EXHIBIT 10.21
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CREDIT AGREEMENT
dated as of
July 29, 1998
as Amended and Restated as of
November 30, 1998
among
iXL ENTERPRISES, INC.,
The Lenders Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
_________________________
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms ..................................... 1
SECTION 1.02. Classification of Loans and
Borrowings ........................................ 20
SECTION 1.03. Terms Generally ................................... 20
SECTION 1.04. Accounting Terms; GAAP ............................ 20
ARTICLE II
The Credits
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SECTION 2.01. Commitments ....................................... 20
SECTION 2.02. Loans and Borrowings .............................. 21
SECTION 2.03. Requests for Borrowings ........................... 21
SECTION 2.04. Letters of Credit ................................. 21
SECTION 2.05. Funding of Borrowings ............................. 26
SECTION 2.06. Termination and Reduction of Commitments .......... 26
SECTION 2.07. Repayment of Loans; Evidence of Debt .............. 27
SECTION 2.08. Amortization of Term Loans ........................ 27
SECTION 2.09. Prepayment of Loans ............................... 28
SECTION 2.10. Fees .............................................. 29
SECTION 2.11. Interest .......................................... 30
SECTION 2.12. Increased Costs ................................... 30
SECTION 2.13. Break Funding Payments ............................ 31
SECTION 2.14. Taxes ............................................. 32
SECTION 2.15. Payments Generally: Pro Rata Treatment; Sharing of
Set-offs ......................................... 33
SECTION 2.16. Mitigation Obligations; Replacement
of Lenders ....................................... 34
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ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers .............................. 35
SECTION 3.02. Authorization; Enforceability ..................... 35
SECTION 3.03. Governmental Approvals; No Conflicts .............. 35
SECTION 3.04. Financial Condition; No Material Adverse Change ... 36
SECTION 3.05. Properties ........................................ 36
SECTION 3.06. Litigation and Environmental Matters .............. 37
SECTION 3.07. Compliance with Laws and Agreements ............... 37
SECTION 3.08. Investment and Holding Company Status ............. 37
SECTION 3.09. Taxes ............................................. 37
SECTION 3.10. ERISA ............................................. 38
SECTION 3.11. Disclosure ........................................ 38
SECTION 3.12. Subsidiaries ...................................... 38
SECTION 3.13. Insurance ......................................... 38
SECTION 3.14. Labor Matters ..................................... 38
SECTION 3.15. Solvency .......................................... 39
SECTION 3.16. Security Documents ................................ 39
SECTION 3.17. Year 2000 ......................................... 40
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date .................................... 40
SECTION 4.02. Each Credit Event ................................. 42
ARTICLE V
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Affirmative Covenants
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SECTION 5.01. Financial Statements and Other Information ........ 43
SECTION 5.02. Notices of Material Events ........................ 45
SECTION 5.03. Information Regarding Collateral .................. 45
SECTION 5.04. Existence; Conduct of Business .................... 46
SECTION 5.05. Payment of Obligations ............................ 46
SECTION 5.06. Maintenance of Properties ......................... 46
SECTION 5.07. Insurance ......................................... 46
SECTION 5.08. Books and Records, Inspection and
Collateral Review Rights ......................... 46
SECTION 5.09. Compliance with Laws .............................. 47
SECTION 5.10. Use of Proceeds and Letters of Credit ............. 47
SECTION 5.11. Additional Subsidiaries ........................... 47
SECTION 5.12. Further Assurances ................................ 48
SECTION 5.13. Federal Reserve Regulations ....................... 48
SECTION 5.14. Delivery of Securities ............................ 48
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SECTION 5.15. [Intentionally Omitted] ........................... 49
SECTION 5.16. Bank Account ...................................... 49
SECTION 5.17. Fees .............................................. 49
ARTICLE VI
Negative Covenants
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SECTION 6.01. Indebtedness and Preferred Stock .................. 49
SECTION 6.02. Liens ............................................. 50
SECTION 6.03. Fundamental Changes ............................... 51
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions ...................... 52
SECTION 6.05. Asset Sales ....................................... 54
SECTION 6.06. Sale and Lease-Back Transactions .................. 54
SECTION 6.07. Hedging Agreements ................................ 55
SECTION 6.08. Restricted Payments; Certain Payments
of Indebtedness .................................. 55
SECTION 6.09. Transactions with Affiliates ...................... 55
SECTION 6.10. Restrictive Agreements ............................ 56
SECTION 6.11. Amendment of Material Documents ................... 56
SECTION 6.12. Subsidiaries ...................................... 56
SECTION 6.13. Minimum Consolidated EBITDA ....................... 57
SECTION 6.14. Total Debt to Contributed Capital ................. 57
SECTION 6.15. Fiscal Year ....................................... 57
ARTICLE VII
Events of Default ............................ 57
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ARTICLE VIII
The Administrative Agent .......................... 60
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ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices ........................................... 62
SECTION 9.02. Waivers; Amendments ............................... 62
SECTION 9.03. Expenses; Indemnity; Damage Waiver ................ 64
SECTION 9.04. Successors and Assigns ............................ 65
SECTION 9.05. Survival .......................................... 67
SECTION 9.06. Counterparts; Integration;
Effectiveness .................................... 68
SECTION 9.07. Severability ...................................... 68
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SECTION 9.08. Right of Set-off .................................. 68
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process ............................ 69
SECTION 9.10. WAIVER OF JURY TRIAL .............................. 69
SECTION 9.11. Headings .......................................... 69
SECTION 9.12. Confidentiality .................................... 70
SECTION 9.13. Interest Rate Limitation .......................... 70
SECTION 9.14. Effect of Amendment and Restatement ............... 71
SCHEDULES:
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Schedule 2.01 - Commitments
Schedule 3.04 - Contingent Liabilities
Schedule 3.05 - Owned or Leased Property
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Subsidiaries
Schedule 3.13 - Insurance
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.09 - Disclosed Affiliate Transactions
Schedule 6.10 - Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Xxxxxx & Xxxxxx, Counsel to Loan Parties
Exhibit B-2 -- Form of Opinion of Debevoise & Xxxxxxxx, Counsel to Loan Parties
Exhibit C -- Form of Guarantee Agreement
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Form of Security Agreement
Exhibit G -- Form of Borrowing Base Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 29, 1998, as amended and restated as of
November 30, 1998, among iXL ENTERPRISES, INC., the
LENDERS party hereto and THE CHASE MANHATTAN
BANK, as Administrative Agent.
The Borrower (such term and the other capitalized terms used herein
having the meanings hereinafter provided) and The Chase Manhattan Bank, as sole
Lender and as Administrative Agent, have entered into the Credit Agreement dated
as of July 29, 1998 (as in effect immediately prior to the date hereof, the
"Original Credit Agreement"). The parties hereto desire to amend and restate the
Original Credit Agreement in the form hereof in order to provide for the
amendment of the definition of "Borrowing Base" and to make certain other
related changes as set forth herein. Accordingly, the parties hereto agree as
follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the following
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terms have the meanings specified below:
"Account" means any right to payment for goods sold or leased or for
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services rendered, whether or not earned by performance.
"Account Debtor" means, with respect to any Account, the obligor with
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respect to such Account.
"Accounts Receivable Subsidiary" means any active, wholly owned
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operating Subsidiary of the Borrower that is also a Subsidiary Loan Party and is
organized under the laws of any state of the United States or any territory
thereof or the District of Columbia.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity
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as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to
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the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1% . Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
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"Amendment Effective Date" means November 30, 1998.
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"Applicable Percentage" means, with respect to any Revolving Lender,
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the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Billed Receivable Availability" means 75% of Eligible Billed
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Accounts Receivable.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Borrower" means iXL Enterprises, Inc., a Delaware corporation.
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"Borrowing" means a group of Loans of the same Class.
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"Borrowing Base" means, an amount equal to the sum, without
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duplication of (i) the Billed Receivable Availability, (ii) the Unbilled
Receivable Availability, (iii) 35% of the Computer Equipment Valuation, (iv)
55% of the Video Equipment Valuation and (v) 100% of the Video Library
Valuation. The Borrowing Base shall be computed as of the end of each fiscal
month; provided that the Borrowing Base in effect at any time shall be
determined by reference to the most recent Borrowing Base Certificate delivered
to the Administrative Agent, absent any error in such Borrowing Base
Certificate. Standards for calculation of the Borrowing Base may be fixed from
time to time solely by the Administrative Agent in the exercise of its
reasonable judgment, with any changes in such standards to be effective 30 days
after delivery of notice thereof to the Borrower.
"Borrowing Base Certificate" has the meaning assigned to such term in
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Section 5.01(f).
"Borrowing Request" means a request by the Borrower for a Borrowing in
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accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
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day on which commercial banks in New York City are authorized or required by law
to remain closed.
"Capital Lease Obligations" of any Person means the obligations of
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such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
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"CB Capital" means CB Capital Investors, L.P.
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"CERCLA" means the Comprehensive Environmental Response, Compensation,
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and Liability Act, 42 U.S.C. (S) 9601 et seq.
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"Change in Control" means, at any time, (a) the failure by Xxxxx, the
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Designated Affiliates and CB Capital to own, directly or indirectly,
beneficially and of record, shares in the aggregate representing at least 51%
of the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; provided that in the event any Designated
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Affiliate (other than Xxxxx Investment Associates, L.P. and Xxxxx Equity
Partners V, L.P.) shall, at any time after the Effective Date, own, directly or
indirectly, beneficially or of record, an amount of shares of capital stock of
the Borrower in excess of the amount owned by such Designated Affiliate as of
the Effective Date, such Designated Affiliate shall no longer constitute a
Designated Affiliate for purposes of this Credit Agreement; (b) the acquisition
of ownership, directly or indirectly, beneficially or of record, by any Person
or group (within the meaning of the Securities Exchange Act of 1934 and the
rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof) other than Xxxxx and/or CB Capital, of shares representing more
than 30% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower; (c) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower
nor (ii) appointed by directors so nominated; (d) the acquisition of direct or
indirect Control of the Borrower by any Person or group other than Xxxxx and/or
CB Capital; or (e) the acquisition at any time of ownership, directly or
indirectly, beneficially and of record, by any Person or group of shares of the
Borrower's capital stock that in the aggregate exceed the aggregate number of
shares of the Borrower's capital stock owned, directly or indirectly,
beneficially and of record by Xxxxx and CB Capital at such time.
"CFN" means Consumer Financial Network, Inc., a Delaware corporation.
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"CFN Subsidiaries" means CFN and its subsidiaries.
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"CFN Wholly owned Period" means the period commencing on the Effective
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Date and ending on the date on which CFN issues an equity interest to a Person
other than the Borrower or its Subsidiaries.
"Change in Law" means (a) the adoption of any law, rule or regulation
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after the Effective Date, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the Effective Date or (c) compliance by any Lender or the Issuing Bank (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's or the Issuing Bank's holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the Effective Date.
"Class", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or
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Term Loans and when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or a Term Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Collateral" means any and all "Collateral", as defined in any
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applicable Security Document.
"Collateral Agent" means the "Collateral Agent", as defined in any
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applicable Security Document.
"Commitment" means a Revolving Commitment or Term Commitment, or any
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combination thereof (as the context requires).
"Computer Equipment Valuation" means, at the time of any determination
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thereof, the net book value of the Borrower's and its Accounts Receivable
Subsidiaries' computer equipment (depreciated on a straight-line basis),
determined in accordance with GAAP on a basis consistent with the Borrower's
historical and current accounting practices. Upon the Borrower's prior consent,
which consent shall not be unreasonably withheld, professionals retained by the
Collateral Agent may conduct annual appraisals of such computer equipment,
provided each such annual appraisal shall utilize appraisal techniques
consistent with the appraisal of such computer equipment conducted on behalf of
the Collateral Agent prior to the Amendment Effective Date. The Borrower shall
pay the fees and expenses of such professionals. For purposes of calculating the
Borrowing Base, no computer equipment may be included in the Computer Equipment
Valuation unless (i) the Borrower or an Accounts Receivable Subsidiary has good
and unencumbered title thereto (subject to Permitted Encumbrances), (ii) the
Collateral Agent on behalf of the Secured Parties possesses a valid first
priority perfected security interest therein pursuant to the Security Documents
and (iii) such equipment is in service at the end of the month for which the
Borrowing Base is being determined and is not construction-in-progress.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
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for such period, plus, without duplication and to the extent deducted from
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revenues in determining Consolidated Net Income, the sum of (a) the aggregate
amount of Consolidated Interest Expense for such period, (b) the aggregate
amount of letter of credit fees paid during such period, (c) the aggregate
amount of income tax expense for such period, (d) all amounts attributable to
depreciation and amortization for such period, (e) all extraordinary charges
during such period, (f) non-cash expenses resulting from the grant of stock
options to management personnel of the Borrower pursuant to a written plan or
agreement and (g) non-cash expenses resulting from the write-off of in-process
research and development incurred as result of the consummation of a Permitted
Acquisition, and minus, without duplication and to the extent added to revenues
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in determining Consolidated Net Income for such period, all extraordinary gains
during such period, all as determined on a consolidated basis with respect to
the Borrower and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
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expense, both expensed and capitalized (including the interest component in
respect of Capital Lease Obligations), accrued or paid by the Borrower and its
Subsidiaries (other
5
than the CFN Subsidiaries) during such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income or loss of
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the Borrower and its Subsidiaries (other than the CFN Subsidiaries) for such
period determined on a consolidated basis in accordance with GAAP; provided that
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there shall be excluded (a) the income (or non-cash loss to the extent recorded
as a loss on the books of the Borrower) of any Person in which any other Person
(other than the Borrower or any Subsidiary (other than the CFN Subsidiaries) or
any director holding qualifying shares in compliance with applicable law) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any Subsidiary (other than the
CFN Subsidiaries) by such Person (or any cash losses incurred by such Person)
during such period and (b) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary (other than the CFN Subsidiaries) or is merged
into or consolidated with the Borrower or any Subsidiary (other than the CFN
Subsidiaries) or the date that Person's assets are acquired by the Borrower or
any Subsidiary (other than the CFN Subsidiaries).
"Contributed Capital" means, as of any date of determination, the
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aggregate dollar value in accordance with GAAP of any equity capital of the
Borrower, in the form of preferred stock or common stock, as of the date of
issuance thereof.
"Control" means the possession, directly or indirectly, of the power
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to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
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"Default" means any event or condition that constitutes an Event of
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Default or that upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designated Affiliates" means Xxxxx Investment Associates V, L.P.,
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Xxxxx Equity Partners V, L.P., 1996 Xxxxxxx Family Trust, Xxxxxxx X. Xxxxx,
Xxxxx and Xxxxxxxx Xxxxx Trust, Xxxxxxxx Family Partnership, LTD, Xxxx X.
XxXxxxxxxxxx, Xxxxx X. Xxxxxxx Retained Annuity Trust 1296-C-IXL, Xxxxxx
Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxxxxx Family Trust and 1996
Xxxxxxxxxx Family Trust.
"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
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America.
"Effective Date" means July 29, 1998.
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"Eligible Billed Accounts Receivable" means, at the time of any
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determination thereof, each Account that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such
determination: such Account (i) has been invoiced and represents the bona fide
amounts due to the Borrower or an Accounts Receivable Subsidiary to the
purchaser of merchandise or services, in each case in the ordinary course of
business of the Borrower or an Accounts Receivable Subsidiary in connection with
its trade operations and (ii) is not
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ineligible for inclusion in the calculation of the Borrowing Base pursuant to
any of clauses (a) through (m) below or otherwise deemed by the Collateral Agent
in good faith to be ineligible for inclusion in the calculation of the Borrowing
Base as described below. Without limiting the foregoing, to qualify as an
Eligible Billed Account Receivable, an Account shall indicate as sole payee and
as sole remittance party the Borrower or any of the Accounts Receivable
Subsidiaries. In determining the amount to be so included, the face amount of
an Account shall be reduced by, without duplication, to the extent not reflected
in such face amount, (i) the amount of all accrued and actual returns,
discounts, claims, credits or credits pending, charges, price adjustments,
freight or finance charges or other allowances (including any amount that the
Borrower or an Accounts Receivable Subsidiary, as applicable, may be obligated
to rebate to a customer pursuant to the terms of any agreement or understanding
(written or oral)), (ii) the aggregate amount of all limits and deductions
provided for in this definition and elsewhere in this Agreement and (iii) the
aggregate amount of all cash received in respect of such Account but not yet
applied by the Borrower or the applicable Subsidiary to reduce the amount of
such Account. Unless otherwise approved from time to time in writing by the
Administrative Agent, no Account shall be an Eligible Billed Account Receivable
if, without duplication:
(a) the Borrower or an Accounts Receivable Subsidiary does not
have sole lawful and absolute title to such Account; or
(b) it arises out of a sale made by the Borrower or an Accounts
Receivable Subsidiary to an Affiliate of the Borrower or any of the
Accounts Receivable Subsidiaries in which the Borrower or any officer
of the Borrower (or any direct or indirect owner of more than 20% of
the Borrower's outstanding common stock) has a 45% or more interest;
or
(c) (i) it is unpaid more than 90 days from the original date of
invoice or 60 days from the original due date or (ii) it has been
written off the books of the Borrower or an Accounts Receivable
Subsidiary or has been otherwise designated on such books as
uncollectible; or
(d) more than 50% in face amount of all Accounts of the same
Account Debtor which are in excess of $50,000 are ineligible pursuant
to clause (c) above; or
(e) the Account Debtor (i) has a potential offset in the form of
deferred revenue, with the ineligible portion being equal to the
lesser of the Account Debtor's (x) deferred revenue balance
(calculated in the aggregate and in accordance with GAAP on a basis
consistent with the Borrower's historical and current accounting
practices) and (y) accounts receivable balance (calculated in the
aggregate), (ii) is a creditor of any Loan Party, (iii) has or has
asserted a right of set-off against any Loan Party (unless such
Account Debtor has entered into a written agreement reasonably
acceptable to the Administrative Agent to waive such set-off rights)
or (iv) has disputed its liability (whether by chargeback or
otherwise) or made any claim with respect to the Account or any other
Account of any Loan Party which has not been resolved, in each case,
without duplication, to the extent of the amount owed by such Loan
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Party to the Account Debtor, the amount of such actual or asserted
right of set-off, or the amount of such dispute or claim, as the case
may be; or
(f) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind; or
(g) the Account is not payable in Dollars or the Account Debtor
is either not incorporated under the laws of the United States of
America, any state thereof or the District of Columbia or is located
outside or has its principal place of business or substantially all of
its assets outside the United States, except to the extent the Account
is supported by an irrevocable letter of credit reasonably
satisfactory to the Administrative Agent (as to form, substance and
issuer) and assigned to and directly drawable by the Collateral Agent;
or
(h) the sale to the Account Debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, ship-and-return, extended terms or
consignment or other similar basis or made pursuant to any other
agreement providing for repurchase or return of any merchandise which
has been claimed to be defective or otherwise unsatisfactory; or
(i) the Account Debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower or
the relevant Accounts Receivable Subsidiary duly assigns its rights to
payment of such Account to the Collateral Agent pursuant to the
Assignment of Claims Act of 1940, as amended, which assignment and
related documents and filings shall be in form and substance
reasonably satisfactory to the Collateral Agent; or
(j) the Account does not comply in all material respects with the
requirements of all applicable laws and regulations, whether Federal,
state or local, including the Federal Consumer Credit Protection Act,
the Federal Truth in Lending Act and Regulation Z of the Board; or
(k) the Account is subject to any adverse security deposit,
retainage or other similar advance made by or for the benefit of the
Account Debtor, in each case to the extent thereof; or
(1) (i) it is not subject to a valid and perfected first priority
Lien in favor of the Collateral Agent for the benefit of the Secured
Parties, subject to no other Liens other than the Liens (if any)
permitted by the Loan Documents or (ii) it does not otherwise conform
in all material respects to the representations and warranties
contained in the Loan Documents relating to Accounts; or
(m) as to all or any part of such Account, a check, promissory
note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned
uncollected for any reason.
