EXHIBIT 17
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TERM LOAN AGREEMENT
among
INFOCROSSING, INC.,
The Several Lenders
from Time to Time Parties Hereto
and
INFOCROSSING AGENT, INC.
as Agent
Dated as of October 21, 2003
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.........................................................1
1.1 DEFINED TERMS................................................1
1.2 OTHER DEFINITIONAL PROVISIONS...............................16
SECTION 2. GENERAL TERMS......................................................17
2.1 LOANS.......................................................17
2.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT........................17
2.3 PREPAYMENTS.................................................18
2.4 INTEREST RATES AND PAYMENT DATES............................19
2.5 COMPUTATION OF INTEREST.....................................20
2.6 PRO RATA TREATMENT AND PAYMENTS.............................20
2.7 REQUIREMENTS OF LAW.........................................20
2.8 TAXES.......................................................21
2.9 INDEMNITY...................................................24
2.10 AGENT FEE...................................................24
SECTION 3. REPRESENTATIONS AND WARRANTIES.....................................24
3.1 FINANCIAL CONDITION.........................................24
3.2 ABSENCE OF CERTAIN CHANGES..................................25
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW....................26
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.....26
3.5 NO LEGAL BAR................................................27
3.6 NO MATERIAL LITIGATION......................................27
3.7 CONTRACTS AND NO DEFAULT....................................27
3.8 OWNERSHIP OF PROPERTY; LIENS................................27
3.9 INTELLECTUAL PROPERTY.......................................27
3.10 NO BURDENSOME RESTRICTIONS..................................28
3.11 TAXES.......................................................28
3.12 FEDERAL REGULATIONS.........................................29
3.13 ERISA.......................................................29
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS...................30
3.15 SUBSIDIARIES................................................30
3.16 ENVIRONMENTAL MATTERS.......................................30
3.17 SOLVENCY....................................................32
3.18 FULL DISCLOSURE.............................................32
SECTION 4. CONDITIONS PRECEDENT TO CLOSING....................................32
SECTION 5. AFFIRMATIVE COVENANTS..............................................36
5.1 FINANCIAL STATEMENTS........................................36
5.2 CERTIFICATES; OTHER INFORMATION.............................36
5.3 PAYMENT OF OBLIGATIONS......................................37
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE............37
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5.5 MAINTENANCE OF PROPERTY; INSURANCE..........................38
5.6 BOOKS AND RECORDS; INSPECTION OF PROPERTY...................39
5.7 NOTICES.....................................................39
5.8 ENVIRONMENTAL LAWS..........................................40
5.9 FURTHER ASSURANCES..........................................40
5.10 ADDITIONAL COLLATERAL.......................................40
5.11 SYNDICATION.................................................42
5.12 TAX RETURNS.................................................42
SECTION 6. NEGATIVE COVENANTS.................................................42
6.1 FINANCIAL CONDITION COVENANTS...............................42
6.2 LIMITATION ON INDEBTEDNESS..................................43
6.3 LIMITATION ON LIENS.........................................44
6.4 LIMITATION ON FUNDAMENTAL CHANGES...........................46
6.5 LIMITATION ON SALE OF ASSETS................................46
6.6 LIMITATION ON AMENDMENTS TO MATERIAL AGREEMENTS.............47
6.7 LIMITATION ON DIVIDENDS.....................................47
6.8 LIMITATION ON CAPITAL EXPENDITURES..........................48
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES...............48
6.10 MODIFICATIONS OF DEBT INSTRUMENTS...........................49
6.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES..................49
6.12 LIMITATION ON SALES AND LEASEBACKS..........................49
6.13 LIMITATION ON CHANGES IN FISCAL YEAR........................49
6.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES.......................49
6.15 LIMITATION ON LINES OF BUSINESS.............................50
SECTION 7. EVENTS OF DEFAULT..................................................50
SECTION 8. THE AGENT..........................................................52
8.1 APPOINTMENT.................................................52
8.2 DELEGATION OF DUTIES........................................52
8.3 EXCULPATORY PROVISIONS......................................53
8.4 RELIANCE BY AGENT...........................................53
8.5 NOTICE OF DEFAULT...........................................53
8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS.....................54
8.7 INDEMNIFICATION.............................................54
8.8 AGENT IN ITS INDIVIDUAL CAPACITY............................54
8.9 SUCCESSOR AGENT.............................................55
8.10 PARITY OBLIGATIONS..........................................55
SECTION 9. MISCELLANEOUS......................................................55
9.1 AMENDMENTS AND WAIVERS......................................55
9.2 NOTICES.....................................................56
9.3 NO WAIVER; CUMULATIVE REMEDIES..............................57
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES..................57
9.5 PAYMENT OF EXPENSES AND TAXES...............................57
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS......58
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9.7 ADJUSTMENTS; SET-OFF........................................60
9.8 COUNTERPARTS................................................61
9.9 SEVERABILITY................................................61
9.10 INTEGRATION.................................................61
9.11 GOVERNING LAW...............................................61
9.12 SUBMISSION TO JURISDICTION; WAIVERS.........................61
9.13 ACKNOWLEDGEMENTS............................................62
9.14 WAIVERS OF JURY TRIAL.......................................62
9.15 CONFIDENTIALITY.............................................62
9.16 SHARING OF LIENS............................................63
SCHEDULES
I Lenders' Addresses.
2.1 Lender's Commitments
2.2 Amortization of Loans
3.2 Absence of Certain Changes
3.4 Consents
3.9 Intellectual Property
3.11 Taxes
3.13 ERISA
3.16 Environmental Matters
6.1(a) Leverage Ratio
6.1(b) Minimum Consolidated EBITDA
6.1(c) Fixed Charge Ratio
6.2(d) Existing Indebtedness
6.3 Existing Liens
EXHIBITS
A Form of Note
B Form of Assignment and Acceptance
C Form of Borrower Deposit Account Control Agreement
D Form of Security Agreement
E Form of Subsidiary Deposit Account Control Agreement
F Form of Stock Pledge Agreement
G Form of Closing Certificate
H Form of Opinion
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TERM LOAN AGREEMENT, dated as of October 21, 2003, among INFOCROSSING,
INC., a Delaware corporation (the "BORROWER"), the several banks and other
financial institutions from time to time parties to this Agreement (the
"LENDERS") and Infocrossing Agent, Inc., as agent for the Lenders hereunder.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower has issued Series A Cumulative Convertible
Participating Preferred Stock, par value $.01 per share (the "EXISTING PREFERRED
STOCK") and warrants to purchase the Borrower's Common Stock at a purchase price
of $.01 per share (the "EXISTING WARRANTS") to Sandler Capital Partners V, L.P.,
Sandler Capital Partners V FTE, L.P., Sandler Technology Partners Subsidiary,
LLC, Sandler Co-Investment Partners, L.P., Sandler Capital Partners V Germany,
L.P., Price Family Limited Partners and MidOcean Capital Investors, L.P.
(collectively, the "INVESTORS"); and
WHEREAS, on the date hereof, pursuant to the Exchange Agreement
(defined below), the Borrower will enter into a recapitalization transaction
(the "RECAPITALIZATION") in which the Investors will exchange all of their
outstanding Existing Preferred Stock and Existing Warrants of the Borrower for
(i) $55,000,000 in cash and (ii) loans outstanding under this Agreement in the
aggregate principal amount of $25,000,000 represented by promissory notes of the
Borrower issued under this Agreement.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"AFFILIATE": with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For the purposes of this definition, "CONTROL" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENT": Infocrossing Agent, Inc., as the agent for the Lenders under
this Agreement and the other Loan Documents.
"AGREEMENT": this Term Loan Agreement, as amended, supplemented or
otherwise modified from time to time.
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"APPLICABLE LAW": as to any Person (a) any United States federal,
state, local or foreign law, statute, rule, regulation, order, writ, injunction,
judgment, decree or permit of any Governmental Authority and (b) any rule or
listing requirement of any applicable national stock exchange or listing
requirement of any national stock exchange or SEC recognized trading market, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"ASSIGNEE": as defined in subsection 9.6(c).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Assignee (with the consent of any party whose consent is
required by Section 9.6), and accepted by the Agent, in the form of Exhibit B.
"BORROWER DEPOSIT ACCOUNT CONTROL AGREEMENTS": the Deposit Account
Control Agreements to be executed and delivered by the Borrower, substantially
in the form of Exhibit C or in a form acceptable to the Agent, as the same may
be amended, supplemented or otherwise modified from time to time.
"BORROWER PROPERTY": as defined in subsection 3.16.
"BORROWER SECURITY DOCUMENTS": the collective reference to the Borrower
Deposit Account Control Agreements, the Security Agreement and the Stock Pledge
Agreement.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close.
"CAMDEN DEBENTURES": the unsecured Debentures issued by the Borrower on
February 1, 2002 to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Strategic Partners Fund, L.P., Strategic
Associates, L.P., Camden Partners Strategic Fund II-A, L.P. and Camden Partners
Strategic Fund II-B, L.P., as purchasers, in the aggregate initial principal
amount of $10,000,000 pursuant to a securities purchase agreement between the
Borrower and such purchasers.
"CAPITAL EXPENDITURES": for any period, with respect to any Person, the
aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are or should be capitalized under GAAP on a balance sheet of
such Person; provided that, Capital Expenditures shall not include investments
that constitute a Permitted Acquisition pursuant to subsection 6.9(h).
"CAPITAL STOCK": (i) with respect to any Person that is a corporation,
any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock and (ii) with respect to any other
Person, any and all partnership or other equity interests of such Person and any
and all warrants or options to purchase any of the foregoing.
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"CASH EQUIVALENTS": (a) securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed or insured by the United
States Government or any agency thereof, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition and overnight bank deposits of any Lender or of any commercial bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of any Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
Government, (d) commercial paper of a domestic issuer rated at least A-2 by
Standard and Poor's Rating Group ("S&P") or P-2 by ▇▇▇▇▇'▇ Investors Service,
Inc. ("MOODY'S"), (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by any Lender
or any commercial bank satisfying the requirements of clause (b) of this
definition or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CHANGE OF CONTROL": means the occurrence of any of the following
events, whether in a single transaction or a series of related transactions, and
any other similar events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total Voting Capital Stock of the Borrower; or (b) the Borrower
consolidates with, or merges with or into, another Person or Persons or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person or Persons, or any Person or
Persons consolidate with, or merge with or into the Borrower, in any such event
pursuant to a transaction in which (i) the holders of the outstanding Voting
Capital Stock of the Borrower immediately prior to such transaction hold less
than 50% of the outstanding Voting Capital Stock of the surviving or transferee
company or its direct or indirect parent company immediately after the
transaction or (ii) immediately after such transaction any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Capital Stock of the surviving
or transferee company or its direct or indirect parent company immediately after
the transaction; or (c) during any consecutive two-year period, individuals who
at the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election by the Board of
Directors of the Borrower or
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whose nomination for election by the stockholders of the Borrower was approved
by a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office PROVIDED,
HOWEVER, that the change in individuals constituting the Board of Directors in
connection with the closing of the transactions contemplated by the Exchange
Agreement shall be deemed not to result in a Change of Control pursuant to this
clause (c); or (d) any transaction subject to Rule 13e-3 under the Exchange Act
if following such Rule 13e-3 transaction such Person owns more than 50% of the
total Voting Capital Stock of the Borrower.
"CLAIM": for purposes of the definition of "Environmental Claims"
contained in subsection 3.16, as defined herein.
"CLOSING DATE": the date on which the conditions precedent set forth in
Section 4 shall be satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all assets of the Loan Parties, now owned or hereinafter
acquired, upon which a Lien is purported to be created by any Security Document.
"COMMITMENT": with respect to each Lender, the commitment of such
Lender with respect to the Loans hereunder on the Closing Date, expressed as an
amount representing the maximum principal amount of the Loans to be held by such
Lender hereunder on the Closing Date after giving effect to the
Recapitalization. The amount of each Lender's Commitment is set forth on
SCHEDULE 2.1. The aggregate amount of the Lenders' Commitments is $25,000,000.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414(b) or (c) of the Code.
"COMMON STOCK": the common stock, par value $.01 per share, of the
Borrower.
"CONSOLIDATED CURRENT ASSETS": of any Person at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of such Person and its Subsidiaries at such date.
"CONSOLIDATED CURRENT LIABILITIES": of any Person at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
"total current liabilities" (or any like caption) on a consolidated balance
sheet of such Person and its Subsidiaries at such date, but excluding, with
respect to the Borrower, (a) the current
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portion of any Funded Debt of the Borrower and its Subsidiaries and (b), without
duplication, all Indebtedness consisting of revolving credit loans to the extent
otherwise included therein.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income of the
Borrower and its Subsidiaries for such period PLUS, without duplication and to
the extent deducted in determining such Consolidated Net Income for such period,
the sum of (a) consolidated income tax expense, (b) consolidated interest
expense, amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness,
(c) depreciation and amortization expense, (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (e) any
extraordinary non-cash charges and (f) any other non-cash charges, and minus, to
the extent included in determining such Consolidated Net Income for such period,
the sum of (a) any extraordinary non-cash gains and (b) any other non-cash
items, all as determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES": with respect to the Borrower and its
Subsidiaries on a consolidated basis for any period, the aggregate of (i)
regularly scheduled principal payments of all Funded Debt made or to be made by
the Borrower and its Subsidiaries on a consolidated basis during such period and
discount or premium relating to such Funded Debt for such period, whether
expensed or capitalized, (ii) Consolidated Interest Expense during such period,
both expensed and capitalized, and (iii) in respect of leases of real and
personal property (other than finance leases), the aggregate amount of rental
obligations or other commitments thereunder to make any direct or indirect
payment, whether as rent or otherwise, for fixed or minimum rentals or
percentage rentals or contingent rentals for such period, in each case
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE": of any Person for any period, total
cash interest expense (including that attributable to Financing Leases) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including, without
limitation, all commissions, discounts and other fees and charges owed by such
Person with respect to letters of credit and bankers' acceptance financing and
net costs of such Person under hedge agreements in respect of interest rates to
the extent such net costs are allocable to such period in accordance with GAAP).
