CREDIT AGREEMENT
AMONG
CROSS MEDIA MARKETING CORPORATION
MEDIA OUTSOURCING, INC.
NATIONAL SYNDICATIONS, INC.
AND
PREFERRED CONSUMER MARKETING, INC.
AS JOINT AND SEVERAL BORROWERS,
THE BANKS, FINANCIAL INSTITUTIONS AND
OTHER INSTITUTIONAL LENDERS NAMED HEREIN,
AND
FLEET NATIONAL BANK,
AS AGENT AND ISSUING LENDER
DATED AS OF MARCH 19, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; ACCOUNTING TERMS. 2
Definitions 2
Accounting Terms 23
ARTICLE II THE CREDIT 23
Loans 23
The Notes 24
Purpose 24
Borrowing Procedures 25
Optional Prepayments and Conversions 25
Mandatory Prepayments 25
Interest Periods; Renewals 25
Certain Notices 26
Minimum Amounts 26
Interest 27
Fees 27
Payments Generally 28
ARTICLE III LETTERS OF CREDIT 29
L/C Commitment 29
Procedure for Issuance of Letters of Credit 30
L/C Participations 31
Reimbursement; Obligations of Borrowers 32
Obligations Absolute 33
Conflict 33
Documents 33
Partial Shipments 34
Extensions, Increases and Other Modifications to Letters of Credit 34
Limitations of Liability 34
Compliance with Regulations; Licenses; Insurance 35
Violations of Law 35
Law and Regulations; Additional Payments 36
Compliance with Letters of Credit 37
ARTICLE IV YIELD PROTECTION; ILLEGALITY; ETC. 37
Additional Costs 37
Limitation on Libor Rate Loans 39
Illegality 40
Certain Conversions Pursuant to Sections 4.01 and Section 4.03 40
Certain Compensation 40
Lending Office Designations 41
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ARTICLE V CONDITIONS PRECEDENT 41
Conditions Precedent to All Loans and Letters of Credit 41
Documentary Conditions Precedent to Initial Loans and Initial Letters of Credit 42
Additional Conditions Precedent 45
Deemed Representations 46
ARTICLE VI REPRESENTATIONS AND WARRANTIES 46
Incorporation, Good Standing and Due Qualification 46
Subsidiaries and Affiliates; Inactive Subsidiaries 46
Capitalization 47
Owned Real Property 47
Leased Real Property 47
Material Contracts 47
Corporate Power and Authority 47
Legally Enforceable Agreements 48
No Violation 48
Licenses, Approvals, etc 48
Litigation 49
Financial Statements 49
Taxes 50
ERISA 50
Environmental Matters 50
Labor Disputes 50
Investment Company Act of 1940; etc 50
No Forfeiture 51
Solvency 51
Patents, Trademarks, etc 51
Offer of Notes 51
Eligible Accounts Receivables 51
Use of Proceeds 52
Disclosure; No Material Adverse Effect 52
Location of Books and Records 52
Fiscal Year 52
ARTICLE VII AFFIRMATIVE COVENANTS 52
Maintenance of Existence; Preservation of Rights, Licenses etc. 52
Conduct of Business 53
Maintenance of Properties 53
Maintenance of Records 53
Maintenance of Insurance 53
Compliance with Laws 53
Right of Inspection; Field Examinations 53
Lockbox Account 54
Reporting Requirements 54
Additional Subsidiaries 58
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Payment of Taxes and Claims 58
Bank Accounts 59
Material Contracts 59
Implementation of New Accounting Software System 59
Interest Rate Protection 59
Trade Payables 59
ARTICLE VIII NEGATIVE COVENANTS 59
Debt 59
Guaranties 60
Liens 61
Leases 61
Investments 61
Distributions 62
Sale of Assets 62
Transactions with Affiliates 63
Mergers; Organization of New Subsidiaries 63
Subsidiaries' Stock and Debt 64
Acquisitions 64
Fiscal Year. 65
Restrictions 65
Sale-Leaseback Transactions 65
Seller Debt 66
Accounting Change 66
Charter Amendments 66
Amendment, Modification and Termination of Material Contracts 66
Inactive Subsidiaries 66
ARTICLE IX FINANCIAL COVENANTS 67
Leverage Ratio 67
Consolidated Net Worth 67
Fixed Charge Coverage Ratio 67
Minimum EBITDA 67
ARTICLE X EVENTS OF DEFAULT 68
Events of Default 68
Remedies 70
Remedies Cumulative 71
Application of Proceeds 71
ARTICLE XI THE AGENT 72
Appointment, Powers and Immunities of Agent 72
Reliance by Agent 72
Defaults 73
Rights of Agent as a Lender 73
Indemnification of Agent 73
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Documents 74
Non-Reliance on Agent and Other Lenders 74
Failure of Agent to Act 74
Resignation or Removal of Agent 75
Amendments Concerning Agency Function 75
Liability of Agent 75
Transfer of Agency Function 75
Non-Receipt of Funds by the Agent 76
Withholding Taxes 76
Several Obligations and Rights of Lenders 76
Pro Rata Treatment of Loans, Etc. 77
Sharing of Payments Among Lenders 77
Security Documents 77
Collateral 77
Amendment of Article 11 78
ARTICLE XII MISCELLANEOUS 78
Amendments and Waivers; Remedies Cumulative 78
Usury 79
Costs; Expenses; Taxes; Indemnification 79
Survival 80
Assignment; Participations 80
Notices 83
Joint and Several Liability 84
Setoff 86
JURISDICTION; IMMUNITIES 86
Table of Contents; Headings 88
Severability 88
Entire Agreement 88
GOVERNING LAW 88
Confidentiality 88
Replacement Notes, Etc. 89
Treatment of Certain Information 89
Counterparts 89
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EXHIBITS:
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Guaranty
Exhibit C Form of Pledge Agreement
Exhibit D Form of Security Agreement
Exhibit E Form of Trademark Security Agreement
Exhibit F Form of LockBox Agreement
Exhibit G Omitted
Exhibit H1 Form of Borrowing Base Certificate
Exhibit H2 Form of Compliance Certificate
SCHEDULES:
Schedule 1.1A Commitments
Schedule 1.1B Certain Permitted Liens
Schedule 1.1C Definition of Business
Schedule 6.02 Subsidiaries; Inactive Subsidiaries; Guarantors; Affiliates
Schedule 6.03 Capitalization
Schedule 6.04 Owned Real Properties
Schedule 6.05 Leased Real Properties
Schedule 6.06 Material Contracts
Schedule 6.11 Litigation
Schedule 6.15 Environmental Matters
Schedule 6.20 Patents, Trademarks, etc.
Schedule 6.24 Material Adverse Effect
Schedule 6.25 Location of Books and Records
Schedule 8.01(f) Seller Debt
Schedule 8.01(g) Existing Debt
Schedule 8.05(f) Existing Investments
Schedule 12.06 Addresses of Lenders
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 19, 2002 among CROSS MEDIA MARKETING
CORPORATION., a corporation organized under the laws of Delaware (together with
its successors and permitted assigns, "Cross Media"), MEDIA OUTSOURCING, INC., a
corporation organized under the laws of Delaware (together with its successors
and permitted assigns, "Media"), NATIONAL SYNDICATIONS, INC., a corporation
organized under the laws of Delaware (together with its successors and permitted
assigns, "NSI") and PREFERRED CONSUMER MARKETING, INC., a corporation organized
under the laws of Florida (together with its successors and permitted assigns,
"PCM," and together with Cross Media, Media and NSI, collectively, the
"Borrowers"), each of the lenders which is a signatory hereto or which shall
become a party hereto from time to time in accordance with the terms hereof
(together with their respective successors and assigns, the "Lenders") and FLEET
NATIONAL BANK, a national banking association organized under the laws of the
United States, as agent for the Lenders and the Issuing Lender (in such
capacity, together with its successors and assigns, the "Agent") (as amended,
supplemented or otherwise modified from time to time, this "Agreement").
WHEREAS, the Borrowers have requested the Lenders to extend credit to it
in order to enable it to borrow under a revolving loan facility on and after the
date hereof and at any time and from time to time prior to the Revolving Credit
Termination Date a principal amount not in excess of an aggregate of $35,000,000
at any time outstanding;
WHEREAS, the Borrowers are to use the proceeds of such borrowings to repay
outstanding indebtedness under the Coast Business Credit Facility, an
outstanding indebtedness owed to the Lancer Group, an outstanding indebtedness
owed by NSI to Fleet National Bank, for general corporate purposes, including
working capital, and to issue Letters of Credit;
WHEREAS, the Lenders are willing to make such loan facilities available to
the Borrowers and the Issuing Lender is willing to issue Standby Letters of
Credit and documentary Letters of Credit, on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS.
