reasonably require. Each Debtor hereby
agrees that a carbon, photographic or other reproduction of this Agreement
or any such financing statement is sufficient for filing as a financing
statement by the Agent without notice thereof to such Debtor wherever the
Agent deems necessary or desirable to perfect or protect the security
interest granted hereby. Each Debtor hereby authorizes the Agent to file
any and all financing statements covering the Collateral or any part
thereof as the Agent may require, including financing statements describing
the Collateral as "all assets" or "all personal property" or words of like
meaning. In the event for any reason the law of any jurisdiction other than
Illinois becomes or is applicable to the Collateral or any material part
thereof, or to any of the Secured Obligations, each Debtor agrees to
execute and deliver all such instruments and documents and to do all such
other things as the Agent reasonably deems necessary or appropriate to
preserve, protect and enforce the security interest of the Agent under the
law of such other jurisdiction.
(n) On the failure of a Debtor to perform any of the covenants
and agreements herein contained beyond any applicable notice and cure
period, the Agent may, at its option (with notice to the relevant Debtor),
perform the same and in so doing may expend
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such reasonable sums as the Agent deems advisable in the performance
thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, liens and encumbrances, expenditures
made in defending against any adverse claims, and all other expenditures
which the Agent may be compelled to make by operation of law or which the
Agent may make by agreement or otherwise for the protection of the security
hereof. All such sums and amounts so expended shall be repayable by the
Debtors immediately upon demand, shall constitute additional Secured
Obligations hereunder, and shall bear interest from the date said amounts
are expended at the rate per annum (computed on the basis of a year of 365
or 366 days, as the case may be, and the actual number of days elapsed)
determined by adding 2% to the Base Rate from time to time in effect plus
the Applicable Margin for Revolving Loans which are Base Rate Loans, with
any change in such rate per annum as so determined by reason of a change in
such Base Rate to be effective on the date of such change in said Base Rate
(such rate per annum as so determined being hereinafter referred to as the
"DEFAULT RATE"). No such performance of any covenant or agreement by the
Agent on behalf of a Debtor, and no such advancement or expenditure
therefor, shall relieve any Debtor of any default under the terms of this
Agreement or in any way obligate any Secured Creditor to take any further
or future action with respect thereto. The Agent in making any payment
hereby authorized may do so according to any xxxx, statement or estimate
procured from the appropriate public office or holder of the claim to be
discharged without inquiry into the accuracy of such xxxx, statement or
estimate or into the validity of any tax assessment, sale, forfeiture, tax
lien or title or claim. The Agent is hereby authorized to charge any
depository or other account of any Debtor maintained with any Secured
Creditor for the amount of such sums and amounts so expended.
SECTION 4. SPECIAL PROVISIONS RE: RECEIVABLES. (a) As of the time any
Receivable becomes subject to the security interest provided for hereby and at
all times thereafter, each Debtor shall be deemed to have warranted as to each
and all of its Receivables that all warranties of such Debtor set forth in this
Agreement are true and correct in all material respects with respect to each
such Receivable; that each of its Receivables and all papers and documents
relating thereto are genuine and in all material respects what they purport to
be; that each of its Receivables is valid and existing and, if such Receivable
is an account, arises out of a bona fide sale of goods sold and delivered by
such Debtor to, or in the process of being delivered to, or out of or for
services theretofore actually rendered by such Debtor to, the account debtor
named therein subject to any credits in the ordinary course; PROVIDED, HOWEVER,
that the representations and warranties contained in this Section 4(a) shall not
apply to Receivables aggregating at any one time an amount less than $500,000.
(b) To the extent any Receivables or other item of Collateral is
evidenced by an instrument, each Debtor shall cause such instrument to be
pledged and delivered to the Agent; PROVIDED, HOWEVER, that, prior to the
existence of a Default of Event of Default and thereafter until otherwise
required by the Agent or the Secured Creditors, a Debtor shall not be required
to deliver any such instrument if and only so long as (i) the fair market value
of any such instrument held by such Debtor is less than $250,000 and (ii) the
aggregate fair market value of all such instruments held by the Debtors and not
delivered to the Agent under the Collateral Documents is less than $250,000 at
any one time outstanding.
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(c) If any Receivable arises out of a contract in an amount greater than
$100,000 with the United States of America or any state or political subdivision
thereof, or any department, agency or instrumentality thereof, at the request of
the Agent or the Secured Creditors after the occurrence and during the
continuation of any Event of Default, the relevant Debtor agrees to execute
whatever instruments and documents are required by the Agent in order that such
Receivable shall be assigned to the Agent and that proper notice of such
assignment shall be given under the federal Assignment of Claims Act (or any
successor statute) or any similar state or local statute relating to the
assignment of such Receivables.
(d) Unless and until an Event of Default occurs and is continuing, any
merchandise or other goods which are returned by a customer or account debtor or
otherwise recovered may be resold by the relevant Debtor in the ordinary course
of its business as presently conducted in accordance with Section 6(b) hereof;
upon the occurrence and during the continuation of any Event of Default, such
merchandise and other goods shall be set aside at the request of the Agent and
held by such Debtor as trustee for the Secured Creditors and shall remain part
of the Collateral. Unless and until an Event of Default occurs and is
continuing, the relevant Debtor may settle and adjust disputes and claims with
its customers and account debtors, handle returns and recoveries and grant
discounts, credits and allowances in the ordinary course of its business as
presently conducted for amounts and on terms which such Debtor in good faith
considers advisable. Upon the occurrence and during the continuation of any
Event of Default, if the Agent so requests, each Debtor shall notify the Agent
promptly of all returns and recoveries and, on the Agent's request, deliver any
such merchandise or other goods to the Agent. Upon the occurrence and during the
continuation of any Event of Default, at the Agent's request, each Debtor shall
also notify the Agent promptly of all disputes and claims and settle or adjust
them at no expense to the Secured Creditors hereunder, but no discount, credit
or allowance other than on normal trade terms in the ordinary course of business
as presently conducted shall be granted to any customer or account debtor and no
returns of merchandise or other goods shall be accepted by any Debtor without
the Agent's consent (such consent not to be unreasonably withheld or delayed).
The Agent may, at all times upon the occurrence and during the continuation of
any Event of Default, settle or adjust disputes and claims directly with
customers or account debtors for amounts and upon terms which the Agent
reasonably considers advisable.
SECTION 5. COLLECTION OF RECEIVABLES. (a) Except as otherwise provided
in this Agreement, each Debtor shall make collection of all of its Receivables
and may use the same to carry on its business in accordance with sound business
practice and otherwise subject to the terms hereof.
(b) Upon the occurrence and during the continuation of any Event of
Default, whether or not the Agent has exercised any or all of its rights under
other provisions of this Section 5, in the event the Agent requests any Debtor
to do so:
(i) all Instruments and tangible Chattel Paper at any time
constituting part of the Receivables (including any postdated checks)
shall, upon receipt by such Debtor, be immediately endorsed to and
deposited with Agent; and/or
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(ii) such Debtor shall instruct all of its customers and account
debtors to remit all payments in respect of its Receivables to a lockbox or
lockboxes under the sole custody and control of Agent and which are
maintained at post offices selected by the Agent.
(c) Upon the occurrence and during the continuation of any Event of
Default, whether or not the Agent has exercised any or all of its rights under
other provisions of this Section 5, the Agent or its designee may notify the
relevant Debtor's customers and account debtors at any time that Receivables
have been assigned to the Agent or of the Agent's security interest therein, and
either in its own name, or such Debtor's name, or both, demand, collect
(including, without limitation, through a lockbox analogous to that described in
Section 5(b)(ii) hereof), receive, receipt for, xxx for, compound and give
acquittance for any or all amounts due or to become due on Receivables, and in
the Agent's discretion file any claim or take any other action or proceeding
which the Agent may deem necessary or appropriate to protect and realize upon
the security interest of the Agent in the Receivables.
(d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of Sections
5(b) or 5(c) hereof after the occurrence and during the continuation of any
Event of Default may be handled and administered by the Agent in and through a
remittance account or accounts maintained at the Agent or by the Agent at a
commercial bank or banks selected by the Agent (collectively the "DEPOSITARY
BANKS" and individually a "DEPOSITARY BANK"), and each Debtor acknowledges that
the maintenance of such remittance accounts by the Agent is solely for the
Agent's convenience and that the Debtors do not have any right, title or
interest in such remittance accounts or any amounts at any time standing to the
credit thereof unless the Secured Obligations have been repaid in full. The
Agent may apply all or any part of any proceeds of Receivables or other
Collateral received by it after the occurrence and during the continuation of
any Event of Default from any source to the payment of the Secured Obligations
(whether or not then due and payable), such applications to be made in such
amounts, in such manner and order and at such intervals as required by the
Credit Agreement and Section 10 hereof. The Agent need not apply or give credit
for any item included in proceeds of Receivables or other Collateral until the
Depositary Bank has received final payment therefor at its office in cash or
final solvent credits current at the site of deposit acceptable to the Agent and
the Depositary Bank as such. However, if the Agent does permit credit to be
given for any item prior to a Depositary Bank receiving final payment therefor
and such Depositary Bank fails to receive such final payment or an item is
charged back to the Agent or any Depositary Bank for any reason, the Agent may
at its election in either instance charge the amount of such item back against
any such remittance accounts or any Deposit Account subject to the lien and
security interest hereof, together with interest thereon at the Default Rate.
Concurrently with each transmission of any proceeds of Receivables or other
Collateral to any such remittance account, upon the Agent's request, the
relevant Debtor shall furnish the Agent with a report in such form as Agent
shall reasonably require identifying the particular Receivable or such other
Collateral from which the same arises or relates. Each Debtor hereby indemnifies
the Secured Creditors from and against all liabilities, damages, losses,
actions, claims, judgments, and all reasonable costs, expenses, charges and
attorneys' fees suffered or incurred by any Secured Creditor because of the
maintenance of the foregoing arrangements; PROVIDED, HOWEVER, that no Debtor
shall be required to indemnify any Secured Creditor for any of the
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foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person seeking to be indemnified. The Secured Creditors shall
have no liability or responsibility to any Debtor for the Agent or any other
Depositary Bank accepting any check, draft or other order for payment of money
bearing the legend "payment in full" or words of similar import or any other
restrictive legend or endorsement whatsoever or be responsible for determining
the correctness of any remittance.
SECTION 6. SPECIAL PROVISIONS RE: INVENTORY AND EQUIPMENT. (a) Each
Debtor shall at its own cost and expense maintain, keep and preserve its
Inventory in good condition and keep and preserve its Equipment in good repair,
working order and condition, ordinary wear and tear excepted, and, without
limiting the foregoing, make all necessary and proper repairs, replacements and
additions to its Equipment so that the efficiency thereof shall be fully
preserved and maintained except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
(b) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume,
sell and lease Inventory in the ordinary course of its business, but a sale in
the ordinary course of business shall not under any circumstance include any
transfer or sale in satisfaction, partial or complete, of a debt owing by such
Debtor.
(c) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell Equipment
in accordance with Section 8.10 of the Credit Agreement.
(d) As of the time any Inventory or Equipment of a Debtor becomes
subject to the security interest provided for hereby and at all times
thereafter, such Debtor shall be deemed to have warranted as to any and all of
such Inventory and Equipment that all warranties of such Debtor set forth in
this Agreement are true and correct with respect to such Inventory and
Equipment; and that all of such Inventory and Equipment is located at, or in
transit to, a location permitted by Section 3(b) hereof. Each Debtor warrants
and agrees that no material portion of its Inventory is or will be consigned to
any other Person without the Agent's prior written consent.