"CONSOLIDATED NET INCOME": for any period, the net income or loss of
the Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP; PROVIDED that there shall be excluded (a) the
income of any Person (other than a Loan Party) in which any other Person (other
than the Borrower or any Subsidiary or any director holding qualifying shares in
compliance with applicable law) owns an equity interest, except to the extent of
the amount of dividends or other cash distributions actually paid to the
Borrower or any of the Subsidiaries during such period, and (b) the income or
loss of any Person accrued prior to the date it becomes
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Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary
or the date that such Person's assets are acquired by the Borrower or any
Subsidiary.
"CONSOLIDATED TOTAL DEBT": as of any date, the sum of (a) the aggregate
principal amount of Indebtedness of the Borrower and the Subsidiaries
outstanding as of such date, in the amount that would be reflected on a balance
sheet prepared as of such date on a consolidated basis in accordance with GAAP,
plus (b) the aggregate principal amount of Indebtedness of the Borrower and the
Subsidiaries outstanding as of such date that is not required to be reflected on
a balance sheet in accordance with GAAP, determined on a consolidated basis,
PROVIDED, that for purposes of clause (b) above, the term "Indebtedness" shall
not include contingent obligations of the Borrower or any Subsidiary as an
account party in respect of any letter of credit or letter or guaranty unless
such letter of credit or letter of guaranty supports an obligation that
constitutes Indebtedness.
"CONSOLIDATED WORKING CAPITAL": at any date, the difference of (a)
Consolidated Current Assets of the Borrower and its Subsidiaries on such date
less (b) Consolidated Current Liabilities of the Borrower and its Subsidiaries
on such date.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEFAULT": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"DEPOSIT ACCOUNT CONTROL AGREEMENTS": the collective reference to the
Borrower Deposit Account Control Agreements and the Subsidiaries Deposit Account
Control Agreements.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"ENVIRONMENTAL CLAIMS": as defined in subsection 3.16.
"ENVIRONMENTAL LAWS": as defined in subsection 3.16.
"EQUALLY AND RATABLY": means, in reference to sharing of any Liens on
Collateral or proceeds of the sale, collection and realization thereof pursuant
to the exercise of the rights and remedies of the Agent and the Lenders under
the Loan Documents, as among the holders of Loan Obligations and Parity
Obligations, shall be allocated and distributed to the holders of the Loan
Obligations and the Parity
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Obligations ratably in proportion to their respective Obligations outstanding as
of the date of such allocation or distribution.
For this purpose:
(1) Unfunded commitments to extend credit shall not be counted
as outstanding Obligations; and
(2) Obligations of the Borrower or any of its Subsidiaries in
respect of outstanding letters of credit, bank guarantees, bankers' acceptances
or other similar instruments which are part of the Parity Obligations shall be
counted as outstanding Obligations (whether or not contingent) PROVIDED, THAT,
(a) the sum of such Obligations under this clause (2), together with the
principal amount of all other Obligations part of the Parity Obligations, shall
not exceed the aggregate principal amount of the Parity Obligations secured
pursuant to subsection 6.3(l), and (b)(i) if such instrument is collateralized
by cash or Cash Equivalents, then such instrument shall not be counted as
outstanding Obligations and (ii) if any such instrument thereafter expires
without being funded, an equitable adjustment shall be made by the holders of
the Parity Obligations and the holders of the Parity Obligations shall pay over
to the Lenders the amount they would have received if such instrument had never
been outstanding so that the amount applied with respect to such instrument is
shared Equally and Ratably among the holders of the Parity Obligations and the
Lenders.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended, and all regulations promulgated thereunder, as in effect from time to
time.
"EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the Borrower, the
difference, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year (without giving effect to any reduction in the
realization reserve of deferred income tax benefits), (iv) the aggregate net
amount of non-cash loss on the disposition of property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year (if
any) in long-term deferred tax accounts of the Borrower MINUS (b) the sum,
without duplication, of (i) the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the Borrower and its Subsidiaries in cash during such fiscal year on
account of Capital Expenditures (except to the extent attributable to the
incurrence of capital lease obligations or other Indebtedness in connection with
such expenditures and except to the extent such expenditures are financed with
the proceeds of any Reinvestment Deferred Amount), (iii) the aggregate amount of
all optional prepayments
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of the Funded Debt during such fiscal year and mandatory prepayments made
pursuant to subsection 2.3(b) with the proceeds of Prepayment Events described
in clause (C) of the definition thereof during such year to the extent such
proceeds are included in the calculation of Consolidated Net Income for such
fiscal year, (iv) the aggregate amount of all regularly scheduled principal
payments of Funded Debt of the Borrower and its Subsidiaries made during such
fiscal year, (v) the amount of the increase, if any, in Consolidated Working
Capital for such fiscal year (without giving effect to any increase in the
realization reserve of deferred income tax benefits), (vi) the aggregate net
amount of non-cash gain on the disposition of property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, and (vii) the net decrease during such fiscal year (if
any) in long-term deferred tax accounts of the Borrower.
"EXCHANGE ACT": Securities Exchange Act of 1934, as amended.
"EXCHANGE AGREEMENT": the Exchange Agreement entered into between the
Borrower and the Investors relating to the Recapitalization.
"EXISTING PREFERRED STOCK": as defined in the recitals.
"EXISTING WARRANTS": as defined in the recitals.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"FIXED EARLY PREPAYMENT AMOUNT": an amount equal to 101% of the
outstanding aggregate principal amount of the Loans to be prepaid.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower organized under
the laws of any jurisdiction outside the United States of America.
"FUNDED DEBT": means, with respect to the Borrower and its Subsidiaries
as of the date of determination thereof, all Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis outstanding at such time (including the
current portion thereof and amounts outstanding in the final year of any Funded
Debt) which matures more than one year after the date of calculation, and any
such Indebtedness maturing within one year from such date of calculation which
is renewable or extendable at the option of the obligor to a date more than one
year from such date and including in any event the Loans.
"GAAP": generally accepted accounting principles in the United States
of America, consistently applied, which are in effect on the date of this
Agreement; PROVIDED, THAT, if any changes in GAAP are hereafter required or
permitted by the rules, regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or
9
agencies with similar functions) and are adopted by the Borrower with the
agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the covenants,
standards or terms found in this Agreement, the Borrower may request that the
parties hereto enter into negotiations in order to amend such provisions so as
to equitably reflect such changes; PROVIDED, HOWEVER, that no change in GAAP
that would affect the method of calculation of any of the covenants, standards
or terms shall be given effect in such calculations until such provisions are
amended, in a manner satisfactory to the Required Lenders and the Borrower, to
so reflect such change in GAAP.
"GOVERNMENTAL AUTHORITY": (i) any foreign, Federal, state or local
court or governmental or regulatory agency or authority, (ii) any arbitration
board, tribunal or mediator and (iii) any national stock exchange or SEC
recognized trading market on which securities issued by the Borrower or any of
the Subsidiaries are listed or quoted.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefore,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"GUARANTOR": any Person party to a Security Agreement other than the
Borrower and the Agent.
10
"HAZARDOUS MATERIALS": as defined in subsection 3.16.
"INDEBTEDNESS": with respect to the Borrower or any specified Person,
all obligations, contingent or otherwise, which in accordance with GAAP are
required to be classified upon the balance sheet of the Borrower (or other
specified Person) as liabilities, but in any event including (without
duplication):
(a) all indebtedness of such Person for borrowed money,
(b) for the deferred purchase price of assets, securities,
property or services, including related non-competition, consulting and stock
repurchase obligations (other than current trade liabilities incurred in the
ordinary course of business),
(c) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument,
(d) all obligations of such Person upon which interest charges are
customarily paid,
(e) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(f) all obligations of such Person under Financing Leases or
synthetic leases or other similar off-balance sheet leases,
(g) all obligations of such Person in respect of bankers'
acceptances, letters of credit, hedging arrangements or similar facilities,
(h) all liabilities secured by any Lien on any property owned
or acquired by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof,
(i) obligations that are immediately and directly due and payable
out of the proceeds of or production from property,
(j) mandatory redemption or cash dividend rights on Capital Stock
(or other equity securities), or
(k) all Guarantee Obligations in respect of the Indebtedness of
others.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": domestic and foreign patents, patent
applications, patent licenses, software licenses, know-how licenses, trade
names, trademarks, copyrights, unpatented inventions, service marks, trademark
registrations and
11
applications, service ▇▇▇▇ registrations and applications, copyright
registrations and applications, uniform resource locators, Internet domain
names, trade secrets and other confidential and proprietary information.
"INTEREST PAYMENT DATE": the last day of each March, June, September
and December of each year.
"INTEREST RATE": 9% per annum.
"INVESTORS": as defined in the recitals.
"LEVERAGE RATIO": on any date, with respect to the Borrower and its
Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Total Debt
as of such date to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Borrower ended on such date (or, if such date is not the
last day of a fiscal quarter, ended on the last day of the fiscal quarter of the
Borrower most recently ended prior to such date).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"LOAN": any term loan held by any Lender pursuant to this Agreement and
such term loans being referred to collectively as the "LOANS".
"LOAN DOCUMENTS": this Agreement, the Notes, the Syndication Letter,
the Security Documents and all other agreements, instruments and certificates
contemplated hereby and thereby, including documents contemplated under
subsection 8.10.
"LOAN OBLIGATIONS": (a) the due and punctual payment by the Borrower of
(i) the principal of, and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, and (ii) all other
monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower to the Agent and the Lenders
under the Loan Documents, (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Borrower under or pursuant to the
Loan Documents, and (c) the due and punctual payment and performance of all the
covenants, agreements, obligations and liabilities of the Guarantors under or
pursuant to the Loan Documents.
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"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower which
is a party to a Loan Document.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
condition (financial or otherwise), business, properties, assets, liabilities,
operations or results of operations of the Borrower and the Subsidiaries, taken
as a whole or (b) the validity or enforceability of this or any of the other
Loan Documents or the rights or remedies of the Agent or the Lenders hereunder
or thereunder.
"MATURITY DATE": October 21, 2008.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": means, with respect to (a) any sale, transfer or other
disposition of any property or asset of the Borrower or any Subsidiary, (b) any
casualty or condemnation event or (c) any other event set forth in the
definition of Prepayment Event, (i) the cash proceeds received in respect of
such event, including (x) in the case of a casualty, insurance proceeds, and (y)
in the case of a condemnation or similar event, condemnation awards and similar
payments, net of (ii) the sum of (x) all reasonable fees and out-of-pocket
expenses paid by the Borrower and the Subsidiaries to third parties (other than
Affiliates) in connection with such event and (y) the amount of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements).
"NON-EXCLUDED TAXES": as defined in subsection 2.8(a).
"NOTE": any of the promissory notes executed pursuant to subsection
2.2(e).
"OBLIGATIONS": means the principal, interest, premium, fees,
indemnifications, reimbursements, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"PARITY OBLIGATIONS": all Obligations in respect of Indebtedness
permitted to be incurred pursuant to subsection 6.2(i) but only to the extent
that such Indebtedness is permitted to be and is actually secured by a pari
passu Lien pursuant to subsection 6.3(l).
"PARTICIPANT": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERMITTED ACQUISITION": the acquisition of all or any portion of the
assets or stock or other equity interests of any Person engaged in a business
that would be permitted under subsection 6.15, including pursuant to a merger or
consolidation;
13
PROVIDED that all such acquisitions are approved by the Board of Directors and
stockholders, if required, of the Borrower and the acquiree and are not
otherwise hostile and the Borrower is the surviving entity; and PROVIDED
FURTHER, that (i) on the closing date of such acquisition, both before and
immediately after giving effect to such proposed acquisition, no Default or
Event of Default has occurred or will occur or be continuing, (ii) after giving
effect to any such acquisition there shall be no negative effect on Consolidated
EBITDA on a pro forma basis, and the Borrower would remain in compliance with
the covenants set forth in subsection 6.1 on a pro forma basis (determined on a
pro forma basis (A) as of the last day of the most recently ended fiscal quarter
of the Borrower for which financial statements are available (computed on the
basis of (X) balance sheet amounts as of the most recently completed fiscal
quarter, and (Y) income statement amounts for the most recently completed period
of four consecutive fiscal quarters) and (B) on the basis of twelve month
projections updated to give effect to such acquisition) and the Borrower
delivers a certificate of a Responsible Officer certifying compliance with this
clause (ii) and (iii) any Person or business acquired becomes a wholly-owned
Subsidiary of the Borrower or a Guarantor following such acquisition and becomes
a Guarantor, and the Borrower shall, and shall cause any applicable Subsidiary
to, execute any documents and take all actions that may be required under
applicable law or that the Agent may reasonably request, in order to comply with
subsection 5.10 herein, all in form and substance satisfactory to the Agent.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PREPAYMENT EVENT": means (A) any sale, transfer or other disposition
of any property or asset of the Borrower or any Subsidiary (including pursuant
to a sale and leaseback transaction) (other than sales, transfers or other
dispositions permitted under subsections 6.5(c), 6.5(d) and 6.5(e) hereof) or
(B) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Subsidiary after the Closing Date or (C) the
receipt by the Borrower or any Subsidiary of any unscheduled payment in excess
of $1,000,000 during any fiscal year of the Borrower under any contract with any
third Person including, without limitation, an amount on account of early
termination of such contract; PROVIDED that such events shall not constitute
"Prepayment Events" to the extent that (1) the aggregate Net Proceeds from all
such casualty events are less than $250,000 during any fiscal year of the
Borrower or (2) the aggregate Net Proceeds from the sale, transfer or other
disposition of assets of the Borrower or any Subsidiary are less than $250,000
during any fiscal year of the Borrower.