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Notwithstanding the foregoing, all Accounts of any single Account
Debtor and its Affiliates which, in the aggregate (after subtracting the
relevant Account Debtor's deferred revenue balance), exceed 25% of the
total amount of all Eligible Billed Accounts Receivable (less the aggregate
deferred revenue balance for the Borrower and the Accounts Receivable
Subsidiaries as a whole) at the time of any determination shall be deemed
not to be Eligible Billed Accounts Receivable to the extent of such excess.
In determining the aggregate amount of Accounts from the same Account
Debtor that are unpaid more than 90 days from the date of invoice or more
than 60 days from the due date pursuant to clause (c) above, there shall be
excluded the amount of any net credit balances relating to Accounts with
invoice dates more than 90 days prior to the date of determination or more
than 60 days from the due date.
"Eligible Unbilled Accounts" means, at the time of any determination
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thereof, all unbilled Accounts that meet the criteria for Eligible Billed
Accounts Receivable, with the exception that (x) unbilled Accounts will not be
considered Eligible Unbilled Accounts if aged over 90 days from the date of
creation and (y) the "extended terms" provision in clause (h) of the definition
of Eligible Billed Accounts Receivable shall not apply.
"Environmental Laws" means all laws, rules, regulations, codes,
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ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by or with any Governmental
Authority, relating in any way to the environment, preservation or reclamation
of natural resources, the handling, treatment, storage, disposal, Release or
threatened Release of any Hazardous Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
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(including, but not limited to, any liability for damages, natural resource
damage, costs of environmental remediation, administrative oversight costs,
fines, penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
-----------
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the
9
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability
under Title IV of ERISA with respect to the termination of any Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any ERISA Affiliate of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by
the Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in Article
----------------
VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
--------------
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction (or any political subdivision thereof or taxing
authority therein) in which the Borrower, or, in the case of any Lender, its
applicable lending office, is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Borrower under Section
2.16(b)), any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.14(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.14(a).
"Federal Funds Effective Rate" means, for any day, the weighted
----------------------------
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
-----------------
accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws of
--------------
a jurisdiction other than that in which the Borrower is located. For purposes of
this
10
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
------------------
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
----
States of America.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
--------- ----------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
---------------
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term "Guarantee" shall not include
--------
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee Agreement, substantially in
-------------------
the form of Exhibit C, made by the Subsidiary Loan Parties in favor of the
Administrative Agent for the benefit of the Secured Parties.
"Hazardous Materials" means all explosive or radioactive substances or
-------------------
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law, including any material listed as a hazardous substance under
Section 101(14) of CERCLA.
"Hedging Agreement" means any interest rate protection agreement,
-----------------
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of
11
such Person under conditional sale or other title retention agreements relating
to property acquired by such Person, (d) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (e) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (i) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Indemnity Subrogation and Contribution Agreement" means the
-------------------------------------------------
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Loan Parties and the Administrative Agent.
"Interest Payment Date" means, with respect to any Loan, the last day
---------------------
of each March, June, September and December.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
------------
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.04(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"Joint Venture" means, as to a Person, any corporation, partnership or
-------------
other legal entity or arrangement in which such Person has any direct or
indirect equity interest (or owns securities convertible into such an equity
interest) and that is not a subsidiary of such Person.
"Xxxxx" means Xxxxx & Company, L.P., a Delaware limited partnership.
-----
"Xxxxx Advisory Agreement" means that certain Advisory Agreement dated
------------------------
April 30, 1996, between Xxxxx and the Borrower.
"LC Availability Period" means the period from and including the
----------------------
second Business Day following the Amendment Effective Date to but excluding the
earlier of (a) the date that is five Business Days prior to the Revolving
Maturity Date and (b) the date of termination of the Revolving Commitments.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
---------------
a Letter of Credit.
12
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
-----------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
-------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
----------------
Agreement.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
----
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means this Agreement, the Guarantee Agreement, the
--------------
Indemnity, Subrogation and Contribution Agreement and the Security Documents.
"Loan Parties" means the Borrower and the Subsidiary Loan Parties.
------------
"Loans" means the loans made by the Lenders to the Borrower pursuant
-----
to this Agreement.
"Margin Stock" has the meaning assigned to such term in Regulation U.
------------
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
---------------------
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Borrower and its Subsidiaries in an aggregate
principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Borrower or any
of its Subsidiaries in respect of any Hedging Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or such Subsidiary would be required to pay if such Hedging Agreement
were terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
13
"Net Proceeds" means, with respect to any event (a) the cash proceeds
------------
received by the Borrower and the Subsidiary Loan Parties in respect of such
event, including any cash received in respect of any non-cash proceeds, but only
as and when received, net of (b) the sum of (i) all reasonable fees and out-of-
pocket expenses paid by the Borrower and the Subsidiary Loan Parties to third
parties (other than to the Borrower or a Subsidiary) in connection with such
event, (ii) the amount of all payments required to be made by the Borrower and
the Subsidiary Loan Parties as a result of such event to repay Indebtedness
(other than Loans) secured by such asset or otherwise subject to mandatory
prepayment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the Subsidiary Loan
Parties, and the amount of any reserves established by the Borrower and its
Subsidiaries to fund contingent liabilities reasonably estimated to be payable,
in each case during the year that such event occurred or the next succeeding
year and that are directly attributable to such event (as determined reasonably
and in good faith by the chief financial officer of the Borrower). In the case
of Net Proceeds denominated in a currency other than dollars, the amount of such
Net Proceeds shall be the dollar equivalent thereof based upon the exchange
rates prevailing at the time.
"Obligations" has the meaning assigned to such term in the Security
-----------
Agreement.
"Other Taxes" means any and all current or future stamp or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to
----------------------
the Security Agreement or any other form approved by the Collateral Agent.
"Permitted Acquisition" means any acquisition of all or substantially
---------------------
all the assets of, or all the shares or other equity interests in, a Person or
division or line of business of a Person if, immediately after giving effect
thereto, (a) no Default has occurred and is continuing or would result
therefrom, (b) all transactions related thereto are consummated in accordance
with applicable laws, (c) in the case of an acquisition of shares or other
equity interests in a Person, 100% of the capital stock of or other equity
interests in such Person, and any other Subsidiary resulting from such
acquisition, shall be owned directly by the Borrower or a Subsidiary Loan Party
and all actions required to be taken, if any, with respect to each Subsidiary
resulting from such acquisition under Sections 5.11 and 5.12 have been taken,
(d) the Borrower and its consolidated Subsidiaries (other than the CFN
Subsidiaries) are in compliance, on a pro forma basis after giving effect to
such acquisition, with the covenants contained in Sections 6.13 and 6.14
recomputed as at the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available as if such acquisition had
occurred on the first day of each relevant period for testing such compliance
and (e) the Borrower has delivered to the Administrative Agent an officer's
certificate to the effect set forth in clauses (a), (b), (c) and (d) above,
together with all relevant financial information for the business or entity
being acquired.
14
"Permitted CFN Indebtedness" means unsecured Indebtedness of any of
--------------------------
the CFN Subsidiaries in respect of debt securities that (a) mature at least one
year after, and do not require any scheduled payment of principal or any
mandatory redemption or prepayment (or any right on the part of the holder
thereof to require any payment) of principal, in each case prior to the date one
year after, the later of the Revolving Maturity Date and the Term Maturity Date,
(b) are not Guaranteed by any Loan Party or any Foreign Subsidiary and (c) are
subordinated to the Borrower's Obligations on terms and conditions reasonably
satisfactory to the Required Lenders.
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations and deposits made in the ordinary
course of business and securing liability to insurance providers;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) any interest of a landlord in or to property of the tenant imposed
by law, arising in the ordinary course of business and securing lease
obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.05, or any possessory rights of a
lessee to the leased property under the provisions of any lease permitted
by the terms of this Agreement; and
(h) Liens of a collection bank arising in the ordinary course of
business under (S) 4-208 of the Uniform Commercial Code in effect in the
relevant jurisdiction;
provided that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness.
15
"Permitted Preferred Stock" means any class of preferred stock of the
-------------------------
Borrower (a) the terms and conditions of which are reasonably satisfactory in
all material respects to the Required Lenders or (b) that does not materially
conflict with or is more restrictive than the terms under the Loan Documents or
include any of the following terms: (i) current pay dividend requirements prior
to the date six months following the later of the Revolving Maturity Date and
the Term Maturity Date, (ii) repayment or redemption requirements (other than at
the sole option of the Borrower) prior to the date six months following the
later of the Revolving Maturity Date and the Term Maturity Date, (iii)
provisions that provide for the exchange or conversion of such preferred stock
with or into Indebtedness prior to the date six months following the later of
the Revolving Maturity Date and the Term Maturity Date or (iv) other terms
similar to or consistent with terms included in documents, instruments or
agreements in respect of Indebtedness.
"Permitted Subordinated Indebtedness" means unsecured Indebtedness of
-----------------------------------
the Borrower in respect of debt securities that (a) mature at least one year
after, and do not require any scheduled payment of principal or any mandatory
redemption or prepayment (or any right on the part of the holder thereof to
require any payment) of principal, in each case prior to the date one year
after, the later of the Revolving Maturity Date and the Term Maturity Date, (b)
are not Guaranteed by any Subsidiary Loan Party or any Foreign Subsidiary, (c)
are subordinated to the Borrower's Obligations on terms and conditions
reasonably satisfactory to the Required Lenders, (d) are issued for cash
consideration, the net proceeds of which are invested in the Borrower and (e)
have terms and conditions that are reasonably satisfactory in all material
respects to the Required Lenders.
"Permitted Investments" means:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or Xxxxx'x;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 365 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof that
has a combined capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and
(e) shares of funds registered under the Investment Company Act of
1940, as amended, that have assets of at least $500,000,000 and invest only
in
16
obligations described in clauses (a) through (c) above to the extent that
such shares are rated by Xxxxx'x or S&P in one of the two highest rating
categories assigned by such agency for shares of such nature.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity .
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any of its ERISA Affiliates is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the
----------------
form of Exhibit E, among the Loan Parties and the Collateral Agent for the
benefit of the Secured Parties.
"Prepayment Event" means any sale, transfer or other disposition
----------------
(including pursuant to a sale and lease-back transaction) of any property or
asset of the Borrower or any of the Subsidiary Loan Parties, other than
dispositions described in clauses (a) and (b) of Section 6.05; provided that, if
--------
the Borrower shall deliver a certificate of a Financial Officer to the
Administrative Agent at the time of such event (i) setting forth the intent of
the Borrower or one of the Subsidiary Loan Parties to use the Net Proceeds of
such event to acquire other assets to be used in a line of business of the type
conducted by the Borrower and the Subsidiary Loan Parties as of the Effective
Date within 365 days of receipt of such Net Proceeds and (ii) certifying that no
Default has occurred and is continuing, then such event shall not constitute a
Prepayment Event except to the extent the Net Proceeds therefrom are not so used
at the end of such 365-day period, at which time such event shall be deemed a
Prepayment Event with Net Proceeds equal to the Net Proceeds so remaining
unused.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 9.04.
--------
"Regulation U" means Regulation U of the Board as from time to time in
------------
effect and all official rulings and interpretations thereunder or thereof.
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Release" has the meaning set forth in Section 101(22) of CERCLA.
-------
"Required Lenders" means, at any time, Lenders having Revolving
----------------
Exposures, Term Loans and unused Commitments representing more than 50% of the
17
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Restricted Payment" means any dividend or other distribution (whether
------------------
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Borrower or any of its Subsidiaries, 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, cancelation or termination of any such shares of capital stock of
the Borrower or any of its Subsidiaries or any option, warrant or other right to
acquire any such shares of capital stock of the Borrower or any of its
Subsidiaries.
"Revolving Availability Period" means the period from and including
-----------------------------
the second Business Day following the Amendment Effective Date to but excluding
the earlier of the Revolving Maturity Date and the date of termination of the
Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.06 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders'
Revolving Commitments is $10,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
------------------
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
----------------
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section
--------------
2.01.
"Revolving Maturity Date" means June 30, 2001.
-----------------------
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-
---
Hill Companies, Inc.
"Secured Parties" has the meaning assigned to such term in the
---------------
Security Agreement.
"Security Agreement" means the Security Agreement, substantially in
------------------
the form of Exhibit F, among the Loan Parties and the Collateral Agent for the
benefit of the Secured Parties.
18
"Security Documents" means the Security Agreement, the Pledge
------------------
Agreement and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.11 or 5.12 to secure any of the
Obligations.
"Subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
----------
"Subsidiary Loan Party" means any Subsidiary of the Borrower other
---------------------
than (a) the CFN Subsidiaries and (b) any Foreign Subsidiaries.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Tax Sharing Agreement" means, with respect to any Person, an
---------------------
agreement between such Person and its direct or indirect parent entities and its
direct or indirect subsidiaries to the effect that such parties will make
payments between themselves such that, with respect to any period, the amount of
taxes to be paid by such Person generally will be determined as though such
Person were to file separate federal, state and local income tax returns.
"Term Commitment" means, with respect to each Lender, the commitment,
---------------
if any, of such Lender to make a Term Loan hereunder on the Effective Date,
expressed as an amount representing the maximum principal amount of the Term
Loan to be made by such Lender hereunder, as such commitment may be (a) reduced
from time to time pursuant to Section 2.06 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Term Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Term Commitment, as applicable. The initial aggregate
amount of the Lenders' Term Commitments is $10,000,000.
"Term Lender" means a Lender with a Term Commitment or an outstanding
-----------
Term Loan.
"Term Loan" means a Loan made pursuant to clause (a) of Section 2.01.
---------
"Term Maturity Date" means June 30, 2001.
------------------
19
"Total Debt" means, as of any date of determination, without
----------
duplication, the aggregate principal amount of Indebtedness of the Borrower and
its Subsidiaries (other than the CFN Subsidiaries) outstanding as of such date
and net of any cash or cash equivalents held by the Borrower and such
Subsidiaries (other than the CFN Subsidiaries), determined on a consolidated
basis in accordance with GAAP (other than Indebtedness of the type referred to
in clause (h) of the definition of the term "Indebtedness", except to the extent
of any unreimbursed drawings thereunder).
"Transactions" means the execution, delivery and performance by each
------------
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.
"Unbilled Receivable Availability" means the lesser of (a) 60% of
--------------------------------
Eligible Unbilled Accounts and (b) 75% of the Billed Receivable Availability.
"Video Equipment Valuation" means, at the time of any determination
-------------------------
thereof, the net book value of the Borrower's and its Accounts Receivable
Subsidiaries' video equipment (depreciated on a straight-line basis), determined
in accordance with GAAP on a basis consistent with the Borrower's historical and
current accounting practices. Upon the Borrower's prior consent, which consent
shall not be unreasonably withheld, professionals retained by the Collateral
Agent may conduct annual appraisals of such video equipment, provided each such
annual appraisal shall utilize appraisal techniques consistent with the
appraisal of such video equipment conducted on behalf of the Collateral Agent
prior to the Amendment Effective Date. The Borrower shall pay the fees and
expenses of such professionals. For purposes of calculating the Borrowing Base,
no video equipment may be included in the Video Equipment Valuation unless (i)
the Borrower or an Accounts Receivable Subsidiary has good and unencumbered
title thereto (subject to Permitted Encumbrances), (ii) the Collateral Agent on
behalf of the Secured Parties possesses a valid first priority perfected
security interest therein pursuant to the Security Documents and (iii) such
equipment is in service at the end of the month for which the Borrowing Base is
being determined and is not construction-in-progress.