(e) Upon the Agent's request, in accordance with Section 4 of the Credit
Agreement, each Debtor shall at its own cost and expense cause the lien of the
Agent in and to any portion of its Collateral subject to a certificate of title
law to be duly noted on such certificate of title or to be otherwise filed in
such manner as is prescribed by law in order to perfect such lien and will cause
all such certificates of title and evidences of lien to be deposited with the
Agent.
(f) Except for Equipment from time to time located on the real estate
described on SCHEDULE D attached hereto or as otherwise hereafter disclosed to
the Agent in writing, none of the Equipment is or will be attached to real
estate in such a manner that the same may become a fixture.
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(g) If any of the Inventory in an aggregate amount of $100,000 or
greater is at any time evidenced by a document of title, such document shall be
promptly delivered by the relevant Debtor to the Agent.
SECTION 7. SPECIAL PROVISIONS RE: INVESTMENT PROPERTY. (a) Unless and
until an Event of Default has occurred and is continuing and thereafter until
notified to the contrary by the Agent pursuant to Section 9(d) hereof:
(i) Each Debtor shall be entitled to exercise all voting and/or
consensual powers pertaining to its Investment Property or any part
thereof, for all purposes not inconsistent with the terms of this
Agreement, the Credit Agreement or any other document evidencing or
otherwise relating to any Secured Obligations; and
(ii) Each Debtor shall be entitled to receive and retain all cash
dividends paid upon or in respect of its Investment Property.
(b) All Investment Property (including all securities, certificated or
uncertificated, securities accounts, and commodity accounts) maintained by each
Debtor on the date hereof is listed and identified on SCHEDULE E attached hereto
and made a part hereof. Upon the written request of Agent, each Debtor shall
promptly notify the Agent of any other Investment Property acquired or
maintained by such Debtor after the date hereof, and shall submit to the Agent a
supplement to SCHEDULE E to reflect such additional rights (provided any
Debtor's failure to do so shall not impair the Agent's security interest
therein). To the extent not so previously delivered, certificates for all
securities now or at any time constituting Investment Property and part of the
Collateral hereunder shall be promptly delivered by the relevant Debtor to the
Agent duly endorsed in blank for transfer or accompanied by an appropriate
assignment or assignments or an appropriate undated stock power or powers, in
every case sufficient to transfer title thereto, including, without limitation,
all stock received in respect of a stock dividend or resulting from a split-up,
revision or reclassification of the Investment Property or any part thereof or
received in addition to, in substitution of or in exchange for the Investment
Property or any part thereof as a result of a merger, consolidation or
otherwise. With respect to any uncertificated securities or Investment Property
held by a securities intermediary, commodity intermediary, or other financial
intermediary of any kind, the relevant Debtor shall execute and deliver, and
shall upon the written request of Agent, use commercially reasonable efforts to
cause any such issuer or intermediary to execute and deliver, an agreement among
such Debtor, the Agent, and such issuer or intermediary in form and substance
satisfactory to the Agent which provides, among other things, for the issuer's
or intermediary's agreement that it will comply with such directions and
entitlement orders, and apply any value distributed on account of any such
Investment Property, as directed by the Agent without further consent by such
Debtor. The Agent may, at any time after the occurrence and during the
continuation of an Event of Default, cause to be transferred into its name or
the name of its nominee or nominees any and all of the Investment Property that
constitutes Collateral hereunder.
(c) Unless and until an Event of Default has occurred and is continuing,
each Debtor may sell or otherwise dispose of any of its Investment Property to
the extent permitted by the Credit Agreement, PROVIDED that except to the extent
permitted by the Credit Agreement, no
-15-
Debtor shall sell or otherwise dispose of any capital stock or other equity
interest in any direct or indirect Subsidiary without the prior written consent
of the Agent. During the existence of any Event of Default, no Debtor shall sell
all or any part of the Investment Property without the prior written consent of
the Agent.
(d) Each Debtor represents that on the date of this Agreement, none of
its Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except to
the extent such Debtor has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock in form and substance reasonably
satisfactory to the Agent. If at any time the Investment Property or any part
thereof consists of margin stock, the relevant Debtor shall promptly so notify
the Agent and deliver to the Agent a duly executed and completed Form U-1 and
such other instruments and documents reasonably requested by the Agent in form
and substance reasonably satisfactory to the Agent.
(e) Notwithstanding anything to the contrary contained herein, in the
event any Investment Property is subject to the terms of a separate security
agreement in favor of the Agent (including, without limitation, the Pledge
Agreement), the terms of such separate security agreement shall govern and
control unless otherwise agreed to in writing by the Agent.
(f) All Deposit Accounts maintained by each Debtor on the date hereof
are listed and identified (by account number and depository institution) on
SCHEDULE E attached hereto and made a part hereof. Each Debtor shall promptly
notify the Agent of any other Deposit Account opened or maintained by such
Debtor after the date hereof, and shall submit to the Agent a supplement to
SCHEDULE E to reflect such additional accounts (provided any Debtor's failure to
do so shall not impair the Agent's security interest therein). With respect to
any Deposit Account maintained by a depository institution other than the Agent,
and as a condition to the establishment and maintenance of any such Deposit
Account, except as otherwise permitted by Section 4.1 of the Credit Agreement,
such Debtor, the depository institution, and the Agent shall execute and deliver
an account control agreement in form and substance reasonably satisfactory to
the Agent which provides, among other things, for the depository institution's
agreement that it will comply with instructions originated by the Agent
directing the disposition of the funds in the Deposit Account without further
consent by such Debtor.
SECTION 8. POWER OF ATTORNEY. In addition to any other powers of
attorney contained herein, each Debtor hereby appoints the Agent, its nominee,
or any other Person whom the Agent may designate as such Debtor's
attorney-in-fact, with full power after the occurrence and during the
continuation of any Event of Default to sign such Debtor's name on verifications
of accounts and other Collateral; to send requests for verification of
Collateral to such Debtor's customers, account debtors and other obligors; to
endorse such Debtor's name on any checks, notes, acceptances, money orders,
drafts and any other forms of payment or security that may come into the Agent's
possession; to endorse the Collateral in blank or to the order of the Agent or
its nominee; to sign such Debtor's name on any invoice or xxxx of lading
relating to any Collateral, on claims to enforce collection of any Collateral,
on notices to and drafts against customers and account debtors and other
obligors, on schedules and assignments of Collateral, on notices of assignment
and on public records; to notify the post office authorities to change the
address for delivery of such Debtor's mail to an address designated by the
Agent; to receive, open and
-16-
dispose of all mail addressed to such Debtor; and to do all things necessary to
carry out this Agreement. Each Debtor hereby ratifies and approves all acts of
any such attorney and agrees that neither the Agent nor any such attorney will
be liable for any acts or omissions nor for any error of judgment or mistake of
fact or law other than such Person's gross negligence or willful misconduct. The
Agent may file one or more financing statements disclosing its security interest
in any or all of the Collateral without any Debtor's signature appearing
thereon, and each Debtor also hereby grants the Agent a power of attorney to
execute any such financing statements, or amendments and supplements to
financing statements, on behalf of such Debtor without notice thereof to any
Debtor. The foregoing powers of attorney, being coupled with an interest, are
irrevocable until the Secured Obligations have been fully paid and satisfied and
the commitments of the Banks to extend credit to or for the account of the
Borrower under the Credit Agreement have expired or otherwise terminated (at
which time the Agent shall execute and deliver any document, instrument or other
writing reasonably requested by the Debtors to evidence the termination of such
power of attorney).
SECTION 9. DEFAULTS AND REMEDIES. (a) The occurrence and continuance of
any event or the existence of any condition which is specified as an "Event of
Default" under the Credit Agreement shall constitute an "EVENT OF DEFAULT"
hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law, all of which each Debtor
hereby waives to the extent permitted by applicable law, at any time or times,
sell and deliver any or all Collateral held by or for it at public or private
sale, at any securities exchange or broker's board or at any Secured Creditor's
office or elsewhere, for cash, upon credit or otherwise, at such prices and upon
such terms as the Agent deems advisable, in its sole discretion. In the exercise
of any such remedies, the Agent may sell the Collateral as a unit even though
the sales price thereof may be in excess of the amount remaining unpaid on the
Secured Obligations. Also, if less than all the Collateral is sold, the Agent
shall have no duty to marshal or apportion the part of the Collateral so sold as
between the Debtors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Debtors are the owners thereof. In
addition to all other sums due any Secured Creditor hereunder, each Debtor shall
pay the Secured Creditors all reasonable costs and expenses incurred by the
Secured Creditors, including reasonable attorneys' fees and court costs, in
obtaining, liquidating or enforcing payment of Collateral or the Secured
Obligations or in the prosecution or defense of any action or proceeding by or
against any Secured Creditor or any Debtor concerning any matter arising out of
or connected with this Agreement or the Collateral or the Secured Obligations,
including, without limitation, any of the foregoing arising in, arising under or
related to a case under the United States Bankruptcy Code (or any successor
statute). Any requirement of reasonable notice shall be met if such notice is
personally served on or mailed, postage prepaid, to the Debtors in accordance
with Section 13(b) hereof at least ten (10) business days before the time of
sale or other event giving rise to the requirement of such notice; PROVIDED,
HOWEVER, no notification need be given to a Debtor if such Debtor has signed,
after an Event of Default hereunder has occurred, a statement renouncing any
right to notification of sale
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or other intended disposition. The Agent shall not be obligated to make any sale
or other disposition of the Collateral regardless of notice having been given.
Any Secured Creditor may be the purchaser at any such sale. Each Debtor hereby
waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, be made at the time and place to which the sale was
postponed or the Agent may further postpone such sale by announcement made at
such time and place. The Agent has no obligation to prepare the Collateral for
sale. The Agent may sell or otherwise dispose of the Collateral without giving
any warranties as to the Collateral or any part thereof, including disclaimers
of any warranties of title or the like, and each Debtor acknowledges and agrees
that the absence of such warranties shall not render the disposition
commercially unreasonable.
(c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, in addition to all other rights
provided herein or by law, (i) the Agent shall have the right to take physical
possession of any and all of the Collateral and anything found therein, the
right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully and without
abridgment of applicable contractual restrictions), and the right to maintain
such possession on the relevant Debtor's premises (each Debtor hereby agreeing,
to the extent it may lawfully do so without abridgment of applicable contractual
restrictions, to lease such premises without cost or expense to the Agent or its
designee if the Agent so requests) or to remove the Collateral or any part
thereof to such other places as the Agent may desire, (ii) the Agent shall have
the right to direct any intermediary at any time holding any Investment Property
or other Collateral, or any issuer thereof, to deliver such Collateral or any
part thereof to the Agent and/or to liquidate such Collateral or any part
thereof and deliver the proceeds thereof to the Agent (including, without
limitation, the right to deliver a notice of control with respect to any
Collateral held in a securities account or commodities account and deliver all
entitlement orders with respect thereto, (iii) the Agent shall have the right to
exercise any and all rights with respect to all Deposit Accounts of each Debtor
including, without limitation, the right to direct the disposition of the funds
in each Deposit Account and to collect, withdraw and receive all amounts due or
to become due or payable thereunder, and (iv) each Debtor shall, upon the
Agent's demand, assemble the Collateral and make it available to the Agent at a
place designated by the Agent. If the Agent exercises its right to take
possession of the Collateral, each Debtor shall also at its expense perform any
and all other steps requested by the Agent to preserve and protect the security
interest hereby granted in the Collateral, such as placing and maintaining signs
indicating the security interest of the Agent, appointing overseers for the
Collateral and maintaining Collateral records.