"PRIVATE PLACEMENT": as defined in subsection 4(f).
14
"PRO RATA SHARE: as to any Lender, at any time, the percentage which
the aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the total Loans then
outstanding at such time.
"RECAPITALIZATION": as defined in the recitals.
"REGISTER": as defined in subsection 9.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"REINVESTMENT AMOUNT": with respect to any Reinvestment Event, the
amount expended prior to the relevant Reinvestment Prepayment Date to acquire
real property, equipment or other tangible assets used in or useful in the
Borrower's business.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment Event,
the aggregate Net Proceeds received by the Borrower or any of its Subsidiaries
in connection therewith that are not applied to prepay the Loans pursuant to
subsection 2.3(b) as a result of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Prepayment Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": with respect to Net Proceeds from a Prepayment
Event specified in paragraphs (A) or (B) of the definition of Prepayment Event,
a written notice executed by a Responsible Officer stating (i) that no Default
or Event of Default has occurred and is continuing, (ii) with respect to Net
Proceeds from a Prepayment Event specified in paragraph (A) of the definition of
Prepayment Event, the aggregate amount of Reinvestment Amounts expended by the
Borrower with respect to Prepayment Events specified in paragraph (A) of the
definition of Prepayment Event (directly or indirectly through a Subsidiary)
during the term of this Agreement does not and will not exceed $5,000,000
(including the specified portion of the Net Proceeds the subject of such
Reinvestment Notice) and specifying such aggregate amount of such Reinvestment
Amounts to date and (iii) that the Borrower (directly or indirectly through a
Subsidiary) intends and expects to use all or a specified portion of the Net
Proceeds of any Prepayment Event to acquire real property, equipment or other
tangible assets used in or useful in its business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto LESS the Reinvestment
Amount relating thereto.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment Event,
the earlier of (a) the date occurring 180 days after such Reinvestment Event and
(b) the date on which the Borrower shall have determined not to, or shall have
otherwise ceased to, acquire real property, equipment or other tangible assets
used in or useful in
15
the Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"RELEASE": as defined in subsection 3.16.
"REORGANIZATION": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections 13, 14, 16, 18, 19 or 20 of PBGC ▇▇▇.▇▇. 2615.
"REQUIRED LENDERS": at any time, Lenders whose Pro Rata Shares
aggregate at least 51%.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer and the president of
the Borrower or, with respect to financial matters, the chief financial officer
of the Borrower.
"RESTRICTED PAYMENT": means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Capital Stock in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Capital Stock or any option, warrant or other right to acquire any such
Capital Stock.
"SEC": United States Securities and Exchange Commission.
"SEC FILINGS": all reports, registration statements and other filings
filed by the Borrower with the SEC (and all notes, exhibits and schedules
thereto and all documents incorporated by reference therein).
"SECURITIES ACT": the Securities Act of 1933, as amended.
"SECURITY AGREEMENT": the Guarantee and Security Agreement to be
executed and delivered by the Borrower and the Subsidiaries, substantially in
the form of Exhibit D, as the same may be amended, supplemented or otherwise
modified from time to time.
"SECURITY DOCUMENTS": the collective reference to the Deposit Account
Control Agreements, the Security Agreement, the Stock Pledge Agreement and all
other security documents hereafter delivered to the Agent granting a Lien on any
asset or assets of any Person to secure the obligations and liabilities of the
Borrower hereunder and
16
under any of the other Loan Documents or to secure any guarantee of any such
obligations and liabilities.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"STOCK PLEDGE AGREEMENT": the Stock Pledge Agreement to be executed and
delivered by the Borrower and each relevant Subsidiary, substantially in the
form of Exhibit F, as the same may be amended, supplemented or otherwise
modified from time to time.
"SUBSIDIARIES DEPOSIT ACCOUNT CONTROL AGREEMENTS": the Deposit Account
Control Agreements to be executed and delivered by each Subsidiary,
substantially in the form of Exhibit E or in a form acceptable to the Agent, as
the same may be amended, supplemented or otherwise modified from time to time.
"SUBSIDIARIES SECURITY DOCUMENTS": the collective reference to the
Subsidiaries Deposit Account Control Agreements, the Security Agreement and the
Stock Pledge Agreement.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having ordinary
voting power (other than stock or such other ownership interests having such
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"SYNDICATION LETTER": the Syndication Letter, to be executed and
delivered by the Borrower, the Agent and the Investors, as the same may be
amended, supplemented or otherwise modified from time to time.
"TRANSFEREE": as defined in subsection 9.6(f).
"VOTING CAPITAL STOCK": means with respect to any Person, securities of
any class or classes of Capital Stock in such Person ordinarily entitling the
holders thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to vote in
the election of members of the board of directors or comparable governing body
of such Person.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
17
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Borrower and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1, to the extent not defined, shall have
the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. GENERAL TERMS
2.1 LOANS. (a) Immediately upon the effectiveness of this
Agreement and on the Closing Date, pursuant to the Exchange Agreement, the
Borrower agrees to exchange all of the outstanding Existing Preferred Stock and
the outstanding Existing Warrants of the Borrower owned by the Investors for (i)
$55,000,000 in cash and (ii) Loans outstanding under this Agreement in the
aggregate principal amount of $25,000,000 represented by Notes issued by the
Borrower in favor of the Investors in their capacity as initial Lenders, and
deliver the aforementioned to the Investors.
(b) Subject to the terms and conditions hereof, each Lender
severally agrees to make a Loan to the Borrower on the Closing Date in an amount
not to exceed the amount of the Commitment of such Lender then in effect by
exchanging its Existing Preferred Stock and Existing Warrants as set forth in
the Exchange Agreement. The Borrower agrees to issue Notes to the Lenders
representing the Loans outstanding under this Agreement. Amounts paid or prepaid
in respect of the Loans may not be reborrowed. The Lenders are under no
obligation to make any additional loans to the Borrower hereunder after the
Closing Date.
2.2 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) (i) In the event
that any of the Investors sells, transfers or assigns any of its Loans to an
unaffiliated third Person who is not another Investor or an Affiliate thereof
pursuant to subsection 9.6, the Borrower hereby unconditionally promises to pay
to the Agent for the account of each Lender the percentage of the unpaid
principal amount of the Loans sold, transferred or assigned by such Investor (or
any additional assignee of such Loans) specified on Schedule 2.2 on each date
set forth on Schedule 2.2, commencing December 31, 2003.
(ii) To the extent not otherwise paid pursuant to subsection
2.2(a)(i), the Borrower hereby unconditionally promises to pay to the
Agent for the account of each Lender the then unpaid principal amount
of the Loan on the Maturity Date (or the then unpaid principal amount
of such Loan, on the date that the Loans become due and payable
pursuant to Section 7).
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(iii) In any event, to the extent not previously paid, all
Loans shall be due and payable on the Maturity Date.
(iv) The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding
from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in subsection 2.4.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to
subsection 9.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of Loan made hereunder, (ii) any assignments of Loans
pursuant to subsection 9.6, (iii) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to each Lender
hereunder and (iv) both the amount of any sum received by the Agent hereunder
from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to subsection 2.2(b) shall, to the extent
permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Borrower therein recorded; PROVIDED, HOWEVER,
that the failure of any Lender or the Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest and premium, if any) the Loans
held by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent
by any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Loan of such Lender, substantially in the
form of Exhibit A with appropriate insertions as to date and principal amount (a
"NOTE").
2.3 PREPAYMENTS. (a) The Borrower shall have the right at any time
and from time to time to prepay the Loans in whole or in part subject to the
requirements of this Section without penalty or premium; PROVIDED that if the
Borrower has entered into an agreement for a Change of Control or the Borrower
or any other Person otherwise has publicly announced its intention to consummate
a transaction that would institute a Change of Control, the Borrower may only
prepay the Loans at a prepayment amount equal to the Fixed Early Prepayment
Amount, plus accrued and unpaid interest to the date of prepayment.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Borrower or any Subsidiary in respect of any
Prepayment Event, then, unless a Reinvestment Notice shall be delivered with
respect to Net Proceeds
19
from a Prepayment Event specified in paragraphs (A) or (B) of the definition of
Prepayment Event, the Borrower shall, within three (3) Business Days after such
Net Proceeds are received, prepay Loans in an aggregate amount equal to such Net
Proceeds; PROVIDED, THAT, on each Reinvestment Prepayment Date, the Loans shall
be repaid in an amount equal to the Reinvestment Prepayment Amount with respect
to the Reinvestment Event.
(c) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year that begins on January 1, 2005, for which there
is any Excess Cash Flow, the Borrower shall prepay Loans in an aggregate amount
equal to 75% of Excess Cash Flow for such fiscal year. Each prepayment pursuant
to this paragraph shall be made on or before the date on which financial
statements are delivered pursuant to subsection 5.1(a) with respect to the
fiscal year for which Excess Cash Flow is being calculated (and in any event
within 90 days after the end of such fiscal year).
(d) In the event and on each occasion that the Borrower or
any Subsidiary after the Closing Date receives cash proceeds from the sale of
Capital Stock or other equity securities, or otherwise receives a cash capital
contribution from any third Person, or raises any private or public capital in
cash (other than cash proceeds received in connection with the exercise of
options and warrants to acquire the common stock of the Borrower that are issued
or outstanding on the date hereof or issued under a Plan or pursuant to the
Syndication Letter, or pursuant to anti-dilution provisions in such options or
warrants or applicable thereto), the Borrower shall, within three (3) Business
Days after the receipt thereof, prepay Loans in an amount equal to 50% of the
net amount received.
(e) Upon the occurrence of a Change of Control, the
Borrower shall, within three (3) Business Days after the occurrence thereof,
prepay all of the Loans at a prepayment price equal to the Fixed Early
Prepayment Amount, plus accrued and unpaid interest, if any, to the date of
prepayment.
(f) In the event of a prepayment hereunder, the Borrower
shall give at least three (3) Business Days' irrevocable notice to the Agent and
the Lenders, specifying the date, the reason for the prepayment and amount of
prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with any
amounts payable pursuant to subsection 2.9 and accrued interest to such date on
the amount prepaid. Each prepayment of principal of the Loans pursuant to
subsection 2.3(a) shall be applied pro rata against the remaining scheduled
payments of principal under subsection 2.2. Partial prepayments of the Loans
(other than pursuant to subsection 2.3(a)) shall be applied to the installments
of principal thereof in the inverse order of their scheduled maturities. Amounts
prepaid on account of the Loans may not be reborrowed. Partial prepayments under
subsection 2.3(a) shall be in an aggregate principal amount of $250,000 or a
whole multiple thereof.
2.4 INTEREST RATES AND PAYMENT DATES. (a) Each Loan shall bear
interest at a rate per annum equal to the Interest Rate.
20
(b) If all or a portion of (i) any principal of any Loan,
(ii) any interest payable thereon or (iii) any other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), the principal of the Loans and any such overdue interest or other
amount shall bear interest at a rate per annum equal to the Interest Rate plus
3%, in each case from the date of such non-payment until such overdue principal,
interest or other amount is paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on the last day of
each March, June, September and December, commencing December 31, 2003 (each an
"INTEREST PAYMENT DATE"), PROVIDED that interest accruing pursuant to paragraph
(b) of this subsection shall be payable from time to time on demand.
2.5 COMPUTATION OF INTEREST. (a) Interest shall be calculated on
the basis of a 360-day year and payable for the actual number of days elapsed.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error.
2.6 PRO RATA TREATMENT AND PAYMENTS. Each payment (including each
prepayment) by the Borrower on account of principal of, interest and premium, if
any, on the Loans shall be made pro rata according to the respective Pro Rata
Share of the outstanding principal amount of the Loans then held by the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without set off or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Lenders (or, if the Agent so directs,
directly to the account of the Agent at the office specified in subsection 9.2),
for the account of the Lenders, at the offices of the Lenders notified from time
to time to the Borrower by the Agent, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest and premium, if any, thereon shall be payable at the then applicable
rate during such extension.
2.7 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any Loan made
by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes and income taxes and
franchise taxes);
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(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Loans or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender (other than an Investor) shall have
determined that the adoption of or any change in any Requirement of Law
regarding capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof shall
have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's or
such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Borrower shall
promptly pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the Borrower (with
a copy to the Agent) of the event by reason of which it has become so entitled.