Section 1.1 Definitions. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"Acquisition" means any transaction pursuant to which any Borrower or any
of their respective Subsidiaries (a) purchases or otherwise acquires a majority
of the equity securities (or warrants, options or other rights to acquire such a
majority equity securities, or securities convertible or exchangeable into such
warrants, options or other rights) of a Person such that such Person becomes a
Subsidiary (other than equity securities or other ownership interests of a
Person organized and formed by a Borrower and/or one of its Subsidiaries as a
new Wholly-Owned Subsidiary), (b) cause or permit any Person to be merged into
any of the Borrowers or any of their respective Subsidiaries, in any case
pursuant to a merger, purchase of assets or any reorganization providing for the
delivery or issuance to the holders of such Person's then outstanding
securities, in exchange for such securities, of cash, assets or securities of
any of the Borrowers or any of their respective Subsidiaries, or a combination
thereof (excluding the merger of any Borrower and/or existing Subsidiary into
another Borrower and/or Subsidiary), (c) purchase all or substantially all of
the business or assets of any Person, or (d) make investments in joint ventures,
provided that no transaction between one or more Borrowers and/or existing
Subsidiaries shall be deemed to be an "Acquisition."
"Additional Costs" has the meaning assigned to such term in Section 4.01.
"Adjusted Net Magazine Subscription Receivables" means, as at any date of
determination thereof, the gross amount of Receivables which have been
outstanding twelve months or less of Borrowers or any of their respective
Subsidiaries arising from the purchase by Customers of Magazine Subscriptions
(a) minus the reserve reflecting the historical pay to maturity/collection
results of Borrowers and their Subsidiaries as determined by Borrowers in good
faith on a basis consistent with past practices as reflected in Borrower's
Financial Statements as delivered to Agent as of the Closing Date and (b) minus
the current Publisher Payables.
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"Affiliate" means any Person which (a) directly or indirectly Controls, or
is Controlled by, or is under common Control with, any of the Borrowers or any
of their respective Subsidiaries, (b) directly or indirectly beneficially owns
or holds 10% or more of any class of equity securities of any of the Borrowers
or any of their respective Subsidiaries; (c) 10% or more of any class of equity
securities of which is directly or indirectly beneficially owned or held by any
of the Borrowers or any of their respective Subsidiaries; (d) is a partnership
in which any of the Borrowers or any of their respective Subsidiaries is a
general partner; or (e) is a limited liability company in which any of the
Borrowers or any of their respective Subsidiaries is a manager or a managing
member.
"Agent" has the meaning assigned to such term in the introductory
paragraph hereof.
"Agreement" has the meaning assigned to such term in the introductory
paragraph hereof. References to Articles, Sections, Exhibits, Schedules and the
like refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Application" means an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Applicable Margin" means a percentage equal to 0.50% with respect to
Revolving Credit Loans that are Prime Rate Loans, 2.50% with respect to
Revolving Credit Loans that are LIBOR Loans and .375% with respect to the
Commitment Fee; provided that, commencing with the delivery by Borrowers of the
financial statements and corresponding Compliance Certificate required by
Section 7.09(b) and 7.09(d) for the Fiscal Quarter ending March 31, 2002, the
Applicable Margin shall be increased or (if no Default or Event of Default
exists) decreased, based upon the Leverage Ratio, as follows:
LEVERAGE RATIO REVOLVING CREDIT LOANS COMMITMENT FEE
--------------------------------------------------------------------------------
PRIME RATE LIBOR RATE
APPLICABLE APPLICABLE APPLICABLE
MARGIN MARGIN MARGIN
--------------------------------------------------------------------------------
Less than 1.00 to 1 .25% 2.25% .25%
If equal to or less than 1.5 to
1, but greater than 1.00 to 1 .50% 2.50% .375%
Equal to or greater than
1.50 to 1 0.75% 2.75% .375%
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The Applicable Margin shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of Borrowers as measured by the Leverage Ratio for the immediately
preceding four Fiscal Quarters of Borrowers as reflected in the annual/quarterly
financial statements and corresponding Compliance Certificates required by
Sections 7.09(a), 7.09(b) and 7.09(d) (the "Financials"). Except as set forth in
the last sentence hereof, any such increase or reduction in the Applicable
Margin provided for herein shall be effective three Business Days after receipt
by Agent of the Financials for each applicable fiscal period and shall continue
in effect until the next adjustment according to the provisions hereof;
provided, however, that any reduction or increase in the Applicable Margin shall
not apply to any LIBOR Loans outstanding on the effective date of such reduction
or increase that have an Interest Period commencing prior to the effective date
of such reduction or increase. If the Financials setting forth the Leverage
Ratio are not received by Agent by the date required pursuant to Section 7.09(a)
or Section 7.09(b) and Section 7.09(d) of this Agreement, the Applicable Margin
shall be determined as if the Leverage Ratio exceeds 1.50 to 1 until such time
as such Financials are received and any Event of Default resulting from a
failure to timely deliver such Financials is waived in writing by Agent and
Lenders (at which time the Applicable Margin shall be adjusted as otherwise
provided herein); provided, however, that during such continuance of any such
Event of Default, Agent and Lenders shall be entitled to accrue and receive
interest at the Default Rate to the extent authorized by Section 2.10(b) of the
Agreement and, on each date that the Default Rate accrues on any Loan (if the
Default Rate is accruing due to Event(s) of Default that include the failure to
deliver the Financials), the Applicable Margin on such date for such Loan shall
be the Applicable Margin that would apply if the Leverage Ratio exceeds 1.50 to
1 (without regard to the actual Leverage Ratio). For the final Fiscal Quarter of
any Fiscal Year of Borrowers, Borrowers may provide the unaudited financial
statements of Borrowers, subject only to year-end and normal audit adjustments,
for the purpose of determining the Applicable Margin; provided, however, that
if, upon delivery of the annual audited financial statements required to be
submitted by Borrowers to Agent pursuant to Section 7.09(a) of the Agreement,
the Leverage Ratio reflected on such audited annual financial statements is
different from the Leverage Ratio reflected by the unaudited financial
statements such that a different Applicable Margin should apply, then (a) such
Applicable Margin reduction or increase (if applicable) shall be terminated and,
effective on the first day of the month following receipt by Agent of such
audited annual financial statements, and the Applicable Margin in effect
thereafter (until the next adjustment according to the provisions hereof) shall
be the Applicable Margin that would have been in effect if the Applicable Margin
were determined according to such audited year-end financial statements, and (b)
on the first day of the month following receipt by Agent of such audited annual
financial statements, (i) if the difference between the amount of interest and
fees that would have been paid from the date of the adjustment based on the
unaudited financial statements through such first day of such following month
using the Applicable Margin determined based upon such audited annual financial
statements and the amount of interest actually paid during the period in which
the reduction of the Applicable Margin was in effect based upon the
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unaudited annual financial statements for the final Fiscal Quarter of the Fiscal
Year of Borrowers then ended is positive, then the Borrowers shall pay to Agent
for the pro-rata benefit of the Lenders, the amount of such positive difference
and (ii) if the difference between such interest amounts calculated according to
clause (i) is negative, the Lenders shall credit the pro-rata shares of such
negative difference to the outstanding principal balance of Borrowers' Loans.
"Availability" means the aggregate of the amount, computed on a daily
basis, by which the Revolving Credit Commitments of the Lenders exceed the sum
of (i) the aggregate principal amount of the Revolving Credit Loans outstanding,
(ii) the aggregate amount available to be drawn on the outstanding Letters of
Credit and (iii) any amounts drawn under Letters of Credit but not yet either
reimbursed or converted to Loans as provided herein.
"Bankruptcy Code" has the meaning assigned to such term in Section
10.01(e).
"Borrowers" has the meaning assigned to such term in the introductory
paragraph hereof.
"Borrowing Base Certificate" means the borrowing base certificate
substantially in the form of Exhibit H-1 to be delivered by the Borrower under
the terms of this Agreement.
"Business" means the business as described on Schedule 1.1C.
"Business Day" means any day (other than a day which is a Saturday, Sunday
or legal holiday in the State of New York) on which banks are open for business
in New York City and to the extent used in connection with calculations
regarding and administration of LIBOR Rate Loans, banks are open for dealings in
dollar deposits in the London interbank market.
"Capital Expenditure" means, with respect to any Person, any expenditure
made or obligation incurred by such Person to purchase, acquire or construct
fixed assets, plant, equipment or intangibles subject to amortization (including
renewals, improvements, replacements and incurrence of obligations under Capital
Leases).
"Capital Lease" means any lease which has been or should be capitalized on
the books of the lessee thereunder in accordance with GAAP.