(d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, all rights of a Debtor to
exercise the voting and/or consensual powers which it is entitled to exercise
pursuant to Section 7(a)(i) hereof and/or to receive and retain the
distributions which it is entitled to receive and retain pursuant to Section
7(a)(ii) hereof, shall, at the option of the Agent (with notice to the relevant
Debtor), cease and thereupon become vested in the Agent, which, in addition to
all other rights provided herein or by law, shall then be entitled solely and
exclusively to exercise all voting and other consensual powers pertaining to the
Investment Property (including, without limitation, the right to deliver
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notice of control with respect to any Investment Property held in a securities
account or commodity account and deliver all entitlement orders with respect
thereto) and/or to receive and retain the distributions which such Debtor would
otherwise have been authorized to retain pursuant to Section 7(a)(ii) hereof and
shall then be entitled solely and exclusively to exercise any and all rights of
conversion, exchange or subscription or any other rights, privileges or options
pertaining to any Investment Property as if the Agent were the absolute owner
thereof including, without limitation, the rights to exchange, at its
discretion, any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other readjustment of the
respective issuer thereof or upon the exercise by or on behalf of any such
issuer or the Agent of any right, privilege or option pertaining to any
Investment Property and, in connection therewith, to deposit and deliver any and
all of the Investment Property with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the Agent
may determine. In the event the Agent in good faith believes any of the
Collateral constitutes restricted securities within the meaning of any
applicable securities laws, any disposition thereof in compliance with such laws
shall not render the disposition commercially unreasonable.
(e) Without in any way limiting the foregoing, each Debtor hereby grants
to the Secured Creditors a royalty-free irrevocable license and right to use all
of such Debtor's patents, patent applications, patent licenses, trademarks,
trademark registrations, trademark licenses, trade names, trade styles, and
similar intangibles in connection with any foreclosure or other realization by
the Agent or the Secured Creditors on all or any part of the Collateral to the
extent permitted by law (to the extent not prohibited by the terms of the
contracts creating the Debtor's rights in the foregoing or applicable law). The
license and right granted the Secured Creditors hereby shall be without any
royalty or fee or charge whatsoever.
(f) The powers conferred upon the Secured Creditors hereunder are solely
to protect their interest in the Collateral and shall not impose on them any
duty to exercise such powers. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession or control if such Collateral is accorded treatment substantially
equivalent to that which the Agent accords its own property, consisting of
similar type assets, it being understood, however, that the Agent shall have no
responsibility for (i) ascertaining or taking any action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Collateral, whether or not the Agent has or is deemed to have knowledge of such
matters, (ii) taking any necessary steps to preserve rights against any parties
with respect to any Collateral, or (iii) initiating any action to protect the
Collateral or any part thereof against the possibility of a decline in market
value. This Agreement constitutes an assignment of rights only and not an
assignment of any duties or obligations of the Debtors in any way related to the
Collateral, and the Agent shall have no duty or obligation to discharge any such
duty or obligation. Neither any Secured Creditor nor any party acting as
attorney for any Secured Creditor shall be liable for any acts or omissions or
for any error of judgment or mistake of fact or law other than such person's
gross negligence or willful misconduct.
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Debtor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective
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unless it is in writing, signed by the party against whom such waiver is sought
to be enforced and then only to the extent specifically stated. The rights and
remedies of the Secured Creditors under this Agreement shall be cumulative and
not exclusive of any other right or remedy which any Secured Creditor may have.
SECTION 10. APPLICATION OF PROCEEDS. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Secured Obligations in accordance with the terms of
Section 3 of the Credit Agreement. The Debtors shall remain liable to the
Secured Creditors for any deficiency. Any surplus remaining after the full
payment and satisfaction of the Secured Obligations shall be returned to the
Borrower, as agent for the Debtors, or to whomsoever the Agent reasonably
determines is lawfully entitled thereto.
SECTION 11. CONTINUING AGREEMENT. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Secured Obligations, both for principal and interest, have been fully
paid and satisfied and the commitments of the Banks to extend credit to or for
the account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Upon such termination of this Agreement, the Agent shall, upon the
request and at the expense of the Debtors, forthwith release its security
interest hereunder.
SECTION 12. THE AGENT. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in the Credit Agreement (including, without limitation,
Section 11 thereof), all of which provisions are incorporated by reference
herein with the same force and effect as if set forth herein in their entirety.
The Agent hereby disclaims any representation or warranty to the other Secured
Creditors or any other holders of the Secured Obligations concerning the
perfection of the liens and security interests granted hereunder or in the value
of any of the Collateral.
SECTION 13. MISCELLANEOUS. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Debtor, its successors
and assigns and shall inure, together with the rights and remedies of the
Secured Creditors hereunder, to the benefit of the Secured Creditors and their
successors and permitted assigns; PROVIDED, HOWEVER, that no Debtor may assign
its rights or delegate its duties hereunder without the Agent's prior written
consent. Without limiting the generality of the foregoing, and subject to the
provisions of the Credit Agreement, any Bank may assign or otherwise transfer
any indebtedness held by it secured by this Agreement to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Bank herein or otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Debtor when given to the Borrower in accordance
with Section 12.8 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.8 of the Credit Agreement.
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(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditors (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event and to the extent that any provision hereof shall be
deemed to be invalid or unenforceable by reason of the operation of any law or
by reason of the interpretation placed thereon by any court, this Agreement
shall to such extent be construed as not containing such provision, but only as
to such jurisdictions where such law or interpretation is operative, and the
invalidity or unenforceability of such provision shall not affect the validity
of any remaining provisions hereof, and any and all other provisions hereof
which are otherwise lawful and valid shall remain in full force and effect.
Without limiting the generality of the foregoing, in the event that this
Agreement shall be deemed to be invalid or otherwise unenforceable with respect
to any Debtor, such invalidity or unenforceability shall not affect the validity
of this Agreement with respect to the other Debtors.
(e) The lien and security interest herein created and provided for stand
as direct and primary security for the Secured Obligations of the Borrower
arising under or otherwise relating to the Credit Agreement as well as for any
of the other Secured Obligations. No application of any sums received by the
Secured Creditors in respect of the Collateral or any disposition thereof to the
reduction of the Secured Obligations or any part thereof shall in any manner
entitle any Debtor to any right, title or interest in or to the Secured
Obligations or any collateral or security therefor, whether by subrogation or
otherwise, unless and until all Secured Obligations have been fully paid and
satisfied and all agreements of the Secured Creditors to extend credit to or for
the account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Each Debtor acknowledges that the lien and security interest hereby
created and provided are absolute and unconditional and shall not in any manner
be affected or impaired by any acts of omissions whatsoever of any Secured
Creditor or any other holder of any Secured Obligations, and without limiting
the generality of the foregoing, the lien and security interest hereof shall not
be impaired by any acceptance by the Secured Creditors or any other holder of
any Secured Obligations of any other security for or guarantors upon any of the
Secured Obligations or by any failure, neglect or omission on the part of any
Secured Creditor or any other holder of any Secured Obligations to realize upon
or protect any of the Secured Obligations or any collateral or security therefor
(including, without limitation, impairment of collateral or failure to perfect
security interest in collateral). The lien and security interest hereof shall
not in any manner be impaired or affected by (and the Secured Creditors, without
notice to anyone, are hereby authorized to make from time to time) any sale,
pledge, surrender, compromise, settlement, release, renewal, extension,
indulgence, alteration, substitution, exchange, change in, modification or
disposition of any of the Secured Obligations or of any collateral or security
therefor, or of any guaranty thereof, or of any instrument or agreement setting
forth the terms and conditions pertaining to any of the foregoing. The Secured
Creditors may at their discretion at any time grant credit to
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the Borrower without notice to the other Debtors in such amounts and on such
terms as the Secured Creditors may elect (all of such to constitute additional
Secured Obligations hereunder) without in any manner impairing the lien and
security interest created and provided for herein. In order to realize hereon
and to exercise the rights granted the Secured Creditors hereunder and under
applicable law, there shall be no obligation on the part of any Secured Creditor
or any other holder of any Secured Obligations at any time to first resort for
payment to the Borrower or to any other Debtor or to any guaranty of the Secured
Obligations or any portion thereof or to resort to any other collateral,
security, property, liens or any other rights or remedies whatsoever, and the
Secured Creditors shall have the right to enforce this Agreement against any
Debtor or any of its Collateral irrespective of whether or not other proceedings
or steps seeking resort to or realization upon or from any of the foregoing are
pending.
(f) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Debtors hereunder or a party shall wish to
become a Debtor hereunder, such substituted or additional Debtor shall, upon
executing an agreement substantially in the form attached hereto as SCHEDULE H,
become a party hereto and be bound by all the terms and conditions hereof to the
same extent as though such Debtor had originally executed this Agreement and, in
the case of a substitution, in lieu of the Debtor being replaced. Any such
agreement shall contain information as to such Debtor necessary to update
SCHEDULES A, B, C, D, E, AND F hereto with respect to it. No such substitution
shall be effective absent the written consent of Agent nor shall it in any
manner affect the obligations of the other Debtors hereunder.
(g) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same agreement.
(i) Each Debtor hereby submits to the non-exclusive personal
jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois state court sitting in Xxxx County, Illinois for
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. Each Debtor 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 proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient form. EACH DEBTOR AND, BY ACCEPTING THE BENEFITS OF THIS
AGREEMENT, EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(j) Upon the execution and delivery of this Agreement by the Debtors
party hereto and the Agent, this Agreement shall supersede all provisions of the
Original Security Agreement as of such date. The Debtors hereby agree that,
notwithstanding the execution and delivery of this
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Agreement, the liens and security interests created and provided for under the
Original Security Agreement continue in effect under and pursuant to the terms
of this Agreement for the benefit of all of the Secured Obligations as defined
herein. Nothing herein contained shall in any manner affect or impair the
priority of the liens and security interests created and provided for by the
Original Security Agreement as to the indebtedness and obligations which would
otherwise be secured thereby prior to giving effect to this Agreement.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, each Debtor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"DEBTORS"
APAC CUSTOMER SERVICES, INC.
APAC CUSTOMER SERVICES GENERAL
PARTNER, INC.
APAC CUSTOMER SERVICES, L.L.C.
APAC CUSTOMER SERVICES OF ILLINOIS, INC.
APAC CUSTOMER SERVICES OF IOWA, L.L.C.
ITI HOLDINGS, INC.
By
Name
----------------------------------
Title
---------------------------------
APAC CUSTOMER SERVICES OF TEXAS, L.P.,
By:_________________, Its General
Partner
By
Name
----------------------------------
Title
---------------------------------
Accepted and agreed to in Chicago, Illinois as of the date first above
written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
----------------------------------
Title
-24-
AMENDED AND RESTATED GUARANTY AGREEMENT
This Amended and Restated Guaranty Agreement (the "GUARANTY") is dated as
of December 20, 2002, by the parties who have executed this Guaranty (such
parties, along with any other parties who execute and deliver to the Agent
hereinafter identified and defined an agreement substantially in the form
attached hereto as EXHIBIT A, being herein referred to collectively as the
"GUARANTORS" and individually as a "GUARANTOR").
PRELIMINARY STATEMENTS
A. Each of the Guarantors is a direct or indirect subsidiary of APAC
Customer Services, an Illinois corporation (the "BORROWER").