A certificate as to any additional amounts payable pursuant to this subsection
submitted by such Lender to the Borrower (with a copy to the Agent) shall be
conclusive in the absence of manifest error. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
2.8 TAXES. (a) (i) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise or similar
taxes (imposed in lieu of net income taxes), including branch profits tax and
minimum tax imposed on the Agent or any Lender as a result of a present or
former connection between the Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Agent or such Lender having executed, delivered or performed its
22
obligations or received a payment under, or enforced, this Agreement or any
Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees
deductions or withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to
be withheld from any amounts payable to the Agent or any Lender hereunder or
under any Note (A) the amounts so payable to the Agent or such Lender shall be
increased as necessary so that after making all required deductions of
Non-Excluded Taxes or Other Taxes (including deductions of Non-Excluded Taxes or
Other Taxes applicable to additional sums payable under this subsection) the
Agent or such Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, and (B) the Borrower shall
pay the full amount withheld to the relevant Governmental Authority in
accordance with applicable law, PROVIDED, HOWEVER, that the Borrower shall not
be required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof (x)
if such Lender fails to comply with the requirements of paragraph (b) of this
subsection or (y) to the extent of any Non-Excluded Taxes that are in effect and
would apply to a payment under this Agreement or any Note made to such Lender as
of the date such Lender becomes a party to this Agreement or any Note, or, in
the case of any other Lender which changes its lending office with respect to
the Loans or any Note to an office outside the U.S., any Non-Excluded Taxes that
are in effect and would apply to a payment to such Lender as of the date of the
change of the lending office.
(ii) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
"OTHER TAXES" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement.
(iii) Whenever any Non-Excluded Taxes or Other Taxes are
payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Agent for its own account or for the account
of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof, or,
if the Borrower cannot, using reasonable efforts, obtain such receipts,
other evidence of such payment by the Borrower reasonably satisfactory
to the Agent or such Lender. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent
and the Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such
failure.
(iv) The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof shall:
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(i) deliver to the Borrower and the Agent two duly
completed copies of United States Internal Revenue Service Form W-8BEN
or Form W-8ECI (or successor applicable form) claiming that amounts
received by the Lender under this Agreement are either exempt from
United States federal withholding tax under an applicable tax treaty or
are effectively connected income, as the case may be, on or before the
date it becomes a party to this Agreement;
(ii) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date that any
such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes. Each Person that shall become a Lender or a Participant pursuant to
subsection 9.6 shall, upon the effectiveness of the related transfer, be
required to provide all of the forms and statements required pursuant to this
subsection, provided that in the case of a Participant such Participant shall
furnish all such required forms and statements to the Lender from which the
related participation shall have been purchased.
(c) If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this subsection 2.8 as a result
of a change in law or treaty occurring after such Lender first became a party to
this Agreement, and such Lender has a lending office in another jurisdiction,
then such Lender will, at the request of the Borrower, change the jurisdiction
of its applicable lending office if such change (i) will eliminate or reduce any
such additional payment which may thereafter accrue and (ii) is, in such
Lender's sole, reasonable discretion, determined not to be materially
disadvantageous or cause unreasonable hardship to such Lender, provided that
fees, charges, costs or expenses that are related to such change shall be borne
by the Borrower on behalf of a Lender, and the mere existence of such expenses,
fees or costs shall not be deemed to be materially disadvantageous or cause
undue hardship to the Lender.
(d) If and to the extent that any Lender is able, in its
sole opinion, to receive any tax refund arising out of or in conjunction with
any deduction or withholding which gives rise to an obligation on the Borrower
to pay any Non-Excluded Taxes or Other Taxes pursuant to this subsection 2.8
then such Lender shall, to the extent
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that in its sole opinion it can do so without prejudice to the retention of the
refund and without any other adverse tax consequences for such Lender, reimburse
to the Borrower at such time as such refund shall have actually been received by
such Lender such amount as such Lender shall, in its sole opinion, have
determined to be attributable to the relevant deduction or withholding and as
will leave such Lender in no better or worse position than it would have been in
if the payment of such Non-Excluded Taxes or Other Taxes had not been required.
2.9 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of default by the Borrower in making any prepayment
after the Borrower has given a notice thereof in accordance with the provisions
of this Agreement. Such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, for the period from the date of such prepayment to the last
day of such Interest Payment Date in each case at the applicable rate of
interest for such Loans provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.10 AGENT FEE. In the event that any of the Lenders sells,
transfers or assigns any of its Loans to an unaffiliated third Person who is not
another Investor or an Affiliate thereof pursuant to subsection 9.6, the
Borrower agrees to pay to the Agent for its own account an annual administrative
fee of $25,000, payable in full on the effective date of such sale, transfer and
assignment (such fee being pro-rated for the first year in which such fee
becomes payable) and each annual anniversary of the Closing Date thereafter.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 FINANCIAL CONDITION. (a) Since January 1, 2001, each of the
Borrower and each Subsidiary have duly filed all forms, reports, schedules,
proxy statements and documents required to be filed by it with the SEC. True and
correct copies of all filings made by the Borrower and each Subsidiary with the
SEC since such date and prior to the date hereof (the "SEC REPORTS"), whether or
not under Requirement of Law and including any registration statement filed by
the Borrower or a Subsidiary under the Securities Act, have been either made
available or are publicly available to the Agent. As of their respective dates,
the SEC Reports (other than preliminary material) complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the SEC thereunder applicable to
such SEC Reports and none of the SEC Reports, at the time filed, contained
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any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No other Person included in the Loan Parties is subject to periodic
reporting requirements of the Exchange Act or is otherwise required to file
documents with the SEC or comparable Governmental Authority or any national
securities exchange or quotation service.
(b) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at December 31, 2002 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Ernst & Young LLP, copies of which have heretofore been furnished
to each Lender, present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and the consolidated
results of their operations and their consolidated cash flows for the fiscal
year then ended. The unaudited consolidated balance sheet of the Borrower and
its consolidated Subsidiaries as at June 30, 2003 and the related unaudited
consolidated statements of income and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Lender, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the six-month period then ended (subject to normal year-end audit
adjustments and the absence of footnotes). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). Neither the Borrower nor any of its consolidated
Subsidiaries had, at the date of the most recent balance sheet referred to
above, any material Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto. During the period from June 30, 2003 to and including the
date hereof there has been no sale, transfer or other disposition by the
Borrower or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or
property (including any capital stock of any other Person) material in relation
to the consolidated financial condition of the Borrower and its consolidated
Subsidiaries at June 30, 2003.
3.2 ABSENCE OF CERTAIN CHANGES. (a) Except (i) for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby, (ii) as disclosed by the SEC Reports or (iii) as set forth in Schedule
3.2 to this Agreement, since December 31, 2002 (a) none of the Borrower or any
Subsidiary have suffered any change, condition, event or development that has
had, or could reasonably be expected to have, a Material Adverse Effect, (b)
each of the Borrower or any Subsidiary have conducted in all material respects
their respective businesses only in the ordinary course consistent with past
practice, except for the negotiation and execution and delivery of this
Agreement and (c) the Borrower has not (i) incurred any Indebtedness or
Guarantee Obligation in excess of $100,000, (ii) granted any Lien in respect of
any material asset to
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any Person, (iii) made any Restricted Payment or investment in excess of
$250,000 or (iv) entered into any transaction (including any merger or
consolidation) with any Person, except, in each case, as would be permitted
under this Agreement.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law, except in the case of the foregoing clauses (c) and (d), to the extent that
the failure to be so qualified or to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person
(including, without limitation, Board of Directors, stockholder, warrant holder
or NASDAQ consents, waivers and approvals) is required in connection with the
Recapitalization, the borrowings hereunder or the issuance of Notes hereunder or
with the execution, delivery, performance, validity or enforceability of the
Loan Documents to which the Borrower is a party, except consents,
authorizations, filings and notices described on Schedule 3.4. This Agreement
has been, and each other Loan Document to which it is a party will be, duly
executed and delivered on behalf of the Borrower. This Agreement constitutes,
and each other Loan Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing. Each
of the Security Documents creates and grants to the Agent, for its own benefit
and for the benefit of the Lenders, a legal, valid and duly perfected Lien in
the Collateral identified therein prior and superior in right to all other
Persons, except as of the date hereof and as of the Closing Date Liens permitted
pursuant to subsection 6.3(f) and the Liens permitted under subsection 6.3 that
have priority over the Agent's Lien by operation of law, and thereafter, Liens
permitted pursuant to subsection 6.3(f), subsection 6.3(g), subsection 6.3(h)
and subsection 6.3(l), and the Liens permitted under subsection 6.3 that have
priority over the Agent's Lien by operation of law. Such Collateral is not
subject to any other Liens whatsoever, except Liens permitted by Section 6.3
hereof.
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3.5 NO LEGAL BAR. The execution, delivery and performance of the
Loan Documents to which the Borrower is a party and the borrowings hereunder
will not violate any Requirement of Law or Contractual Obligation (other than as
set forth on Schedule 3.4) of the Borrower or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any of
its or their respective properties or revenues pursuant to any such Requirement
of Law or Contractual Obligation (other than Liens created by the Security
Documents).
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that, if reasonably likely
to be adversely determined, which could reasonably be expected to have a
Material Adverse Effect.
3.7 CONTRACTS AND NO DEFAULT. Each of the Borrower and the
Subsidiaries is in compliance with respect to all of its Contractual
Obligations, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
3.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 6.3.
3.9 INTELLECTUAL PROPERTY. Schedule 3.9 contains an accurate and
complete list of all material Intellectual Property which is used in the
business of the Borrower or any of its Subsidiaries, other than off-the-shelf
software that is commercially available. Unless otherwise indicated in the SEC
Filings or on Schedule 3.9, as of the date hereof and as of the Closing Date the
Borrower (or the Subsidiary indicated) owns the entire right, title and interest
in and to the Intellectual Property listed on such Schedule 3.9 (including,
without limitation, the exclusive right to ▇▇▇ and license the same) free and
clear of any Liens, other than Liens permitted by subsection 6.3 hereof (and
without obligation to pay any royalty or other fee with respect thereto) and
each item constituting part of the Intellectual Property which is owned by the
Borrower or any of its Subsidiaries and listed on Schedule 3.9 has been, to the
extent indicated in Schedule 3.9, duly registered with, filed in or issued by,
as the case may be, the United States Patent and Trademark Office or such other
government entities, domestic or foreign, or a duly accredited and appropriate
domain name registrar, as are indicated in Schedule 3.9 and such registrations,
filings and issuances remain in full force and effect. As of the date hereof and
as of the Closing Date, to the best knowledge of the Borrower, neither the
Borrower's nor any of its Subsidiaries' use or practice of the Intellectual
Property infringes any other Person's rights thereto. As of the date hereof and
as of the Closing Date, no Intellectual Property set forth on Schedule 3.9 has
been canceled,
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abandoned, or otherwise terminated and all renewal fees (if applicable) in
respect thereof have been duly paid. Except as stated in Schedule 3.9, as of the
Closing Date are no pending or to the best knowledge of the Borrower, threatened
proceedings or litigation or other adverse claims affecting or with respect to
the Intellectual Property listed on Schedule 3.9. Schedule 3.9 lists all notices
or claims pending as of the Closing Date or received by the Borrower or any of
its Subsidiaries during the two years immediately preceding the Closing Date
which claim, as applicable, infringement, contributory infringement, inducement
to infringe, misappropriation, misuse or breach by the Borrower or any of its
Subsidiaries with respect to any Intellectual Property or license thereof and,
except as set forth on Schedule 3.9, as of the Closing Date there is, to the
knowledge of the Borrower, no reasonable basis upon which any such claim may be
asserted. As of the date hereof and as of the Closing Date, to the best
knowledge of the Borrower, except as indicated on Schedule 3.9, no Person is
infringing, misappropriating or misusing any of the Intellectual Property.
3.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation as of the date hereof and as of the Closing Date of the
Borrower or any of its Subsidiaries could reasonably be expected to have a
Material Adverse Effect.
3.11 TAXES. Except as set forth on Schedule 3.11:
(a) Each of the Borrower and its Subsidiaries has timely
filed or caused to be timely filed (including by way of permitted extensions)
all income Tax Returns and all material other United States federal, state,
county, local and foreign Tax Returns required to be filed by or with respect to
it, and all such Tax Returns are complete and accurate in all material respects.
Each of the Borrower and its Subsidiaries has timely paid all material Taxes for
which it is directly or indirectly liable and any assessments made against it or
any of its property and all other Taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority, other than any taxes, fees or
other charges the amount or validity of which is currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the June 30, 2003 balance sheet of
the Borrower.
(b) There are no audits, examinations, actions, suits,
proceedings, investigations, claims or assessments pending or, to the knowledge
of the Borrower, threatened, against the Borrower or any of its Subsidiaries for
any alleged deficiency in any Tax (a "TAX CONTROVERSY") and the Borrower has not
been notified in writing of any proposed Tax Controversy against the Borrower or
any of its Subsidiaries (other than a Tax Controversy set forth on Schedule 3.11
which is being contested in good faith).
(c) For purposes of this Agreement, the term "TAX" means
any United States federal, state, county or local, or foreign or provincial
income, gross receipts, profits, capital gains, capital stock, occupation,
severance, stamp, withholding, property, sales, use, license, excise, franchise,
employment, payroll, value added,
29
alternative or added minimum, ad valorem or transfer tax, or any other tax,
levy, custom, duty or governmental fee or other like assessment or charge of any
kind whatsoever (whether payable directly or by withholding and whether or not
requiring the filing of a Tax Return), together with all estimated taxes,
deficiency assessments, additions to tax, interest or penalties imposed by any
Governmental Authority, and shall include any liability for such amounts as a
result either of being a member of a combined, consolidated, unitary or
affiliated group or of a contractual obligation to indemnify any person or other
entity. The term "TAX RETURN" means any and all reports, returns or other
information (including any attached schedules or any amendments to such reports,
returns or other information) required to be supplied to or filed with any
Governmental Authority with respect to any Tax, including an information return,
claim for refund, amended return or declaration or estimated Tax.