"Cash Equivalents" means (a) direct obligations of the United States of
America or any agency or instrumentality thereof with maturities of one year or
less from the date of acquisition; (b) commercial paper of a domestic issuer
rated at least "A-1" by Standard & Poor's Rating Services or "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc.; (c) certificates of deposit and other time deposits
with maturities of one year or less from the date of acquisition issued by any
commercial bank operating within the United States of America and having a
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combined capital and surplus in excess of $500,000,000; (d) commercial paper,
maturing not more than one year after the date of acquisition, issued by a
corporation (other than an Affiliate) organized and existing under the laws of
the United States of America or any State thereof with a rating, at the time as
of which any investment therein is made, of "P-1" (or higher) according to
▇▇▇▇▇'▇ Investors Service, Inc., or "A-1" (or higher) according to Standard &
Poor's Rating Services; (e) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (a) above
entered into with any financial institution; and (f) nationally-recognized money
market or mutual funds whose sole investments are comprised of investments
permitted under the foregoing clauses (a) through (e).
"Change of Control" means the occurrence of either of the following events
after the date of this Agreement: (a) any Person or group of Persons (other than
any Person or group of Persons who, as of the date hereof, beneficially own at
least 20% of the aggregate Voting Power of Cross Media) shall beneficially own
(as defined in Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act or any successor provision thereto) more than 50% of the aggregate
Voting Power of Cross Media; or (b) during any period of 12-consecutive months,
(i) individuals who at the beginning of such period were members of the Board of
Directors of Cross Media, together with (ii) individuals who during such period
became members of such Board of Directors and were either elected by such Board
of Directors or whose nomination for election was approved by a majority of the
members of such Board of Directors who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Board of
Directors of Cross Media then in office.
"Closing Date" means the date upon which the initial borrowing hereunder
occurs.
"Coast Business Credit Facility" means the $20,000,000 loan facility
established under the Loan and Security Agreement among Coast Business Credit, a
division of Southern Pacific Bank and Media dated January 28, 2000, as amended.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all of any Obligor's right, title and interest in and
to Property in which such Obligor has granted a Lien to the Agent for the
benefit of the Lenders under any Facility Document.
"Commitment Percentage" means, as to any Lender at any date of
determination thereof, the percentage of the aggregate Revolving Credit
Commitments constituted by such Lender's Revolving Credit Commitment at such
date.
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"Compliance Certificate" means a compliance certificate substantially in
the form of Exhibit H-2 to be executed and delivered by Cross Media under the
terms of this Agreement.
"Consolidated Capital Expenditures" means, with respect to any fiscal
period, the aggregate amount of Capital Expenditures made by the Consolidated
Entities during such period, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Debt" means, at any date of determination thereof, the
aggregate amount of Debt of the Consolidated Entities, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA" means, with respect to any fiscal period, the sum of
(a) Consolidated Net Income for such period; (b) the aggregate amount of (i)
income taxes and (ii) Consolidated Interest Expense (to the extent that any such
amounts were deducted in the computation of Consolidated Net Income for such
period); (c) the aggregate amount of amortization; (d) the aggregate amount of
depreciation, all calculated for the Consolidated Entities as determined on a
consolidated basis in accordance with GAAP; and (e) in the event that an
Acquisition permitted by Section 8.11 is consummated during such fiscal period,
the EBITDA of the entity that is the subject of the Acquisition (with
appropriate adjustments for officers' salaries) for the period beginning on the
first day of such fiscal measurement period and ending on the date of such
Acquisition.
"Consolidated Entities" means, collectively, the Borrowers and each of
their respective Subsidiaries whose accounts are or are required to be
consolidated or included with the accounts of the Borrowers in accordance with
GAAP. The Agent and the Lenders acknowledge that although certain joint ventures
of Borrowers, including J. Cross Marketing, are consolidated with Borrowers,
and, as such, are Consolidated Entities, such joint ventures are not
Subsidiaries (as defined herein) of Borrowers to the extent Borrowers own less
than a 51% equity interest in such joint venture or do not have the ability to
direct unilaterally the actions of any such joint venture.
"Consolidated Funded Debt" means, at any date of determination thereof,
the aggregate amount of Funded Debt of the Consolidated Entities, as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, interest expense on
all Debt of the Consolidated Entities for such period net of cash interest
income for such period, whether paid or accrued, and including, without
limitation, (i) interest expense in respect of Debt resulting from Loans, (ii)
the interest component of all obligations under Capital Leases, (iii)
commissions, discounts and other fees and charges payable in connection with
standby letters of credit, which are the equivalent of interest, (iv) the net
payments, if any, payable in connection with Interest Rate Protection Agreements
and (v) all fees paid by Borrowers
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pursuant to Section 2.11(b) (other than non-cash amortization related thereto),
and all finance charges, premiums and other fees, charges and expenses accrued
with respect to Consolidated Debt during such period which are the equivalent of
interest (excluding up-front costs and costs associated with this Agreement),
all as determined as a consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means, at a particular date, an amount equal to
(i) the book value (net of related depreciation, obsolescence, amortization, and
other proper reserves) at which the assets of the Consolidated Entities would be
shown on a balance sheet of such Consolidated Entities at such date in
accordance with GAAP, less (ii) the amount at which liabilities of the
Consolidated Entities (other than capital stock and surplus and retained
earnings) would be shown on a balance sheet of such Consolidated Entities in
accordance with GAAP, and including as liabilities all reserves for
contingencies and other potential liabilities required to be accrued in
accordance with GAAP, which would be included under shareholders' equity on a
consolidated balance sheet of the Consolidated Entities prepared in accordance
with GAAP, less amounts due from Affiliates.
"Consolidated Net Income" means, with respect to any fiscal period, net
income of the Consolidated Entities for such period plus all non-cash deemed
dividends and non-recurring items other than extraordinary or nonrecurring gains
or losses.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and
"Controlling" and "Controlled" shall have meanings correlative thereto.
"Customer" means the account debtor with respect to any of the Receivables
or the purchaser of goods, services or both with respect to any contract or
contract right, or any Person who enters into any contract or other arrangement
with any Borrower or any Subsidiary, pursuant to which any Borrower or any
Subsidiary is to deliver any personal Property or perform any services.
"Debt" means, with respect to any Person (without duplication): (a)
indebtedness of such Person for borrowed money; (b) the Seller Debt; (c)
indebtedness for the deferred purchase price of Property or services
constituting Capital Expenditures; (d) Unfunded Benefit Liabilities of such
Person; (e) the face amount of any outstanding letter of credit issued for the
account or upon the application of such Person (including any Standby Letters of
Credit including Standby Letters of Credit issued hereunder) issued to secure or
support performance by Borrowers and/or their Subsidiaries under operating
leases (including operating real estate leases); (f) obligations arising under
banker's acceptance facilities; (g) guaranties of such Person; (h) obligations
of other Persons secured by any Lien on Property of such Person; (i) obligations
of such Person as lessee under Capital Leases; (j) the net
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obligations of such Person in respect of Interest Rate Protection Agreements;
and (k) all capital stock of such Person subject to repurchase or redemption
during the term of this Agreement, other than at the sole option of such Person.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount (other than interest) payable by
any Obligor under this Agreement or any other Facility Document, that is not
paid when due (whether at stated maturity, by acceleration or otherwise), a rate
per annum during the period from and including the due date, to, but excluding
the date on which such amount is paid in full equal to two percent (2.0%) per
annum above the interest rate for such Loan as provided in Section 2.10 (or, if
not a Loan, at two percent (2.0%) per annum above the Prime Rate); provided,
however, with respect to Libor Rate Loans, the "Default Rate" of two percent
(2.0%) above the applicable Libor Rate plus the applicable Interest Margin shall
be applied through the day before the last day of the Interest Period, and
thereafter, the rate provided for above in this definition.
"Distribution" means, with respect to any Person, the declaration or
payment of any dividends by such Person, or the purchase, redemption, retirement
or other acquisition for value of any of its capital stock now or hereafter
outstanding, or the making of any distribution of assets to its stockholders as
such whether in cash, assets or obligations of such Person, or the allocation or
other setting apart of any sum for the payment of any dividend or distribution
on, or for the purchase, redemption, retirement or other acquisition of any
shares of its capital stock, or the making of any other distribution by
reduction of capital or otherwise in respect of any shares of its capital stock.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, with respect to any fiscal period of any Person, the sum
of (a) net income for such period; (b) the aggregate amount of (i) income taxes
and (ii) interest expense (to the extent that any such amounts were deducted in
the computation of net income for such period) calculated for such Person
according to the method specified in the definition of Consolidated Interest
Expense; (c) the aggregate amount of amortization; and (d) the aggregate amount
of depreciation, all as determined in accordance with GAAP.