"Video Library Valuation" means, at the time of any determination
-----------------------
thereof, the value of the Borrower's and its Accounts Receivable Subsidiaries'
video library as determined by the most recent fixed asset appraisal (excluding
any portion thereof that has been sold or otherwise disposed of since such
appraisal). Upon the Borrower's prior consent, which consent shall not be
unreasonably withheld, professionals retained by the Collateral Agent may
conduct annual appraisals of such video library, provided each such annual
appraisal shall utilize appraisal techniques consistent with the appraisal of
such video library conducted on behalf of the Collateral Agent prior to the
Amendment Effective Date. The Borrower shall pay the fees and expenses of such
professionals. For purposes of calculating the Borrowing Base, no part of the
video library may be included in the Video Library Valuation unless (i) the
Borrower or an Accounts Receivable Subsidiary has good and unencumbered title
thereto (subject to Permitted Encumbrances or any licenses or sublicenses to
third parties) and (ii) the Collateral Agent on behalf of the Secured Parties
possesses a valid first priority perfected security interest therein pursuant to
the Security Documents.
20
"Withdrawal Liability" means liability to a Multiemployer Plan as a
--------------------
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of
--------------------------------------
this Agreement, Loans may be classified and referred to by Class (e.g., a
----
"Revolving Loan"). Borrowings also may be classified and referred to by Class
(e.g., a "Revolving Borrowing").
----
SECTION 1.03. Terms Generally. The definitions of terms herein shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms: GAAP. Except as otherwise expressly
----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. Subject to the terms and conditions set
-----------
forth herein, each Lender agrees (a) to make a Term Loan to the Borrower on the
Effective Date in a principal amount not exceeding its Term Commitment and (b)
to make Revolving Loans to the Borrower from time to time during the Revolving
21
Availability Period in an aggregate principal amount that will not result in (i)
such Lender's Revolving Exposure exceeding such Lender's Revolving Commitment or
(ii) the sum of the Revolving Exposures and the Term Loans at any time exceeding
the Borrowing Base then in effect. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans. Amounts repaid in respect of the Term Loans may not be
reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as
--------------------
part of a Borrowing consisting of Loans of the same Class made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
--------
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) At the time that each Revolving Borrowing is made, such Borrowing
shall be in an aggregate amount that is an integral multiple of $100,000 and not
less than $200,000; provided that a Revolving Borrowing may be in an aggregate
--------
amount that is equal to the entire unused balance of the total Revolving
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Borrowings of more than one
Class may be outstanding at the same time.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
-----------------------
Borrower shall notify the Administrative Agent of such request by telephone not
later than 11:00 a.m., New York City time, one Business Day before the date of
the proposed Borrowing; provided that any such notice of a Revolving Borrowing
--------
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 10:00 a.m., New York City time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing
or Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day; and
(iv) the location and number of the account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender's Loan to be made as part of the
requested Borrowing.
SECTION 2.04. Letters of Credit. (a) General. Subject to the terms and
----------------- -------
conditions set forth herein, the Borrower may request the issuance of Letters of
22
Credit for its account, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the LC
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
----------------------------------------------------------
Conditions. To request the issuance of a Letter of Credit (or the amendment,
----------
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank's standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $3,000,000, (ii) the
total Revolving Exposures shall not exceed the total Revolving Commitments and
(iii) the sum of the total Revolving Exposures and the Term Loans shall not
exceed the Borrowing Base then in effect.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
---------------
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
--------------
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Administrative Agent, for the account of the Issuing Bank, such
Lender's Applicable Percentage of each LC Disbursement made by the Issuing Bank
and not reimbursed by the Borrower on the date due as provided in paragraph (e)
of this Section, or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
23
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement
-------------
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
--------
if such LC Disbursement is not less than $200,000, the Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section
2.03 that such payment be financed with a Revolving Borrowing in an equivalent
amount and, to the extent so financed, the Borrower's obligation to make such
payment shall be discharged and replaced by the resulting Revolving Borrowing.
If the Borrower fails to make such payment when due, the Administrative Agent
shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Borrower, in the same manner as provided in
Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
------- --------
and the Administrative Agent shall promptly pay to the Issuing Bank the amounts
so received by it from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the Issuing
Bank or, to the extent that Revolving Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the
Issuing Bank as their interests may appear. Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC
Disbursement (other than the funding of Revolving Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
--------------------
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a
24
right of set-off against, the Borrower's obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
--------
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or wilful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented that appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
-----------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
--------
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If the Issuing Bank shall make any LC
----------------
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to Revolving Loans; provided
--------
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (e) of this Section, then Section 2.11(b) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Revolving
Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
-------------------------------
at any time by written agreement among the Borrower, the Administrative Agent,
the
25
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.10(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
----------------------
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 51% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to the LC Exposure as of such
date attributable to all Letters of Credit issued for the account of the
Borrower plus any accrued and unpaid interest thereon; provided that the
--------
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VII. The
Borrower also shall deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.09(b), and any such cash collateral so
deposited and held by the Administrative Agent hereunder shall constitute part
of the Borrowing Base for purposes of determining compliance with Section
2.09(b). Each such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Agreement. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower's risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Revolving Lenders with LC Exposure representing greater than 51% of
the total LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived. If the Borrower is required to provide an amount of cash collateral
hereunder pursuant to Section 2.09(b), such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower as and to the extent that, after
giving effect to such return.
26
the Borrower would remain in compliance with Section 2.09(b) and no Default
shall have occurred and be continuing.
SECTION 2.05. Funding of Borrowings. (a) Each Lender shall make each
---------------------
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that Revolving Loans made to finance the reimbursement of an LC
--------
Disbursement as provided in Section 2.04(e) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to Loans pursuant to Section 2.11(a). If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. Termination and Reduction of Commitments.
----------------------------------------
(a) Unless previously terminated, (i) the Term Commitments shall terminate at
5:00 p.m., New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of the
--------
Commitments of any Class shall be in an amount that is an integral multiple of
$100,000 and not less than $1,000,000 and (ii) the Borrower shall not terminate
or reduce the Revolving Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.09, the sum of
the Revolving Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable;
27
provided that a notice of termination of the Revolving Commitments delivered by
--------
the Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or reduction
of the Commitments of any Class shall be permanent. Each reduction of the
Commitments of any Class shall be made ratably among the Lenders in accordance
with their respective Commitments of such Class.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The Borrower
------------------------------------
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of (i) each Revolving
Loan held by such Lender on the Revolving Maturity Date and (ii) each Term Loan
held by such Lender as provided in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder and the Class thereof,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
----- -----
amounts of the obligations recorded therein; provided that the failure of any
--------
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08. Amortization of Term Loans. (a) Subject to adjustment
--------------------------
pursuant to paragraph (c) of this Section, the Borrower shall repay Term
28
Borrowings on each date set forth below in the aggregate principal amount set
forth opposite such date:
Date Amount
---- ------
September 30, 1998 $ 50,000
December 31, 1998 50,000
March 31, 1999 50,000
June 30, 1999 50,000
September 30, 1999 50,000
December 31, 1999 50,000
March 31,2000 50,000
June 30, 2000 50,000
September 30, 2000 50,000
December 31, 2000 50,000
March 31, 2001 50,000
June 30, 2001 9,450,000
(b) To the extent not previously paid, all Term Loans shall be due
and payable on the Term Maturity Date.
(c) If the initial aggregate amount of the Lenders' Term Commitments
exceeds the aggregate principal amount of Term Loans that are made on the
Effective Date, then the scheduled repayments of Term Borrowings to be made
pursuant to this Section shall be reduced ratably by an aggregate amount equal
to such excess. Any prepayment of a Term Borrowing shall be applied to reduce
the subsequent scheduled repayments of the Term Borrowings to be made pursuant
to this Section ratably.
(d) Each repayment of Term Borrowings shall be applied ratably to the
outstanding Term Loans. Repayments of Term Borrowings shall be accompanied by
accrued interest on the amount repaid.
SECTION 2.09. Prepayment of Loans. (a) The Borrower shall have the
-------------------
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section.
(b) In the event and on such occasion that the sum of the Revolving
Exposures and the Term Loans exceeds the Borrowing Base, the Borrower shall
prepay Revolving Borrowings (or, if no such Borrowings are outstanding, prepay
Term Borrowings or deposit cash collateral in an account with the Administrative
Agent pursuant to Section 2.04(j)) in an aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary Loan Party in respect
of any Prepayment Event, the Borrower shall, immediately after such Net Proceeds
are received, prepay Term Borrowings in an aggregate amount equal to such Net
Proceeds.
29
(d) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment of a Borrowing hereunder not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the Class and principal amount of Borrowings to be prepaid;
provided that, if a notice of optional prepayment is given in connection with a
--------
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.06, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Revolving
Borrowing as provided in Section 2.02. Each prepayment of a Borrowing of either
Class shall be applied ratably to the outstanding Loans of such Class.
Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.11.
SECTION 2.10. Fees. (a) The Borrower agrees to pay to the
----
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at a rate of 0.50% per annum on the average daily unused amount of
the Revolving Commitment of such Lender during the period from and including the
Effective Date to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). For purposes of computing commitment
fees with respect to Revolving Commitments, a Revolving Commitment of a Lender
shall be deemed to be used to the extent of the outstanding Revolving Loans and
LC Exposure of such Lender.
(b) The Borrower agrees to pay (i) to the Administrative Agent for
the account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at a rate per annum of
4.00% on the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on
which such Lender's Revolving Commitment terminates and the date on which such
Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at a rate of 0.25% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any LC Exposure,
as well as the Issuing Bank's standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the Effective Date; provided that all such fees
--------
shall be payable on the date on which the Revolving Commitments terminate and
any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any
30
other fees payable to the Issuing Bank pursuant to this paragraph shall be
payable within 10 days after demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.11. Interest. (a) The Loans shall bear interest at a rate
--------
per annum equal to 2.00% plus the Alternate Base Rate.
(b) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to 2% plus the rate otherwise applicable to the Loans as
provided in paragraph (a) of this Section.
(c) Accrued interest on each Loan shall be payable in arrears (i) on
each Interest Payment Date and (ii) in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (A) interest accrued
--------
pursuant to paragraph (b) of this Section shall be payable on demand and (B) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
a Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment.
(d) All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.12. Increased Costs. (a) If any Change in Law shall:
---------------
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank any other condition
affecting this Agreement or any Letter of Credit or participation therein;
31
and the result of any of the foregoing shall be to increase the cost to such
Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrower agrees to pay to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrower agrees to pay to such
Lender or the Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuing Bank or such Lender's or
the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt by the Borrower thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
--------
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
-------- -------
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.13. Break Funding Payments. In the event of the failure to
----------------------
borrow or prepay any Revolving Loan or Term Loan on the date specified in any
notice delivered pursuant hereto, then, in any such event, the Borrower agrees
to compensate each Lender for the loss, cost and expense attributable to such
event. A certificate of any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt by the Borrower thereof.
32
SECTION 2.14. Taxes. (a) Any and all payments by or on account of any
-----
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
--------
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers indemnifies the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Each Foreign Lender, and any Issuing Bank that is not a "United
States person" within the meaning of Section 7701(a)(30) of the Code (together
with the Foreign Lenders, the "Non-U.S. Lenders"), shall deliver to the Borrower
(with a copy to the Administrative Agent) two copies of either United States
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such Non-
U.S. Lender delivers a Form W-8, a certificate representing that such Non-U.S.
Lender is not a bank for purposes of Section 881(c) of the Code, is not a 10-
percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the Borrower under
this Agreement or any other Loan Document. Such
33
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement or designates a new lending office. In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence, expiration or invalidity of any form previously delivered by such
Non-U.S. Lender. Notwithstanding any other provision of this Section 2.14, a
Non-U.S. Lender shall not be required to deliver any form pursuant to this
Section 2.14(e) that such Non-U.S. Lender is not legally able to deliver.
SECTION 2.15. Payments Generally: Pro Rata Treatment: Sharing of Set-
-------------------------------------------------------
offs. (a) The Borrower shall make each payment required to be made by it
----
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.12,
2.13 or 2.14, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.12,
2.13, 2.14 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements, interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans, Term Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans and participations in
LC Disbursements and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans, Term
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Term and participations in
LC Disbursements; provided that (i) if any such
--------
34
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrower
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(d) or (e), 2.05(b), 2.15(d) or 9.03(c), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.16. Mitigation Obligations: Replacement of Lenders.
----------------------------------------------
(a) If any Lender requests compensation under Section 2.12, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.12, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental
35
Authority for the account of any Lender pursuant to Section 2.14, or if any
Lender defaults in its obligation to fund Loans hereunder, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
--------
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required
to be made pursuant to Section 2.14, such assignment will result in a material
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization: Powers. Each of the Borrower and its
--------------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization: Enforceability. The Transactions to be
-----------------------------
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of the Borrower or such Loan
Party (as the case may be), enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals: No Conflicts. The Transactions
------------------------------------
(a) do not require any consent or approval of, registration or filing with,
36
or any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except filings necessary
to perfect Liens created under the Loan Documents, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, except such violations or defaults which,
individually and in the aggregate, would not be reasonably likely to result in a
Material Adverse Effect, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition: No Material Adverse Change.
-----------------------------------------------
(a) The Borrower has heretofore furnished to the Lenders its (i) consolidated
balance sheet and statements of income, stockholders equity and cash flows (A)
as of and for the fiscal year ended December 31, 1997, reported on by Price
Waterhouse LLP, independent public accountants, (B) as of and for the fiscal
quarter and the portion of the fiscal year ended March 31, 1998, certified by
its chief financial officer and (ii) consolidated balance sheet and statements
of income and stockholders equity as of and for any month and the portion of the
fiscal year ended on the last day of such month that has been completed during
the fiscal quarter ended June 30, 1998, certified by its chief financial
officer. Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clauses (ii) and (iii)
above.
(b) The Borrower has heretofore furnished to the Lenders its pro
forma consolidated balance sheet as of March 31, 1998, prepared giving effect to
the Transactions as if the Transactions had occurred on such date. Such pro
forma consolidated balance sheet (i) has been prepared in good faith (which
assumptions are believed by the Borrower to be reasonable), (ii) is based on the
best information available to the Borrower after due inquiry, (iii) accurately
reflects all material adjustments necessary to give effect to the Transactions
and (iv) presents fairly, in all material respects, the pro forma financial
position of the Borrower and its consolidated Subsidiaries as of March 31, 1998
as if the Transactions had occurred on such date.
(c) Except as disclosed on Schedule 3.04 or in the financial
statements referred to above or the notes thereto and except for the Disclosed
Matters, after giving effect to the Transactions, none of the Borrower or any of
its Subsidiaries has, as of the Effective Date, any material contingent
liabilities, unusual long-term commitments or unrealized losses.
(d) Since December 31, 1997, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
----------
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for minor defects in
title that do not interfere
37
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property that
is owned or leased by the Borrower or any of its Subsidiaries as of the
Effective Date after giving effect to the Transactions.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
------------------------------------
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of the Borrower or its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the Effective Date, there has been no change in the status
of the Disclosed Matters that, individually or in the aggregate, has resulted
in, or materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
-----------------------------------
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. None of the
-------------------------------------
Borrower or any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has
-----
timely filed or caused to be filed all Tax returns or extensions and reports
required to
38
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
-----
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No.87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No.87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Lenders
----------
all agreements, instruments and corporate or other restrictions to which the
Borrower or any of its Subsidiaries is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of any
Loan Party to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any other Loan Document or delivered hereunder
or thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
--------
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and
------------
the direct or indirect ownership interest of the Borrower in, each direct and
indirect Subsidiary of the Borrower and identifies each such Subsidiary that is
a Subsidiary Loan Party, in each case as of the Effective Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
---------
insurance maintained by or on behalf of the Borrower and its Subsidiaries as of
the Effective Date. As of the Effective Date, all premiums in respect of such
insurance have been paid in accordance with their terms.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
-------------
strikes, lockouts or slowdowns against the Borrower or any of its Subsidiaries
pending or, to the knowledge of the Borrower, threatened. The hours worked by
and payments made to employees of the Borrower and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters except where any
such violations, individually or in the aggregate, could not be reasonably
expected to result in a Material Adverse Effect. All
39
payments due from the Borrower or any Subsidiary, or for which any claim may be
made against the Borrower or any Subsidiary, on account of wages and employee
health and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of the Borrower or such Subsidiary. The consummation of
the Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of the
--------
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (b) the present fair saleable value of
the property of each Loan Party will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
SECTION 3.16. Security Documents. (a) The Pledge Agreement is
------------------
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Collateral is
delivered to the Collateral Agent, the Pledge Agreement shall constitute a fully
perfected first priority Lien on, and security interest in, all right, title and
interest of the pledgor thereunder in such Collateral, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified pursuant to the Perfection Certificate, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in such Collateral (other than the
Intellectual Property (as defined in the Security Agreement), in each case prior
and superior in right to any other person, other than with respect to Liens
expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Intellectual Property (as defined
in the Security Agreement) in which a security interest may be perfected by
filing, recording or registering a security agreement, financing statement or
analogous document in the United States Patent and Trademark Office or the
United States Copyright Office, as applicable, in each case prior and superior
in right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a lien on registered trademarks,
40
trademark applications and copyrights acquired by the Loan Parties after the
Effective Date).