3.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. If requested by any Lender or the Agent, the Borrower will furnish to
the Agent and each Lender a statement to the foregoing effect in conformity with
the requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation U.
3.13 ERISA. (a) Schedule 3.13 sets forth as of the date hereof and
as of the Closing Date a true and complete list of each "EMPLOYEE BENEFIT PLAN"
(as defined in Section 3(3) of ERISA) of the Borrower and its Subsidiaries in
which current or former employees, agents, directors, or independent contractors
of the Borrower or its Subsidiaries ("EMPLOYEES") participate or pursuant to
which the Borrower or any of its Subsidiaries may have a liability with respect
to Employees (each, an "EMPLOYEE PLAN"). Except as disclosed in the SEC Filings
or on Schedule 3.13, as of the date hereof and as of the Closing Date, neither
the Borrower nor any of its Subsidiaries has any commitment to establish any
additional Employee Plans or to modify or change materially any existing
Employee Plan. The Borrower has made available to the Lenders with respect to
each Employee Plan as of date hereof and as of the Closing Date: (i) a true and
complete copy of all written documents comprising such Employee Plan (including
amendments and individual agreements relating thereto) or, if there is no such
written document, an accurate and complete description of such Employee Plan;
and (ii) the most recent financial statements, if any.
(b) Each Employee Plan has been established and maintained
in substantial compliance with its terms and the requirements of all Applicable
Law, and all contributions required to be made to the Employee Plans have been
made in a timely fashion.
(c) Each Employee Plan which is intended to be "QUALIFIED"
within the meaning of Section 401(a) of the Code has received a favorable
determination letter or opinion letter from the Internal Revenue Service and, to
the Borrower's knowledge, no event has occurred and no condition exists which
could reasonably be expected to result in the revocation of any such
determination letter or opinion letter.
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(d) Neither the Borrower nor any of its Subsidiaries
currently maintains or contributes to, or has at any time maintained or
contributed to or been obligated to contribute to, any plan, program or
arrangement covered by Title IV of ERISA or subject to Section 412 of the Code
or Section 302 of ERISA.
(e) Neither the Borrower nor any of its Subsidiaries, nor,
to the Borrower's knowledge, any other "disqualified person" or "party in
interest" (as defined in Section 4975(e)(2) of the Code and Section 3(14) of
ERISA, respectively) has engaged in any transactions in connection with any
Employee Plan that could reasonably be expected to result in the imposition of a
material penalty pursuant to Section 502 of ERISA, material damages pursuant to
Section 409 of ERISA or a material tax pursuant to Section 4975 of the Code.
(f) There are no actions, suits, arbitrations, inquiries,
investigations or other proceedings (other than routine claims for benefits)
pending or, to the Borrower's knowledge, threatened, with respect to any
Employee Plan, except for any of the foregoing that do not and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(g) The Borrower and its Subsidiaries are in compliance in
all material respects with the terms and provisions of the Immigration Reform
and Control Act of 1986, as amended, and all related regulations promulgated
thereunder (the "IMMIGRATION LAWS"). As of the date hereof and as of the Closing
Date, the Borrower and its Subsidiaries have never been the subject of any
inspection or investigation relating to its compliance with or violation of the
Immigration Laws, nor have they been warned, fined or otherwise penalized by
reason of any such failure to comply with the Immigration Laws, nor is any such
proceeding pending or to the Borrower's knowledge, threatened.
(h) Except as set forth in the SEC Filings or on Schedule
3.13, the Borrower and its Subsidiaries are in compliance in all material
respects with all Applicable Laws respecting employment and employment
practices, terms and conditions and wages and hours.
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
3.15 SUBSIDIARIES. The following constitute all the Subsidiaries
of the Borrower at the date hereof and as of the Closing Date: Infocrossing
Services, Inc., ETG, Inc., AmQUEST, Inc. and AmQUEST Services, Inc.
3.16 ENVIRONMENTAL MATTERS. Except as set forth in the SEC Filings
or on Schedule 3.16: (a) Hazardous Materials have not at any time been
generated, use,
31
treated or stored on, or transported to or from, any Borrower Property by the
Borrower or any Subsidiary in a manner which has resulted or is reasonably
likely to result in an Environmental Claim, (b) Hazardous Materials have not at
any time been Released or disposed of on any Borrower Property in a manner which
has resulted or is reasonably likely to result in an Environmental Claim, (c)
the Borrower and each of its Subsidiaries are in compliance in all material
respects with all applicable Environmental Laws and the requirements of any
permits issued under such applicable Environmental Laws with respect to any
Borrower Property, (d) there are no pending or, to the knowledge of the
Borrower, threatened or unresolved past material Environmental Claims against
the Borrower or any of its Subsidiaries or any Borrower Property, (e) there are
no facts, conditions or circumstances that, to the knowledge of the Borrower,
could reasonably be expected to form the basis of an Environmental Claim, and
(f) there are not now and never have been any underground storage tanks located
on any Borrower Property.
For purposes of this Agreement, the following terms shall have
the following meanings: (a) "BORROWER PROPERTY" means any real property and
improvements currently or formerly owned or leased by the Borrower or any of its
Subsidiaries; (b) "HAZARDOUS MATERIALS" means (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or is reasonably
likely to become friable, urea formaldehyde foam insulation, polychlorinated
biphenyls, and radon gas; and (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," or words of similar
import, under any applicable Environmental Law; (c) "ENVIRONMENTAL LAW" means
any federal, state or local statute, law, rule, regulation, ordinance, code or
rule of common law in effect and in each case as amended as of the date hereof
and as of the Closing Date, applicable to the Borrower or its operations or
Borrower Property as of the date hereof and as of the Closing Date, including
any judicial or administrative order, consent decree or judgment relating to the
environment, occupational safety and health or Hazardous Materials; and (d)
"ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of noncompliance
or violation, investigations or proceedings under any Environmental Law or any
permit issued under any such Environmental Law (for purposes of this subclause
(d), "CLAIMS"), including without limitation (i) any and all Claims by any
Governmental Authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law and (ii)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment; and (e) "RELEASE" means disposing,
discharging, injecting, spilling, leaking, leaching, dumping, emitting,
escaping, emptying or seeping into or upon any land or water or air, or
otherwise entering into the environment.
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3.17 SOLVENCY. As of the date hereof and as of the Closing Date and
without regard to any inter-company debt obligations between the Loan Parties:
(a) the amount of the "present fair saleable value" of the
assets of each of the Loan Parties will, as of such date, exceed the amount of
all "liabilities of such Loan Party, contingent or otherwise", as of such date,
as such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of each
Loan Party will, as of such date, be greater than the amount that will be
required to pay the liability of such Loan Party on its debts as such debts
become absolute and matured,
(c) each Loan Party will not have, as of such date, an
unreasonably small amount of capital with which to conduct its business, and
(d) each Loan Party is then able and expects to be able to
pay its debts as they mature.
For purposes of this subsection 3.17, (i) "debt" means liability on a "claim",
and (ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
3.18 FULL DISCLOSURE. No statement of fact made by or on behalf of
any Person other than the Lenders in this Agreement, the Security Documents, the
documents relating to the Recapitalization or in any certificate or schedule
furnished to the Lenders pursuant hereto or thereto contains any untrue
statement of a material fact or omits to state any material fact necessary to
make statements contained therein or herein not misleading. There is no fact
presently known to the Borrower which has not been disclosed to the Lenders in
writing which has had or, as far as the Borrower can reasonably foresee, could
reasonably be expected to have a Material Adverse Effect.
SECTION 4. CONDITIONS PRECEDENT TO CLOSING
The making of the Loans hereunder and the agreement of each
Lender to be a party to this Agreement is subject to the satisfaction,
immediately prior to or on the Closing Date, of the following conditions
precedent:
(a) LOAN DOCUMENTS. The Lenders shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) the Notes, executed and delivered by a duly authorized officer of
the Borrower, (iii) the Stock Pledge Agreement, each executed and delivered by a
duly authorized officer of the parties thereto, (iv) the Security Agreement
executed and delivered by a duly authorized
33
officer of the parties thereto and (v) each of the Deposit Account Control
Agreements, each executed and delivered by a duly authorized officer of the
party thereto.
(b) RELATED AGREEMENTS. (i) The Lenders shall have received
true and correct copies, certified as to authenticity by the Borrower, of the
Exchange Agreement and the other documents relating to the Recapitalization,
each on terms mutually acceptable to the Lenders and the Borrower, and such
other documents or instruments as may be reasonably requested by the Lenders,
including, without limitation, a copy of any debt instrument, security agreement
or other material contract to which the Borrower, or its Subsidiaries may be a
party.
(ii) The Lenders shall have received evidence satisfactory
to them in their sole discretion that the closing conditions under the
Exchange Agreement have been satisfied.
(c) CLOSING CERTIFICATE. The Lenders shall have received a
certificate of the Borrower, dated the Closing Date, substantially in the form
of Exhibit G, with appropriate insertions and attachments, including financial
statements requested by the Lenders, confirming compliance with the conditions
set forth in Section 4, satisfactory in form and substance to the Lenders,
executed by the Chairman of the Board, the President or any Vice President of
the Borrower.
(d) CORPORATE PROCEEDINGS OF THE BORROWER. The Lenders
shall have received a copy of the resolutions, in form and substance
satisfactory to the Lenders, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party, (ii) the Loans contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Borrower Security Documents, certified by the Secretary or an Assistant
Secretary of the Borrower as of the Closing Date, which certificate shall be in
form and substance satisfactory to the Lenders and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(e) BORROWER INCUMBENCY CERTIFICATE. The Lenders shall have
received a Certificate of the Borrower, dated the Closing Date, as to the
incumbency and signature of the officers of the Borrower executing any Loan
Document satisfactory in form and substance to the Lenders, executed by the
President or any Vice President and the Secretary or any Assistant Secretary of
the Borrower.
(f) PRIVATE PLACEMENT. The Lenders shall have received at
least $55,000,000 in cash from the net proceeds of a successfully consummated
private placement of the Borrower's Common Stock (the "PRIVATE PLACEMENT"),
which private placement shall have been consummated on terms and conditions
(including, without limitation, the issuance price of the Common Stock)
satisfactory to the Lenders.
(g) DUE DILIGENCE. Satisfactory completion of due diligence
by the Lenders, including legal and tax due diligence, to the satisfaction of
the Lenders in their sole and absolute discretion.
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(h) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Lenders
shall have received a copy of the resolutions, in form and substance
satisfactory to the Lenders, of the Board of Directors of each Subsidiary of the
Borrower which is a party to a Loan Document authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party and (ii)
the granting by it of the Liens created pursuant to the Subsidiaries Security
Documents to which it is a party, certified by the Secretary or an Assistant
Secretary of each such Subsidiary as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Lenders and shall state that
the resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(i) SUBSIDIARY INCUMBENCY CERTIFICATES. The Lenders shall
have received a certificate of each Subsidiary of the Borrower which is a Loan
Party, dated the Closing Date, as to the incumbency and signature of the
officers of such Subsidiaries executing any Loan Document, satisfactory in form
and substance to the Lenders, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of each such Subsidiary.
(j) CORPORATE DOCUMENTS. The Lenders shall have received
true and complete copies of the certificate of incorporation and by-laws of each
Loan Party, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of such Loan Party.
(k) CONSENTS, LICENSES AND APPROVALS. The Lenders shall
have received a certificate of a Responsible Officer of the Borrower (i)
attaching copies of all consents, authorizations and filings referred to in
subsection 3.4 (other than the consent of Dell Financial under operating leases
relating to Master Lease 1558532), and (ii) stating that such consents, licenses
and filings attached are in full force and effect, and each such consent,
authorization and filing attached shall be in form and substance satisfactory to
the Lenders in their sole and absolute discretion.
(l) FEES. As of the date hereof and as of the Closing Date,
all fees owed to the Agent, the Lenders and their respective Affiliates under
this Agreement and all legal fees and expenses of counsel to the Agent and the
Lenders incurred through such date shall have been paid in full.
(m) LEGAL OPINIONS. The Lenders shall have received the
following executed legal opinions:
(i) the executed legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel to the Borrower and the other Loan Parties substantially in the
form of Exhibit H; and
(ii) the executed legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP,
special Georgia counsel to the Borrower.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Lenders may require in their
sole and absolute discretion.
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(n) PLEDGED STOCK; STOCK POWERS. The Agent shall have
received the certificates representing the shares pledged pursuant to the Stock
Pledge Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.
(o) ACTIONS TO PERFECT LIENS. The Lenders shall have
received evidence in form and substance satisfactory to it that all filings,
recordings, registrations and other actions, including, without limitation, the
filing of duly executed financing statements on form UCC-1, necessary or, in the
opinion of the Lenders, desirable to perfect the first priority Liens created by
the Security Documents shall have been completed.
(p) LIEN SEARCHES. The Lenders shall have received the
results of a recent search by a Person satisfactory to the Lenders, of the
Uniform Commercial Code, judgment and tax lien filings which may have been filed
with respect to personal property of the Borrower, and the results of such
search shall be satisfactory to the Lenders in their sole and absolute
discretion.
(q) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by the Borrower and the Subsidiaries in or
pursuant to the Loan Documents shall be true and correct in all material
respects on and as the date hereof and as of the Closing Date; PROVIDED that any
such representations and warranties that by their express terms are made as of a
specific date shall have been true and correct as of such specific date.
(r) NO DEFAULT. At the time of and immediately after giving
effect to the making of the Loans, no Default shall have occurred and be
continuing.