B. The Guarantors are currently party to a Guaranty Agreement dated as of
May 20, 1998 (the "ORIGINAL GUARANTY"), pursuant to which such Guarantors have
guaranteed, among other things, the payment and performance of the indebtedness,
obligations, and liabilities of the Borrower owing under the Amended and
Restated Credit Agreement dated as of September 8, 1998, as amended, by and
among the Borrower, Xxxxxx Trust and Savings Bank ("HTSB") individually and as
agent, and the banks and other financial institutions party thereto (the
"ORIGINAL CREDIT AGREEMENT").
C. The Borrower and HTSB, individually and as agent (HTSB acting as such
agent and any successor or successors to HTSB in such capacity being hereinafter
referred to as the "AGENT") have entered into an Amended and Restated Credit
Agreement dated as of December 20, 2002 (such Amended and Restated Credit
Agreement, as the same may be amended or modified from time to time, including
further amendments and restatements thereof in its entirety, being hereinafter
referred to as the "CREDIT AGREEMENT"), pursuant to which HTSB and the other
banks and financial institutions from time to time parties thereto (HTSB and
such other banks and financial institutions being hereinafter referred to
collectively as the "BANKS" and individually as a "BANK") have agreed to amend
and restate the Original Credit Agreement and, subject to certain terms and
conditions, extend credit and make certain financial accommodations available to
the Borrower (the Agent and the Banks, together with affiliates of the Banks
with respect to Hedging Liability and Funds Transfer and Deposit Account
Liability referred to below, being hereinafter referred to collectively as the
"GUARANTEED CREDITORS" and individually as a "GUARANTEED CREDITOR").
D. In addition, the Borrower and the Guarantors, or any one or more of
them, may from time to time be liable to the Banks and/or their affiliates with
respect to Hedging Liability and Funds Transfer and Deposit Account Liability
(as such terms are defined in the Credit Agreement).
E. As a condition to amending and restating the Original Credit Agreement
and extending credit to the Borrower under the Credit Agreement, the Banks have
required, among other things, that the Guarantors guarantee the payment and
performance of all indebtedness, obligations, and liabilities of the Borrower
owing to the Guaranteed Creditors under the Credit
Agreement and owing to the Guaranteed Creditors with respect to Hedging
Liability and Funds Transfer and Deposit Account Liability and, in connection
therewith, that the Original Guaranty be amended and restated in its entirety to
read as set forth in this Guaranty.
F. The Borrower provides each of the Guarantors with substantial
financial, management, administrative, and technical support, and each Guarantor
will directly and substantially benefit from credit and other financial
accommodations extended and to be extended by the Banks and their affiliates to
the Borrower.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrower by
the Guaranteed Creditors from time to time, each Guarantor hereby represents and
warrants to, and covenants and agrees with, the Guaranteed Creditors as follows:
SECTION 1. All capitalized terms used herein without definition shall
have the same meanings herein as such terms have in the Credit Agreement.
SECTION 2. Each Guarantor hereby jointly and severally guarantees, the
due and punctual payment and performance when due of (a) any and all
indebtedness, obligations, and liabilities of the Borrower and the Guarantors,
and of any of them individually, to the Guaranteed Creditors, and to any of them
individually, under or in connection with or evidenced by the Credit Agreement
or any other Loan Document, including, without limitation, all obligations
evidenced by the Notes of the Borrower heretofore or hereafter issued under the
Credit Agreement, all obligations of the Borrower to reimburse the Guaranteed
Creditors, or any of them individually, for the amount of all drawings on all
Letters of Credit issued pursuant to the Credit Agreement and all other
obligations of the Borrower under any and all Applications for Letters of Credit
delivered thereunder, all obligations of the Borrower and the Guarantors, and of
any of them individually, arising under or in connection with or otherwise
evidenced by agreements with any one or more of the Guaranteed Creditors or
their affiliates with respect to any Hedging Liability, and all obligations of
the Borrower and the Guarantors, and of any of them individually, arising under
or in connection with or otherwise evidenced by agreements with any one or more
of the Guaranteed Creditors or their affiliates with respect to any Funds
Transfer and Deposit Account Liability, in each case whether now existing or
hereafter arising (and whether arising before or after the filing of a petition
in bankruptcy and including all interest accrued after the petition date), due
or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired and (b) any and all reasonable expenses and charges,
legal or otherwise, suffered or incurred by the Guaranteed Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor. The indebtedness, obligations and liabilities described in
the immediately preceding clauses (a) and (b) are hereinafter referred to as the
"INDEBTEDNESS HEREBY GUARANTEED". In case of failure by the Borrower punctually
to pay any indebtedness hereby guaranteed, each Guarantor hereby jointly and
severally agrees to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and as if such payment were made by the
Borrower. All payments hereunder by any Guarantor shall be made in immediately
available funds in U.S. Dollars without set-off, counterclaim or other defense
or
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withholding or deduction of any nature. Notwithstanding anything in this
Guaranty to the contrary, the right of recovery against a Guarantor under this
Guaranty shall not exceed $1.00 less than the lowest amount which would render
such Guarantor's obligations under this Guaranty void or voidable under
applicable law, including fraudulent conveyance law.
SECTION 3. Each Guarantor further jointly and severally agrees to pay
on demand all reasonable expenses, legal and/or otherwise (including court costs
and reasonable attorneys' fees), paid or incurred by any Guaranteed Creditor in
endeavoring to collect the indebtedness hereby guaranteed, or any part thereof,
or in enforcing or endeavoring to enforce any Guarantor's obligations hereunder,
or any part thereof, or in protecting, defending or enforcing this Guaranty in
any litigation, bankruptcy or insolvency proceedings or otherwise.
SECTION 4. Each Guarantor agrees that, upon demand, such Guarantor
shall pay to the Agent for the benefit of the Guaranteed Creditors the full
amount of the indebtedness hereby guaranteed then due (subject to the right of
recovery from such Guarantor pursuant to the last sentence of Section 2 above)
whether or not any one or more of the other Guarantors shall then or thereafter
pay any amount whatsoever in respect to their obligations hereunder.
SECTION 5. Each Guarantor agrees that such Guarantor will not exercise
or enforce any right of exoneration, contribution, reimbursement, recourse or
subrogation available to such Guarantor against any Person liable for payment of
the indebtedness hereby guaranteed, or as to any security therefor, unless and
until the full amount owing to the Guaranteed Creditors of the indebtedness
hereby guaranteed has been fully paid and satisfied and each of the commitments
by the Guaranteed Creditors to extend any indebtedness hereby guaranteed shall
have expired or otherwise terminated. The payment by any Guarantor of any amount
or amounts to the Guaranteed Creditors pursuant hereto shall not in any way
entitle any such Guarantor, either at law, in equity or otherwise, to any right,
title or interest (whether by way of subrogation or otherwise) in and to the
indebtedness hereby guaranteed or any part thereof or any collateral security
therefor or any other rights or remedies in any way relating thereto or in and
to any amounts theretofor, then or thereafter paid or applicable to the payment
thereof howsoever such payment may be made and from whatsoever source such
payment may be derived unless and until all of the indebtedness hereby
guaranteed and all costs and expenses suffered or incurred by the Guaranteed
Creditors in enforcing this Guaranty have been paid and satisfied in full and
each of the commitments by the Guaranteed Creditors to extend any indebtedness
hereby guaranteed shall have expired or otherwise terminated and unless and
until such payment in full and termination, any payments made by any Guarantor
hereunder and any other payments from whatsoever source derived on account of or
applicable to the indebtedness hereby guaranteed or any part thereof shall be
held and taken to be merely payments in gross to the Guaranteed Creditors
reducing pro tanto the indebtedness hereby guaranteed.
SECTION 6. To the extent permitted by the Credit Agreement, each
Guaranteed Creditor may, without any notice whatsoever to any of the Guarantors,
sell, assign, or transfer all of the indebtedness hereby guaranteed, or any part
thereof, or grant participations therein, and in that event each and every
immediate and successive assignee, transferee, or holder of all or any part of
the indebtedness hereby guaranteed, shall have the right through the Agent
pursuant to Section 18 hereof to enforce this Guaranty, by suit or otherwise,
for the benefit of such assignee, transferee, or holder as fully as if such
assignee,
-3-
transferee, or holder were herein by name specifically given such rights, powers
and benefits; but each Guaranteed Creditor through the Agent pursuant to Section
18 hereof shall have an unimpaired right to enforce this Guaranty for its own
benefit, as to so much of the indebtedness hereby guaranteed that it has not
sold, assigned or transferred.
SECTION 7. This Guaranty is a continuing, absolute, and unconditional
Guaranty, and shall remain in full force and effect until all of the
indebtedness hereby guaranteed, shall be fully paid and satisfied and each of
the commitments by the Guaranteed Creditors to extend any indebtedness hereby
guaranteed shall have expired or otherwise terminated. The dissolution of any
Guarantor shall not terminate this Guaranty as to such Guarantor until notice of
such dissolution shall have been actually received by the Guaranteed Creditors,
nor until all of the indebtedness hereby guaranteed, created or existing or
committed to be extended in each case before receipt of such notice shall be
fully paid and satisfied. The Guaranteed Creditors may at any time or from time
to time release any Guarantor from its obligations hereunder or effect any
compromise with any Guarantor and no such release or compromise shall in any
manner impair or otherwise affect the obligations hereunder of the other
Guarantors. No release, compromise, or discharge of any one or more of the
Guarantors shall release, compromise or discharge the obligations of the other
Guarantors hereunder.
SECTION 8. All payments received from the Borrower or on account of the
indebtedness hereby guaranteed from whatsoever source, shall be taken and
applied pursuant to the Credit Agreement, and this Guaranty shall apply to and
secure any ultimate balance that shall remain owing to the Guaranteed Creditors.
SECTION 9. The liability hereunder shall in no way be affected or
impaired by (and the Guaranteed Creditors are hereby expressly authorized to
make from time to time, without notice to any of the Guarantors), any sale,
pledge, surrender, compromise, settlement, release, renewal, extension,
impairment, indulgence, alteration, substitution, exchange, change in,
modification or other disposition of any of the indebtedness hereby guaranteed,
either express or implied, or of any Loan Document or any other contract or
contracts evidencing any thereof, or of any security or collateral therefor or
any guaranty thereof. The liability hereunder shall in no way be affected or
impaired by any acceptance or release by the Guaranteed Creditors of any
security for or other guarantors upon any of the indebtedness hereby guaranteed,
or by any failure, neglect or omission on the part of the Guaranteed Creditors
to realize upon or protect any of the indebtedness hereby guaranteed, or any
collateral or security therefor (including, without limitation, impairment of
collateral and failure to perfect security interest in any collateral), or to
exercise any lien upon or right of appropriation of any moneys, credits or
property of the Borrower or any Guarantor, possessed by any of the Guaranteed
Creditors, toward the liquidation of the indebtedness hereby guaranteed, or by
any application of payments or credits thereon. Subject to the terms of the
Credit Agreement, the Guaranteed Creditors shall have the exclusive right to
determine how, when and what application of payments and credits, if any, shall
be made on said indebtedness hereby guaranteed, or any part of same. In order to
hold any Guarantor liable hereunder, there shall be no obligation on the part of
the Guaranteed Creditors, at any time, to resort for payment to the Borrower or
to any other Guarantor, or to any other Person, its property or estate, or
resort to any collateral, security, property, liens or other rights or remedies
-4-
whatsoever, and the Guaranteed Creditors shall have the right to enforce this
Guaranty against any Guarantor irrespective of whether or not other proceedings
or steps are pending seeking resort to or realization upon or from any of the
foregoing are pending.