SECTION 3.17. Year 2000. Any reprogramming required to permit the
---------
proper functioning, in and following the year 2000, of (i) the computer systems
of the Borrower and its Subsidiaries and (ii) equipment containing embedded
microchips (including, to the Borrower's knowledge, systems and equipment
supplied by others or, such material systems or equipment with which the systems
of the Borrower and its Subsidiaries interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed in all material
respects by June 30, 1999. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Borrower and its Subsidiaries (including reprogramming errors and,
to the Borrower's knowledge, the failure of the systems or equipment of others
material to the Borrower or its Subsidiaries) will not result in a Default or a
Material Adverse Effect. Except for such of the reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Borrower and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be
sufficient to permit the Borrower to conduct its business without a Material
Adverse Effect.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to make
--------------
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of each of (i) Xxxxxx & Xxxxxx, counsel for the Loan
Parties, substantially in the form of Exhibit B-1, and (ii) Debevoise &
Xxxxxxxx, counsel for the Loan Parties, substantially in the form of
Exhibit B-2, and in each case covering such other matters relating to the
Loan Parties, the Loan Documents or the Transactions as the Required
Lenders shall reasonably request. The Borrower hereby requests such counsel
to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the
41
Loan Parties, the Loan Documents or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by any Loan Party hereunder or under any
other Loan Document.
(f) The Administrative Agent shall have received counterparts of the
Pledge Agreement signed on behalf of each Loan Party, together with stock
certificates representing all the outstanding shares of capital stock of
each Subsidiary of the Borrower (other than IXL-London, LTD. and IXL-Madrid
S.A.) owned by or on behalf of any Loan Party as of the Effective Date
after giving effect to the Transactions (except that such delivery of stock
certificates representing shares of common stock of a Foreign Subsidiary
may be limited to 65% of the outstanding shares of common stock of such
Foreign Subsidiary), promissory notes evidencing all intercompany
Indebtedness owed to any Loan Party by the Borrower or any Subsidiary as of
the Effective Date after giving effect to the Transactions and stock powers
and instruments of transfer, endorsed in blank, with respect to such stock
certificates and promissory notes.
(g) The Administrative Agent shall have received counterparts of the
Security Agreement signed on behalf of each Loan Party, together with the
following:
(i) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create
or perfect the Liens intended to be created under the Security
Agreement; and
(ii) a completed Perfection Certificate dated the Effective Date
and signed by a Financial Officer and Legal Officer of the Borrower,
together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent)
filings made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the
Liens indicated by such financing statements (or similar documents)
are permitted by Section 6.02 or have been released.
(h) The Administrative Agent shall have received (i) counterparts of
the Guarantee Agreement signed on behalf of each Loan Party and each CFN
42
Subsidiary and (ii) counterparts of the Indemnity, Subrogation and
Contribution Agreement signed on behalf of each Loan Party.
(i) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect.
(j) The Lenders shall be reasonably satisfied as to the amount and
nature of any Environmental Liabilities to which the Borrower and its
Subsidiaries may be subject, and the plans of the Borrower with respect
thereto, after giving effect to the Transactions and the consummation of
the other transactions contemplated hereby.
(k) The Lenders shall be reasonably satisfied with the sufficiency of
amounts available under this Agreement to meet the ongoing working capital
requirements of the Borrower following the Transactions and the
consummation of the other transactions contemplated hereby.
(l) After giving effect to the Transactions, none of the Borrower and
its Subsidiaries (other than the CFN Subsidiaries) shall have outstanding
any shares of preferred stock (other than the Borrower's Class A Preferred
Stock, Class B Preferred Stock and Class C Preferred Stock, outstanding as
of the Effective Date) or any Indebtedness, other than Indebtedness
incurred under the Loan Documents.
(m) None of the Borrower and its Subsidiaries are obligated to pay
any fee to any Affiliate or third party in respect of management,
consulting or similar services other than the advisory fees payable to
Xxxxx pursuant to the Xxxxx Advisory Agreement.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective unless each
of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at
or prior to 3:00 p.m., New York City time, on August 5, 1998 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make
-----------------
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Loan Party and CFN
Subsidiary set forth in the Loan Documents shall be true and correct on and
as of the date of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, except to the
extent such representations and warranties expressly relate to an earlier
date in which case such representations and warranties shall be true and
correct as of such earlier date.
43
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower
------------------------------------------
will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated and unaudited consolidating balance sheet and
related statements of operations, stockholders' equity and cash flows as of
the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Price
Waterhouse Coopers LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated and
consolidating balance sheets and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each of the first two fiscal
months of each fiscal quarter of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal month and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers
as presenting in all material respects
44
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(d) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.13 and 6.14
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines);
(f) on the Amendment Effective Date (as of the end of the most recent
calendar month ended prior to the Amendment Effective Date) and within 20
days after the end of each calendar month ended thereafter (and, if
requested by the Administrative Agent at any other time when the
Administrative Agent reasonably believes that the then-existing Borrowing
Base is materially inaccurate, as soon as reasonably available but no later
than 10 days after the request), a completed Borrowing Base Certificate in
the form of Exhibit G calculating and certifying the Borrowing Base as of
the last day of such calendar month (or as of such other requested date, as
the case may be), with supporting documentation (including, without
limitation, the documentation described in Schedule 1 to the Borrowing Base
Certificate), in each case signed on behalf of the Borrower by a Financial
Officer thereof and certified as being complete and correct in all material
respects;
(g) at least 30 days prior to the commencement of each fiscal year of
the Borrower, a detailed consolidated budget for such fiscal year
(including a projected consolidated balance sheet and related statements of
projected operations and cash flow as of the end of and for such fiscal
year) and, promptly when available, any significant revisions of such
budget;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may
be; and
45
(i) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to
---------- ---------------
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $500,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Borrower will
--------------------------------
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure or (iv) in any Loan
Party's Federal Taxpayer Identification Number. The Borrower agrees not to
effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01, the Borrower shall deliver to the Administrative Agent a certificate of a
Financial Officer (i) setting forth the information required pursuant to Section
2 of the Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this Section and (ii) certifying that all Uniform
46
Commercial Code financing statements (including fixture filings, as applicable)
or other appropriate filings, recordings or registrations, including all
refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (i) above
to the extent necessary to protect and perfect the security interests under the
Security Agreement for a period of not less than 18 months after the date of
such certificate (except as noted therein with respect to any continuation
statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The Borrower will, and
------------------------------
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
--------
liquidation or dissolution permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. The Borrower will, and will
----------------------
cause each of its Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP, (c) such contest effectively suspends collection of the contested
obligation and the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Borrower will, and will
-------------------------
cause each of its Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted.
SECTION 5.07. Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (i) adequate insurance for its insurable properties, all to such
extent and against such risks, including fire, casualty and other risks insured
against by extended coverage, as is customary with companies in the same or
similar businesses operating in the same or similar locations and (ii) such
other insurance as is required pursuant to the terms of any Security Document.
SECTION 5.08. Books and Records; Inspection and Collateral Review
---------------------------------------------------
Rights. (a) The Borrower will, and will cause each of its Subsidiaries to, keep
------
proper books of record and account in which full, true and correct entries in
conformity with GAAP in all material respects and all requirements of law are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
upon reasonable prior notice, to visit and inspect its financial records and
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
47
(b) The Borrower will, and will cause each of its Subsidiaries to,
permit any representatives designated by the Collateral Agent or the
Administrative Agent (including any consultants, accountants, lawyers and
appraisers retained by the Collateral Agent or the Administrative Agent) to
conduct evaluations and appraisals of the Borrower's computation of the
Borrowing Base and the assets included in the Borrowing Base, all at such
reasonable times and as often as reasonably requested. The Borrower shall pay
the reasonable fees and expenses of any such representatives retained by the
Collateral Agent or the Administrative Agent to conduct any such evaluation or
appraisal, including the reasonable fees and expenses associated with collateral
monitoring services performed by the Collateral Agent Services Group of the
Administrative Agent; provided that the Borrower shall not be required to pay
--------
such fees and expenses for more than two such evaluations or appraisals during
any calendar year unless an Event of Default has occurred and is continuing. To
the extent required by the Collateral Agent as a result of any such evaluation,
appraisal or monitoring, the Borrower also agrees to modify or adjust the
computation of the Borrowing Base (which may include maintaining additional
reserves, modifying the advance rates or modifying the eligibility criteria for
the components of the Borrowing Base).
(c) In the event that historical accounting practices, systems or
reserves relating to the components of the Borrowing Base are modified in a
manner that is adverse to the Lenders in any material respect, the Borrower will
agree to maintain such additional reserves (for purposes of computing the
Borrowing Base) in respect the components of the Borrowing Base and make such
other adjustments to its parameters for including the components of the
Borrowing Base as the Collateral Agent or the Administrative Agent, on behalf of
the Required Lenders, shall reasonably require based upon such modifications.
SECTION 5.09. Compliance with Laws. The Borrower will, and will cause
--------------------
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.10. Use of Proceeds and Letters of Credit. The proceeds of
-------------------------------------
the Term Loans will be used only for (a) general corporate purposes, including
working capital, acquisitions and capital expenditures, (b) the payment of fees
and expenses payable in connection with the Transactions and (c) the repayment
of certain Indebtedness owed by the Borrower to Xxxxxx Xxxxx in an aggregate
principal amount of approximately $4,000,000. The proceeds of Revolving Loans
will be used only for general corporate purposes, including working capital,
acquisitions and capital expenditures. No part of the proceeds of any Loan will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, for any purpose that entails a violation of, or that is
inconsistent with, any of the Regulations of the Board, including Regulations U
and X. Letters of Credit will be issued only to support obligations incurred by
the Borrower in the ordinary course of their businesses, including operating
leases with respect to premises used by the Borrower and its Subsidiaries (other
than any CFN Subsidiary) in the conduct of its business.
SECTION 5.11. Additional Subsidiaries. If any additional Subsidiary of
-----------------------
the Borrower (other than a CFN Subsidiary) is formed or acquired after the
Effective Date, the Borrower will notify the Administrative Agent and the
Lenders thereof and
48
(a) will cause such Subsidiary (other than a Foreign Subsidiary) to become a
party to the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement and each applicable Security Document in the manner provided therein
within three Business Days after such Subsidiary is formed or acquired and
promptly take such actions to create and perfect Liens on such Subsidiary's
assets to secure the Obligations as the Administrative Agent or the Required
Lenders shall reasonably request and (b) if any shares of capital stock or
Indebtedness of such Subsidiary are owned by or on behalf of any Loan Party,
will cause such shares and promissory notes evidencing such Indebtedness to be
pledged pursuant to the Pledge Agreement within three Business Days after such
Subsidiary is formed or acquired (except that, if such Subsidiary is a Foreign
Subsidiary, shares of common stock of such Subsidiary that are owned by or on
behalf of any Loan Party and that are to be pledged pursuant to the Pledge
Agreement may be limited to 65% of the outstanding shares of common stock of
such Subsidiary).
SECTION 5.12. Further Assurances. (a) The Borrower will, and will
------------------
cause each Subsidiary Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), that may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower also
agrees to provide to the Administrative Agent, from time to time upon request,
evidence reasonably satisfactory to the Administrative Agent as to the
perfection and priority of the Liens created or intended to be created by the
Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein) are acquired by the Borrower or
any Subsidiary Loan Party after the Effective Date (other than assets
constituting Collateral under the Security Agreement that become subject to the
Lien of the Security Agreement upon acquisition thereof), the Borrower will
notify the Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties.
SECTION 5.13. Federal Reserve Regulations. Neither the Borrower nor
---------------------------
any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying Margin Stock.
SECTION 5.14. Delivery of Securities. The Borrower shall deliver to
----------------------
the Collateral Agent 65% of the outstanding shares of common stock of IXL -
Madrid. S.A., and stock powers or instruments of transfer, endorsed in blank,
with respect to such stock certificates, or such other documents as may be
reasonably acceptable to the Administrative Agent, no later than December 31,
1998.
49
SECTION 5.15 [Intentionally Omitted]
SECTION 5.16. Bank Account. The Borrower will establish and maintain
------------
a cash concentration account (the "Chase Account") with the Collateral Agent
-------------
within three Business Days following the Effective Date. The Borrower will, and
the Borrower will cause each of its Subsidiaries (other than the CFN
Subsidiaries) to, transfer to the Chase Account on a weekly basis all its cash
other than prudent reserves to satisfy the weekly cash needs of such Subsidiary,
but in no event will the aggregate weekly cash needs of the Subsidiaries (other
than the CFN Subsidiaries) exceed $2,000,000; provided that (i) the Borrower
--------
will cause each of the banks (other than Chase) holding accounts of the Borrower
or its Subsidiaries in the ten locations in the United States which generate the
greatest percentage of revenues for the Borrower and its Subsidiaries, taken as
a whole, to enter into a depositary agreement, in a form to be mutually agreed
upon between the Administrative Agent and the Borrower, no later than December
31, 1998 and (ii) if an Event of Default has occurred and is continuing, the
Collateral Agent may, in its sole discretion, review the cash management system
of the Borrowers and its Subsidiaries and require the Borrower to institute a
new cash management system (including, without limitation, the use of a lockbox
system).
SECTION 5.17. Fees. None of the Borrower and its Subsidiaries shall
----
be obligated after the Effective Date to pay any fee to any Affiliate or third
party in respect of management, consulting or similar services other than the
advisory fees payable to Xxxxx pursuant to the Xxxxx Advisory Agreement.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:
SECTION 6.01. Indebtedness and Preferred Stock. (a) The Borrower
--------------------------------
will not, nor will it permit any of its Subsidiaries (other than the CFN
Subsidiaries, except at any time that loans or advances by the Borrower to any
of the CFN Subsidiaries pursuant to Section 6.04(d) shall remain outstanding)
to, create, incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the Effective Date and set forth in
Schedule 6.01, and any extensions, renewals or replacements of any such
Indebtedness that (A) do not increase the outstanding principal amount
thereof, (B) do not result in an earlier maturity date or decreased
weighted average life thereof and (C) are consummated on terms and subject
to conditions no more restrictive than are in existence with respect to
such Indebtedness as of the Effective Date; provided, that any Indebtedness
--------
owed by any of the CFN Subsidiaries to the Borrower or any Subsidiary Loan
Party shall not be reborrowed following repayment thereof;
50
(iii) Indebtedness of any Loan Party to any other Loan Party;
(iv) Guarantees by the Borrower of Indebtedness of any other
Subsidiary Loan Party permitted hereunder;
(v) Indebtedness of the Borrower, any Subsidiary Loan Party or any
CFN Subsidiary incurred to finance the acquisition, construction or
improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition
of any such assets or secured by a Lien on any such assets prior to the
acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
provided that (A) such Indebtedness is incurred prior to or within 90 days
--------
after such acquisition or the completion of such construction or
improvement and (B) (x) in the case of the Borrower and the Subsidiary Loan
Parties, the aggregate principal amount of Indebtedness permitted by this
clause (v) shall not exceed $1,000,000 at any time outstanding and (y) in
the case of the CFN Subsidiaries, the aggregate principal amount of
Indebtedness permitted by this clause (v) shall not exceed $2,000,000 at
any time outstanding;
(vi) Indebtedness of any Person that becomes a Subsidiary after the
Effective Date; provided that (A) such Indebtedness exists at the time such
--------
Person becomes a Subsidiary and is not created in contemplation of or in
connection with such Person becoming a Subsidiary and (B) the aggregate
principal amount of Indebtedness permitted by this clause (vi) shall not
exceed $2,000,000 at any time outstanding;
(vii) Indebtedness not yet due that arises pursuant to provisions in
acquisition agreements relating to purchase price adjustments in connection
with Permitted Acquisitions;
(viii) Permitted Subordinated Indebtedness; and
(ix) Permitted CFN Indebtedness.
(b) The Borrower will not, nor will it permit any of its
Subsidiaries (other than the CFN Subsidiaries) to issue or permit to exist any
shares of preferred stock, except shares of Permitted Preferred Stock.
SECTION 6.02. Liens. The Borrower will not, nor will the Borrower
-----
permit any of its Subsidiaries (other than the CFN Subsidiaries, except at any
time that loans or advances by the Borrower to any of the CFN Subsidiaries
pursuant to Section 6.04(d) shall remain outstanding) to, create, incur, assume
or permit to exist
51
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of any Subsidiary of
the Borrower existing on the Effective Date and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or asset
--------
of any Subsidiary of the Borrower and (B) such Lien shall secure only those
obligations that it secures on the Effective Date and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof.
(iv) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
Effective Date hereof prior to the time such Person becomes a Subsidiary;
provided that (A) such Lien is not created in contemplation of or in
--------
connection with such acquisition or such Person becoming a Subsidiary, as
the case may be, (B) such Lien shall not apply to any other property or
assets of the Borrower or any Subsidiary and (C) such Lien shall secure
only those obligations that it secures on the date of such acquisition or
the date such Person becomes a Subsidiary, as the case may be, and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;
(v) Liens on fixed or capital assets acquired, constructed
or improved by the Borrower or any Subsidiary; provided that (A) such
--------
security interests secure Indebtedness permitted by clause (v) of Section
6.01, (B) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring, constructing
or improving such fixed or capital assets and (D) such security interests
shall not apply to any other property or assets of the Borrower or any
Subsidiary; and
(vi) Liens (other than those permitted by paragraphs (i) through (v)
above and other than Liens on Collateral) securing liabilities permitted
hereunder in an aggregate amount not exceeding $500,000 at any time
outstanding.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, nor
-------------------
will the Borrower permit any of its Subsidiaries (other than the CFN
Subsidiaries) to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Subsidiary (other than
a CFN Subsidiary) may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Subsidiary may merge into any
Subsidiary Loan Party in a transaction in which the surviving entity is a
Subsidiary Loan Party, (iii) any Foreign Subsidiary may merge
52
into any other Foreign Subsidiary and (iv) any Subsidiary of the Borrower may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
--------
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.