"Eligible Accounts Receivables" means, as of any date of determination
thereof, the current portions of all Receivables of the Borrowers or any of
their respective Subsidiaries that arise out of the sale of any goods and the
providing of services in connection with the Business (other than Receivables
arising out of the sale of Magazine Subscriptions), as to which the Agent for
the benefit of the Lenders holds a first priority perfected security interest,
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provided that such Receivables:(a) arose in the ordinary course of business of a
Borrower or such Subsidiary; (b) do not represent amounts owed to such Borrower
or such Subsidiary for goods shipped on a consignment or "▇▇▇▇ and hold"
basis;(c) represent amounts owed for goods sold or leased or services rendered
to a Customer; (d) are payable in Dollars; (e) do not include any amount which
has not been paid within 90 days of the invoice date; (f) do not have as the
Customer a Person that is the subject of any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law; (g) do not have as the Customer, any Obligor or any Affiliate thereof; (h)
do not have as the Customer a Person located outside the United States or
Canada; (i) do not include any portion of a Receivable as to which the Customer
has asserted any defense; (j) do not include that portion of any Receivable as
to which any offset or counterclaim has been asserted or can be asserted by any
distributor for any promotional, advertising or other expense; (k) do not
include the amount by which the aggregate unpaid principal balance of all
Receivables past due from any single Customer exceeds 50% of the aggregate
unpaid principal balance of all Receivables due from such Customer;(l) do not
include any Eligible Magazine Subscription Receivables; and (m) do not include
any Receivable (or portion thereof) the Agent in the exercise of its good faith
business judgment has deemed ineligible because of the impairment of the
collateral value thereof to the Lenders, the impairment of the Lenders' ability
to realize the value thereof or the significant uncertainty as to the ability of
the Customer to make payment thereunder.
"Eligible Magazine Subscription Receivables" means, as of any date of
determination thereof, the then current Adjusted Net Magazine Subscription
Receivables provided that such Receivables:(a) arose in the ordinary course of
business of a Borrower or such Subsidiary; (b) are payable in Dollars; (c) do
not have as the Customer, any Obligor or any Affiliate thereof; (d) do not have
as the Customer a Person located outside the United States or Canada; and (e) do
not include any Receivable (or portion thereof) the Agent in the exercise of its
good faith business judgment has deemed ineligible because of the impairment of
the collateral value thereof to the Lenders, the impairment of the Lenders'
ability to realize the value thereof or the significant uncertainty as to the
ability of the Customer to make payment thereunder.
"Environmental Laws" means any and all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, licenses, agreements or other governmental restrictions
relating to the environment or to the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, emission, release, threatened release, discharge, spillage,
seepage, or filtration of pollutants, contaminants, chemicals, or industrial,
toxic or other Hazardous Wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing distribution, use, treatment, storage,
disposal, transport, or handling of pollutants,
10
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes,
including petroleum and petroleum products.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of any group of organizations (i) described in Section 414 (b) or (c) of
the Code of which any of the Borrowers or any of their respective Subsidiaries
is a member, or (ii) solely for purposes of potential liability under Section
302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created
under Section 302 (f) of ERISA and Section 412 (n) of the Code, described in
Section 414 (m) or (o) of the Code of which any Borrower or any Subsidiary is a
member.
"Event of Default" has the meaning assigned to such term in Section 10.01.
"Facility Documents" means this Agreement, the Notes, the Security
Documents, the Letters of Credit, any Interest Rate Protection Agreement entered
into with a Lender and the Lockbox Agreement, as each may be amended,
supplemented or otherwise modified from time to time.
"Financial Statements" has the meaning assigned to such term in Section
6.17(a).
"Fiscal Quarter" means a fiscal quarter of the Borrowers ending on March
31, June 30, September 30 or December 31.
"Fiscal Year" means a fiscal year of the Borrowers.
"Fixed Charge Coverage Ratio" means, at any date of determination thereof,
the ratio of (a) (i) Consolidated EBITDA for the four Fiscal Quarter period
ending on such date of determination, minus (ii) the aggregate amount of
unfunded Consolidated Capital Expenditures during such four Fiscal Quarter
period ending on such date of determination, minus (iii) cash taxes paid during
such four most recently ended Fiscal Quarter period ending on such date of
determination and minus (iv) cash earnout payments made in connection with
Acquisitions which are not expensed and not included as a Consolidated Capital
Expenditure, to (b) the sum of (i) all scheduled payments of principal due
during the immediately preceding four Fiscal Quarters on, or with respect to,
Consolidated Debt (including, without limitation, imputed principal on Capital
Leases), plus (ii) Consolidated Interest Expense on, or with respect to,
Consolidated Debt for the four Fiscal Quarter period ending on such date of
determination, all calculated for the Consolidated Entities as determined on a
consolidated basis in accordance with GAAP. For purposes of this definition,
non-cash interest expense and non-cash charges related to capital assets will be
excluded.
11
"Forfeiture Proceeding" means any action or proceeding affecting any of
the Borrowers or any of their respective Subsidiaries before any Governmental
Authority which could reasonably be expected to result in the seizure or
forfeiture of any of their respective Properties.
"Funded Debt" means with respect to any Person, at the date of
determination, (without duplication): (a) indebtedness for borrowed money; (b)
the Seller Debt; (c) indebtedness for the deferred purchase price of Property or
services constituting Capital Expenditures; (d) obligations arising under
banker's acceptance facilities; (d) guaranties of such Person, if the primary
obligor is in default of the underlying obligation; (e) obligations of other
Persons secured by any Lien on Property of such other Person, if such Person is
in default of the underlying obligation; and (f) obligations of such Person as
lessee under Capital Leases.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantors" means each of the Subsidiaries designated as such on Schedule
6.02 and each other Person that has otherwise provided a Guaranty of any of the
Obligations.
"Guaranty" means the Guaranty substantially in the form of Exhibit B to be
delivered by the Guarantors under the terms of this Agreement, as amended,
supplemented or otherwise modified from time to time.
"guaranty" means, with respect to any Person, any guaranty, endorsement
(other than for collection in the ordinary course of business) or other
contingent obligation of such Person with respect to the Debt obligations of any
other Person (including, but not limited to, an agreement to purchase any
obligation or stock, assets, goods or services or to supply or advance any funds
assets, goods or services, or an agreement to maintain or cause such Person to
maintain a minimum working capital or net worth or otherwise to assure the
creditors of any such other Person against loss with respect to the Debt
obligations of any such other Person).
"Hazardous Materials" means any material, substance, compound, solid,
liquid or gas, or any radiation, emission or release of energy in any form,
whether naturally occurring, man made or the product of any process, (a) which
is or may under certain conditions be toxic, harmful, or hazardous to public
health, public safety, or the environment, (b) which is or may
12
be defined or regulated as a "hazardous waste", "hazardous substance", "toxic
substance", pollutant or contaminant under any Environmental Law, (c) the use,
handling, management, release, treatment, storage, transportation or disposal of
which is or may be regulated under any Environmental Law, or (d) the removal,
remediation or abatement of which is required under any Environmental Law.
Hazardous Materials include, but are not limited to, asbestos, polychlorinated
biphenlys, mercury, lead, petroleum and petroleum products and derivatives, urea
formaldehyde foam insulation, and radon and other radioactive materials.
"Inactive Subsidiaries" means those Subsidiaries that do not own or lease
any Property or engage in any business and are not party to any agreement other
than the Facility Documents.
"Interest Period" means, with respect to any Libor Rate Loan, the period
commencing on the date such Loan is made, converted from a Prime Rate Loan or
renewed, as the case may be, and ending, as Cross Media may select pursuant to
Section 2.07, on the numerically corresponding day in the first, second, third
or sixth calendar month thereafter; provided in each case that if an Interest
Period would end on a day which is not a Business Day, such Interest Period
shall be extended to the next Business Day, unless such Business Day would fall
in the next calendar month in which event such Interest Period shall end on the
immediately preceding Business Day and provided further that each such Interest
Period which commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
calendar month.
"Interest Rate Protection Agreement" means, with respect to any Person, an
interest rate swap, cap or collar agreement or similar arrangement between one
or more financial institutions (including, without limitation, the Lenders) and
such Person providing for the transfer or mitigation of interest risks either
generally or under specific contingencies.
"Interest Rate Protection Agreement Counterparty" means any Lender or any
of its affiliates, together with its successors and assigns, in its capacity as
the Counterparty to any Interest Rate Protection Agreement with any of the
Borrowers or any of their Subsidiaries.
"Investment" means any loan or advance to any Person (other than the
extension of trade credit in the ordinary course of business) or any purchase or
other acquisition of any capital stock, obligations or other securities of any
Person, or any capital contribution to, investment in, or other acquisition of
any equity interest in, any Person, provided that any transaction which
constitutes an Acquisition shall not be included in this definition of
Investment.
"Issuing Lender" means Fleet National Bank, in its capacity as issuer of
any Letters of Credit.
13
"Knowledge" means, with respect to any Person, after reasonable inquiry,
no information has come to the attention of such Person, which information has
given or should reasonably have given such Person knowledge of facts contrary to
the existence of or absence of such facts indicated.
"knowledge" means, with respect to any Person, the actual knowledge of (x)
such Person (if such Person in an individual) or (y) a responsible officer of
such Person (if such Person is an organization).