SECTION 10. In the event the Guaranteed Creditors shall at any time in
their discretion permit a substitution of Guarantors hereunder or a party shall
wish to become Guarantor hereunder, such substituted or additional Guarantor
shall, upon executing an agreement in the form attached hereto as EXHIBIT A,
become a party hereto and be bound by all the terms and conditions hereof to the
same extent as though such Guarantor had originally executed this Guaranty and
in the case of a substitution, in lieu of the Guarantor being replaced. No such
substitution shall be effective absent the written consent of the Guaranteed
Creditors delivered in accordance with the terms of the Credit Agreement, nor
shall it in any manner affect the obligations of the other Guarantors hereunder.
SECTION 11. All diligence in collection or protection, and all
presentment, demand, protest and/or notice, as to any and everyone, whether or
not the Borrower or the Guarantors or others, of dishonor and of default and of
non-payment and of the creation and existence of any and all of said
indebtedness hereby guaranteed, and of any security and collateral therefor, and
of the acceptance of this Guaranty, and of any and all extensions of credit and
indulgence hereunder, are expressly waived.
SECTION 12. No act of commission or omission of any kind, or at any
time, upon the part of the Guaranteed Creditors in respect to any matter
whatsoever, shall in any way affect or impair this Guaranty.
SECTION 13. The Guarantors waive any and all defenses, claims and
discharges of the Borrower, or any other obligor or guarantor, pertaining to the
indebtedness hereby guaranteed, except the defense of discharge by payment in
full. Without limiting the generality of the foregoing, the Guarantors will not
assert, plead or enforce against the Guaranteed Creditors any defense of waiver,
release, discharge in bankruptcy, statute of limitations, res judicata, statue
of frauds, anti-deficiency statute, fraud, incapacity, minority, usury,
illegality or unenforceability which may be available to the Borrower or any
other Person liable in respect of any of the indebtedness hereby guaranteed, or
any set-off available against the Guaranteed Creditors to the Borrower or any
such other Person, whether or not on account of a related transaction. The
Guarantors agree that the Guarantors shall be and remain jointly and severally
liable for any deficiency remaining after foreclosure or other realization on
any lien or security interest securing the indebtedness hereby guaranteed,
whether or not the liability of the Borrower or any other obligor for such
deficiency is discharged pursuant to statute or judicial decision.
SECTION 14. If any payment applied by the Guaranteed Creditors to the
indebtedness hereby guaranteed is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Borrower or any other obligor),
the indebtedness hereby guaranteed to which such payment was applied shall for
the purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such of the indebtedness hereby guaranteed as fully as if such application had
never been made.
-5-
SECTION 15. The liability of the Guarantors under this Guaranty is in
addition to and shall be cumulative with all other liabilities of the Guarantors
after the date hereof to the Guaranteed Creditors as a guarantor of the
indebtedness hereby guaranteed, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability provides to
the contrary.
SECTION 16. Any invalidity or unenforceability of any provision or
application of this Guaranty shall not affect other lawful provisions and
applications hereof, and to this end the provisions of this Guaranty are
declared to be severable. Without limiting the generality of the foregoing, any
invalidity or unenforceability against any Guarantor of any provision or
application of the Guaranty shall not affect the validity or enforceability of
the provisions or application of this Guaranty as against the other Guarantors.
SECTION 17. Any demand for payment on this Guaranty or any other notice
required or desired to be given hereunder to any Guarantor shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth on the appropriate
signature page hereof, or such other address or telecopier number as such party
may hereafter specify by notice to the Agent given by United States certified or
registered mail, by telecopy or by other telecommunication device capable of
creating a written record of such notice and its receipt. Each such notice,
request or other communication shall be effective (i) if given by telecopier,
when such telecopy is transmitted to the telecopier number specified in this
Section and a confirmation of such telecopy has been received by the sender,
(ii) if given by mail, 5 days after such communication is deposited in the mail,
certified or registered with return receipt requested, addressed as aforesaid or
(iii) if given by any other means, when delivered at the addresses specified in
this Section.
SECTION 18. No Guaranteed Creditor (other than the Agent) shall have the
right to institute any suit, action or proceeding in equity or at law in
connection with this Guaranty for the enforcement of any remedy under or upon
this Guaranty; it being understood and intended that no one or more of the
Guaranteed Creditors (other than the Agent) shall have any right in any manner
whatsoever to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Guaranteed Creditors.
SECTION 19. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING
TO THE LAW OF THE STATE OF ILLINOIS (without regard to principles of conflicts
of laws that would require the application of laws other than those of the State
of Illinois) in which state it shall be performed by the Guarantors and may not
be waived, amended, released or otherwise changed except by a writing signed by
the Agent. This Guaranty and every part thereof shall be effective upon delivery
to the Agent, without further act, condition or acceptance by the Guaranteed
Creditors, shall be binding upon the Guarantors and upon the legal
representatives, successors and assigns of the Guarantors, and shall inure to
the benefit of the Guaranteed Creditors, their successors, legal representatives
and assigns. The Guarantors waive notice of the Guaranteed Creditors' acceptance
hereof. This Guaranty may be executed in counterparts and by different parties
hereto on separate counterpart signature pages, each of which shall be an
original, but all together to be one and the same instrument.
-6-
SECTION 20. Each Guarantor hereby submits to the nonexclusive personal
jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois State court sitting in Xxxx County, Illinois, for
purposes of all legal proceedings arising out of or relating to this Guaranty or
the transactions contemplated hereby. Each Guarantor 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 proceeding brought in such a court
and any claim that any such proceeding brought in such court has been brought in
an inconvenient forum. EACH GUARANTOR AND, BY ACCEPTING THE BENEFITS OF THIS
AGREEMENT, EACH GUARANTEED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 19. Upon the execution and delivery of this Guaranty by the
Guarantors hereunder, this Guaranty shall supersede all provisions of the
Original Guaranty as of such date. The Guarantors hereby agree that,
notwithstanding the execution and delivery of this Guaranty, the obligations of
such Guarantors created and provided for under the Original Guaranty continue in
effect under and pursuant to the terms of this Guaranty for the benefit of all
of the indebtedness hereby guaranteed.
[SIGNATURE PAGES TO FOLLOW]
-7-
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be executed
and delivered as of the date first above written.
"GUARANTORS"
APAC CUSTOMER SERVICES GENERAL
PARTNER, INC.
APAC CUSTOMER SERVICES, L.L.C.
APAC CUSTOMER SERVICES OF ILLINOIS, INC.
APAC CUSTOMER SERVICES OF IOWA, L.L.C.
ITI HOLDINGS, INC.
By
Name
-----------------------------------
Title
----------------------------------
Address:
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention:
---------------------------
Telephone:
---------------------------
Telecopy:
---------------------------
APAC CUSTOMER SERVICES OF TEXAS, L.P.,
By:_________________, Its General Partner
By
Name
-----------------------------------
Title
----------------------------------
Address:
Xxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention:
---------------------------
Telephone:
---------------------------
Telecopy:
---------------------------
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Accepted and agreed to in Chicago, Illinois, as of the date first above
written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
-----------------------------------
Title
----------------------------------
Address:
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-9-
EXHIBIT A
TO
GUARANTY AGREEMENT
ASSUMPTION AND SUPPLEMENT TO GUARANTY AGREEMENT
This Assumption and Supplement to Guaranty Agreement (the "AGREEMENT") is
dated as of this _____ day of ____________, _____, made by [NEW GUARANTOR], a
___________ CORPORATION/LIMITED LIABILITY COMPANY/PARTNERSHIP (the "NEW
GUARANTOR");
W I T N E S S E T H T H A T:
WHEREAS, certain parties have executed and delivered to the Guaranteed
Creditors that certain Amended and Restated Guaranty Agreement dated as of
December 20, 2002 (such Amended and Restated Guaranty Agreement, as the same may
be amended, modified or further restated from time to time, including
supplements thereto which add or substitute parties as Guarantors thereunder,
being hereinafter referred to as the "GUARANTY") pursuant to which such parties
(the "EXISTING GUARANTORS") have guaranteed to the Guaranteed Creditors the full
and prompt payment of, among other things, any and all indebtedness, obligations
and liabilities of APAC Customer Services, Inc. (the "BORROWER") arising under
or relating to the Credit Agreement and the Loan Documents as defined therein;
and
WHEREAS, the Borrower provides the New Guarantor with substantial
financial, managerial, administrative and technical support and the New
Guarantor will directly and substantially benefit from credit and other
financial accommodations extended and to be extended by the Guaranteed Creditors
to the Borrower;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances made
or to be made, or credit accommodations given or to be given, to the Borrower by
the Guaranteed Creditors from time to time, the New Guarantor hereby agrees as
follows:
1. The New Guarantor acknowledges and agrees that it shall become a
"Guarantor" party to the Guaranty effective upon the date of the New Guarantor's
execution of this Agreement and the delivery of this Agreement to the Agent on
behalf of the Guaranteed Creditors, and that upon such execution and delivery,
all references in the Guaranty to the terms "GUARANTOR" or "GUARANTORS" shall be
deemed to include the New Guarantor.
2. The New Guarantor hereby assumes and becomes liable (jointly and
severally with all the other Guarantors) for the indebtedness hereby guaranteed
(as defined in the Guaranty) and agrees to pay and perform all of the
obligations of a Guarantor under the Guaranty according to, and otherwise on and
subject to, the terms and conditions of, the Guaranty to the same extent and
with the same force and effect as if the New Guarantor had originally been one
of the Existing Guarantors under the Guaranty and had originally executed the
same as such an Existing Guarantor.
3. All capitalized terms used in this Agreement without definition shall
have the same meaning herein as such terms have in the Guaranty, except that any
reference to the term "Guarantor" or "Guarantors" and any provision of the
Guaranty providing meaning to such term shall be deemed a reference to the
Existing Guarantors and the New Guarantor. Except as specifically modified
hereby, all of the terms and conditions of the Guaranty shall stand and remain
unchanged and in full force and effect.
4. The New Guarantor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent or
the Guaranteed Creditors may deem reasonably necessary or proper to carry out
more effectively the purposes of this Agreement.
5. No reference to this Agreement need be made in the Guaranty or in any
other document or instrument making reference to the Guaranty, any reference to
the Guaranty in any of such to be deemed a reference to the Guaranty as modified
hereby.
6. This Agreement shall be governed by and construed in accordance with
the State of Illinois (without regard to principles of conflicts of law that
would require the application of laws other than those of the State of Illinois)
in which state it shall be performed by the New Guarantor.
[NEW GUARANTOR]
By
Name
-----------------------------------
Title
----------------------------------
Acknowledged and agreed to as of the date first above written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
-----------------------------------
Title
----------------------------------
-2-
AMENDED AND RESTATED PLEDGE AGREEMENT
This Amended and Restated Pledge Agreement (the "AGREEMENT") is dated as of
December 20, 2002, by and among APAC Customer Services, Inc., an Illinois
corporation (the "BORROWER"), and the other parties executing this Agreement
under the heading "Pledgors" (the Borrower and such other parties, along with
any parties who execute and deliver to the Agent an agreement substantially in
the form attached hereto as SCHEDULE F, being hereinafter referred to
collectively as the "PLEDGORS" and individually as a "PLEDGOR"), and Xxxxxx
Trust and Savings Bank ("HTSB"), acting as agent hereunder for the Secured
Creditors hereinafter identified and defined (HTSB acting as such agent and any
successor or successors to HTSB acting in such capacity being hereinafter
referred to as the "AGENT").
P R E L I M I N A R Y S T A T E M E N T S
A. The Borrower and HTSB, individually and as agent, are currently
parties to an Amended and Restated Credit Agreement dated as of September 8,
1998, as amended (such Amended and Restated Credit Agreement, as amended, being
referred to herein as the "ORIGINAL CREDIT AGREEMENT").