(b) The Borrower will not, nor will the Borrower permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.
(c) The Borrower will not engage in any business or activity other
than (i) the ownership of all the outstanding shares of capital stock of the
Subsidiary Loan Parties and any Foreign Subsidiaries, (ii) the maintenance of
investments permitted under Section 6.04 and (iii) activities incidental
thereto. The Borrower will not own or acquire any assets (other than shares of
capital stock of the Subsidiary Loan Parties, CFN or any Foreign Subsidiaries,
cash and Permitted Investments) or incur any liabilities (other than
Indebtedness permitted by Section 6.01, liabilities under the Loan Documents,
liabilities imposed by law, including tax liabilities, and other liabilities
incidental to its existence and permitted business and activities).
SECTION 6.04. Investments, Loans, Advances, Guarantees and
--------------------------------------------
Acquisitions. The Borrower will not, nor will the Borrower permit any of its
------------
Subsidiaries (other than the CFN Subsidiaries) to, purchase, hold or acquire
(including pursuant to any merger with any Person that was not a wholly owned
Subsidiary prior to such merger) any capital stock, evidences of indebtedness or
other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, Guarantee
any obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit, except:
(a) Permitted Investments;
(b) investments existing on the Effective Date and set forth on
Schedule 6.04, to the extent such investments would not be permitted under
any other clause of this Section;
(c) investments by the Borrower in the capital stock of CFN, the
Subsidiary Loan Parties and any Foreign Subsidiaries and investments by any
Subsidiary Loan Party or CFN Subsidiary in the capital stock of its
Subsidiaries; provided that (i) any such shares of capital stock owned by
--------
or on behalf of a Loan Party shall be pledged pursuant to the Pledge
Agreement (subject to the limitations applicable to common stock of a
Foreign Subsidiary referred to in Section 5.12), (ii) the Subsidiary Loan
Parties shall not make any investment in, loan or advance to or guarantee
in respect of any CFN Subsidiary, (iii) any investments by the Borrower in
any of the CFN Subsidiaries after the Effective Date shall be made as loans
and evidenced by a promissory note pledged pursuant to the Pledge Agreement
and (iv) the sum of the amount of such investments by the Borrower in the
CFN Subsidiaries plus
53
the amount of loans and advances by the Borrower to the CFN Subsidiaries
shall not exceed, in the aggregate at any time outstanding, $5,000,000 plus
the amount of any investment by the Borrower in the CFN Subsidiaries
permitted under clause (b) above; provided further that, from and after
-------- -------
November 2, 1998, the total amount of loans and advances by the Borrower to
the CFN Subsidiaries shall not exceed, in the aggregate at any time
outstanding, $1,300,000.
(d) loans or advances made by (i) any Subsidiary Loan Party to any
other Subsidiary Loan Party, (ii) any Foreign Subsidiary to any other
Foreign Subsidiary and (iii) subject to the limitations set forth in clause
(c) above, the Borrower to any CFN Subsidiary; provided that any such loans
--------
and advances by a Loan Party shall be evidenced by a promissory note
pledged pursuant to the Pledge Agreement;
(e) Guarantees by the Borrower constituting Indebtedness permitted by
Section 6.01; provided that no Loan Party may enter into any Guarantee in
--------
respect of a CFN Subsidiary;
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(g) Permitted Acquisitions;
(h) prepaid expenses in the ordinary course of business;
(i) loans to employees of the Borrower and the Subsidiaries in their
capacity as such, in an aggregate principal amount not to exceed $250,000
at any time outstanding;
(j) Hedging Agreements permitted under Section 6.07;
(k) investments in Joint Ventures in an aggregate amount not to
exceed $500,000;
(l) promissory notes received upon a sale of assets permitted under
Section 6.05;
(m) investments in an employee stock ownership plan sponsored by the
Borrower (i) if such investments are made with the Borrower's common stock
or are to be used by such employee stock ownership plan to immediately
purchase common stock from the Borrower or (ii) in an amount up to $75,000
per year for operational expenses of such employee stock ownership plan;
(n) Loans or Advances to Xxxxxx.Xxx, a Delaware corporation, by the
Borrower in an aggregate amount not to exceed $1,000,000; provided that any
--------
such loans or advances shall be evidenced by a promissory note pledged
pursuant to the Pledge Agreement;
54
(o) Loans by the Borrower to Foreign Subsidiaries in an aggregate
amount not to exceed $5,000,000; provided that any such loans shall be
--------
evidenced by a promissory note pledged pursuant to the Pledge Agreement;
(p) other investments in an aggregate amount not to exceed $250,000
at any time outstanding; and
(q) non-recourse loans made by the Borrower to any of its employees
in connection with the purchase of stock of the Borrower by such employee;
provided that (i) such employee pledges such purchased stock as collateral
--------
with respect to such non-recourse loan and (ii) any such transaction does
not involve the payment of cash by the Borrower to such employee.
SECTION 6.05. Asset Sales. The Borrower will not, nor will the
-----------
Borrower permit any of its Subsidiaries (other than the CFN Subsidiaries) to,
sell, transfer, lease or otherwise dispose of any asset, including any capital
stock owned by any of them, nor will the Borrower permit any of its Subsidiaries
(other than the CFN Subsidiaries) to issue any additional shares of its capital
stock or other ownership interest in such Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) sales, transfers and dispositions by any Subsidiary of the
Borrower to any other Subsidiary of the Borrower; provided that (i) capital
--------
stock of a Subsidiary Loan Party shall not be sold or transferred to a
Subsidiary that is not a Subsidiary Loan Party and (ii) any such sales,
transfers or dispositions involving a Subsidiary that is not a Subsidiary
Loan Party shall be made in compliance with Section 6.09; and
(c) sales, transfers and dispositions of assets by Subsidiaries of
the Borrower (other than capital stock of a Subsidiary) that are not
permitted by any other clause of this Section; provided that the
--------
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this clause (c) shall not exceed $500,000 in
the aggregate;
provided that all sales, transfers, leases and other dispositions permitted
--------
hereby shall be made for fair value and for at least 80% cash consideration.
SECTION 6.06. Sale and Lease-Back Transactions. The Borrower will
--------------------------------
not, nor will the Borrower permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except for any such sale of
fixed or capital assets that is consummated within 90 days after the date the
Borrower, any Subsidiary Loan Party or any CFN Subsidiary, as applicable,
acquires or finished construction of such fixed or capital asset.
55
SECTION 6.07. Hedging Agreements. The Borrower will not, nor will
------------------
the Borrower permit any of its Subsidiaries (other than the CFN Subsidiaries)
to, enter into any Hedging Agreement, other than Hedging Agreements entered into
by the Borrower in the ordinary course of business to hedge or mitigate risks to
which the Borrower or its Subsidiaries (other than the CFN Subsidiaries) is
exposed in the conduct of its business or the management of its liabilities.
SECTION 6.08. Restricted Payments: Certain Payments of Indebtedness.
-----------------------------------------------------
(a) The Borrower will not, nor will the Borrower permit any of its Subsidiaries
(other than the CFN Subsidiaries) to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except (i) the Borrower may declare and pay
dividends ratably with respect to its capital stock payable solely in additional
shares of its common stock, (ii) any Subsidiary Loan Party may declare and pay
dividends ratably with respect to its capital stock; (iii) any Subsidiary of a
Subsidiary Loan Party may declare and pay dividends ratably with respect to its
capital stock, (iv) the Borrower's Subsidiaries may make payments to the
Borrower pursuant to and in accordance with the Tax Sharing Agreement and (v)
the Borrower may, pursuant to and in accordance with stock option plans, warrant
plans or other benefit plans for management or employees of the Borrower and its
Subsidiaries, make Restricted Payments not exceeding $500,000 during any fiscal
year. The Borrower will not permit any CFN Subsidiary to make any payment
(whether in cash, securities or other property) on account of the purchase,
redemption, retirement, acquisition, cancelation or termination of any shares of
capital stock of the Borrower or any option, warrant or other right to acquire
any such shares.
(b) The Borrower will not, nor will the Borrower permit any of its
Subsidiaries (other than the CFN Subsidiaries) to, make or agree to pay or make,
directly or indirectly, any payment or other distribution (whether in cash
securities or other property) of or in respect of principal of or interest on
any Indebtedness, or any payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancelation or
termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal payments
as and when due in respect of any Indebtedness (to the extent not
prohibited by applicable subordination provisions, if any);
(iii) refinancings of Indebtedness to the extent permitted by Section
6.01; and
(iv) payment of Indebtedness permitted by Section 6.01(ii), (iii),
(v), (vi), (vii) or (viii).
SECTION 6.09. Transactions with Affiliates. Except as set forth in
----------------------------
Schedule 6.09, the Borrower will not nor will the Borrower permit any of its
Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any
56
other transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business that are at prices and on terms and conditions not
less favorable to any Subsidiary of the Borrower than could be obtained on an
arm' s-length basis from unrelated third parties, (b) transactions between or
among the Loan Parties not involving any other Affiliate and (c) any Restricted
Payment permitted by Section 6.08.
SECTION 6.10. Restrictive Agreements. The Borrower will not, nor
----------------------
will the Borrower permit any Subsidiary Loan Party to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary Loan Party to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Subsidiary
Loan Party to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to any other Subsidiary
Loan Party or to Guarantee Indebtedness of any other Subsidiary Loan Party;
provided that (i) the foregoing shall not apply to restrictions and conditions
--------
imposed by law or by any Loan Document, (ii) the foregoing shall not apply to
restrictions and conditions existing on the Effective Date identified on
Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale;
provided such restrictions and conditions apply only to the Subsidiary that is
--------
to be sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases restricting the assignment thereof.
SECTION 6.11. Amendment of Material Documents. The Borrower will not,
-------------------------------
nor will the Borrower permit any of its Subsidiaries to, amend, modify or waive
any of its rights under (a) its certificate of incorporation, by-laws or other
organizational documents (other than the CFN Subsidiaries following the CFN
Wholly owned Period), (b) the Tax Sharing Agreement or (c) any of the
instruments, agreements or documents evidencing or related to the Borrower's
Class A Preferred Stock, Class B Preferred Stock or Class C Preferred Stock,
Permitted Preferred Stock and any Permitted Subordinated Indebtedness; provided
--------
that the Borrower or any Subsidiary may amend, modify or waive any of its rights
under clause (c) above if such amendment, modification or waiver (i) is on terms
no less favorable to the Borrower and its Subsidiaries than would be obtained on
an arm's length basis from unrelated third parties and (ii) is not, individually
or in the aggregate, in any manner adverse to the Lenders in any material
respect.
SECTION 6.12. Subsidiaries. The Borrower will not have any
------------
Subsidiary (other than the CFN Subsidiaries) unless such Subsidiary is wholly
owned, directly or indirectly, by the Borrower, and the Borrower will not take
any action that would result in any Subsidiary (other than the CFN Subsidiaries)
ceasing to be a wholly owned Subsidiary of the Borrower; provided that the
--------
Borrower may permit the sale of up to 10% of the outstanding capital stock of
iXL - Madrid, S.A.
57
SECTION 6.13. Minimum Consolidated EBITDA. The Borrower will not
---------------------------
permit Consolidated EBITDA of the Borrower and its Subsidiaries for any of the
following periods ending on any date set forth below to be less than the amount
set forth below opposite such date:
Date Amount
---- ------
Six Months Ending December 31, $(13,000,000)
1998
Nine Months Ending March 31, (16,000,000)
1999
Twelve Months Ending June 30, (14,000,000)
1999
Twelve Months Ending September (5,000,000)
30, 1999
Twelve Months Ending December 3,000,000
31, 1999
Twelve Months Ending March 31, 3,000,000
2000
Twelve Months Ending June 30, 6,000,000
2000
Twelve Months Ending September 6,000,000
30, 2000
Twelve Months Ending December 10,000,000
31, 2000
Twelve Months Ending March 31, 10,000,000
2001
Twelve Months Ending June 30, 10,000,000
2001
SECTION 6.14. Total Debt to Contributed Capital. The Borrower will
---------------------------------
not permit the ratio of Total Debt to Contributed Capital as of any date to be
in excess of 1.00 to 1.00.
SECTION 6.15. Fiscal Year. The Borrower will not change the end of
-----------
its fiscal year from December 31 to any other date.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
58
(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement or any other Loan Document, when
and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of any Loan Party in or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or
in connection with any Loan Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been incorrect (in the
case of any representation or warranty that is not qualified as to
materiality, in any material respect) when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01(f), 5.02, 5.04 (with
respect to the existence of the Borrower) or 5.10 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);
(f) the Borrower or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due
and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (g)
--------
shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such
Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Borrower or any of its Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any of
its Subsidiaries or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered;
59
(i) the Borrower or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (h)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any of its Subsidiaries or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any of its Subsidiaries shall become unable,
admit in writing its inability or fail generally to pay its debts as they
become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against the Borrower, any
of its Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
of its Subsidiaries to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral, with the priority required by
the applicable Security Document, except (i) as a result of the sale or
other disposition of the applicable Collateral in a transaction permitted
under the Loan Documents or (ii) as a result of the Administrative Agent's
failure to maintain possession of any stock certificates, promissory notes
or other instruments delivered to it under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower;
60
and in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any of its Subsidiaries or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall not be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other
61
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor the
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent that
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender
62
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or related agreement
or any document furnished hereunder or thereunder.
The provisions of this Article applicable to the Administrative Agent
also shall apply to the Collateral Agent in its capacity as such.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
-------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to iXL Enterprises, Inc., 0000 Xxxxx Xxxxxx,
X.X., Xxxxxxx, XX 00000, Attention of Xxxxx Xxxxxxxx (Telecopy No.404-267-
3801);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Loan
and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention of Xxxx Xxxxxxxx (Telecopy No. (000) 000-0000),
with a copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx 00000,
Attention of Xxxx Xxxxxx (Telecopy No. 212-972-0009);
(c) if to the Issuing Bank, to The Chase Manhattan Bank, Loan and
Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention of Xxxx Xxxxxxxx (Telecopy No. (000) 000-0000), with
a copy to The Chase Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx 00000,
Attention of Xxxx Xxxxxx (Telecopy No. 212-972-0009); and
(d) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
-------------------
Administrative Agent, the Issuing Bank or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies
63
that they would otherwise have. No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by the Administrative Agent and the Loan Party or Loan Parties that are
parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
--------
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the Term Maturity Date or the Revolving Maturity Date or
the scheduled date of payment of the principal amount of any LC Disbursement, or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.15(b) or (c) in a manner that would alter the pro rata
sharing of payments required thereby, without the written consent of each
Lender, (v) change any of the provisions of this Section or the definition of
the term "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release any
Loan Party from its Guarantee under the Guarantee Agreement (except as expressly
provided in the Guarantee Agreement), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (vii) release all or
substantially all of the Collateral from the Liens of the Security Documents,
without the written consent of each Lender or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each affected Class; provided further that (A) no such agreement shall
----------------
amend, modify or otherwise affect the rights or duties of the Administrative
Agent or the Issuing Bank without the prior written consent of the
Administrative Agent or the Issuing Bank, as the case may be, and (B) any
waiver, amendment or modification of this Agreement that by its terms affects
the rights or duties under this Agreement of the Revolving Lenders (but not the
Term Lenders) or the Term Lenders (but not the Revolving Lenders) may be
affected by an agreement or agreements in writing entered into by the Borrower
and the requisite percentage in interest of the affected Class of Lenders. If,
in connection with any proposed change, waiver, discharge or termination of or
to any of the provisions of this Agreement as contemplated by this Section
9.02(b), the consent of the Required Lenders is obtained but the consent of one
or more other Lenders whose consent is
64
required pursuant to one of the provisos to the immediately preceding sentence
is not obtained, then the Borrower may, at its sole expense and effort, upon
notice to such non-consenting Lender or Lenders and the Administrative Agent,
require such non-consenting Lender or Lenders to assign or delegate (so long as
all non-consenting Lenders are so required), without recourse (in accordance
with and subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement to an assignee (so long
as such assignee at the time of the assignment consents to such proposed change,
waiver, discharge or termination) that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
--------
that (i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Revolving Commitment is being assigned, the
Issuing Bank), which consent shall not unreasonably be withheld, and (ii) such
non-consenting Lender shall have received payment of an amount equal to the
outstanding principal amount of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts).
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
----------------------------------
agrees to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent and their Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent and the Collateral Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments, modifications or waivers of the provisions thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out-of-
pocket expenses incurred by the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender, in connection with the enforcement or protection of its rights in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans made or Letters of Credit issued hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.
(b) The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, the Issuing Bank and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an "Indemnitee")
----------
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
65
Hazardous Materials on or from any property currently or formerly owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
--------
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by them to the Administrative Agent or the Issuing Bank under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Issuing Bank, as the case may be, such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
--------
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent or the Issuing Bank in its capacity as such. For purposes
hereof, a Lender's "pro rata share" shall be determined based upon its share of
the sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing
Bank and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it); provided that (i) except
--------
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower and the
66
Administrative Agent (and, in the case of an assignment of all or a portion of a
Revolving Commitment or any Lender's obligations in respect of its LC Exposure,
the Issuing Bank) must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) except in the case of
an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment or Loans, the
amount of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $2,500,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, except that this clause (iii) shall not be construed to
prohibit the assignment of a proportionate part of all the assigning Lender's
rights and obligations in respect of one Class of Commitments or Loans, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided further that any
----------------
consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (h) or (i) of Article VII has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.13, 2.14 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
--------
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders may treat each Person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by any of the Borrower, the Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any
67
written consent to such assignment required by paragraph (b) of this Section,
the Administrative Agent shall accept such Assignment and Acceptance and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
-----------
rights and obligations under this Agreement (including all or a portion of its.