"Law" means, with respect to any Person, any statute, law, rule,
regulation, ordinance, order, permit, license, writ, judgment, injunction,
decree, determination, award or other restriction or requirement of any
Governmental Authority applicable to such Person or its Property.
"L/C Cash Collateral Account" has the meaning assigned to such term in the
Security Agreement.
"L/C Obligations" means, at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit, and (b) the aggregate amount of drawings under Letters of Credit
which have not been reimbursed (including reimbursement through the making of a
Revolving Credit Loan) as provided in Section 3.03 or Section 3.04(a).
"L/C Participants" means the collective reference to all Lenders holding
Revolving Credit Commitments other than the Issuing Lender.
"Lender" has the meaning assigned to such term in the introductory
paragraph hereof, and all references to the rights and benefits (but not the
obligations) of a "Lender" contained in any Facility Document shall be deemed to
include the Issuing Lender and all Interest Rate Protection Agreement
Counterparties.
"Lending Office" means, for each Lender and for each type of Loan, the
lending office of such Lender (or of an affiliate of such Lender) designated as
such for such type of Loan on its signature page hereof or such other office of
such Lender (or of an affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrowers as the office by which its Loans of
such type are to be made and maintained.
"Letters of Credit" means all Standby Letters of Credit and all
documentary Letters of Credit.
"Leverage Ratio" means, at any date of determination thereof, the ratio of
(a) Consolidated Funded Debt at such date (after giving effect to any
amortization payment made
14
on such date) to (b) Consolidated EBITDA for the immediately preceding four
Fiscal Quarter period.
"Libor Rate" means, as applicable to any Libor Rate Loan, the rate per
annum as determined on the basis of the offered rates for deposits in U.S.
Dollars, for a period of time comparable to the Interest Period for such Libor
Rate Loan which appears on the Telerate page 3750 as of 11:00 a.m. London time
on the day that is two Business Days preceding the first day of such Libor Rate
Loan; provided, however, if the rate described above does not appear on the
Telerate System on any applicable interest determination date, the Libor Rate
shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in U.S. dollars for a period of time comparable to
the Interest Period for such Libor Rate Loan which are offered by four major
banks in the London interbank marked at approximately 11:00 a.m. London time, on
the day that is two (2) Business Days preceding the first day of such Interest
Period as selected by Agent. The principal London office of each of the four
major London banks will be requested to provide a quotation of its U.S. Dollar
deposit offered rate. If at least two such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in U.S. dollars to leading European
banks for a period of time comparable to the Interest Period for such Libor Rate
Loan offered by major banks in New York City at approximately 11:00 a.m. New
York City time, on the day that is two Business Days preceding the first day of
such Interest Period. In the event that Agent is unable to obtain any such
quotation as provided above, it will be deemed that a Libor Rate cannot be
determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to Libor Rate deposits of
the Agent or any Lender then for any period during which such Reserve Percentage
shall apply, the applicable Libor Rate shall be equal to the amount determined
above divided by an amount equal to 1 minus the Reserve Percentage. "Reserve
Percentage" shall mean the maximum aggregate reserve requirement (including all
basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against "Euro-currency Liabilities" as
defined in Regulation D.
"Libor Rate Loan" means any Loan when and to the extent the interest rate
therefor is determined in relation to the Libor Rate.
"Lien" means any lien (statutory or other), security interest, mortgage,
deed of trust, priority, pledge, charge, conditional sale, title retention
agreement, financing lease or other encumbrance or similar right of others, or
any agreement to give any of the foregoing.
"Loan" means any loan made by a Lender pursuant to Sections 2.01 or 3.03.
15
"Lockbox Account" means an account established by a Borrower or a
Subsidiary with the Agent.
"Lockbox Agreement" means an agreement between Agent and a Borrower or a
Subsidiary to open a Lockbox Account, substantially in the form attached hereto
as Exhibit F.
"Magazine Subscriptions" means one or more magazine subscriptions sold in
a package to individual consumers by a Borrower and/or one of its Subsidiaries.
"Material Adverse Effect" means any event, condition, action or
circumstance which has or could reasonably be expected to have any material
adverse effect on (a) the business, profits, Properties or financial condition
of the Borrowers and their Subsidiaries, taken as a whole, (b) the ability of
the Obligors to perform any of their material obligations under any of the
Facility Documents taken us a while, (c) the binding nature, validity or
enforceability of any of the Facility Documents, or (d) the validity,
perfection, priority or enforceability of the Liens in favor of the Agent for
the benefit of the Lenders securing the obligations hereunder.
"Material Contract" means each contract, agreement or other understanding
to which any of the Borrowers or any of their respective Subsidiaries is a party
the breach, termination or expiration of which could reasonably be expected to
have a Material Adverse Effect.
"Multiemployer Plan" means, at a particular time, an employee benefit plan
(a) which is a "multiemployer plan" as defined in Section 3(37) of ERISA and
which is contributed to by any of the Borrowers or any of their respective
Subsidiaries or any ERISA Affiliate or (b) with respect to which any of the
Borrowers or any of their respective Subsidiaries or any ERISA Affiliate would
have liability under Section 4212(c) of ERISA in the event of a withdrawal or
plan termination at such time.
"Notes" means the Revolving Credit Notes.
"Obligations" means the unpaid principal of and interest on (including
without limitation interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Obligor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding, even if obligations do not
accrue because of an automatic stay under Bankruptcy Code Section 362 or
otherwise) the Notes and all other obligations and liabilities of any Obligor to
the Agent, any Lender, the Issuing Lender or any Interest Rate Protection
Agreement Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any Note, any other Facility
Document and any other document made, delivered or given in connection therewith
or herewith, and any exposure pursuant to any cash management agreement between
any Obligor and any Lender (including as a result of an automatic
16
clearing house arrangement), whether on account of principal, interest,
guaranties, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and disbursements of counsel
to the Agent, any Lender, any Interest Rate Protection Agreement Counterparty or
the Issuing Lender) or otherwise.
"Obligor Agreement" means any indenture, loan or credit agreement, or any
other financing or debt agreement, Capital Lease or instrument, to which any of
the Borrowers, any Subsidiary or any other Obligor is a party or by which any of
the Borrowers, any Subsidiary or any other Obligor or their respective
Properties may be bound or affected providing for financing or indebtedness of
$50,000 or more.
"Obligors" means the Borrowers and each Guarantor.
"Payor" has the meaning assigned to such term in Section 11.13.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means:
(1) Liens created by, under or in connection with this Agreement
or the Facility Documents in favor of the Agent for the benefit of the Lenders;
(2) Liens to secure Interest Rate Protection Agreements required
by Section 7.15, to the extent provided by in Interest Rate Protection Agreement
Counterparty.
(3) Liens for taxes or assessments or other government charges or
levies not yet due and payable or if due and payable, Liens for taxes or
assessments or other government charges or levies being contested by the
Borrower in good faith by appropriate proceedings, diligently prosecuted,
provided that, at the time of the commencement and during the pendency of such
proceedings (i) no Default or Event of Default shall exist and be continuing,
(ii) adequate reserves have been established on the Borrower's books in
accordance with GAAP (including reserves for any penalty for late payment),
(iii) such contest operates to suspend collection of the contested taxes and
(iv) neither the Property subject to such Lien nor any interest therein would be
in any danger of being sold, forfeited or lost if the Borrower pays the amount
and satisfies the condition being contested, and Borrower would have the
opportunity to so pay such amount or satisfy such condition before the Property
is subject to foreclosure, sale or loss on account thereof if Borrower
ultimately fails to prevail in such contest;
17
(4) Liens in respect of Property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics', warehousemen's
and other like Liens, provided that such Liens secure (i) only amounts not yet
due and payable or (ii) amounts being contested in good faith by appropriate
proceedings, diligently prosecuted, provided that adequate reserves have been
established on the Borrower's books in accordance with GAAP and such Liens have
been satisfied or bonded or otherwise stayed in operation or enforcement;
(5) Liens under worker's compensation, unemployment insurance,
social security or similar legislation (other than Liens in excess of $150,000
under ERISA or the related provisions of the Code);
(6) Liens described on Schedule 1.1B provided that such Liens
shall secure only those obligations which they secure on the date hereof and/or
restatements, refinancings or replacements thereof, so long as such
refinancings, etc. do not increase the principal amount outstanding on such
obligations at the time of such refinancings;
(7) cash security securing letters of credit (not including any
Letters of Credit issued under this Agreement) either (i) listed on Schedule
8.01(f) or (ii) permitted under Section 8.01(c); and
(8) Purchase Money Liens; provided that:
(1) the Lien on any Property subject to such a Purchase Money Lien
is created contemporaneously with, or assumed in connection with, such
acquisition;
(2) the obligation secured by any Lien so created, assumed or
existing shall not exceed 100% of the lesser of the cost or fair market
value as of the time of acquisition of the Property covered thereby to the
Borrower or the Subsidiary acquiring the same; provided that if one or
more items of Property are acquired in one or a series of related
transactions (including pursuant to a master lease arrangement), such
Liens may also secure up to 100% of the lesser of cost or fair market
value of all other such related Property, so long as all obligations are
permitted by Section 8.01(e));
(3) each such Lien shall attach only to the Property so acquired
(including, in appropriate cases under clause (ii), cross
collateralization of related Property) and fixed improvements thereon; and
(4) the obligations secured by such Liens are permitted by Section
8.01(e).