B. Indebtedness, obligations, and liabilities of the Borrower under the
Original Credit Agreement and certain other obligations relating to Hedging
Liability hereinafter referred to are currently secured by, among other things,
that certain Pledge Agreement dated as of May 20, 1998, as amended and
supplemented, by and among the Pledgors and the Agent, and the personal property
of the Pledgors described therein (the "ORIGINAL PLEDGE AGREEMENT").
C. The Borrower and HTSB, individually and as Agent, have entered into an
Amended and Restated Credit Agreement dated as of December 20, 2002 (such
Amended and Restated Credit Agreement, as the same may be amended or modified
from time to time, including further amendments and restatements thereof in its
entirety, being referred to herein as the "CREDIT AGREEMENT") pursuant to which
HTSB and other banks and financial institutions from time to time parties
thereto (HTSB, in its individual capacity, and such other banks and financial
institutions being hereinafter referred to collectively as the "BANKS" and
individually as a "BANK") have agreed to amend and restate the Original Credit
Agreement and, subject to certain terms and conditions, extend credit and make
certain other financial accommodations available to the Borrower (the Agent and
the Banks, together with affiliates of the Banks with respect to Hedging
Liability and Funds Transfer and Deposit Account Liability referred to below,
being hereinafter referred to collectively as the "SECURED CREDITORS" and
individually as a "SECURED CREDITOR").
D. In addition, the Pledgors, or any one or more of them, may from time
to time be liable to the Banks and/or their affiliates with respect to Hedging
Liability and Funds Transfer and Deposit Account Liability (as such terms are
defined in the Credit Agreement).
E. As a condition to amending and restating the Original Credit Agreement
and extending credit to the Borrower under the Credit Agreement, the Secured
Creditors have
required, among other things, that each Pledgor grant to the Agent for the
benefit of the Secured Creditors a lien on and security interest in certain
personal property of such Pledgor described herein subject to the terms and
conditions hereof and, in connection therewith, that the Original Pledge
Agreement be amended and restated in its entirety to read as set forth in this
Agreement.
F. The Borrower owns, directly or indirectly, equity interests in each of
the other Pledgors and the Pledgors provide each other with financial,
management, administrative, and technical support which enables the Pledgors to
conduct their businesses in an orderly and efficient manner in the ordinary
course.
G. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors under the
Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, receipt and sufficiency whereof is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. TERMS DEFINED IN CREDIT AGREEMENT. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties, and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
PROVIDED, HOWEVER, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.
SECTION 2. GRANT OF SECURITY INTEREST IN THE COLLATERAL. As collateral
security for the Secured Obligations defined below, each Pledgor hereby grants
to the Agent for the benefit of the Secured Creditors a lien on and security
interest in, and acknowledges and agrees that the Agent has and shall continue
to have for the benefit of the Secured Creditors a continuing lien on and
security interest in, all right, title, and interest of each Pledgor in the
equity interests of each of its direct Subsidiaries as set forth below, whether
now owned or existing or hereafter created, acquired or arising, and in whatever
form, including all of the following:
(a) STOCK COLLATERAL. (i) All shares of the capital stock of
each Subsidiary which is a corporation owned or held by such Pledgor,
whether now owned or hereafter formed or acquired (those shares delivered
to and deposited with the Agent on or prior to the date hereof being listed
and described on SCHEDULE A attached hereto), and all substitutions and
additions to such shares (herein, the "PLEDGED SECURITIES") PROVIDED THAT,
in the case of a lien and security interest on the capital stock or other
equity interest of a company incorporated or otherwise organized outside of
the United States of America or any State or territory thereof (herein, a
"FOREIGN COMPANY"), such lien and security interest on such capital stock
shall be limited to 65% of the total combined capital stock or other equity
interest of such Foreign Company except as otherwise required by Section
4.1 of the Credit Agreement, (ii) all dividends, distributions, and
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sums distributable or payable from, upon or in respect of the Pledged
Securities and (iii) all other rights and privileges incident to the
Pledged Securities (all of the foregoing being hereinafter referred to
collectively as the "STOCK COLLATERAL");
(b) PARTNERSHIP INTEREST COLLATERAL. (i) All partnership or
other equity interests in each Subsidiary which is a partnership (whether
general or limited) owned or held by such Pledgor, whether now owned or
hereafter formed or acquired (each of such equity interests existing on the
date hereof being listed and identified on SCHEDULE B attached hereto)
(such partnerships being hereinafter referred to collectively as the
"PARTNERSHIPS" and individually as a "PARTNERSHIP"), (ii) any and all
payments and distributions of whatever kind or character, whether in cash
or other property, at any time made, owing or payable to such Pledgor in
respect of or on account of its present or hereafter acquired interests in
each Partnership, whether due or to become due and whether representing
profits, distributions pursuant to complete or partial liquidation or
dissolution of any such Partnership, distributions representing the
complete or partial redemption of such Pledgor's interest in any such
Partnership or the complete or partial withdrawal of such Pledgor from any
such Partnership, repayment of capital contributions, payment of management
fees or commissions, or otherwise, and the right to receive, receipt for,
use, and enjoy all such payments and distributions, and (iii) all other
rights and privileges incident to such Pledgor's interest in each
Partnership (all of the foregoing being hereinafter collectively called the
"PARTNERSHIP INTEREST COLLATERAL");
(c) LLC COLLATERAL. (i) All membership or other equity interests
in each Subsidiary which is a limited liability company owned or held by
such Pledgor, whether now owned or hereafter formed or acquired (each of
such equity interests existing on the date hereof being listed and
identified on SCHEDULE C attached hereto) (such limited liability companies
being hereinafter referred to collectively as the "LLCS" and individually
as a "LLC"), (ii) any and all payments and distributions of whatever kind
or character, whether in cash or other property, at any time made, owing or
payable to such Pledgor in respect of or on account of its present or
hereafter acquired interests in each LLC, whether due or to become due and
whether representing profits, distributions pursuant to complete or partial
liquidation or dissolution of any such LLC, distributions representing the
complete or partial redemption of such Pledgor's interest in such LLC or
the complete or partial withdrawal of such Pledgor from any such LLC,
repayment of capital contributions, payment of management fees or
commissions, or otherwise, and the right to receive, receipt for, use, and
enjoy all such payments and distributions, and (iii) all other rights and
privileges incident to such Pledgor's interest in each LLC (all of the
foregoing being hereinafter referred to as the "LLC COLLATERAL"); and
(d) PROCEEDS. All proceeds of the foregoing;
all of the foregoing being herein sometimes referred to collectively as the
"COLLATERAL". All terms which are used in this Agreement which are defined in
the Uniform Commercial Code of the State of Illinois as in effect from time to
time ("UCC") shall have the same meanings herein as such terms are defined in
the UCC, unless this Agreement shall otherwise specifically provide.
-3-
SECTION 3. SECURED OBLIGATIONS. This Agreement is made and given to
secure, and shall secure, the prompt payment and performance when due of (a) any
and all indebtedness, obligations, and liabilities of the Pledgors, and of any
of them individually, to the Secured Creditors, and to any of them individually,
under or in connection with or evidenced by the Credit Agreement or any other
Loan Document, including, without limitation, all obligations evidenced by the
Notes of the Borrower heretofore or hereafter issued under the Credit Agreement,
all obligations of the Borrower to reimburse the Secured Creditors for the
amount of all drawings on all Letters of Credit issued pursuant to the Credit
Agreement and all other obligation of the Borrower under any and all
Applications for Letters of Credit delivered thereunder, all obligations of the
Pledgors, and of any of them individually, with respect to any Hedging
Liability, all obligations of the Pledgors, and of any of them individually,
with respect to any Funds Transfer and Deposit Account Liability, and all
obligations of the Pledgors, and of any of them individually, arising under any
guaranty issued by any of them relating to the foregoing or any part thereof, in
each case whether now existing or hereafter arising (and whether arising before
or after the filing of a petition in bankruptcy and including all interest
accrued after the petition date), due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired and (b) any
and all expenses and charges, legal or otherwise, suffered or incurred by the
Secured Creditors, and any of them individually, in collecting or enforcing any
of such indebtedness, obligations and liabilities or in realizing on or
protecting or preserving any security therefor, including, without limitation,
the lien and security interest granted hereby (all of the indebtedness,
obligations, liabilities, expenses and charges described above being hereinafter
referred to as the "SECURED OBLIGATIONS"). Notwithstanding anything in this
Agreement to the contrary, the right of recovery against any Pledgor under this
Agreement (other than the Borrower to which this limitation shall not apply)
shall not exceed $1.00 less than the lowest amount which would render such
Pledgor's obligations under this Agreement void or voidable under applicable
law, including fraudulent conveyance law.
SECTION 4. COVENANTS, AGREEMENTS, REPRESENTATIONS AND WARRANTIES. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:
(a) Each Pledgor is a duly organized and validly existing in
good standing under the laws of the state of its organization. Each
Pledgor's legal name, state of organization, chief executive office, and
organizational identification number (if any) are correctly set forth on
Schedule D to this Agreement. No Pledgor shall change its state of
organization without giving the Agent 30 days' prior written notice. No
Pledgor shall change its legal name or any location set forth on Schedule D
hereto without giving 30 days' prior written notice of its intent to do so
to the Agent (provided in all cases such locations shall be within the
United States of America). The execution and delivery of this Agreement,
and the observance and performance of each of the matters and things herein
set forth, will not (i) contravene or constitute a default under any
provision of law or any judgment, injunction, order or decree binding upon
any Pledgor or any provision of any Pledgor's organizational agreements
(e.g., charter, certificate or articles of incorporation or by-laws,
certificate or articles of formation or operating agreement, partnership
agreement, or other comparable organizational documents) or any material
covenant, indenture or agreement of or affecting any Pledgor or any of its
property or (ii) result in the creation or imposition of any material lien
or encumbrance on any
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property of any Pledgor except for the lien and security interest granted
to the Agent hereunder.
(b) Each Pledgor is the sole and lawful legal, record and
beneficial owner of its Collateral. No Pledgor shall, without the Agent's
prior written consent, sell, assign, or otherwise dispose of the Collateral
or any interest therein, except to the extent permitted by the Credit
Agreement. The Collateral, and every part thereof, is and shall be free and
clear of all security interests, liens, rights, claims, attachments, levies
and encumbrances of every kind, nature and description and whether
voluntary or involuntary, except for the security interest of the Agent
hereunder and for other Liens permitted by the Credit Agreement. Each
Pledgor shall warrant and defend the Collateral against any claims and
demands of all Persons at any time claiming the same or any interest in the
Collateral adverse to the Secured Creditors.
(c) Each Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may reasonably deem necessary or appropriate
to assure the Agent its lien and security interest hereunder, including,
without limitation, such assignments, acknowledgments (including
acknowledgments of collateral assignment in the form attached hereto as
SCHEDULE E), stock powers, financing statements, instruments and documents
as the Agent may from time to time require in order to comply with the UCC.
Each Pledgor hereby agrees that a carbon, photographic or other
reproduction of this Agreement or any such financing statement is
sufficient for filing as a financing statement by the Agent without prior
notice thereof to such Pledgor wherever the Agent in its discretion desires
to file the same. Each Pledgor hereby authorizes the Agent to file any and
all financing statements covering the Collateral or any part thereof as the
Agent may require. The Agent may order lien searches from time to time
against any Pledgor and the Collateral, and the Pledgors shall promptly
reimburse the Agent for all reasonable costs and expenses incurred in
connection with such lien searches. In the event for any reason the law of
any jurisdiction other than Illinois becomes or is applicable to the
Collateral or any part thereof, or to any of the Secured Obligations, each
Pledgor agrees to execute and deliver all such agreements, assignments,
instruments and documents and to do all such other things as the Agent
reasonably deems necessary or appropriate to preserve, protect and enforce
the lien and security interest of the Agent under the law of such other
jurisdiction.