Commitment and the Loans owing to it); provided that (i) such Lender's
--------
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Bank and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce the Loan Documents and to approve any amendment, modification or waiver
of any provision of the Loan Documents; provided that such agreement or
--------
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 9.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a
Lender; provided such Participant agrees to be subject to Section 2.15(c) as
--------
though it were a Lender.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.12 or 2.14 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.14(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
--------
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations and
--------
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the
68
making of any Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.12, 2.13, 2.14 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement
----------------------------------------
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Document and any separate letter agreements with respect to fees payable to
the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Set-off. If an Event of Default shall have
----------------
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of set-off)
that such Lender may have.
69
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of
--------------------------------------------------
Process. (a) This Agreement shall be construed in accordance with and governed
-------
by the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against the Borrower or its respective properties in the courts of any
jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
--------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
--------
Contents used herein are for convenience of reference only, are not part of this
70
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Administrative Agent, the
---------------
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement, (g) with the consent of
the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
-----------
relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; provided that, in the
--------
case of information received from the Borrower after the Effective Date, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything
------------------------
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts that are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") that may be contracted for, charged,
-------------
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
71
SECTION 9.14. Effect of Amendment and Restatement. Upon the
-----------------------------------
effectiveness of the amendment and restatement of the Original Credit Agreement
in the form hereof:
(a) the Original Credit Agreement (including all Exhibits and
Schedules thereto) will be amended and restated in its entirety as set
forth herein; and
(b) all Loans outstanding under the Original Credit Agreement as
of the Amendment Effective Date shall continue to remain outstanding
hereunder;
provided that the amendment and restatement of the Original Credit Agreement in
the form hereof shall not affect the Borrower's obligations accrued in respect
of any principal, interest, fees or other amounts under the Original Credit
Agreement, discharge or release the Lien under any Security Document, constitute
a novation of the obligations and liabilities existing under the Original Credit
Agreement, or be deemed to evidence or constitute repayment of all or any
portion of any such obligations or liabilities.
72
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
iXL ENTERPRISES, INC.,
by /s/ M. Xxxxx Xxxxxxxx
----------------------------
Name: M. Xxxxx Xxxxxxxx
Title: Chief Financial Officer/EVP
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent,
by /s/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
73
SCHEDULES:
---------
Schedule 2.01 - Commitments
Schedule 3.04 - Contingent Liabilities
Schedule 3.05 - Owned or Leased Property
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Subsidiaries
Schedule 3.13 - Insurance
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.09 - Disclosed Affiliate Transactions
Schedule 6.10 - Existing Restrictions
EXHIBITS:
--------
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Xxxxxx & Xxxxxx, Counsel to Loan Parties
Exhibit B-2 -- Form of Opinion of Debevoise & Xxxxxxxx, Counsel to Loan Parties
Exhibit D -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E -- Form of Pledge Agreement
Exhibit G -- Form of Borrowing Base Certificate
ANNEXES:
-------
Annex 1 -- Perfection Certificate
EXHIBIT K
GUARANTEE AGREEMENT dated as of July 29, 1998, among each of
the subsidiaries listed on Schedule I hereto (each such
subsidiary individually, a "Loan Party Guarantor" and
--------------------
collectively, the "Loan Party Guarantors") of IXL HOLDINGS, INC.
---------------------
(the "Borrower"), CONSUMER FINANCIAL NETWORK, INC., a Delaware
--------
corporation ("CFN"), CFN AGENCY, INC., a Delaware corporation
---
("Agency"), CFN FINANCE, INC., a Delaware corporation ("Finance"
------ -------
and together with CFN and Agency, the "CFN Guarantors"), and THE
--------------
CHASE MANHATTAN BANK, a New York banking corporation ("Chase"),
-----
as collateral agent (the "Collateral Agent") for the Lenders
----------------
under the Credit Agreement referred to below.
Reference is made to the Credit Agreement dated as of July 29, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among the Borrower, the lenders from time to time party thereto
---------
(the "Lenders") and Chase, as administrative agent (the "Administrative Agent")
------- --------------------
for the Lenders. Capitalized terms used herein and not defined herein shall have
the meanings assigned to such terms in the Credit Agreement or the Security
Agreement referred to therein. For purposes of this Agreement, "Guarantors"
----------
shall be defined as the Loan Party Guarantors and, until such time as the CFN
Guarantors are terminated as Guarantors hereunder pursuant to Section 10 of this
Agreement, the CFN Guarantors.
The Lenders have agreed to make Loans to the Borrower, and the Issuing Bank
has agreed to issue Letters of Credit for the account of the Borrower, pursuant
to, and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Borrower has requested that the Guarantors guarantee the
Obligations (as defined below) by entering into this Agreement. Each of the
Guarantors is a direct or indirect Subsidiary of the Borrower and each of the
Guarantors acknowledges that it will derive substantial benefit from the making
of the Loans by the Lenders, and the issuance of the Letters of Credit by the
Issuing Bank. The obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit are conditioned on, among other things, the
execution and delivery by the Guarantors of a Guarantee Agreement in the form
hereof. As consideration therefor and in order to induce the Lenders to make
Loans and the Issuing Bank to issue Letters of Credit, the Guarantors are
willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees,
---------
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, (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, (ii) each payment required to be
made by the Borrower under the Credit Agreement in respect of any Letter of
Credit, when and as due, including payments in respect of reimbursement of
disbursements, interest thereon and obligations to provide cash collateral and
(iii) 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 Loan Parties to the Secured
Parties under the Credit Agreement and the other Loan Documents, (b) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents, (c) unless otherwise agreed upon in writing by the applicable Lender
party thereto, the due and punctual payment and performance of all obligations
of the Borrower, monetary or otherwise, under each Hedging Agreement entered
into with any counterparty that was a Lender (or an Affiliate thereof) at the
time such Hedging Agreement was entered into and (d) the due and punctual
payment and performance of all obligations in respect of overdrafts and related
liabilities owed to the Administrative Agent or any of its Affiliates and
arising from treasury, depository and cash management services in connection
with any automated clearing house transfers of funds (all the monetary and other
obligations described in the preceding clauses (a) through (d) being
collectively called the "Obligations"). Each Guarantor further agrees that the
-----------
Obligations may be extended or renewed, in whole or in part, without notice to
or further assent from it, and that it will remain bound upon its guarantee
notwithstanding any extension or renewal of any Obligation.
Anything contained in this Agreement to the contrary notwithstanding, the
obligations of each Guarantor hereunder shall be limited to a maximum aggregate
amount equal to the greatest amount that would not render such Guarantor's
2
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "Fraudulent Transfer
-------------------
Laws"), in each case after giving effect to all other liabilities of such
----
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (a) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(b) under any Guarantee of senior unsecured indebtedness or Indebtedness
subordinated in right of payment to the Obligations which Guarantee contains a
limitation as to maximum amount similar to that set forth in this paragraph,
pursuant to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such Guarantor
pursuant to (i) applicable law or (ii) any agreement providing for an equitable
allocation among such Guarantor and other Affiliates of the Borrower of
obligations arising under Guarantees by such parties (including the Indemnity,
Subrogation and Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
----------------------
applicable law, each Guarantor waives presentment to, demand of payment from and
protest to the other Loan Parties of any of the Obligations, and also waives
notice of acceptance of its guarantee and notice of protest for nonpayment. To
the fullest extent permitted by applicable law, the obligations of each
Guarantor hereunder shall not be affected by (a) the failure of the Collateral
Agent or any other Secured Party to assert any claim or demand or to enforce or
exercise any right or remedy against the Borrower or any other Guarantor under
the provisions of the Credit Agreement, any other Loan Document or otherwise,
(b) any rescission, waiver, amendment or modification of, or any release from
any of the terms or provisions of this Agreement, any other Loan Document, any
Guarantee or any other agreement, including with respect to any other Guarantor
under this Agreement, or (c) the failure to perfect any security interest in, or
the release of, any of the security held by or on behalf of the Collateral Agent
or any other Secured Party.
3
SECTION 3. Security. Each of the guarantors authorizes the Collateral
--------
Agent and each of the other Secured Parties to (a) take and hold security
pursuant to the Security Documents for the payment of this Guarantee and the
Obligations and exchange, enforce, waive and release any such security, (b)
apply such security and direct the order or manner of sale thereof as they in
their sole discretion may determine and (c) release or substitute any one or
more endorsees, other Guarantors or other obligors.
SECTION 4. Guarantee of Payment. Each Guarantor further agrees that its
--------------------
guarantee constitutes a guarantee of payment when due and not of collection, and
waives any right to require that any resort be had by the Collateral Agent or
any other Secured Party to any of the security held for payment of the
Obligations or to any balance of any deposit account or credit on the books of
the Collateral Agent or any other Secured Party in favor of the Borrower or any
other Person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations
-----------------------------------------
of each Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Obligations, and shall not be
subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
obligations or otherwise. Without limiting the generality of the fore-going,
the obligations of each Guarantor hereunder shall not be discharged or impaired
or otherwise affected by the failure of the Collateral Agent or any other
Secured Party to assert any claim or demand or to enforce any remedy under the
Credit Agreement, any other Loan Document or any other agreement, by any waiver
or modification of any provision of any thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the Obligations, or by any
other act or omission that may or might in any manner or to any extent vary the
risk of any Guarantor or that would otherwise operate as a discharge of any
Guarantor as a matter of law or equity (other than the indefeasible payment in
full in cash of all the obligations.)
SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted
---------------------------
by applicable law, each of the Guarantors waives any defense based on or arising
out of any defense of the Borrower or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the Borrower,
4
other than the final and indefeasible payment in full in cash of the
Obligations. The Collateral Agent and the other Secured Parties may, at their
election, foreclose on any security held by one or more of them by one or more
judicial or nonjudicial sales, accept an assignment of any such security in lieu
of foreclosure, compromise or adjust any part of the Obligations, make any other
accommodation with the Borrower or any other guarantor or exercise any other
right or remedy available to them against the Borrower or any other guarantor,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Obligations have been fully, finally and
indefeasibly paid in cash. Pursuant to applicable law, each of the Guarantors
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower or any other Guarantor or guarantor, as the case may be, or any
security.
SECTION 7. Agreement to Pay; Subordination. In furtherance of the foregoing
-------------------------------
and not in limitation of any other right that the Collateral Agent or any other
Secured Party has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when and as the same shall become due, whether at maturity, by acceleration,
after notice of prepayment or otherwise, each Guarantor hereby promises to and
will forthwith pay, or cause to be paid, to the Collateral Agent or such other
Secured Party as designated thereby in same day funds the amount of such unpaid
Obligations. Upon payment by any Guarantor of any sums to the Collateral Agent
or any Secured Party as provided above, all rights of such Guarantor against any
other Loan Party arising as a result thereof by way of right of subrogation,
contribution, reimbursement, indemnity or otherwise shall in all respects be
subordinate and junior in right of payment to the prior indefeasible payment in
full in same day funds of all the Obligations. In addition, any indebtedness of
any other Loan Party now or hereafter held by any Guarantor is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. If any amount shall erroneously be paid to any Guarantor on account
of (i) such subrogation, contribution, reimbursement, indemnity or similar right
or (ii) any such indebtedness of a Loan Party, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith be paid to the
Collateral Agent to be credited against the payment of the Obligations, whether
matured or unmatured, in accordance with the terms of the Loan Documents.
5
SECTION 8. Information. Each of the Guarantors assumes all responsibility
-----------
for being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the Collateral
Agent or the other Secured Parties will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 9. Representations and Warranties. Each of the Guarantors
------------------------------
represents and warrants as to itself that all representations and warranties
relating to it contained in the Credit Agreement are true and correct.
SECTION 10. Termination. The Guarantees made hereunder (a) shall terminate
-----------
when all the Obligations have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the LC Exposure
has been reduced to zero and the Issuing Bank has no further obligation to issue
Letters of Credit under the Credit Agreement and (b) shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Secured Party or any Guarantor upon the bankruptcy or reorganization of the
Borrower, any Guarantor or otherwise; provided, however, that following the last
-------- -------
day of the CFN Wholly-Owned Period, the rights and obligations of the CFN
Guarantors (other than obligations of the CFN Guarantors to make payments
pursuant to Section 7 of this Agreement that arose during the CFN Wholly-Owned
Period) under this Agreement shall automatically be deemed to have terminated
and this Agreement shall be of no further effect with respect thereto.
SECTION 11. Binding Effect; Several Agreement; Assignments. Whenever in
----------------------------------------------
this Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
as to any Guarantor when a counterpart hereof executed on behalf of such
Guarantor shall have been delivered to the Collateral Agent, and a counterpart
hereof shall have been executed on behalf of the Collateral Agent, and
thereafter shall be binding upon such Guarantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Guarantor,
6
the Collateral Agent and the other Secured Parties, and their respective
successors and assigns, except that no Guarantor shall have the right to assign
its rights or obligations hereunder or any interest herein (and any such
attempted assignment shall be void). If all of the capital stock of a Guarantor
is sold, transferred or otherwise disposed of (other than to a Loan Party)
pursuant to a transaction permitted by the Credit Agreement (or any waiver
thereof), such Guarantor shall be released from its obligations under this
Agreement without further action. This Agreement shall be construed as a
separate agreement with respect to each Guarantor and may be amended, modified,
supplemented, waived or released with respect to any Guarantor without the
approval of any other Guarantor and without affecting the obligations of any
other Guarantor hereunder.
SECTION 12. Waivers; Amendment. (a) No failure or delay of the
------------------
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other or right power. The rights and remedies of the Collateral Agent hereunder
and of the other Secured Parties under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to a written agreement entered into between the
Guarantors with respect to which such waiver, amendment or modification relates
and the collateral Agent, with the prior written consent of the Required Lenders
(except as otherwise provided in the Credit Agreement).
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7
SECTION 14. Notices. All communications and notices hereunder shall be in
-------
writing and given as provided in Section 9.01 of the Credit Agreement. All
communications and notices hereunder to each Guarantor shall be given to it in
care of the Borrower.
SECTION 15. Survival of Agreement; Severability. (a) All covenants,
-----------------------------------
agreements, representations and warranties made by the Guarantors herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the issuance of the
Letters of Credit by the Issuing Bank regardless of any investigation made by
the Secured Parties or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or the LC Exposure does not equal zero and as long as the
Commitments have not been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 16. Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provide in Section 11 of this Agreement. Delivery of an executed signature page
to this Agreement by facsimile transmission shall be as effective as delivery of
a manually executed counterpart of this Agreement.
SECTION 17. Rules of Interpretation. The rules of interpretation
-----------------------
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
8
SECTION 18. Jurisdiction; Consent to Service of Process. (a) Each Guarantor
-------------------------------------------
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that, to the
extent permitted by applicable law, all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement or the other Loan Documents
against any Guarantor or its properties in the courts of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
court referred to in paragraph (a) of this Section 18. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 14 of this Agreement.
Nothing in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law.
SECTION 19. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
--------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
9
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. Additional Guarantors. Pursuant to Section 5.11 of the Credit
----------------------
Agreement, each Loan Party and, until such time as the CFN Guarantors are
released from their respective obligations pursuant to Section 10 of this
Agreement, each subsidiary of CFN, that was not in existence on the date of the
Credit Agreement is required to enter into this Agreement as a Guarantor upon
becoming a Subsidiary Loan Party. Upon execution and delivery after the date
hereof by the Collateral Agent and such a Subsidiary of Holdings of an
instrument in the form of Annex 1, such Subsidiary shall become a Guarantor
hereunder with the same force and effect as if originally named as a Guarantor
herein. The execution and delivery of any instrument adding an additional
Guarantor as a party to this Agreement shall not require the consent of any
other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Agreement.
SECTION 21. Right of Setoff. If an Event of Default shall have occurred and
----------------
be continuing, each Secured Party is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other Indebtedness at any time owing by such Secured Party to or
for the credit or the account of any Guarantor against any or all the
obligations of such Guarantor now or hereafter existing under this Agreement and
the other Loan Documents held by such Secured Party, irrespective of whether or
not such Secured Party shall have made any demand under this Agreement or any
other Loan Document and although such obligations may be unmatured. The rights
of each Secured Party under this
10
Section 21 are in addition to other rights and remedies (including other rights
of setoff) which such Secured Party may have.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
IXL HOLDINGS, INC.,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name:
Title:
EACH OF THE LOAN PARTY
GUARANTORS LISTED ON
SCHEDULE I HERETO,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name:
Title: Authorized Officer
CONSUMER FINANCIAL NETWORK, INC.,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name:
Title:
CFN AGENCY, INC.,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name:
Title:
CFN FINANCE, INC.,
by
/s/ Xxxxx X. Xxxxxx
---------------------
Name:
Title:
11
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
/s/ Xxxx X. Xxxxxx
------------------------------
Name:
Title:
12
SCHEDULE I TO THE
GUARANTEE AGREEMENT
Loan Party Guarantors
---------------------
Boxtop Interactive, Inc.
Creative Video Library, Inc.
Entrepreneur Television, Inc.
iXL, Inc.
iXL-Boston, Inc.
IXL-Charlotte, Inc.
iXL-Chicago, Inc.
iXL-DC, Inc.
iXL-Denver, Inc.
iXL-Los Angeles, Inc.
IXL-Memphis, Inc.
iXL-New York, Inc.
iXL-Richmond, Inc.
iXL-San Diego, Inc.
iXL-San Francisco, Inc.
iVisit, Inc.