18
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan" means, at a particular time, any employee benefit plan (other than
a Multiemployer Plan) (i) which is covered by Title IV of ERISA and which is
maintained or contributed to by the Borrower or any Subsidiary or any ERISA
Affiliate or (ii) with respect to which the Borrower or any Subsidiary or any
ERISA Affiliate would have any liability under Section 4069 of ERISA if such
plan were terminated at such time.
"Pledge Agreement" means the Pledge Agreement substantially in the form of
Exhibit C to be executed and delivered by Cross Media under the terms of this
Agreement, as amended, supplemented or otherwise modified from time to time.
"Possession Collateral" means all Collateral where physical possession is
necessary for the perfection of a security interest.
"Prime Rate" means the variable per annum rate of interest so designated
from time to time by the Reference Lender as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
charged to any customer.
"Prime Rate Loan" means any Loan when and to the extent the interest rate
for such Loan is determined in relation to the Prime Rate.
"Principal Office" means the principal office of the Agent, presently
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
"Publisher Payables" means as of any date of determination, the current
net accounts payable owed by Borrowers and their Subsidiaries to magazine
publishers in connection with Magazine Subscriptions sold by Borrowers and their
Subsidiaries to Customers.
"Purchase Money Debt" means any Debt, including Capital Leases, incurred
in connection with the purchase of Property, specifically including any such
Debt secured by a Purchase Money Lien.
"Purchase Money Lien" means a Lien on any Property acquired by the
Borrower or any Subsidiary (including Property acquired pursuant to an
Acquisition permitted in accordance with Section 8.11 hereof) or placed on any
Property in order to finance the acquisition of such Property, or the assumption
of any Lien on Property existing
19
at the time of the acquisition of such Property or of the Person holding such
Property or a Lien in connection with any conditional sale or other title
retention agreement or a Capital Lease.
"Receivables" means all of the Borrowers' and any Subsidiary's accounts,
contract rights, instruments, documents, chattel paper, general intangibles
relating to accounts, drafts and acceptances, and all other forms of obligations
owing to the Borrowers or any Subsidiaries arising out of or in connection with
the sale or lease of goods or for services rendered, all guaranties and other
security thereof, whether secured or unsecured, now existing or hereafter
created, and whether or not specifically transferred or assigned to the Agent
for the benefit of the Lenders under the Security Agreement or under any other
Facility Document.
"Reference Lender" means the Person which is the Agent (or, with respect
to Libor Rate Loans, if the Person which is the Agent no longer quotes on the
London interbank market, such successor leading bank in the London interbank
market which shall be reasonably appointed by the Agent and shall be reasonably
acceptable to Cross Media).
"Regulation A" means Regulation A of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation T" means Regulation T of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulation X" means Regulation X of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Lender, any change after
the date of this Agreement in United States federal, state, municipal or foreign
Laws (including without limitation Regulation D) or the adoption or making after
such date of any written interpretations, directives or requests applying to a
class of banks of which such bank is a member, of or under any United States,
federal, state, municipal or foreign Laws (whether or not having the force of
law) by any Government Authority charged with the interpretation or
administration thereof.
20
"Required Lenders" means Lenders having at least 66% of the aggregate
amount of the Commitments, or if the Commitments have expired or terminated,
Lenders holding at least 66% of the aggregate outstanding principal amount of
the Loans; provided, however, the term Required Lender shall not include a
Lender, which, at the time of determination, has failed or is refusing to make a
Revolving Credit Loan as required by this Agreement.
"Required Payment" has the meaning assigned to such term in Section 11.13.
"Revolving Credit Borrowing Base" means, on any date of determination
thereof, an amount determined by the Agent with reference to the most recent
Borrowing Base Certificate to be equal to 75% of (a) Eligible Accounts
Receivables, plus (b) Eligible Magazine Subscription Receivables. Based on the
results of the field examination referred to in Section 7.14, the Agent with the
consent of the Required Lenders may in its good faith business judgment amend
the advance rate contained herein.
"Revolving Credit Commitment" means with respect to each Lender, the
obligation of such Lender to make Revolving Credit Loans under this Agreement in
the aggregate principal amount set forth in Schedule 1.1A, as such amount may be
reduced or modified from time to time.
"Revolving Credit Commitment Percentage" means, as to any Lender on any
date of determination thereof, the percentage of the aggregate Revolving Credit
Commitments constituted by such Lender's Revolving Credit Commitment at such
date.
"Revolving Credit Loans" has the meaning assigned to such term in Section
2.01(a).
"Revolving Credit Notes" means the promissory notes issued by the Borrower
substantially in the form of Exhibit A, dated the Closing Date, evidencing the
Revolving Credit Loans made by the Lenders hereunder and all promissory notes
delivered in substitution or exchange therefor, as amended or supplemented or
otherwise modified from time to time.
"Revolving Credit Termination Date" means March 19, 2004.
"Security Agreement" means the Security Agreement substantially in the
form of Exhibit D to be executed and delivered by the each of the Borrowers and
each of their respective Subsidiaries under the terms of this Agreement, as
amended, supplemented or otherwise modified from time to time.
21
"Security Documents" means the Guaranty, the Pledge Agreement, the
Security Agreement, the Trademark Security Agreement and each other guaranty or
security document that may from time to time be delivered to the Agent by an
Obligor in connection herewith or therewith. Each of the Security Documents
shall be cross defaulted and cross-collateralized with this Agreement and the
other Security Documents, without the requirement of further action.
"Seller Debt" means the Debt payable by the Borrowers to the holders of
the promissory notes issued by PCM in connection with the acquisition of PCM, to
the prior stockholders of PCM, as amended, supplemented or otherwise modified
from time to time.
"Standby Letters of Credit" means all standby letters of credit issued
hereunder to support obligations of the Borrower and the Subsidiaries,
contingent or otherwise, not prohibited hereunder.
"subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
"Subsidiary" means any subsidiary of any of the Borrowers on or after the
date hereof. The Agent and the Lenders acknowledge that although certain joint
ventures of Borrowers, including J. Cross Marketing, are consolidated with
Borrowers, and, as such, are Consolidated Entities, such joint ventures are not
Subsidiaries (as defined herein) of Borrowers to the extent Borrowers own less
than a 51% equity interest in such joint venture or do not have the ability to
direct unilaterally the actions of any such joint venture.
"Termination Date" means the later of (i) the Revolving Credit Termination
Date and (ii) the date on which all Obligations have been indefeasibly paid in
full.
"Trademark Security Agreement" means the Trademark Security Agreement
substantially in the form of Exhibit E, to be executed by each of Cross Media,
Media, NSI and ▇▇▇▇▇▇▇▇.▇▇▇, Inc., as amended, supplemented or otherwise
modified from time to time.
"Transferor Lender" has the meaning assigned to such term in Section
12.05(c).
"type of Loans" has the meaning assigned to such term in Section 2.01(f).
"UCC" means the Uniform Commercial Code (as amended from time to time) of
any state which is applicable to the granting, attachment, perfection, priority
or
22
enforcement of a security interest in, and the rights of a secured party to, the
Collateral or any portion thereof.
"Unfunded Benefit Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all benefit liabilities (within the
meaning of Section 4001(a)(16) of ERISA) under such Plan exceeds the fair market
value of all Plan assets allocable to such benefit liabilities, as determined on
the most recent valuation date of such Plan and in accordance with the
provisions of ERISA for calculating the potential liability of the Borrowers or
any of their respective Subsidiaries or any ERISA Affiliate under Title IV of
ERISA.
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"Voting Power" means, with respect to any Person, the power ordinarily
(without the occurrence of a contingency) to elect the members of the board of
Directors (or persons performing similar functions) of such Person.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
corporation or other entity of which all of the securities or other ownership
interests thereof are owned, directly or indirectly, by such Person.
Section 1.2 Accounting Terms. All accounting terms not specifically
defined herein shall be defined in accordance with GAAP, and all financial data
required to be delivered hereunder shall, to the extent GAAP is applicable, be
prepared in accordance with GAAP, except that all financial covenants shall be
determined in accordance with GAAP in effect as of the date hereof, unless the
Borrowers and Required Lenders agree to an adjustment of such financial
covenants to take into account any changes in GAAP.
ARTICLE II
THE CREDIT
Section 1.3 Loans.