(s) ADDITIONAL MATTERS. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement, the other Loan
Documents and the Exchange Agreement shall be satisfactory in form and substance
to the Lenders, and the Lenders shall have received such other documents in
respect of any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
(t) CLOSING. The Closing Date shall have occurred before
October 31, 2003, unless otherwise agreed to by the Lenders in their sole and
absolute discretion.
(u) CAMDEN DEBENTURES. The Lenders shall have received
evidence of the repayment of the Camden Debentures and termination of the
Debentures and the related securities purchase agreement simultaneously with the
closing of this Agreement, satisfactory to the Lenders in their sole and
absolute discretion.
(v) INSURANCE. The Lenders shall have received evidence of
the compliance by the Borrower with subsection 5.5, satisfactory to the Lenders
in their sole and absolute discretion.
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SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount is owing to any
Lender or the Agent hereunder or under any other Loan Document, the Borrower
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
5.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such year and the related consolidated statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out of the
scope of the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of the Borrower and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes); and
(c) as soon as available, but in any event not later than
30 days after the end of each month, the monthly unaudited consolidated
statements of income and retained earnings and of cash flows of the Borrower and
its consolidated Subsidiaries for such months and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative form
the figures for the previous month and the figures from the budget, together
with a narrative of the performance of the Borrower and its consolidated
Subsidiaries for such period in the same form as delivered to the Board of
Directors or the senior executives of the Borrower, certified by a Responsible
Officer as being fairly stated in all material respects;
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in subsection 5.1(a), a certificate of the independent
certified public
37
accountants reporting on such financial statements stating that in making the
examination necessary therefore no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial
statements referred to in subsections 5.1(a), (b) and (c), a certificate of a
Responsible Officer stating that, to the best of such Officer's knowledge,
during such period (i) no Subsidiary has been formed or acquired (or, if any
such Subsidiary has been formed or acquired, the Borrower has complied with the
requirements of subsection 5.10 with respect thereto, (ii) neither the Borrower
nor any of its Subsidiaries has changed its name, its principal place of
business, its chief executive office or the location of any material item of
tangible Collateral without complying with the requirements of this Agreement
and the Security Documents with respect thereto and (iii) the Borrower has
observed or performed all of its covenants and other agreements contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate;
(c) not later than thirty days prior to the end of each
fiscal year of the Borrower, a copy of the projections by the Borrower of the
operating budget and cash flow budget of the Borrower and its Subsidiaries for
the succeeding fiscal year, such projections to be accompanied by a certificate
of a Responsible Officer stating that such projections are based on estimates,
information and assumptions reasonably believed by such Responsible Officer to
be reasonable on the date of delivery thereof;
(d) within five days after the same are sent, copies of all
financial statements and reports which the Borrower sends to its stockholders,
and within five days after the same are filed, copies of all financial
statements and reports which the Borrower may make to, or file with, the SEC or
any successor or analogous Governmental Authority; and
(e) promptly, such additional financial and other
information as any Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except where the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of the Borrower or its Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. (a) Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
material to the normal conduct of its business except as otherwise permitted
pursuant to subsection 6.5; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that
38
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Maintain in all material respects all property
necessary and useful in the conduct of its business, in good operating condition
and repair, ordinary wear and tear excepted.
(b) Maintain with financially sound and reputable insurers
having a rating of at least A- or better by Best Rating Guide, insurance against
loss or damage by fire with extended coverage; theft, burglary, pilferage and
loss in transit; public liability and third party property damage; larceny,
embezzlement or other criminal liability; business interruption and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business. Without limiting the foregoing, in the event that any real
estate owned or leased by any Loan Party on which is located any inventory or
equipment of a Loan Party is determined to be located within an area that has
been identified by the Director of the Federal Emergency Management Agency as a
Special Flood Hazard Area ("SFHA"), such Loan Party shall purchase and maintain
flood insurance on the improved real estate and any equipment and inventory
located on such real estate. The amount of said flood insurance will be
reasonably determined by the Agent, and such insurance shall, at a minimum
(subject to customary deductibles), comply with applicable federal regulations
as required by the Flood Disaster Protection Act of 1973, as amended. Such Loan
Party shall also maintain flood insurance for its inventory and equipment which
is, at any time, located in a SFHA.
(c) Cause the Agent, for the ratable benefit of the Agent
and the Lenders, to be named as secured party or mortgagee and loss payee as its
interest may appear or additional insured, in a manner reasonably acceptable to
the Agent on each policy of insurance of such Loan Party. Such Loan Party shall
use commercially reasonable efforts to cause each policy of insurance of such
Loan Party to contain a clause or endorsement requiring the insurer to give not
less than thirty (30) days' prior written notice to the Agent in the event of
cancellation of the policy for any reason whatsoever (other than non-payment of
premiums, in which case not less than ten (10) days' prior written notice is
sufficient). Each policy of such Loan Party for property insurance shall contain
a clause or endorsement stating that the interest of the Agent shall not be
impaired or invalidated by any act or neglect of any Loan Party or any of its
Subsidiaries or the owner of any real estate for purposes more hazardous than
are permitted by such policy. All premiums for such insurance shall be paid by
such Loan Party when due, and certificates of insurance and, if requested by the
Agent or any Lender, photocopies of the policies, shall be delivered to the
Agent, in each case in sufficient quantity for distribution by the Agent to each
of the Lenders. If a Loan Party fails to procure such insurance or to pay the
premiums therefore when due, the Agent may do so, but at the Borrowers' expense
and without any responsibility on the Agent's part for obtaining the insurance,
the solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims.
39
(d) Such Loan Party shall promptly notify the Agent and the
Lenders of any loss, damage or destruction to any of the Collateral in an amount
in excess of $250,000, whether or not covered by insurance. To the extent that
the Borrower or its Subsidiaries are not permitted to reinvest insurance and
condemnation proceeds hereunder, the Agent is hereby authorized to collect all
insurance and condemnation proceeds in respect of Collateral and directly after
deducting from such proceeds the reasonable expenses, if any, incurred by the
Agent in the collection or handling thereof, the Agent shall apply such proceeds
to the payment of the Loans in the manner provided for in this Agreement.
5.6 BOOKS AND RECORDS; INSPECTION OF PROPERTY.
(a) Keep proper books of records and account in which full,
true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and
activities.
(b) Permit representatives of the Agent and Lenders (at the
expense of the Loan Parties) to visit and inspect any of its properties, to
examine its corporate, financial and operating records, and make copies thereof
or abstracts therefrom and to discuss its affairs, finances and accounts with
its directors (or Persons serving a similar function), officers and independent
public accountants, at such reasonable times during normal business hours and as
soon as may be reasonably desired, upon reasonable advance notice to such Loan
Party; PROVIDED, HOWEVER, when an Event of Default exists, the Agent or any
Lender may do any of the foregoing at the expense of the Loan Parties at any
time during normal business hours and without advance notice.
5.7 NOTICES. Promptly give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which in
either case, if not cured or if reasonably likely to be adversely determined, as
the case may be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or
any of its Subsidiaries in which the amount involved is $250,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings
or the taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer
40
Plan with respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan; and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 ENVIRONMENTAL LAWS. (a) Comply with, and ensure compliance by
all of Borrower's tenants and subtenants on any Borrower Property, if any, with,
all applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all such tenants and subtenants obtain and comply with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except, in each case, to the extent
that failure to do so could not be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions that the
Borrower or any of its Subsidiaries are required to complete and conduct under
applicable Environmental Laws and promptly comply with all related lawful orders
and directives of all Governmental Authorities regarding applicable
Environmental Laws except to the extent that (i) the same are being contested,
if deemed reasonably necessary to contest by the Borrower, in good faith by
appropriate proceedings and (ii) such investigations, action or compliance could
not be reasonably expected to have a Material Adverse Effect.
5.9 FURTHER ASSURANCES. Upon the request of the Agent, promptly
perform or cause to be performed any and all acts and execute or cause to be
executed any and all documents (including, without limitation, financing
statements and continuation statements) for filing under the provisions of the
Uniform Commercial Code or any other Requirement of Law which are necessary or
advisable to maintain in favor of the Agent, for the benefit of the
41
Lenders, a fully perfected Lien on the Collateral prior and superior in right to
all other Persons except Liens permitted pursuant to subsection 6.3(f),
subsection 6.3(g), subsection 6.3(h) and subsection 6.3(l) and other Liens
permitted under subsection 6.3 that have priority over the Agent's Lien by
operation of law.
5.10 ADDITIONAL COLLATERAL. (a) With respect to any assets acquired
after the Closing Date by the Borrower or any of its Domestic Subsidiaries that
are intended to be subject to the Lien created by any of the Security Documents
but which are not so subject (other than (x) any assets described in paragraph
(b) or (c) of this subsection, (y) immaterial assets a Lien on which cannot be
perfected by filing UCC-1 financing statements and (z) property acquired by a
Foreign Subsidiary), promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the Agent such amendments to
the relevant Security Documents or such other documents as the Agent shall deem
necessary or advisable to grant to the Agent, for the benefit of the Lenders, a
Lien on such assets, (ii) take all actions necessary or advisable to cause such
Lien to be duly perfected in accordance with all applicable Requirements of Law,
including, without limitation, the filing of financing statements in such
jurisdictions as may be requested by the Agent, and (iii) if requested by the
Agent, deliver to the Agent legal opinions relating to the matters described in
clauses (i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent.
(b) With respect to any Person that, subsequent to the
Closing Date, becomes a Subsidiary (other than a Foreign Subsidiary), promptly
upon the request of the Agent: (i) execute and deliver to the Agent, for the
benefit of the Lenders, a new pledge agreement or such amendments to the Stock
Pledge Agreement as the Agent shall deem necessary or advisable to grant to the
Agent, for the benefit of the Lenders, a Lien on the Capital Stock of such
Subsidiary which is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Agent the certificates representing such Capital Stock, together
with undated stock powers executed and delivered in blank by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary (A) to become a party to the Security Agreement, in each case
pursuant to documentation which is in form and substance satisfactory to the
Agent, and (B) to take all actions necessary or advisable to cause the Lien
created by the Security Agreement to be duly perfected in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be requested by the Agent and
(iv) if requested by the Agent, deliver to the Agent legal opinions relating to
the matters described in clauses (i), (ii) and (iii) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Agent.
(c) With respect to any Person that, subsequent to the
Closing Date, becomes a Foreign Subsidiary, promptly upon the request of the
Agent: (i) execute and deliver to the Agent a new pledge agreement or such
amendments to the Stock Pledge Agreement as the Agent shall deem necessary or
advisable to grant to the Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower or any of its
Subsidiaries (provided that in no event shall more than 65% of the Capital Stock
of any such Subsidiary be required to be so pledged), (ii) deliver to the Agent
any certificates representing such Capital Stock, together with undated stock
powers executed and delivered in blank by a duly authorized officer of the
Borrower or such Subsidiary, as the case may be, and take or cause to be taken
all such other actions under the law of the jurisdiction of organization of such
Foreign Subsidiary as may be necessary or advisable to perfect such Lien on such
Capital Stock and (iii) if requested by the Agent, deliver to the Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Agent.
(d) Notwithstanding anything to the contrary in this
subsection 5.10, paragraphs (a), (b) and (c) shall not apply to any property,
Subsidiary or Foreign Subsidiary created or acquired after the Closing Date, as
applicable, to which the Agent has determined in its sole discretion that the
collateral value thereof is insufficient
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to justify the difficulty, time and/or expense of obtaining a perfected security
interest therein.
(e) If the Borrower or any Subsidiary creates any initial
or additional Lien pursuant to subsection 6.3(l) upon any of its property,
assets or revenues to secure Indebtedness incurred under subsection 6.2(i), such
Borrower or Subsidiary shall simultaneously grant a pari passu Lien on such
property, assets or revenues to secure the Loan Obligations. If any Subsidiary
that is not a Guarantor guarantees the payment of Indebtedness incurred under
subsection 6.2(i) of the Borrower or any Subsidiary, then such Subsidiary shall
simultaneously become a party to the Security Agreement and a Guarantor.
5.11 SYNDICATION. To assist the Investors in their syndication
efforts, upon the request of the Agent or any Investor, promptly provide such
information to such Investor as the Agent may request with respect to the
Borrower and its Subsidiaries in such form as the Agent or such Investor may
reasonably request (including, without limitation, a true, correct and complete
schedule of material contracts to which the Borrower or any of its Subsidiaries
is a party).
5.12 TAX RETURNS. At the request of the Agent or the Required
Lenders, the Borrower will deliver to the Lenders correct and complete copies of
all United States federal, state, and foreign income Tax Returns (to the extent
filed as of the date hereof or, if not filed, correct and complete copies of
extensions thereof), examination reports, statements of deficiencies assessed
against or agreed to by the Borrower and any of its Subsidiaries, or any other
similar correspondence from a taxing authority, relating to taxable years 2000,
2001 and 2002.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any amount is owing to any
Lender or the Agent hereunder or under any other Loan Document, the Borrower
shall not, and (except with respect to subsection 6.1) shall not permit any of
its Subsidiaries to, directly or indirectly:
6.1 FINANCIAL CONDITION COVENANTS.
(a) LEVERAGE. Permit the Leverage Ratio at any time during
any period set forth on Schedule 6.1(a) to be greater than the ratio set forth
opposite such period specified on Schedule 6.1(a).
(b) MINIMUM CONSOLIDATED EBITDA. Permit Consolidated EBITDA
for any period of four consecutive fiscal quarters ending on the date set forth
on Schedule 6.1(b) to be less than the amount set forth opposite such period
specified on Schedule 6.1(b).