Annex 1 to the
Guarantee Agreement
Form of Supplement
EXECUTION COPY
SECURITY AGREEMENT dated as of July 29, 1998, among IXL
HOLDINGS, INC., a Delaware corporation (the "Borrower"), each
--------
subsidiary of the Borrower listed on Schedule I hereto (each such
subsidiary individually, a "Loan Party Guarantor" and
--------------------
collectively, the "Loan Party Guarantors"; the Loan Party
---------------------
Guarantors and the Borrower are referred to collectively herein
as the "Grantors") and THE CHASE MANHATTAN BANK, a New York
--------
banking corporation ("Chase"), as collateral agent (in such
-----
capacity, the "Collateral Agent") for the Secured Parties (as
----------------
defined herein).
Reference is made to (a) the Credit Agreement dated as of July 29, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement"), among the Borrower, the lenders from time to time party thereto
---------
(the "Lenders") and Chase, as administrative agent (in such capacity, the
-------
"Administrative Agent") for the Lenders, and (b) the Guarantee Agreement
--------------------
referred to in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrower, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrower, in
an amount up to $20,000,000, pursuant to, and upon the terms and subject to the
conditions specified in, the Credit Agreement. The Loan Party Guarantors have
agreed to guarantee, among other things, all the obligations of the Borrower
under the Credit Agreement. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit under the Credit Agreement are
conditioned upon, among other things, the execution and delivery by the Grantors
of an agreement in the form hereof to secure (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, (ii) each payment required to be made by the Borrower under the
Credit Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral and (iii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary
2
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 Loan Parties to the Secured Parties under
the Credit Agreement and the other Loan Documents, (b) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Loan Parties under or pursuant to the Credit Agreement and the other Loan
Documents, (c) unless otherwise agreed upon in writing by the applicable Lender
party thereto, the due and punctual payment and performance of all obligations
of the Borrower, monetary or otherwise, under each Hedging Agreement entered
into with any counterparty that was a Lender (or an Affiliate thereof) at the
time such Hedging Agreement was entered into and (d) the due and punctual
payment and performance of all obligations in respect of overdrafts and related
liabilities owed to the Administrative Agent or any of its Affiliates and
arising from treasury, depository and cash management services in connection
with any automated clearing house transfers of funds (all the monetary and other
obligations described in the preceding clauses (a) through (d) being
collectively called the "Obligations").
-----------
Accordingly, the Grantors and the Collateral Agent, on behalf of
itself and each Secured Party (and each of their respective successors or
assigns), hereby agree as follows:
ARTICLE I
Definitions
-----------
SECTION 1.01. Definition of Terms Used Herein. Unless the context
-------------------------------
otherwise requires, all capitalized terms used but not defined herein shall have
the meanings set forth in the Credit Agreement and all references to the Uniform
Commercial Code shall mean the Uniform Commercial Code in effect in the State of
New York as of the date hereof.
SECTION 1.02. Definition of Certain Terms Used Herein. As used
---------------------------------------
herein, the following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become
--------------
obligated to any Grantor under, with respect to or on account of an Account.
3
"Accounts" shall mean any and all right, title and interest of any
--------
Grantor to payment for goods and services sold or leased, including any such
right evidenced by chattel paper, whether due or to become due, whether or not
it has been earned by performance, and whether now or hereafter acquired or
arising in the future, including accounts receivable from Affiliates of the
Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
-------------------
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents,
----------
(c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash
accounts, (g) Investment Property and (h) Proceeds.
"Commodity Account" shall mean an account maintained by a Commodity
-----------------
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an
------------------
option on a commodity futures contract, a commodity option or any other contract
that, in each case, is (a) traded on or subject to the rules of a board of trade
that has been designated as a contract market for such a contract pursuant to
the federal commodities laws or (b) traded on a foreign commodity board of
trade, exchange or market, and is carried on the books of a Commodity
Intermediary for a Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity
------------------
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as
----------------------
a futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or
-----------------
hereafter in effect, granting any right to any third party under any Copyright
now or hereafter owned by any Grantor or which such Grantor otherwise has the
right to
4
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following now owned or hereafter
----------
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise, and (b) all registrations and applications
for registration of any such copyright in the United States or any other
country, including registrations, recordings, supplemental registrations and
pending applications for registration in the United States Copyright Office,
including those listed on Schedule II.
"Credit Agreement" shall have the meaning assigned to such term in the
----------------
preliminary statement of this Agreement.
"Documents" shall mean all instruments, files, records, ledger sheets
---------
and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the records of
------------------
a Securities Intermediary as the person having a Security Entitlement against
the Securities Intermediary. If a Person acquires a Security Entitlement by
virtue of Section 8-501(b) (2) or (3) of the Uniform Commercial Code, such
Person is the Entitlement Holder.
"Equipment" shall mean all equipment, furniture and furnishings, and
---------
all tangible personal property similar to any of the foregoing, including tools,
parts and supplies of every kind and description, and all improvements,
accessions or appurtenances thereto, that are now or hereafter owned by any
Grantor. The term Equipment shall include Fixtures.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
---------------
Person or a share, participation or other interest in a Person or in property or
an enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for Investment or (c) any property that is held by a
Securities Itermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certifi-
5
cated or uncertificated Security, a certificate representing a Security or a
Security Entitlement.
"Fixtures" shall mean all items of Equipment, whether now owned or
--------
hereafter acquired, of any Grantor that become so related to particular real
estate that an interest in them arises under any real estate law applicable
thereto.
"General Intangibles" shall mean all choses in action and causes of
-------------------
action and all other assignable intangible personal property of any Grantor of
every kind and nature (other than Accounts Receivable) now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements and other agreements (other than rights under contracts that
prohibit assignment or a grant of a security interest therein)), Intellectual
Property, goodwill, registrations, franchises, tax refund claims and any letter
of credit, guarantee, claim, security interest or other security held by or
granted to any Grantor to secure payment by an Account Debtor of any of the
Accounts Receivable.
"Intellectual Property" shall mean all intellectual and similar
---------------------
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions to,
and books and records describing or used in connection with, any of the
foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
---------
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business,
including raw materials, intermediates, work in process, packaging materials,
finished goods, semi-finished inventory, scrap inventory, manufacturing supplies
and spare parts, and all such goods that have been returned to or repossessed by
or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated
-------------------
or uncertificated), Security
6
Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of
any Grantor, whether now owned or hereafter acquired by any Grantor.
"License" shall mean any Patent License, Trademark License, Copyright
-------
License or other franchise agreement, license or sublicense to which any Grantor
is a party, including those listed on Schedule III (other than those agreements
in existence on the date hereof and those agreements entered into after the date
hereof, which by their terms prohibit assignment or a grant of a security
interest by such Grantor as licensee thereunder).
"Obligations" shall have the meaning assigned to such term in the
-----------
preliminary statement of this Agreement.
"Patent License" shall mean any written agreement, now or hereafter in
--------------
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned or hereafter
-------
acquired by any Grantor: (a) all letters patent of the United States or any
other country, all registrations and recordings thereof, and all applications
for letters patent of the United States or any other country, including
registrations, recordings and pending applications in the United States Patent
and Trademark Office or any similar offices in any other country, including
those listed on Schedule IV, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Perfection Certificate" shall mean a certificate substantially in the
----------------------
form of Annex 2 hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by a Financial Officer and
the chief legal officer of each of the Borrower and the Loan Party Guarantors.
"Proceeds" shall mean any consideration received from the sale,
--------
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any
7
Collateral and any payment received from any insurer or other Person or entity
as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include (a) any claim of any Grantor against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor, or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark now or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or
symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative
---------------
Agent, (c) the Collateral Agent, (d) the Issuing Bank, (e) each counterparty to
an Hedging Agreement entered into with the Borrower if such counterparty was a
Lender (or an Affiliate of a Lender) at the time the Hedging Agreement was
entered into, (f) the beneficiaries of each indemnification obligation
undertaken by any Grantor under any Loan Document and (g) the permitted
successors and assigns of each of the foregoing.
"Securities" shall mean any obligations of an issuer or any shares,
----------
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series, or by its terms is divisible into a class or series, of
shares, participations, interests or obligations and (c) (i) are, or are of a
type, dealt with or traded on securities exchanges or securities markets or (ii)
are a medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset
------------------
is or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account
8
is maintained as entitled to exercise rights that comprise the Financial Asset.
"Securities Intermediary" shall mean (a) a clearing corporation or (b)
-----------------------
a Person, including a bank or broker, that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Security Entitlements" shall mean the rights and property interests
---------------------
of an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning assigned to such term in
-----------------
Section 2.01.
"Trademark License" shall mean any written agreement, now or hereafter
-----------------
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following now owned or hereafter
----------
acquired by any Grantor: (a) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, trade dress, logos, other source or business identifiers, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all registration and
recording applications filed in connection therewith, including registrations
and registration applications in the United States Patent and Trademark Office,
any State of the United States or any similar offices in any other country or
any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule V, (b) all goodwill associated therewith or
symbolized thereby and (c) all other assets, rights and interests that uniquely
reflect or embody such goodwill.
SECTION 1.03. Rules of Interpretation. The rules of interpretation
-----------------------
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
9
ARTICLE II
Security Interest
-----------------
SECTION 2.01. Security Interest. As security for the payment or
-----------------
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"). Without limiting the
-----------------
foregoing, the Collateral Agent is hereby authorized to file one or more
financing statements, continuation statements, filings with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) or other documents for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor, without the signature of any Grantor,
and naming any Grantor or the Grantors as debtors and the Collateral Agent as
secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is
--------------------------
granted as security only and shall not subject the Collateral Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
------------------------------
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid
-------------------
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other
10
Person other than any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
-------
prepared, completed and executed and the information set forth therein is
correct and complete (to the knowledge of the Grantors in the case of
information with respect to Acquired Entities (as defined in the Perfection
Certificate)) in all material respects. Fully executed Uniform Commercial Code
financing statements, as applicable, or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered to
the Collateral Agent for filing in each governmental, municipal or other office
specified in Schedule 6 to the Perfection Certificate, which are all the
filings, recordings and registrations (other than filings, recordings and
registrations required to be made in the United States Patent and Trademark
Office and the United States Copyright Office in order to perfect the Security
Interest in Collateral consisting of United States Patents, United States
Trademarks and United States Copyrights) that are necessary to publish notice of
and protect the validity of and to establish a legal, valid and perfected
security interest in favor of the Collateral Agent (for the ratable benefit of
the Secured Parties) in respect of all Collateral in which the Security Interest
may be perfected by filing, recording or registration in the United States (or
any political subdivision thereof), and no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration is necessary in
any such jurisdiction, except as provided under applicable law with respect to
the filing of continuation statements.
(b) Each Grantor represents and warrants that fully executed security
agreements in the form hereof and containing a description of all Collateral
consisting of Intellectual Property shall have been received and recorded within
three months after the execution of this Agreement with respect to United States
Patents and United States registered Trademarks (and Trademarks for which United
States registration applications are pending) and within one month after the
execution of this Agreement with respect to United States registered Copyrights
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. (S) 261, 15 U.S.C. (S) 1060 or 17 U.S.C. (S) 205
and the regulations thereunder, as applicable, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent (for the ratable benefit of the Secured Parties) in respect of
all Collateral consisting of Patents, Trademarks and Copyrights in which a
security interest may
11
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof), or in any other necessary jurisdiction, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary (other than such actions as are necessary to perfect
the Security Interest with respect to any Collateral consisting of Patents,
Trademarks and Copyrights (or registration or application for registration
thereof) acquired or developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
-----------------------------
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) pursuant to the Uniform Commercial Code or
other applicable law in such jurisdictions and (c) a security interest that
shall be perfected in all Collateral in which a security interest may be
perfected in the United States Patent and Trademark Office and the United States
Copyright Office upon the receipt and recording of this Agreement with the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, within the three month period (commencing as of the date
hereof) pursuant to 35 U.S.C. (S) 261 or 15 U.S.C. (S) 1060 or the one-month
period (commencing as of the date hereof) pursuant to 17 U.S.C. (S) 205 and
otherwise as may be required pursuant to the laws of any other necessary
jurisdiction. The Security Interest is and shall be prior to any other Lien on
any of the Collateral, other than Liens expressly permitted to be prior to the
Security Interest pursuant to Section 6.02 of the Credit Agreement.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
----------------------
Grantors free and clear of any Lien, except for Liens expressly permitted with
respect to such Collateral pursuant to Section 6.02 of the Credit Agreement. No
Grantor has filed or consented to the filing of (a) any financing statement or
analogous document under the Uniform Commercial Code or any other applicable
laws covering any Collateral, (b) any assignment in which any Grantor assigns
any Collateral or any security agreement or similar instrument covering any
Collateral in the United States Patent and Trademark Office or the United States
Copyright Office or (c) any assignment in which any Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with any foreign governmental, municipal or other office, which
12
financing statement or analogous document is still in effect, except, in each
case, for Liens expressly permitted with respect to the applicable Collateral
pursuant to Section 6.02 of the Credit Agreement.
ARTICLE IV
Covenants
---------
SECTION 4.01. Records. Each Grantor agrees to maintain, at its own
-------
cost and expense, such complete and accurate records with respect to the
Collateral owned by it as is consistent with its current practices and in
accordance with such prudent and standard practices used in industries that are
the same as or similar to those in which such Grantor is engaged, but in any
event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Collateral, and, at such time
or times as the Collateral Agent may reasonably request, promptly to prepare and
deliver to the Collateral Agent a duly certified schedule or schedules in form
and detail reasonably satisfactory to the Collateral Agent showing the identity,
amount and location of any and all Collateral.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own
----------------------
cost and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted with respect to the applicable Collateral pursuant to
Section 6.02 of the Credit Agreement.
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own
------------------
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements or other documents in connection
herewith or therewith. If any amount payable under or in connection with any of
the Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and delivered
to the Collateral Agent,
13
duly endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedule II, III, IV or V hereto or
adding additional schedules hereto to specifically identify any asset or item
that may constitute Copyrights, Licenses, Patents or Trademarks; provided,
--------
however, that any Grantor shall have the right, exercisable within 30 days after
-------
it has been notified by the Collateral Agent of the specific identification of
such Collateral, to advise the Collateral Agent in writing of any inaccuracy of
the representations and warranties made by such Grantor hereunder with respect
to such Collateral. Each Grantor agrees that it will use its best efforts to
take such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.04. Inspection and Verification. The Collateral Agent and
---------------------------
such Persons as the Collateral Agent may reasonably designate shall have the
right, at the Grantors' own cost and expense, to inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantors' affairs with the officers of the Grantors and their independent
accountants and to verify under reasonable procedures the validity, amount,
quality, quantity, value, condition and status of, or any other matter relating
to, the Collateral, including, in the case of Accounts or Collateral in the
possession of any third party, by contacting Account Debtors or the third person
possessing such Collateral for the purpose of making such a verification. The
Collateral Agent shall have the absolute right to share any information it gains
from such inspection or verification with any Secured Party.
SECTION 4.05. Taxes; Encumbrances. At its option, the Collateral
-------------------
Agent may discharge past due taxes, assessments, charges, fees, Liens, security
interests or other encumbrances at any time levied or placed on the Collateral
and not expressly permitted pursuant to Section 6.02 of the Credit Agreement,
and may pay for the maintenance and preservation of the Collateral to the extent
any Grantor fails to do so as required by the Credit Agreement or this
Agreement, and each Grantor jointly and
14
severally agrees to reimburse the Collateral Agent on demand for any payment
made or any expense incurred by the Collateral Agent pursuant to the foregoing
authorization; provided, however, that nothing in this Section 4.05 shall be
-------- -------
interpreted as excusing any Grantor from the performance of, or imposing any
obligation on the Collateral Agent or any Secured Party to cure or perform, any
covenants or other promises of any Grantor with respect to taxes, assessments,
charges, fees, liens, security interests or other encumbrances and maintenance
as set forth herein or in the other Loan Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any
-------------------------------
Grantor shall take a security interest in any property of an Account Debtor or
any other Person to secure payment and performance of an Account, such Grantor
shall promptly assign such security interest to the Collateral Agent. Such
assignment need not be filed of public record unless necessary to continue the
perfected status of the security interest against creditors of and transferees
from the Account Debtor or other Person granting the security interest.
SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor
--------------------------------------
shall remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
---------------------------------
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted with respect to such Collateral by Section 6.02 of the
Credit Agreement. Unless and until the Collateral Agent shall notify the
Grantors that (i) an Event of Default shall have occurred and be continuing and
(ii) during the continuance thereof the Grantors shall not sell, convey, lease,
assign, transfer or otherwise dispose of any Collateral (which notice may be
given by telephone if promptly confirmed in writing), the Grantors may use and
dispose of the Collateral in any lawful manner not inconsistent with the
provisions of this Agreement, the Credit Agreement or any other Loan Document.
Without limiting the generality of the foregoing, each Grantor agrees that it
shall not permit any Inventory to be in the possession or control of any
warehouseman, bailee,
15
agent or processor at any time, unless such warehouseman, bailee, agent or
processor shall have been notified of the Security Interest and shall have
agreed in writing to hold the Inventory subject to the Security Interest and the
instructions of the Collateral Agent and to waive and release any Lien held by
it with respect to such Inventory, whether arising by operation of law or
otherwise.
SECTION 4.09. Limitation on Modification of Accounts. None of the
--------------------------------------
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices and in accordance with such prudent
and standard practices used in industries that are the same as or similar to
those in which such Grantor is engaged.
SECTION 4.10. Insurance. (a) Each of the Grantors will maintain with
---------
financially sound and reputable insurance companies:
(i) fire and extended coverage insurance, on a replacement cost
basis, with respect to all Collateral constituting personal property and
improvements to real property, in such amounts as are customarily
maintained by companies in the same or similar business operating in the
same or similar locations;
(ii) commercial general liability insurance against claims for bodily
injury, death or property damage occurring upon, about or in connection
with the use of any properties owned, occupied or controlled by it,
providing coverage on an occurrence basis with a combined single limit of
not less than $25,000 and including the broad form CGL endorsement;
(iii) business interruption insurance, insuring against loss of gross
earnings for a period of not less than 12 months arising from any risks or
occurrences required to be covered by insurance pursuant to clause (i)
above; and
(iv) such other insurance as may be required by law.