(1) Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, each of the Lenders severally agrees to make revolving credit
loans (the "Revolving Credit Loans") to the Borrowers at any time and from time
to time from and including the Closing Date to but excluding the Revolving
Credit Termination Date, in such amounts that the aggregate principal amount of
such Lender's Revolving Credit Loans at any
23
one time outstanding does not exceed the amount of its Revolving Credit
Commitment. Notwithstanding the foregoing, no Revolving Credit Loan shall be
made if immediately thereafter the aggregate principal amount of the Revolving
Credit Loans outstanding plus the L/C Obligations shall exceed the lesser of (i)
the Revolving Credit Borrowing Base and (ii) the aggregate amount of the
Revolving Credit Commitments at such time. The Revolving Credit Loans shall be
repaid on the Revolving Credit Termination Date.
(2) Letters of Credit. Subject to the terms and conditions of this
Agreement, each of the Lenders severally agrees to participate in Letters of
Credit pursuant to Article 3, at any time and from time to time from and
including the Closing Date to but excluding the Revolving Credit Termination
Date. Notwithstanding the foregoing, no Letter of Credit shall be issued if
immediately thereafter (i) the aggregate principal amount of the Revolving
Credit Loans outstanding plus the L/C Obligations shall exceed the lesser of (x)
the Revolving Credit Borrowing Base and (y) the aggregate amount of the
Revolving Credit Commitments at such time or (ii) the L/C Obligations shall
exceed $6,000,000. Each Letter of Credit shall expire no later than the
Revolving Credit Termination Date. All L/C Obligations shall be paid on or prior
to the Revolving Credit Termination Date.
(3) Commitments. Notwithstanding anything contained in this
Agreement to the contrary, (i) at no time shall the sum of the aggregate
principal amount of all Loans outstanding and all L/C Obligations exceed the
aggregate amount of the Revolving Credit Commitments and (ii) at all times the
aggregate principal amount of all outstanding Loans made by each Lender
hereunder shall equal the product of (x) its Revolving Credit Commitment
Percentage and (y) the aggregate principal amount of all Loans outstanding.
(4) Types of Loans. The Loans may be outstanding as Prime Rate
Loans or Libor Rate Loans (each a "type" of Loans). Each type of Loan of each
Lender shall be made and maintained at such Lender's Lending Office for such
type of Loans.
Section 1.4 The Notes. The Revolving Credit Loans of each Lender shall be
evidenced by a single Revolving Credit Note in favor of such Lender.
Section 1.5 Purpose. The Borrowers shall use the proceeds of the Revolving
Credit Loans solely for (a) repayment of outstanding indebtedness under the
Coast Business Credit Facility, (b) repayment of outstanding indebtedness to the
Lancer Group, (c) repayment of outstanding indebtedness of NSI to Fleet National
Bank, (d) general corporate purposes including working capital and to issue
letters of credit as provided hereunder and (e) for general corporate purposes.
Such proceeds shall not be used for the purpose, whether immediate, incidental
or ultimate, of buying or carrying "margin stock" within the meaning of
Regulation U, or extending credit to others for the purpose of purchasing or
carrying any margin stock.
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Section 1.6 Borrowing Procedures. Cross Media shall give the Agent notice
of each borrowing to be made, and each Letter of Credit to be issued, hereunder
as provided in Section 2.08. With respect to each borrowing, not later than
12:00 noon New York, New York time on the date specified for such borrowing
hereunder, each Lender shall, through its Lending Office, subject to the
conditions of this Agreement, make the amount of the Loan to be made by it on
such date available to the Agent at the Principal Office.
Section 1.7 Optional Prepayments and Conversions. The Borrowers shall have
the right to make prepayments of principal without penalty or premium (other
than compensation payable in accordance with Article 4), or to convert one type
of Loan into another type of Loan, at any time or from time to time; provided
that (a) Cross Media shall give the Agent notice of each such prepayment or
conversion as provided in Section 2.08; and (b) Libor Rate Loans may be prepaid
or converted only on the last day of an Interest Period for such Loans unless
the Borrowers agree to provide to the Agent for the account of each Lender
compensation in accordance with Section 4.05.
Section 1.8 Mandatory Prepayments.
(1) Borrowing Base; Commitments Exceeded. If at any time the
aggregate principal amount of all Revolving Credit Loans outstanding plus the
L/C Obligations shall exceed the lesser of (x) the Revolving Credit Borrowing
Base and (y) the aggregate amount of the Revolving Credit Commitments at such
time, the Borrowers shall repay the Lenders forthwith such amounts as may be
necessary to eliminate such excess (and if prepayment on such date would cause
Borrowers to incur costs pursuant to Section 4.05, the Borrowers shall deposit
with the Agent, until such prepayment can be made or such additional costs
avoided, sufficient cash collateral (which cash collateral shall be held by the
Agent in an interest bearing account) to cover such excess which shall be
withdrawn by the Agent upon the expiration of the applicable Interest Period to
eliminate such excess and any remaining funds on deposit in the cash collateral
account shall be paid to the Borrowers, it being understood that so long as any
such funds are on deposit interest shall continue to accrue on the outstanding
Loans), and the failure of the Borrowers to make such payment shall constitute
an Event of Default.
Section 1.9 Interest Periods; Renewals. (a) In the case of each Libor Rate
Loan, Cross Media shall select an Interest Period of any duration in accordance
with the definition of Interest Period in Section 1.01, subject to the following
limitations: (i) no Interest Period may extend beyond the Revolving Credit
Termination Date; (ii) notwithstanding clause (i) above, no Interest Period
shall have a duration of less than one month, and if any such proposed Interest
Period would otherwise be for a shorter period, such Interest Period shall not
be available; and (iii) no more than eight Interest Periods for Loans of any
Lender may be outstanding at any one time.
25
(1) Upon notice to the Agent as provided in Section 2.08, Cross
Media may renew any Libor Rate Loan on the last day of the Interest Period
therefor as the same type of Loan with an Interest Period of the same or
different duration in accordance with the limitations provided above. If Cross
Media shall fail to give notice to the Agent of such a renewal, such Libor Rate
Loan shall automatically become a Prime Rate Loan on the last day of the current
Interest Period for such Libor Rate Loan.
Section 1.10 Certain Notices. Notices by Cross Media to the Agent of each
borrowing pursuant to Section 2.04, each prepayment or conversion pursuant to
Section 2.05 and each renewal pursuant to Section 2.07(b): (i) shall be
irrevocable; (ii) in the case of borrowings and prepayments of, conversions into
and renewals of Prime Rate Loans, shall be effective only if received by the
Agent not later than 12:00 noon New York, New York time on the same Business
Day; (iii) in the case of borrowings and prepayments of, conversions into and
(in the case of Libor Rate Loans) renewals of Libor Rate Loans, shall be
effective only if received by the Agent not later than 12:00 noon New York, New
York time three Business Days prior to such borrowing, prepayment, conversion or
renewal. Each such notice shall specify the type of the Loans to be borrowed,
prepaid, converted or renewed and the amount thereof (subject to Section 2.09)
(and, in the case of a conversion, the type of Loan to result from such
conversion, and, in the case of a Libor Rate Loan, the Interest Period
therefor), the date of the borrowing or prepayment, or conversion or renewal
(which shall be a Business Day). The Agent shall promptly notify the Lenders of
the contents of each such notice.
In order to request the issuance of a Letter of Credit, Cross Media shall
deliver to the Agent a completed and duly executed Application. The procedure
with respect to any Letter of Credit issued or requested to be issued hereunder
shall otherwise be as set forth in Article 3. The Agent, upon receipt of any
Application shall promptly deliver to each Lender a copy thereof.
Section 1.11 Minimum Amounts. Except for borrowings which exhaust the full
remaining amount of the Commitments, or prepayments or conversions which result
in the prepayment or conversion of all Loans of a particular type or conversions
made pursuant to Section 4.04, each borrowing, prepayment, conversion and
renewal of principal of Loans of a particular type shall be in an amount not
less than (i) $100,000 in the aggregate in the case of Prime Rate Loans and (ii)
$750,000 in the aggregate (plus increments of $100,000 in excess thereof) in the
case of Libor Rate Loans unless such minimum amount is waived by the Required
Lenders (borrowings, prepayments, conversions or renewals of or into Loans of
different types or, in the case of Libor Rate Loans having different Interest
Periods at the same time hereunder to be deemed separate borrowings,
prepayments, conversions and renewals for the purposes of the foregoing, one for
each type and one for each Interest
26
Period). Anything in this Agreement to the contrary notwithstanding, the
aggregate principal amount of Libor Rate Loans having concurrent Interest
Periods shall be at least equal to $750,000.
Section 1.12 Interest.
(1) Subject to the other terms and conditions of this Agreement,
interest on each Loan shall be calculated, at Cross Media's option, in one or
more of the following manners: (A) a variable interest rate equal to the Prime
Rate plus the Prime Rate Applicable Margin, and (B) subject to availability, at
Cross Media's request with respect to Libor Rate Loans, the Libor Rate plus the
Libor Rate Applicable Margin.