(d) If, as and when any Pledgor (x) acquires any Pledged
Securities in addition to those listed on SCHEDULE A hereto or (y) acquires
any interests in any Partnership in addition to those listed on SCHEDULE B
hereto or (z) acquires any interests in any LLC, in addition to those
listed on SCHEDULE C hereto, the Pledgors shall furnish to the Agent a
supplement to the relevant Schedule reflecting the additional Collateral
subject to this Agreement (provided any Pledgor's failure to do so shall
not impair the Agent's security interest therein).
(e) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
-5-
(f) On the failure of any Pledgor to perform when due any of the
agreements and covenants herein contained, the Agent may, at its option
(with notice to the relevant Pledgor), perform the same and in so doing may
expend such sums as the Agent reasonably deems advisable in the performance
thereof, including, without limitation, the payment of any taxes, liens and
encumbrances, expenditures made in defending against any adverse claim, and
all other expenditures which the Agent may be compelled to make by
operation of law or which Agent may make by agreement or otherwise for the
protection of the security hereof. All such sums and amounts so expended
shall be repayable by the Pledgors upon demand, shall constitute additional
Secured Obligations hereunder and shall bear interest from the date said
amounts are expended at the rate per annum (computed on the basis of a year
of 365 or 366 days, as the case may be, and the actual number of days
elapsed) determined by adding 2% to the Base Rate from time to time in
effect plus the Applicable Margin for Base Rate Loans (such rate per annum
as so determined being hereinafter referred to as the "DEFAULT RATE"). No
such performance of any covenant or agreement by the Agent on behalf of any
Pledgor, and no such advancement or expenditure therefor, shall relieve
such Pledgor of any default under the terms of this Agreement or in any way
obligate any Secured Creditor to take any further or future action with
respect thereto. The Agent, in making any payment hereby authorized, may do
so according to any xxxx, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such xxxx, statement or estimate, or into the
validity of any tax assessment, sale, forfeiture, tax lien or title or
claim.
SECTION 5. SPECIAL PROVISIONS RE: STOCK COLLATERAL.
(a) Each Pledgor has the right to vote the Pledged Securities
and there are no restrictions upon the voting rights associated with, or
the transfer of, any of the Pledged Securities, except as provided by
federal and state and, with respect to a Foreign Company, foreign laws
applicable to the sale of securities generally and the terms of this
Agreement.
(b) The certificates for all shares of the Pledged Securities
shall be delivered by the relevant Pledgor to the Agent duly endorsed in
blank for transfer or accompanied by an appropriate assignment or
assignments or an appropriate undated stock power or powers. The Agent may,
at any time after the occurrence and during the continuation of an Event of
Default, cause to be transferred into its name or into the name of its
nominee or nominees any and all of the Pledged Securities. After the
occurrence and during the continuation of any Event of Default, the Agent
shall have the right to exchange the certificates representing the Pledged
Securities for certificates of smaller or larger denominations.
(c) The Pledged Securities have been validly issued and, except
as described on SCHEDULE A, are fully paid and non-assessable. Except as
set forth on SCHEDULE A, there are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue, and
no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such issuers.
The Pledged
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Securities listed and described on SCHEDULE A attached hereto constitute
the percentage of the issued and outstanding capital stock of each series
and class of the issuers thereof as set forth thereon owned by the relevant
Pledgor. Each Pledgor further agrees that in the event any such issuer
shall issue any additional capital stock of any series or class (whether or
not entitled to vote) to such Pledgor or otherwise on account of its
ownership interest therein, subject to the limitations set forth in Section
2(a) above, such Pledgor will forthwith pledge and deposit hereunder, or
cause to be pledged and deposited hereunder, all such additional shares of
such capital stock.
SECTION 6. SPECIAL PROVISIONS RE: PARTNERSHIP INTEREST COLLATERAL AND
LLC COLLATERAL.
(a) Each Pledgor further represents and warrants to, and agrees
with, the Secured Creditors as follows:
(i) each Partnership is a valid and existing entity of
the type listed on SCHEDULE B and is duly organized and existing
under applicable law; and each LLC is duly organized and existing
under applicable law;
(ii) the Partnership Interest Collateral listed and
described on SCHEDULE B attached hereto (as supplemented from time
to time pursuant to Section 4(d) hereof) constitutes the percentage
of the equity interest in each Partnership set forth thereon owned
by the relevant Pledgor; and the LLC Collateral listed and described
on SCHEDULE C attached hereto (as supplemented from time to time
pursuant to Section 4(d) hereof) constitutes the percentage of the
equity interest in each LLC set forth thereon owned by the relevant
Pledgor; and
(iii) the copies of the partnership agreements of each
Partnership and the articles of association and operating agreements
of each LLC (each such agreement being hereinafter referred to as an
"ORGANIZATIONAL AGREEMENT") heretofore delivered to the Agent are
true and correct copies thereof as of the date hereof and have not
been amended or modified in any respect.
(b) Each Pledgor agrees that it shall not, without the prior
written consent of the Agent, agree to any amendment or modification to any
of the Organizational Agreements which would in any manner materially
adversely affect or impair the Partnership Interest Collateral or LLC
Collateral or reduce or dilute the rights of such Pledgor with respect to
any Partnership or LLC, any of such done without such prior written consent
to be null and void. The Pledgors shall promptly send to the Agent copies
of all notices and communications with respect to each Partnership and each
LLC alleging the existence of a default by any Pledgor in the performance
of any of its obligations under any Organizational Agreement. Each Pledgor
shall perform when due all of its obligations under each Organizational
Agreement, except where such failure to perform could not reasonably be
expected to cause a Material Adverse Effect. In the event any Pledgor fails
to pay or perform any obligation arising under any Organizational Agreement
or otherwise related to any Partnership or any LLC, the Agent may, but need
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not, pay or perform such obligation at the expense and for the account of
the Pledgors and all funds expended for such purposes shall constitute
Secured Obligations hereby which the Pledgors promise to pay to the Agent
on demand together with interest thereon at the Default Rate.
(c) The certificates, if any, at any time evidencing any
Pledgor's interest in any Partnership or LLC shall be delivered to the
Agent duly endorsed in blank for transfer or accompanied by an appropriate
assignment or assignments or an appropriate undated stock power or powers.
The Agent may, at any time after the occurrence and during the continuation
of an Event of Default, cause to be transferred into its name or the name
of its nominee or nominees, any and all of such Collateral. After the
occurrence and during the continuation of any Event of Default, the Agent
shall have the right to exchange the certificates representing such
Collateral for certificates of smaller or larger denominations.
(d) Each Pledgor has the right to vote its interest in each
Partnership and LLC (except as set forth herein) and there are no
restrictions upon the voting rights associated with, or the transfer of,
any of the Partnership Interest Collateral or LLC Collateral, except as
provided by federal and state laws applicable to the sale of securities
generally, the terms of any Organizational Agreement under which such
Person is organized, and the terms of this Agreement.
(e) Except as set forth on SCHEDULE C, there are no outstanding
commitments or other obligations of any LLC to issue, and no options,
warrants or other rights of any individual or entity to acquire, any
interest in such LLC.
SECTION 7. VOTING RIGHTS AND DIVIDENDS. Unless and until an Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 9(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of such Pledgor, or any part
thereof, for all purposes not inconsistent with the terms of this Agreement
or any other document evidencing or otherwise relating to any of the
Secured Obligations.
(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid in
cash of whatsoever nature; PROVIDED, HOWEVER, that such dividends and
distributions representing:
(i) stock or liquidating dividends or a distribution or
return of capital upon or in respect of the Pledged Securities or
any part thereof or resulting from a split-up, revision or
reclassification of the Pledged Securities or any part thereof or
received in addition to, in substitution of or in exchange for the
Pledged Securities or any part thereof as a result of a merger,
consolidation or otherwise; or
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(ii) distributions in complete or partial liquidation of
any Partnership or LLC or the interest of such Pledgor therein;
in each case, shall be paid, delivered or transferred, as appropriate,
directly to the Agent immediately upon the receipt thereof by such Pledgor
and may, in the case of cash, be applied by the Agent to the Secured
Obligations in accordance with and subject to the terms of the Credit
Agreement, whether or not the same may then be due or otherwise adequately
secured and shall, in the case of all other property, together with any
cash received by the Agent and not applied as aforesaid, be held by the
Agent pursuant hereto as part of the Collateral pledged under and subject
to the terms of this Agreement.
(c) In order to permit each Pledgor to exercise such voting
and/or consensual powers which it is entitled to exercise under subsection
(a) above and to receive such distributions which such Pledgor is entitled
to receive and retain under subsection (b) above, the Agent will, if
necessary, upon the written request of such Pledgor, from time to time
execute and deliver to such Pledgor appropriate proxies and dividend
orders.
SECTION 8. POWER OF ATTORNEY. Each Pledgor hereby appoints the Agent,
its nominee, or any other Person whom the Agent may designate as such Pledgor's
attorney-in-fact, with full power and authority upon the occurrence and during
the continuation of any Event of Default to ask, demand, collect, receive,
receipt for, xxx for, compound and give acquittance for any and all sums or
properties which may be or become due, payable or distributable in respect of
the Collateral or any part thereof, with full power to settle, adjust or
compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. Each
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such Person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without any Pledgor's signature appearing thereon, and each
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the Secured
Obligations have been fully satisfied and all commitments of the Banks to extend
credit to or for the account of the Borrower under the Credit Agreement have
expired or otherwise terminated (at which time the Agent shall execute and
deliver any document, instrument or other writing reasonably requested by the
Pledgors to evidence the termination of such power of attorney).