(c) FIXED CHARGE RATIO. Permit for any period of four
consecutive fiscal quarters ending on the date set forth on Schedule 6.1(c), the
ratio of
43
Consolidated EBITDA for such period to Consolidated Fixed Charges for such
period to be less than the amount set forth opposite such period specified on
Schedule 6.1(c).
6.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower and its Subsidiaries under
the Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary which is
a Loan Party and of any Subsidiary to the Borrower or any other Subsidiary which
is a Loan Party;
(c) Indebtedness of the Borrower and any of its
Subsidiaries incurred to finance the acquisition of fixed or capital assets
(whether pursuant to a loan, a Financing Lease or otherwise) in an aggregate
principal amount not exceeding as to the Borrower and its Subsidiaries
$2,000,000 at any time outstanding, PROVIDED that such Indebtedness shall be
created substantially simultaneously with the capitalization or recapitalization
of such fixed or capital assets on the balance sheet of the Borrower and its
Subsidiaries;
(d) Indebtedness of the Borrower or any of its Subsidiaries
outstanding on the date hereof and listed on Schedule 6.2(d) and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof or interest thereon (other than with
respect to any reasonable fees) or shorten any maturity or average life to
maturity thereof and otherwise on substantially similar terms to such existing
Indebtedness;
(e) Indebtedness of a Person which becomes a Subsidiary
after the date hereof, PROVIDED that (i) such indebtedness existed at the time
such corporation became a Subsidiary and was not created in anticipation
thereof, (ii) such indebtedness is in an aggregate principal amount not
exceeding as to the Borrower and its Subsidiaries $5,000,000 at any time
outstanding and (iii) immediately after giving effect to the acquisition of such
Person by the Borrower no Default or Event of Default shall have occurred and be
continuing;
(f) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of the
Borrower or any other Loan Party which obligations are otherwise permitted under
this Agreement;
(g) Indebtedness of the Borrower or any of its Subsidiaries
in respect of worker's compensation claims, performance, bid and surety bonds
and completion guarantees, in each case, in the ordinary course of business;
(h) Indebtedness of the Borrower or any of its Subsidiaries
consisting of customary overdraft and similar protections in connection with
deposit accounts; and
44
(i) Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries) not to
exceed $5,000,000 at any time outstanding.
6.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its Subsidiaries,
as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on
Schedule 6.3, securing Indebtedness permitted by subsection 6.2(d), PROVIDED
that no such Lien is spread to cover any additional property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 6.2(c) incurred to finance the acquisition
of fixed or capital assets, PROVIDED that (i) such Liens and the Indebtedness
secured thereby shall be created or incurred substantially simultaneously with
the capitalization or recapitalization of such fixed or capital assets on the
balance sheet of the Borrower and its Subsidiaries, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased
and (iv) the principal amount of Indebtedness secured by any such Lien shall at
no time exceed 100% of the original purchase price of such property at the time
it was acquired;
45
(h) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness permitted by
subsection 6.2(e), PROVIDED that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or assets of such
corporation after the time such corporation becomes a Subsidiary, and (iii) the
amount of Indebtedness secured thereby is not increased;
(i) Liens created pursuant to the Security Documents;
(j) any interest or title of a lessor under any lease
entered into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased and any Lien arising from
precautionary Uniform Commercial Code financing statements (or equivalent
filings, registrations or agreements in foreign jurisdictions) relating to and
covering only equipment leased in accordance with any Loan Document (and such
Lien does not apply to any additional property or assets of the Borrower or any
Subsidiary);
(k) Liens arising from judgments and attachments in
connection with court proceedings provided that the attachment or enforcement of
such Liens would not result in an Event of Default hereunder and such Liens are
being contested in good faith by appropriate proceedings, adequate reserves have
been set aside, no material property is subject to a material risk of loss or
forfeiture, the claims in respect of such Liens are fully covered by insurance
(subject to ordinary and customary deductibles) and a stay of execution pending
appeal or proceeding for review is in effect; and
(l) Liens securing Indebtedness of the Borrower or any of
its Subsidiaries permitted under subsection 6.2(i), PROVIDED, THAT, (a) such
Lien shall only be permitted hereunder if the Leverage Ratio of the Borrower and
its Subsidiaries calculated at the time of incurrence of such Indebtedness and
after giving effect thereto and using Consolidated EBITDA for the most recently
completed period of four consecutive fiscal quarters is less than 3.00:1.00; (b)
such Lien shall be pari passu with the Lien securing the Loan Obligations; (c)
the aggregate amount of Indebtedness secured by such Lien does not exceed (i)
$2,500,000 if the Leverage Ratio at the time of such incurrence and after giving
effect thereto is less than 3.0:1.0 and greater than or equal to 2.0:1.0 or (ii)
$5,000,000 if the Leverage Ratio at the time of such incurrence and after giving
effect thereto is less than 2.0:1.0; PROVIDED that for purposes of this
subsection 6.3(l), the time of incurrence with respect to Indebtedness under any
revolving credit facility shall be deemed to be the date such revolving credit
facility was established and the amount incurred shall be the full committed
amount of such revolving credit facility and (d) (i) no portion of the principal
of such Indebtedness is stated to be payable or is required to be paid prior to
the Maturity Date, (ii) the material terms, conditions and restrictive covenants
contained in the instrument governing such Indebtedness, taken as a whole, are
no less favorable to the Borrower or any of its Subsidiaries, as the case may
be, than the terms, conditions and restrictive covenants contained in this
Agreement and (iii) no
46
Default or Event of Default shall be in effect at the time of or shall have
occurred after giving effect to the incurrence of such Indebtedness.
6.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except that, if at the time thereof and immediately after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more wholly
owned Subsidiaries of the Borrower (PROVIDED that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation and is a Loan
Party);
(b) any wholly owned Subsidiary may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any other wholly owned Subsidiary of the Borrower
that is a Loan Party; and
(c) the Borrower or any Subsidiary thereof may merge with
any Person organized or existing under the laws of the United States of America,
any State thereof or the District of Columbia in connection with a Permitted
Acquisition; provided that if such transaction involves the Borrower, the
Borrower shall be the continuing or surviving corporation and, if such
transaction involves any other Loan Party, the surviving person must be a
Domestic Subsidiary and must become a Guarantor of the obligations of the
Borrower hereunder.
6.5 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business, PROVIDED that (other than inventory) the aggregate
book value of all assets so sold or disposed of in any period of twelve
consecutive months shall not exceed 10% of consolidated total assets of the
Borrower and its Subsidiaries as at the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of
business;
47
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;
(e) as permitted by subsection 6.4(b); and
(f) dispositions of equipment in exchange for other
equipment of reasonably equivalent or greater value in the ordinary course of
business.
6.6 LIMITATION ON AMENDMENTS TO MATERIAL AGREEMENTS. The Borrower
will not, nor will it permit any Subsidiary to, amend, modify or waive any of
its rights under its certificate of incorporation, by-laws or other
organizational documents (other than to change its name), except, in each case,
for such amendments, modifications or waivers that could not be reasonably
expected to effect any change materially adverse to the interests and rights of
the Agent or the Lenders under any Loan Document.
6.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
any Subsidiary, except
(i) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor;
(ii) the Borrower may declare and pay dividends with respect
to its Capital Stock payable solely in additional Capital Stock;
(iii) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may purchase its common stock
or common stock options from present or former officers or employees of
the Borrower or any Subsidiary upon the death, disability or
termination of employment of such officer or employee, PROVIDED, that
the aggregate amount of payments under this clause (iii) subsequent to
the date hereof (net of any proceeds received by the Borrower
subsequent to the date hereof in connection with resales of any common
stock or common stock options so purchased) shall not exceed $250,000;
(iv) the Borrower may consummate repurchases of Capital
Stock that are deemed to occur upon the non-cash exercise of permitted
stock options and warrants; and
(v) the Borrower and its Subsidiaries may consummate the
Recapitalization.
48
6.8 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
(by way of the acquisition of securities of a Person or otherwise) any Capital
Expenditures (excluding any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations)
except for Capital Expenditures in the ordinary course of business not
exceeding, in the aggregate for the Borrower and its Subsidiaries during any of
the fiscal years of the Borrower, the amount set forth opposite the applicable
Leverage Ratio (determined on the last day of the prior fiscal year) for the
Borrower and its Subsidiaries,
LEVERAGE RATIO AMOUNT
-------------- ------
Greater than or equal to 3.00:1.00 $3,500,000
Less than 3.00:1.00 but greater $4,000,000
than or equal to 2.50:1.0
Less than 2.5:1.00 $4,250,000
PROVIDED, that (i) if at the end of any fiscal year of the Borrower, the amount
specified pursuant to this section for such Capital Expenditures during such
fiscal year exceeds the aggregate amount of Capital Expenditures made or
incurred by the Borrower and its Subsidiaries on a consolidated basis during
such fiscal year (the amount of such excess being referred to herein as the
"EXCESS AMOUNT"), the Borrower and its Subsidiaries shall be entitled to make
additional Capital Expenditures in the succeeding fiscal year (and only in such
succeeding fiscal year) in an aggregate amount equal to the Excess Amount and
(ii) Capital Expenditures made pursuant to this subsection 6.8 during any fiscal
year shall be deemed made FIRST, in respect of amounts permitted for such fiscal
year as provided above (without giving effect to amounts carried over from the
prior fiscal year pursuant to clause (i) above) and SECOND, in respect of the
Excess Amount carried over from the prior fiscal year pursuant to clause (i)
above.
6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount for the Borrower and its Subsidiaries
not to exceed $100,000 at any one time outstanding;
(d) investments and advances by the Borrower in its
Subsidiaries which are Loan Parties and investments and advances by such
Subsidiaries in the Borrower and in other Subsidiaries which are Loan Parties;
49
(e) investments in real property, equipment or other
tangible assets useful in the Borrower's or the applicable Subsidiaries business
made by the Borrower or any of its Subsidiaries with the proceeds of any
Reinvestment Deferred Amount;
(f) investments, loans and advances consisting of
pay-in-kind interest on employee loans existing as of the date hereof;
(g) investments received in connection with the bankruptcy,
reorganization or settlement of delinquent agreements or disputes with customers
and suppliers, in each case, in the ordinary course of business; and
(h) Permitted Acquisitions by the Borrower or any of its
Subsidiaries in an aggregate amount (valued at cost) not to exceed $10,000,000
during the term of this Agreement.
6.10 MODIFICATIONS OF DEBT INSTRUMENTS. Amend, modify or change,
or consent or agree to any amendment, modification or change to any of the terms
of any material Indebtedness (including terms of any Parity Obligations), except
for such amendments, modifications or waivers that could not reasonably be
expected to effect any change materially adverse to the interests and rights of
the Agent or the Lenders under any Loan Document.
6.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) not prohibited under this Agreement, (b) in the ordinary
course of the Borrower's or such Subsidiary's business and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
6.12 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
6.13 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year
of the Borrower to end on a day other than December 31.
6.14 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than (a) this Agreement, (b) the Recapitalization
documents, (c) any industrial revenue bonds, purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets securing such
Indebtedness) and (d) any secured Indebtedness permitted under subsection
6.2(i), which prohibits or limits the ability of the Borrower or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon
50
any of its property, assets or revenues, whether now owned or hereafter
acquired.
6.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are directly related thereto.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or the Borrower
shall fail to pay any interest on any Loan, or any other amount payable
hereunder, within five days after any such interest or other amount becomes due
in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by
the Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in
the observance or performance of any agreement contained in subsections 5.4(a),
5.5, 5.7, 5.9 or Section 6 hereof or in the Syndication Letter; or
(d) The Borrower or any other Loan Party shall default in
the observance or performance of any other agreement contained in this Agreement
or any other Loan Document (other than as provided in paragraphs (a) through (c)
of this Section), and such default shall continue unremedied for a period of 30
days; or
(e) The Borrower or any of its Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness (other
than the Loans) or in the payment of any Guarantee Obligation, beyond the period
of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; PROVIDED, that a default, event
51
or condition described in clause (i), or (ii) of this paragraph (e) shall not at
any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i) and (ii) of
this paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the aggregate
$250,000; or
(f) (i) The Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of its Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any of its Subsidiaries any
case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) the Borrower or any of its
Subsidiaries shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
52
(h) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $250,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be enforceable and
of the same effect and priority purported to be created thereby (other than by
reason of the express release thereof pursuant to the Security Documents);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it.
53
8.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the other Loan Documents
in accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
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8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its members, partners, officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Pro Rata Share in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of, the Commitments,
this Agreement, any of the other Loan Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in connection with
any of the foregoing; PROVIDED that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, make investments in, hold equity interest in, accept deposits
from and generally engage in any kind of business with the Borrower as though
the Agent were not the Agent hereunder and under the other Loan Documents. With
respect to the Loans made by it, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were
55
not the Agent, and the terms "Lender" and "Lenders" shall include the Agent in
its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10 days'
notice to the Lenders and the Borrower. If the Agent shall resign as Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent (provided that it shall have been approved by the Borrower),
shall succeed to the rights, powers and duties of the Agent hereunder. Effective
upon such appointment and approval, the term "Agent" shall mean such successor
agent, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Loans. After
any retiring Agent's resignation as Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement and the other Loan Documents.