16
Deductibles or self-insured retention shall not exceed $1,000 for fire and
extended coverage policies, $25,000 for commercial general liability policies or
one day for business interruption policies.
(b) Fire and extended coverage policies maintained with respect to
any Collateral shall be endorsed or otherwise amended to include (i) a non-
contributing mortgage clause (regarding improvements to real property) and
lenders' loss payable clause (regarding personal property), in each case in
favor of the Collateral Agent and providing for losses thereunder to be payable
to the Collateral Agent or its designee, (ii) a provision to the effect that
none of the Grantors, the Collateral Agent or any other party shall be a
coinsurer and (iii) such other provisions as the Collateral Agent may reasonably
require from time to time to protect the interests of the Secured Parties.
Commercial general liability policies shall be endorsed to name the Collateral
Agent as an additional insured. Business interruption policies shall name the
Collateral Agent as loss payee. Each such policy referred to in this paragraph
also shall provide that it shall not be canceled, modified or not renewed (i) by
reason of nonpayment of premium except upon not less than 10 days' prior written
notice thereof by the insurer to the Collateral Agent (giving the Collateral
Agent the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon not less than 30 days' prior written notice thereof by
the insurer to the Collateral Agent. The Grantors shall deliver to the
Collateral Agent, prior to the cancelation, modification or nonrenewal of any
such policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Collateral Agent)
together with evidence satisfactory to the Collateral Agent of payment of the
premium therefor.
(c) Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact)
for the purpose, during the continuance of an Event of Default, of making,
settling and adjusting claims in respect of Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument or
other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of
17
the Grantors hereunder or any Event of Default, in its sole discretion, obtain
and maintain such policies of insurance and pay such premium and take any other
actions with respect thereto as the Collateral Agent deems advisable. All sums
disbursed by the Collateral Agent in connection with this Section 4.10,
including reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, upon demand, by the Grantors to the
Collateral Agent and shall be additional Obligations secured hereby.
SECTION 4.11. Legend. Each Grantor shall legend, in form and manner
------
satisfactory to the Collateral Agent, its Accounts Receivable and its books,
records and documents evidencing or pertaining thereto with an appropriate
reference to the fact that such Accounts Receivable have been assigned to the
Collateral Agent for the benefit of the Secured Parties and that the Collateral
Agent has a security interest therein.
SECTION 4.12. Covenants Regarding Patent, Trademark and Copyright
---------------------------------------------------
Collateral. (a) Each Grantor agrees that it will not, nor will it permit any
----------
of its licensees to, do any act, or omit to do any act, whereby any Patent which
is material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that it shall continue to xxxx any products
covered by a Patent with the relevant patent number as necessary and sufficient
to establish and preserve its maximum rights under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
third party rights.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws.
18
(d) Each Grantor shall notify the Collateral Agent promptly if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or United States Copyright Office
or any court or similar office of any country) regarding such Grantor's
ownership of any Patent, Trademark or Copyright, its right to register the same,
or to keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any
agent, employee, licensee or designee, file an application for any Patent,
Trademark or Copyright (or for the registration of any Trademark or Copyright)
with the United States Patent and Trademark Office, United States Copyright
Office or any office or agency in any political subdivision of the United States
or in any other country or any political subdivision thereof, unless it promptly
informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may request to evidence the Collateral Agent's security
interest in such Patent, Trademark or Copyright, and each Grantor hereby
appoints the Collateral Agent as its attorney-in-fact to execute and file such
writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power, being coupled with an interest, is
irrevocable.
(f) Each Grantor will take all necessary steps that are consistent
with the practice in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees, and, if consistent with good business judgment, to initiate opposition,
interference and cancelation proceedings against third parties.
19
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are appropriate under the circumstances to protect such
Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
by the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
ARTICLE V
Bank Accounts
-------------
The Borrower will establish and maintain a cash concentration account
(the "Chase Account") with the Collateral Agent within three Business Days
--------------
following the Effective Date. The Borrower will, and the Borrower will cause
each of its Subsidiaries (other than the CFN Subsidiaries) to, transfer to the
Chase Account on a weekly basis all its cash other than prudent reserves to
satisfy the weekly cash needs of such Subsidiary, but in no event will the
aggregate weekly cash needs of the Subsidiaries (other than the CFN
Subsidiaries) exceed $2,000,000; provided that (i) the Borrower will cause each
--------
of the banks (other than Chase) holding accounts of the Borrower or its
Subsidiaries in the ten locations in the United States which generate the
greatest percentage of revenues for the Borrower and its Subsidiaries, taken as
a whole, to enter into a depositary agreement, in a form to be mutually agreed
upon between the Administrative Agent and the Borrower, no later than the date
60 days following the Effective Date and (ii) if an Event of Default has
occurred and is continuing, the Collateral Agent may, in its sole discretion,
review the cash management system of the Borrowers and its Subsidiaries and
require the Borrower to institute a new cash management system (including,
without limitation, the use of a lockbox system).
20
ARTICLES VI
Power of Attorney
-----------------
Each Grantor irrevocably makes, constitutes and appoints the
Collateral Agent (and all officers, employees or agents designated by the
Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact,
and in such capacity the Collateral Agent shall have the right, with power of
substitution for each Grantor and in each Grantor's name or otherwise, for the
use and benefit of the Collateral Agent and the Secured Parties, upon the
occurrence and during the continuance of an Event of Default (a) to receive,
endorse, assign and/or deliver any and all notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Collateral or any
part thereof; (b) to demand, collect, receive payment of, give receipt for and
give discharges and releases of all or any of the Collateral; (c) to sign the
name of any Grantor on any invoice or xxxx of lading relating to any of the
Collateral; (d) to send verifications of Accounts Receivable to any Account
Debtor; (e) to commence and prosecute any and all suits, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect or
otherwise realize on all or any of the Collateral or to enforce any rights in
respect of any Collateral; (f) to settle, compromise, compound, adjust or defend
any actions, suits or proceedings relating to all or any of the Collateral; (g)
to notify, or to require any Grantor to notify, Account Debtors to make payment
directly to the Collateral Agent; and (h) to use, sell, assign, transfer,
pledge, make any agreement with respect to or otherwise deal with all or any of
the Collateral, and to do all other acts and things necessary to carry out the
purposes of this Agreement, as fully and completely as though the Collateral
Agent were the absolute owner of the Collateral for all purposes; provided,
--------
however, that nothing herein contained shall be construed as requiring or
-------
obligating the Collateral Agent or any Secured Party to make any commitment or
to make any inquiry as to the nature or sufficiency of any payment received by
the Collateral Agent or any Secured Party, or to present or file any claim or
notice, or to take any action with respect to the Collateral or any part thereof
or the moneys due or to become due in respect thereof or any property covered
thereby, and no action taken or omitted to be taken by the Collateral Agent or
any Secured Party with respect to the Collateral or any part thereof shall give
rise to any defense, counterclaim or offset in favor of any Grantor or to any
claim or action against the Collateral Agent or any Secured Party. It is
understood and agreed that the appointment of the Collateral Agent as the agent
and
21
attorney-in-fact of the Grantors for the purposes set forth above is coupled
with an interest and is irrevocable. The provisions of this Section shall in no
event relieve any Grantor of any of its obligations hereunder or under any other
Loan Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Loan Document, by law or otherwise.
ARTICLE VII
Remedies
--------
SECTION 7.01. Remedies upon Default. Upon the occurrence and during
---------------------
the continuance of an Event of Default, each Grantor agrees to deliver each item
of Collateral to the Collateral Agent on demand, and it is agreed that the
Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (a) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and conveyance of any of or all such
Collateral by the applicable Grantors to the Collateral Agent, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any such Collateral throughout the world on such terms
and conditions and in such manner as the Collateral Agent shall determine, and
(b) with or without legal process and with or without prior notice or demand for
performance, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral and, generally, to
exercise any and all rights afforded to a secured party under the Uniform
Commercial Code or other applicable law. Without limiting the generality of the
foregoing, each Grantor agrees that the Collateral Agent shall have the right,
subject to the mandatory requirements of applicable law, to sell or otherwise
dispose of all or any part of the Collateral, at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery as the Collateral Agent shall deem appropriate. The Collateral
Agent shall be authorized at any such sale (if it deems it advisable to do so)
to restrict the
22
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each
such purchaser at any such sale shall hold the property sold absolutely, free
from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by law) all rights of redemption, stay and
appraisal which such Grantor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors 10 days' prior written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-504(3) of the Uniform Commercial Code as in effect in the State of New
York or its equivalent in other jurisdictions) of the Collateral Agent's
intention to make any sale of Collateral. Such notice, in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange, shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix and state in the
notice (if any) of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to
23
this Section, any Secured Party may bid for or purchase, free (to the extent
permitted by law) from any right of redemption, stay, valuation or appraisal on
the part of any Grantor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to such Secured Party from any Grantor as a credit against the purchase
price, and such Secured Party may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Grantor therefor. For purposes hereof, a written agreement to purchase the
Collateral or any portion thereof shall be treated as a sale thereof; the
Collateral Agent shall be free to carry out such sale pursuant to such agreement
and no Grantor shall be entitled to the return of the Collateral or any portion
thereof subject thereto, notwithstanding the fact that after the Collateral
Agent shall have entered into such an agreement all Events of Default shall have
been remedied and the Obligations paid in full. As an alternative to exercising
the power of sale herein conferred upon it, the Collateral Agent may proceed by
a suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts having competent jurisdiction or pursuant to a proceeding by a court-
appointed receiver.
SECTION 7.02. Application of Proceeds. The Collateral Agent shall
-----------------------
apply the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by the
Administrative Agent or the Collateral Agent (in its capacity as such
hereunder or under any other Loan Document) in connection with such
collection or sale or otherwise in connection with this Agreement or any of
the Obligations, including all court costs and the fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Collateral Agent hereunder or under any other Loan Document on behalf of
any Grantor and any other costs or expenses incurred in connection with the
exercise of any right or remedy hereunder or under any other Loan Document;
SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance
with the amounts of the Obligations owed to them on the date of any such
distribution); and
24
THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 7.03. Grant of License to Use Intellectual Property. For the
---------------------------------------------
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof and sufficient rights of quality control in
favor of such Grantor to avoid the invalidation of the Trademarks subject to the
license. The use of such license by the Collateral Agent shall be exercised, at
the option of the Collateral Agent, upon the occurrence and during the
continuation of an Event of Default; provided that any license, sub-license or
--------
other transaction entered into by the Collateral Agent in accordance herewith
shall be binding upon the Grantors notwithstanding any subsequent cure of an
Event of Default.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Notices. All communications and notices hereunder
-------
shall (except as otherwise expressly permitted herein) be in writing and given
as provided in
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Section 9.01 of the Credit Agreement. All communications and notices hereunder
to any Loan Party Guarantor shall be given to it in care of the Borrower.
SECTION 8.02. Security Interest Absolute. All rights of the
--------------------------
Collateral Agent hereunder, the Security Interest and all obligations of the
Grantors hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Credit Agreement, any other Loan Document or any other agreement or
instrument, (c) any exchange, release or non-perfection of any Lien on other
collateral, or any release or amendment or waiver of or consent under or
departure from any guarantee, securing or guaranteeing all or any of the
Obligations, or (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Grantor in respect of the
Obligations or this Agreement.
SECTION 8.03. Survival of Agreement. All covenants, agreements,
---------------------
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the making by the Lenders of the Loans, and
the execution and delivery to the Lenders of any notes evidencing such Loans,
regardless of any investigation made by the Lenders or on their behalf, and
shall continue in full force and effect until this Agreement shall terminate.
SECTION 8.04. Binding Effect; Several Agreement. This Agreement shall
---------------------------------
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the other Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement or the Credit Agreement. This
Agreement shall be
26
construed as a separate agreement with respect to each Grantor and may be
amended, modified, supplemented, waived or released with respect to any Grantor
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.
SECTION 8.05. Successors and Assigns. Whenever in this Agreement any
----------------------
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of any Grantor or the Collateral Agent that are
contained in this Agreement shall bind and inure to the benefit of their
respective successors and assigns.
SECTION 8.06. Collateral Agent's Expenses; Indemnification. (a)
--------------------------------------------
Each Grantor jointly and severally agrees to pay upon demand to the Collateral
Agent the amount of any and all expenses, including the reasonable fees,
disbursements and other charges of its counsel and of any experts or agents,
which the Collateral Agent may incur in connection with (i) the administration
of this Agreement, (ii) the custody or preservation of, or the sale of,
collection from or other realization upon any of the Collateral, (iii) the
exercise, enforcement or protection of any of the rights of the Collateral Agent
hereunder or (iv) the failure of any Grantor to perform or observe any of the
provisions hereof.
(b) Without limitation of their indemnification obligations under the
other Loan Documents, the Grantors jointly and severally agree to indemnify the
Collateral Agent and the other Indemnitees against, and hold each of them
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including reasonable fees, disbursements and other charges of counsel,
incurred by or asserted against any of them arising out of, in any way connected
with, or as a result of, the execution, delivery or performance of this
Agreement or any claim, litigation, investigation or proceeding relating hereto
or to the Collateral, whether or not any Indemnitee is a party thereto; provided
--------
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Security Documents. The provisions
of this
27
Section 7.06 shall remain operative and in full force and effect regardless of
the termination of this Agreement or any other Loan Document, the consummation
of the transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the Collateral
Agent or any Lender. All amounts due under this Section 7.06 shall be payable
on written demand therefor.
SECTION 8.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.08. Waivers; Amendment. (a) No failure or delay of the
------------------
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent, the Issuing Bank, the Administrative Agent and the
Lenders under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provisions of this Agreement or any other Loan Document or consent to any
departure by any Grantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Grantor in any case shall entitle such
Grantor or any other Grantor to any other or further notice or demand in similar
or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 9.02 of the Credit Agreement.
SECTION 8.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
--------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY
28
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.09.
SECTION 8.10. Severability. In the event any one or more of the
------------
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8.11 Counterparts. This Agreement may be executed in two or
------------
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract (subject to Section 8.04),
and shall become effective as provided in Section 8.04. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 8.12. Headings. Article and Section headings used herein are
--------
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 8.13. Jurisdiction; Consent to Service of Process. (a) Each
-------------------------------------------
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District Court of
the Southern District of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that,
to the extent permitted by applicable law, all claims in respect of any such
action or proceeding may be heard and determined in
29
such New York State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Collateral Agent or any other Secured
Party may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against any Grantor or its properties in
the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in paragraph (a) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 8.14. Termination. This Agreement and the Security Interest
-----------
shall terminate when all the Obligations have been indefeasibly paid in full,
the Lenders have no further commitment to lend, the LC Exposure has been reduced
to zero and the Issuing Bank has no further commitment to issue Letters of
Credit under the Credit Agreement, at which time the Collateral Agent shall
execute and deliver to the Grantors, at the Grantors' expense, all Uniform
Commercial Code termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 8.14
shall be without recourse to or warranty by the Collateral Agent. A Loan Party
Guarantor shall automatically be released from its obligations hereunder and the
Security Interest in the Collateral of such Loan Party Guarantor shall be
automatically released in the event that all the capital stock of such Loan
Party Guarantor shall be sold, transferred or otherwise disposed of to a Person
that is not an Affiliate of the Borrower in accordance with the terms of the
Credit Agreement; provided that the Required Lenders shall have consented to
--------
such sale, transfer or other disposition (to
30
the extent required by the Credit Agreement) and the terms of such consent did
not provide otherwise.
31
SECTION 8.15. Additional Grantors. Upon execution and delivery by
-------------------
the Collateral Agent and a Subsidiary of the Borrower of an instrument in the
form of Annex 3 hereto, such Subsidiary shall become a Grantor hereunder with
the same force and effect as if originally named as a Grantor herein. The
execution and delivery of any such instrument shall not require the consent of
any Grantor hereunder. The rights and obligations of each Grantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Grantor as a party to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
IXL HOLDINGS, INC.,
by
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Name:
Title:
EACH OF THE LOAN PARTY
GUARANTORS LISTED ON
SCHEDULE I HERETO,
by
/s/ Xxxxx X. Xxxxxx
----------------------------------------
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
/s/ Xxxx X. Xxxxxx
----------------------------------------
Name:
Title:
SCHEDULE I
TO THE SECURITY AGREEMENT
SUBSIDIARY GUARANTORS
iXL, Inc.
Boxtop Interactive, Inc.
Creative Video Library, Inc.
Entrepreneur Television, Inc.
iXL-Boston, Inc.
IXL-Charlotte, Inc.
iXL-Chicago, Inc.
iXL-DC, Inc.
iXL-Denver, Inc.
iXL-Los Angeles, Inc.
IXL-Memphis, Inc.
iXL-New York, Inc.
iXL-Richmond, Inc.
iXL-San Diego, Inc.
iXL-San Francisco, Inc.
iVisit, Inc.
32
SCHEDULE II
TO THE SECURITY AGREEMENT
COPYRIGHTS
SCHEDULE III
TO THE SECURITY AGREEMENT
LICENSES
SCHEDULE IV
TO THE SECURITY AGREEMENT
PATENTS
SCHEDULE V
TO THE SECURITY AGREEMENT
TRADEMARKS
33
Annex 1 to the Security Agreement--Perfection Certificate
Annex 2 to the Security Agreement--Form of Supplement
34