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SECTION 9. DEFAULTS AND REMEDIES. (a) The occurrence and continuance of
any event or the existence of any condition which is specified as an "Event of
Default" under the Credit Agreement shall constitute an "EVENT OF DEFAULT"
hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default at any time when the Obligations are, or have been declared to be, due
and payable in full, all rights of the Pledgors to receive and retain the
distributions which they are entitled to receive and retain pursuant to Section
7(b) hereof shall, at the option of the Agent cease and thereupon become vested
in the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to receive and retain the
distributions which the Pledgors would otherwise have been authorized to retain
pursuant to Section 7(b) hereof and all rights of the Pledgors to exercise the
voting and/or consensual powers which they are entitled to exercise pursuant to
Section 7(a) hereof shall, at the option of the Agent, cease and thereupon
become vested in the Agent which, in addition to all other rights provided
herein or by law, shall then be entitled solely and exclusively to exercise all
voting and other consensual powers pertaining to the Collateral and to exercise
any and all rights of conversion, exchange or subscription and any other rights,
privileges or options pertaining thereto as if the Agent were the absolute owner
thereof including, without limitation, the right to exchange, at its discretion,
the Collateral or any part thereof upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the respective issuer
thereof or upon the exercise by or on behalf of any such issuer or the Agent of
any right, privilege or option pertaining to the Collateral or any part thereof
and, in connection therewith, to deposit and deliver the Collateral or any part
thereof with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Agent may determine. In
the event the Agent in good faith believes any of the Collateral constitutes
restricted securities within the meaning of any applicable securities law, any
disposition thereof in compliance with such laws shall not render the
disposition commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law to the extent permitted by
applicable law, all of which each Pledgor hereby waives to the extent permitted
by applicable law, at any time or times, sell and deliver any or all of the
Collateral held by or for it at public or private sale, at any securities
exchange or broker's board or at any of the Agent's offices or elsewhere, for
cash, upon credit or otherwise, at such prices and upon such terms as the Agent
deems advisable, in its reasonable discretion. In the exercise of any such
remedies, the Agent may sell the Collateral as a unit even though the sales
price thereof may be in excess of the amount remaining unpaid on the Secured
Obligations. Also, if less than all the Collateral is sold, the Agent shall have
no duty to marshal or apportion the part of the Collateral so sold as between
the Pledgors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Pledgors are the owners thereof. In
addition to all other sums due any Secured Creditor hereunder, each Pledgor
shall pay the Secured Creditors all reasonable costs and expenses incurred by
the Secured Creditors, including reasonable attorneys' fees and court costs, in
obtaining, liquidating or enforcing
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payment of Collateral or the Secured Obligations or in the prosecution or
defense of any action or proceeding by or against any Secured Creditor or any
Pledgor concerning any matter arising out of or connected with this Agreement or
the Collateral or the Secured Obligations including, without limitation, any of
the foregoing arising in, arising under or related to a case under the United
States Bankruptcy Code (or any successor statute). Any requirement of reasonable
notice shall be met if such notice is personally served on or mailed, postage
prepaid, to the Pledgors in accordance with Section 14(b) hereof at least 10
business days before the time of sale or other event giving rise to the
requirement of such notice; PROVIDED, HOWEVER, no notification need be given to
a Pledgor if such Pledgor has signed, after an Event of Default has occurred, a
statement renouncing any right to notification of sale or other intended
disposition. The Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. Any
Secured Creditor may be the purchaser at any such sale. Each Pledgor hereby
waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, be made at the time and place to which the sale was
postponed or the Agent may further postpone such sale by announcement made at
such time and place. The Agent may sell or otherwise dispose of the Collateral
without giving any warranties as to the Collateral or any part thereof,
including disclaimers of any warranties of title or the like, and each Pledgor
acknowledges and agrees that the absence of such warranties shall not render the
disposition commercially unreasonable.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO THE
AGENT, RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT
OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, AND A SALE SUBJECT TO
SUCH CONDITION SHALL BE DEEMED COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE COLLATERAL,
THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR RESTRICTION IN
CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED IN WRITING BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
(d) In the event the Agent shall sell or otherwise dispose of all or any
part of the Partnership Interest Collateral or LLC Collateral, each Pledgor
hereby grants the purchaser of
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such portion of the Partnership Interest Collateral or LLC Collateral to the
fullest extent of its capacity, the ability (but not the obligation) to become a
partner or member in the relevant Partnership or LLC, as the case may be
(subject to the approval of the relevant Partnership or LLC, as the case may be,
in the exercise of its discretion in accordance with its Organizational
Agreement and subject to any requirements of applicable law), in the place and
stead of such Pledgor. To exercise such right, the purchaser shall give written
notice to the relevant Partnership or LLC, as the case may be, of its election
to become a partner or member in such Partnership or LLC. Following such
election and giving of consent by all necessary partners or members of the
relevant Partnership or LLC as to the purchaser becoming a partner or member,
the purchaser shall have the right and powers and be subject to the liabilities
of a partner or member under the relevant Organizational Agreement and the
partnership or limited liability company act governing the Partnership or LLC.
(e) Upon the occurrence and during the continuation of any Event of
Default, in addition to all other rights provided herein or by law, the Agent
shall have the right to cause all or any part of the Partnership Interest
Collateral or LLC Collateral of any of the Pledgors in any one or more of the
Partnerships or LLCs to be redeemed and to cause a withdrawal, in whole or in
part, of any Pledgor from any Partnership or LLC or any of its interest therein.
(f) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession or control if the
Collateral is accorded treatment substantially equivalent to that which the
Agent accords its own property, consisting of similar types securities, it being
understood, however, that the Agent shall have no responsibility for (i)
ascertaining or taking any action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not
the Agent has or is deemed to have knowledge of such matters, (ii) taking any
necessary steps to preserve rights against any parties with respect to any
Collateral, or (iii) initiating any action to protect the Collateral or any part
thereof against the possibility of a decline in market value. This Agreement
constitutes an assignment of rights only and not an assignment of any duties or
obligations of the Pledgors in any way related to the Collateral, and the Agent
shall have no duty or obligation to discharge any such duty or obligation. By
its acceptance hereof, the Agent does not undertake to perform or discharge and
shall not be responsible or liable for the performance or discharge of any such
duties or responsibilities and shall not in any event become a "SUBSTITUTED
LIMITED PARTNER" or words of like import (as defined in the relevant
Organizational Agreement) in the relevant Partnership. Neither any Secured
Creditor, nor any party acting as attorney for any Secured Creditor, shall be
liable hereunder for any acts or omissions or for any error of judgment or
mistake of fact or law other than such Person's gross negligence or willful
misconduct.
(g) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
-12-
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which the any Secured Creditor may have.
SECTION 10. APPLICATION OF PROCEEDS. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Secured Obligations in accordance with the terms of
the Credit Agreement. The Pledgors shall remain liable to the Secured Creditors
for any deficiency. Any surplus remaining after the full payment and
satisfaction of the Secured Obligations shall be returned to the Borrower, as
agent for Pledgors, or to whomsoever the Agent reasonably determines is lawfully
entitled thereto.
SECTION 11. CONTINUING AGREEMENT. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Secured Obligations, both for principal and interest, have been fully
paid and satisfied and the commitments of the Secured Creditors to extend credit
to or for the account of the Borrower under the Credit Agreement shall have
expired or otherwise terminated. Upon such termination of this Agreement, the
Agent shall forthwith return all Collateral delivered to it, and upon the
request and at the expense of the Pledgors, shall forthwith release all its
liens and security interests hereunder and execute any documents, instruments or
other writings reasonably requested by the Pledgors to evidence such release,
including, without limitation, UCC termination statements.
SECTION 12. PRIMARY SECURITY; OBLIGATIONS ABSOLUTE. The lien and
security herein created and provided for stand as direct and primary security
for the Secured Obligations. No application of any sums received by the Agent in
respect of the Collateral or any disposition thereof to the reduction of the
Secured Obligations or any portion thereof shall in any manner entitle any
Pledgor to any right, title or interest in or to the Secured Obligations or any
collateral security therefor, whether by subrogation or otherwise, unless and
until all Secured Obligations have been fully paid and satisfied and all
commitments to extend credit constituting Secured Obligations shall have expired
or otherwise terminated. Each Pledgor acknowledges and agrees that the lien and
security hereby created and provided for are absolute and unconditional and
shall not in any manner be affected or impaired by any acts or omissions
whatsoever of any Secured Creditor or any other holder of any of the Secured
Obligations, and without limiting the generality of the foregoing, the lien and
security hereof shall not be impaired by any acceptance by any Secured Creditor
or any other holder of any of the Secured Obligations of any other security for
or guarantors upon any Secured Obligations or by any failure, neglect or
omission on the part of any Secured Creditor or any other holder of any of the
Secured Obligations to realize upon or protect any of the Secured Obligations or
any collateral security therefor. The lien and security hereof shall not in any
manner be impaired or affected by (and the Secured Creditors, without notice to
anyone, are hereby authorized to make from time to time) any sale, pledge,
surrender, compromise, settlement, release, renewal, extension, indulgence,
alteration, substitution, exchange, change in, modification or disposition of
any of the Secured Obligations, or of any collateral security therefor, or of
any guaranty thereof, or of any instrument or agreement setting forth the terms
and conditions pertaining to any of the foregoing. The Secured Creditors may at
their discretion at any time grant credit to the Borrower without notice to the
other Pledgors in such amounts and on such terms as the Secured Creditors may
elect without in
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any manner impairing the lien and security hereby created and provided for. In
order to realize hereon and to exercise the rights granted the Secured Creditors
hereunder and under applicable law, there shall be no obligation on the part of
any Secured Creditor or any other holder of any of the Secured Obligations at
any time to first resort for payment to the Borrower or any other Pledgor or to
any guaranty of the Secured Obligations or any portion thereof or to resort to
any other collateral security, property, liens or any other rights or remedies
whatsoever, and the Secured Creditors shall have the right to enforce this
Agreement as against any Pledgor or any of its Collateral irrespective of
whether or not other proceedings or steps seeking resort to or realization upon
or from any of the foregoing are pending.
SECTION 13. THE AGENT. In acting under or by virtue of this Agreement,
Agent shall be entitled to all the rights, authority, privileges and immunities
provided in the Credit Agreement (including, without limitation, Section 11
thereof), all of which provisions are incorporated by reference herein with the
same force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Secured Obligations concerning the perfection of the liens
and security interests granted hereunder or in the value of the Collateral.
SECTION 14. MISCELLANEOUS. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; PROVIDED, HOWEVER, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Bank may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Bank herein or otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Pledgor when given to the Borrower in accordance
with Section 12.8 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.8 of the Credit Agreement.
(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditor (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
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(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect. Without limiting the generality of the
foregoing, in the event that this Agreement shall be deemed to be invalid or
otherwise unenforceable with respect to any Pledgor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect to
the other Pledgors.
(e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as SCHEDULE F, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such agreement shall
contain information as to such Pledgor necessary to update SCHEDULES A, B, C,
AND D with respect to it. No such substitution shall be effective absent the
written consent of Agent nor shall it in any manner affect the obligations of
the other Pledgors hereunder.
(f) This Agreement shall be deemed to have been made in the State of
Illinois and shall be governed by, and construed in accordance with, the laws of
the State of Illinois. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(g) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument.
(h) Each Pledgor hereby submits to the non-exclusive personal
jurisdiction of the United States District Court for the Northern District of
Illinois and of any Illinois state court sitting in Xxxx County, Illinois for
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. Each Pledgor 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 proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient form. EACH PLEDGOR AND, BY ACCEPTING THE BENEFITS OF THIS
AGREEMENT, EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(i) Upon the execution and delivery of this Agreement by the Pledgors
party hereto and the Agent, this Agreement shall supersede all provisions of the
Original Pledge Agreement as of such date. The Pledgors hereby agree that,
notwithstanding the execution and delivery of this Agreement, the liens and
security interests created and provided for under the Original Pledge
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Agreement continue in effect under and pursuant to the terms of this Agreement
for the benefit of all of the Secured Obligations hereby. Nothing herein
contained shall in any manner affect or impair the priority of the liens and
security interests created and provided for by the Original Pledge Agreement as
to the indebtedness and obligations which would otherwise be secured thereby
prior to giving effect to this Agreement.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGORS"
APAC CUSTOMER SERVICES, INC.
APAC CUSTOMER SERVICES GENERAL
PARTNER, INC.
APAC CUSTOMER SERVICES, L.L.C.
APAC CUSTOMER SERVICES OF ILLINOIS, INC.
APAC CUSTOMER SERVICES OF IOWA, L.L.C.
ITI HOLDINGS, INC.
By
Name
-----------------------------------
Title
----------------------------------
APAC CUSTOMER SERVICES OF TEXAS, L.P.,
By:_________________, Its General Partner
By
Name
-----------------------------------
Title
----------------------------------
Acknowledged and agreed to in Chicago, Illinois, as of the date first above
written.
XXXXXX TRUST AND SAVINGS BANK, as Agent
By
Name
-----------------------------------
Title
----------------------------------
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