8.10 PARITY OBLIGATIONS. The Lenders authorize the Agent to enter
into (i) a collateral trust agreement or other arrangement on terms acceptable
to the Agent and the Required Lenders to secure on an Equal and Ratable basis
with the Loan Obligations, any Parity Obligations, and (ii) an intercreditor
agreement on terms acceptable to the Agent and the Required Lenders with the
holders of Parity Obligations.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower written
amendments, supplements or modifications hereto and to the other Loan Documents
(other than the Syndication Letter) for the purpose of adding any provisions to
this Agreement or the other Loan Documents (other than the Syndication Letter)
or changing in any manner the rights of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the Required Lenders
or the Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Loan Documents (other than the
Syndication Letter) or any Default or Event of Default and its consequences;
PROVIDED, HOWEVER, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of
maturity of any Loan or of any installment thereof, or reduce the stated rate of
any interest or fee payable hereunder or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of any
Lender's Commitments, in each case without the consent of each Lender affected
thereby, or (ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Lenders or consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents or release all or
substantially all of the Collateral, in each case without the written consent of
all the Lenders or (iii) amend, modify or waive any provision of Section 8
without the written consent of the then
56
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
9.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower and the Agent, and as set forth in Schedule
I in the case of the other parties hereto, or to such other address as may be
hereafter notified by the respective parties hereto:
The Borrower: Infocrossing, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Senior Vice
President and General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Infocrossing Agent, Inc.
C/ MidOcean Capital Investors, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
And C/ Sandler Capital Partners V, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
57
and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. Director, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
shall not be effective until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay
or reimburse the Agent and each Lender and their Affiliates for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement, waiver
or modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith (including, for all
purposes of subsection 9.5, documents prepared pursuant to subsection 8.10), and
the consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to the Agent and each Lender and their Affiliates, provided, that, from
and after the Closing Date, such reimbursement for legal fees shall be limited
to the fees and disbursements of one primary counsel except (i) as provided in
clause (b) of this subsection 9.5, and (ii) for so long as the Investors
together comprise the Required Lenders, (b) to pay or reimburse each Lender and
the Agent and their Affiliates for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to the Agent, (c) to pay, indemnify, and hold each Lender and the Agent
and their Affiliates and the respective members, partners, directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the
58
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and the Agent and their Affiliates and the respective members, partners,
directors, officers, employees, agents and advisors of such Person and such
Person's Affiliates harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents, documents in connection with the
Recapitalization and any such other documents, including, without limitation,
any of the foregoing relating to any Environmental Claims or noncompliance with
Environmental Laws applicable to the operations of the Borrower, any of its
Subsidiaries or any of the Borrower Property (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), PROVIDED that the Borrower
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities to the extent determined in the final non-appealable
judgment of a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of the Agent or any such Lender. The agreements
in this subsection shall survive repayment of the Loans and all other amounts
payable hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Agent and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Any Lender may at any time sell to one or more banks or
other entities ("PARTICIPANTS") participating interests in any Loan owing to
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. No Lender shall
be entitled to create in favor of any Participant, in the participation
agreement pursuant to which such Participant's participating interest shall be
created or otherwise, any right to vote on, consent to or approve any matter
relating to this Agreement or any other Loan Document except for those specified
in clauses (i) and (ii) of the proviso to subsection 9.1. The Borrower agrees
that if amounts outstanding under this Agreement are due or unpaid, or shall
have been declared or shall have become due and payable upon the occurrence of
an Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, PROVIDED that, in purchasing such participating
interest, such Participant shall
59
be deemed to have agreed to share with the Lenders the proceeds thereof as
provided in subsection 9.7(a) as fully as if it were a Lender hereunder. The
Borrower also agrees that each Participant shall be entitled to the benefits of
subsections 2.7, 2.8 and 2.9 (Requirements of Law, Taxes and Indemnity) with
respect to its participation in the Loans outstanding from time to time as if it
was a Lender; PROVIDED that, in the case of subsection 2.8 (Taxes), such
Participant shall have complied with the requirements of said subsection and
PROVIDED, FURTHER, that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may at any time and from time to time assign
to any Lender, any affiliate thereof or any other entity having total assets in
excess of $5,000,000 (an "ASSIGNEE") all or any part of its rights and
obligations under this Agreement and the other Loan Documents pursuant to an
Assignment and Acceptance, executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender or an affiliate
thereof, by the Agent) and delivered to the Agent for its acceptance and
recording in the Register, PROVIDED that, in the case of any such assignment to
any Person other than an Affiliate of a Lender, the sum of the aggregate
principal amount of the Loans being assigned and, if such assignment is of less
than all of the rights and obligations of the assigning Lender, the sum of the
aggregate principal amount of the Loans remaining with the assigning Lender are
each not less than 5% of the aggregate principal amount of the Loans then
outstanding (or such lesser amount as may be agreed to by the Borrower and the
Agent). A Lender may assign its rights and obligations under this Agreement and
the other Loan Documents relating to the Loans without assigning its rights and
obligations with respect to any warrants that it may own. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). At the request of the
Assignee and/or the assigning Lender, new Notes shall be executed and delivered
by the Borrower for any assignment.
(d) The Agent, on behalf of the Borrower, shall maintain at
the address of the Agent referred to in subsection 9.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders the principal amount(s) of
the Loans owing to each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Lenders may (and, in the case of any Loan or other obligation
hereunder not evidenced by a Note, shall) treat each Person whose name is
recorded in the Register as the owner of a Loan or other obligation hereunder as
the owner thereof for all purposes of this Agreement and the other Loan
Documents, notwithstanding any notice to the contrary. Any assignment of any
Loan or
60
other obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. Any
assignment of any Loan or other obligation hereunder evidenced by a Note shall
be effective only if effected by the surrender of the Note to the Borrower (or
other acceptable affidavit of lost or misplaced Note from the applicable
Lender).
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Assignee (and, in the case of an Assignee
that is not then a Lender or an affiliate thereof, by the Agent) together with
payment to the Agent of a registration and processing fee of $4000, the Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee,
any and all financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
9.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by
61
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender, PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application.
9.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Agent.
9.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 INTEGRATION. This Agreement, the Syndication Letter and the
other Loan Documents represent the agreement of the Borrower, the Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent or any Lender relative
to subject matter hereof not expressly set forth or referred to herein, in the
Syndication Letter or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of
62
any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 9.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or consequential
damages.
9.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among the Borrower and the Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
9.15 CONFIDENTIALITY.
(a) Each of the Agent and the Lenders agrees to keep
confidential all non-public information provided to it by the Borrower or any
Subsidiary pursuant to this Agreement that is designated by the Borrower or such
Subsidiary as confidential; PROVIDED that nothing herein shall prevent the Agent
or any Lender from disclosing any such information (i) to the Agent, any other
Lender or any affiliate of any thereof, (ii) to any Transferee or prospective
Transferee that agrees to comply with the provisions of this Section or
substantially equivalent provisions, (iii) to any of its employees, directors,
agents, attorneys, accountants and other professional advisors,
63
(iv) upon the request or demand of any Governmental Authority having
jurisdiction over it, (v) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) that has been publicly disclosed other than in breach
of this Section, (vii) to the National Association of Insurance Commissioners or
any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender.
(b) Notwithstanding anything to the contrary in this
Agreement, any party to this Agreement (and each employee, representative, or
other agent of any party to this Agreement) may disclose to any and all Persons,
without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement, and all materials of any kind
(including opinions or other tax analyses) related to such tax treatment and tax
structure; provided that this sentence shall not permit any Person to disclose
the name of, or other information that would identify, any party to such
transactions or to disclose confidential commercial information regarding such
transactions not otherwise permitted hereunder.
9.16 SHARING OF LIENS. Notwithstanding (i) anything to the contrary
contained in the Loan Documents or any other document executed in connection
therewith, (ii) the time of incurrence of any of the Loan Obligations or the
Parity Obligations, (iii) the order or method of attachment or perfection of any
Liens securing the Parity Obligations, (iv) the time or order of filing or
recording of financing statements, mortgages or other documents filed or
recorded to perfect any Lien upon the Collateral, (v) the time of taking
possession or control over any Collateral, or (vi) the rules for determining
priority under any law governing relative priorities of Liens: (x) all Liens at
any time granted by the Borrower or its Subsidiaries in the Collateral to secure
the Loan Obligations or the Parity Obligations shall secure Equally and Ratably
all liabilities of the Borrower and such Subsidiary under or in respect of the
Loan Obligations or the Parity Obligations; and (y) all proceeds of the sale,
collection and realization of Collateral pursuant to the exercise of the rights
and remedies of the Agent and the Lenders under the Loan Documents subject to a
Lien at any time granted by the Borrower or any of its Subsidiaries in the
Collateral to secure the Loan Obligations or the Parity Obligations shall be
allocated and distributed Equally and Ratably on account of the liabilities of
the Borrower or such Subsidiary under or in respect of the Loan Obligations or
the Parity Obligations.
64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
INFOCROSSING, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
65
INFOCROSSING AGENT, INC., as Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
66
MIDOCEAN CAPITAL INVESTORS, L.P.,
as a Lender
By: MidOcean Capital Partners, L.P.,
its general partner
By: Existing Fund GP, Ltd.,
its general partner
By: /s/ ▇▇▇▇▇▇ Spring
----------------------------
Name:
Title:
67
SANDLER CAPITAL PARTNERS V, L.P.,
as a Lender
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER CAPITAL PARTNERS V FTE, L.P.,
as a Lender
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER TECHNOLOGY PARTNERS SUBSIDIARY, LLC,
as a Lender
By: Sandler Technology Partners, L.P.,
Manager
By: Sander Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
68
SANDLER CO-INVESTMENT PARTNERS, L.P.,
as a Lender
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
SANDLER CAPITAL PARTNERS V GERMANY, L.P.,
as a Lender
By: Sandler Investment Partners, L.P.,
General Partner
By: Sandler Capital Management,
General Partner
By: MJDM Corp., a General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
69
PRICE FAMILY LIMITED PARTNERS,
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name:
Title:
Schedule I
Lender's Addresses
MidOcean Capital Investors, L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V FTE, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Technology Partners
Subsidiary, LLC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Co-Investment Partners, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sandler Capital Partners V
Germany, L.P. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Price Family Limited Partners C/ Evercore Partners, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 2.1
Lender's Commitment
MidOcean Capital Investors, L.P. $12,520,875.00
Sandler Capital Partners V Germany, L.P. $ 301,308.00
Sandler Capital Partners V, L.P. $ 8,097,892.00
Sandler Capital Partners V FTE, L.P. $ 2,994,801.00
Sandler Technology Partners Subsidiary, LLC $ 834,724.00
Sandler Co-Investment Partners, L.P. $ 208,675.00
Price Family Limited Partners $ 41,725.00
--------------
Total Commitment: $25,000,000.00
==============
Schedule 2.2
Amortization of Loans
PAYMENT DATE AMOUNT
------------ ------
December 31, 2003 0.25%
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
Maturity Date 100% LESS AMOUNTS PREVIOUSLY PAID
---------------------------------
Schedule 6.1(a)
Leverage Ratio
FISCAL QUARTER ENDED RATIO
-------------------- -----
December 31, 2003 3.65 to 1.00
March 31, 2004 3.50 to 1.00
June 30, 2004 3.25 to 1.00
September 30, 2004 3.00 to 1.00
December 31, 2004 2.75 to 1.00
March 31, 2005 2.50 to 1.00
June 30, 2005 2.35 to 1.00
September 30, 2005 2.25 to 1.00
December 31, 2005 2.00 to 1.00
March 31, 2006 1.25 to 1.00
June 30, 2006 1.25 to 1.00
September 30, 2006 1.25 to 1.00
December 31, 2006 1.25 to 1.00
March 31, 2007 0.75 to 1.00
June 30, 2007 0.75 to 1.00
September 30, 2007 0.75 to 1.00
December 31, 2007 0.75 to 1.00
March 31, 2008 0.75 to 1.00
June 30, 2008 0.75 to 1.00
September 30, 2008 0.75 to 1.00
Schedule 6.1(b)
Minimum Consolidated EBITDA
FISCAL QUARTER ENDED AMOUNT
-------------------- ------
December 31, 2003 $9,000,000
March 31, 2004 $9,500,000
June 30, 2004 $10,200,000
September 30, 2004 $11,000,000
December 31, 2004 $12,000,000
March 31, 2005 $12,000,000
June 30, 2005 $12,500,000
September 30, 2005 $13,200,000
December 31, 2005 $13,900,000
March 31, 2006 $14,900,000
June 30, 2006 $15,900,000
September 30, 2006 $15,900,000
December 31, 2006 $15,900,000
March 31, 2007 $18,200,000
June 30, 2007 $18,200,000
September 30, 2007 $18,200,000
December 31, 2007 $18,200,000
March 31, 2008 $20,000,000
June 30, 2008 $20,000,000
September 30, 2008 $20,000,000
Schedule 6.1(c)
Fixed Charge Ratio
FISCAL QUARTER ENDED RATIO
-------------------- -----
December 31, 2003 0.90 to 1.00
March 31, 2004 0.95 to 1.00
June 30, 2004 1.00 to 1.00
September 30, 2004 1.00 to 1.00
December 31, 2004 1.00 to 1.00
March 31, 2005 1.10 to 1.00
June 30, 2005 1.20 to 1.00
September 30, 2005 1.30 to 1.00
December 31, 2005 1.40 to 1.00
March 31, 2006 1.50 to 1.00
June 30, 2006 1.50 to 1.00
September 30, 2006 1.50 to 1.00
December 31, 2006 1.50 to 1.00
March 31, 2007 1.50 to 1.00
June 30, 2007 1.50 to 1.00
September 30, 2007 1.50 to 1.00
December 31, 2007 1.50 to 1.00
March 31, 2008 1.50 to 1.00
June 30, 2008 1.50 to 1.00
September 30, 2008 1.50 to 1.00