(2) Interest shall accrue on the outstanding and unpaid principal
amount of each Loan for the period from and including the date of such Loan to
but excluding the date such Loan is due. While an Event of Default is
continuing, interest shall accrue at the Default Rate on the outstanding
principal amount of any Loan and any other amount payable by the Borrowers
hereunder (to the extent such amount is past due), under any Note or under any
other Facility Document (including the amount of any interest due thereon) to
the fullest extent permitted by law from and including such due date to but
excluding the date such amount is paid in full or such Event of Default is cured
or waived.
(3) Changes in the rate of interest resulting from changes in the
Prime Rate shall take place immediately without notice or demand of any kind.
Interest on each Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
Cross Media and the Lenders in writing of such determination.
(4) All accrued interest shall be paid in arrears (i) for each
Prime Rate Loan on the last Business Day of each Fiscal Quarter commencing on
the first such date after such Loan; and (iv) for each Libor Rate Loan, on the
last day of the Interest Period with respect thereto and, in the case of an
Interest Period greater than three months, at three-month intervals after the
first day of such Interest Period; provided that interest accruing at the
Default Rate shall be due and payable from time to time on demand of the Agent.
In addition, at the time of conversion of any Loan, all accrued interest shall
be due and payable. Notwithstanding anything to the contrary contained herein,
all interest shall become due and payable upon the maturity (whether as
scheduled or as accelerated or otherwise) of the Loans.
27
Section 1.13 Fees.
(1) Up Front Fee. The Borrowers shall pay to the Agent for the
ratable account of each Lender (based on its Commitment Percentage) an up-front
fee equal to $175,000, which shall be due and payable on the Closing Date.
(2) Commitment Fee. The Borrowers shall pay to the Agent for the
account of each Lender (based on its Revolving Credit Commitment Percentage
thereof) a commitment fee on the daily average of the Availability, for the
period from and including the Closing Date to the earlier of the date the
Revolving Credit Commitments are terminated or the Revolving Credit Termination
Date at the Commitment Fee Applicable Margin (as indicated in the definition of
"Applicable Margin"), calculated on the basis of a year of 360 days for the
actual number of days elapsed ("Commitment Fee"). The accrued Commitment Fee
shall be due and payable in arrears on the last Business Day of each Fiscal
Quarter, commencing on the first such date after the Closing Date.
Notwithstanding anything to the contrary, no Lender shall be entitled to receive
any Commitment Fee for any day that any such Lender fails or refuses (or has
failed or refused) to make a Revolving Credit Loan as required by this
Agreement, regardless of whether such Lender subsequently makes such Revolving
Credit Loan, and the Commitment Fee payable by Borrowers shall be calculated
accordingly.
(3) Standby Letter of Credit Fees. The Borrowers shall pay to the
Agent for the account of each Lender (based on its Revolving Credit Commitment
Percentage) Letter of Credit fees equal to the LIBOR Rate Applicable Margin
multiplied by the face amount of each Standby Letter of Credit issued hereunder
and outstanding, collected on the basis of a year of 360 days for the actual
number of days elapsed, such fees to be payable in four (4) calendar quarterly
payments based on the face amount of such Letter of Credit on the first day of
each such calendar quarter, the first payment to be made upon issuance of each
such Letter of Credit.
(4) Letter of Credit Processing Fees. In addition to the fees set
forth in Section 2.11(c), the Borrowers agree to pay, upon demand, the customary
fees, charges and expenses of the Issuing Lender in connection with the issuance
and processing of Letters of Credit, including Documentary Letters of Credit.
(5) Other Fees. The Borrowers shall pay to the Agent such other
fees as set forth in a separate written agreement entered into between the
Borrowers and the Agent.
Section 1.14 Payments Generally. All payments under this Agreement, the
Notes and the other Facility Documents shall be made by the Borrowers to the
Agent at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other place as
Agent may from time to time specify in writing in lawful currency of the United
States of America in immediately available funds, without counterclaim or set
off and free and clear of, and without deduction or withholding for, any taxes
or other payments, not later than 12:00 noon New York, New
28
York time on the relevant dates specified herein (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day) by, unless the Agent agrees to accept payment by other means, the
debiting by the Agent for the account of the applicable Lending office of each
Lender, of the amount of any such payment from any ordinary deposit account of
the Borrowers with the Agent. Cross Media shall, at the time of making each
optional payment under this Agreement, any Note or any other Facility Document,
and in addition to any notice required by Section 2.08, specify to the Agent the
principal or other amount payable by the Borrowers under this Agreement, such
Note or such other Facility Document to which such payment is to be applied (and
in the event that it fails to so specify, or if a Default or Event of Default
has occurred and is continuing, the Agent may apply such payment as provided in
Section 10.04). If the due date of any payment under this Agreement, any Note or
any other Facility Document would otherwise fall on a day which is not a
Business Day, such date shall be extended to the next succeeding Business Day
(unless, in the case of a Libor Rate Loan, such extension would carry such due
date into another calendar month, in which event such payment shall be due on
the immediately preceding Business Day) and interest shall be payable for any
principal so extended for the period of such extension. Each payment received by
the Agent hereunder, under any Note or under any other Facility Document for the
account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's Lending Office.
All payments shall be applied first to the payment of all fees,
expenses and other amounts due the Agent and/or the Lenders (excluding principal
and interest), then to accrued interest, and the balance on account of
outstanding principal; provided, however, that after the occurrence of a Default
or an Event of Default, payments will be applied as set forth in Section 10.04.
29
ARTICLE III
LETTERS OF CREDIT
Section 1.15 L/C Commitment.
(1) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the Lenders set forth in Section 3.03
(a) and the agreements of the Borrowers contained herein, agrees to issue
Letters of Credit for the account of the Borrowers or any Subsidiary on any
Business Day during the term of the Revolving Credit Commitments in such form as
may be approved from time to time by the Issuing Lender; provided that the
Issuing Lender shall not issue any Letter of Credit if, after giving effect to
such issuance, the conditions of Section 2.01 (b) and (c) would not be
satisfied; and provided, further, that no Letter of Credit shall be issued in a
face amount of less than $20,000.00.
(2) Each Letter of Credit shall (i) be denominated in Dollars; and
(ii) expire no later than the Revolving Credit Termination Date.
(3) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York, without giving effect to the conflicts of laws principles thereof.
(4) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Law.
(5) The responsibility of the Issuing Lender to the Borrowers in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit and otherwise comply with the
Uniform customs.
Section 1.16 Procedure for Issuance of Letters of Credit. Cross Media may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and Cross Media. The Issuing Lender shall furnish a copy of such Letter
of Credit to the Borrowers promptly following the issuance thereof.
30
Section 1.17 L/C Participations. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights (other than any rights of the Issuing Lender to receive,
pursuant to Section 2.11(d), the customary fees, charges and expenses of the
Issuing Lender in connection with issuing or processing of Letters of Credit)
under each Letter of Credit issued hereunder and the amount of each draft paid
by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower or a Revolving Credit Loan is not made by such L/C Participant, in each
case in accordance with the terms of this Agreement, such L/C Participant shall,
within three (3) Business Days, pay to the Issuing Lender at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, in Dollars and in immediately available funds, an
amount equal to such L/C Participant's Revolving Credit Commitment Percentage of
the amount of such draft, or any part thereof, which is not so reimbursed or
financed with a Revolving Credit Loan.
(1) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.03 (a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
not paid to the Issuing Lender on the date such payment is due, such L/C
Participant shall pay to the Issuing Lender on demand, in addition to such
amount, an amount equal to the product of (i) such amount and (ii) the daily
average Federal Funds Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender multiplied by (iii) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which
is 365. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this Section shall be conclusive in the
absence of manifest error.
(2) Except to the extent that the amount paid under any Letter of
Credit is financed with a Revolving Credit Loan pursuant to Section 3.04,
whenever, at any time after the Issuing Lender has made payment under any Letter
of Credit and has received from any L/C Participant its pro rata share of such
payment in accordance with Section 3.03(a), the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrowers or
otherwise, including proceeds of Collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender shall
distribute to such L/C Participant its pro rata share thereof provided, however,
that in the event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall return
to the Issuing Lender the portion thereof previously distributed by the Issuing
Lender to it.
31
Section 1.18 Reimbursement; Obligations of Borrowers. (a) The Borrowers
agree to, jointly and severally, reimburse the Issuing Lender on each date on
which the Issuing Lender notifies the Borrowers of the date and amount of a
draft presented under any Letter of Credit and paid by the Issuing Lender for
the amount of (i) such draft so paid and (ii) any taxes, fees, charges or other
out-of-pocket costs or expenses incurred by the Issuing Lender in connection
with such payment (exclusive and without duplication of any such fees, charges
and expenses paid under Section 2.11(d)). Unless such amounts are paid by the
Borrowers on the date of such notice and provided that a Revolving Credit Loan
in such amount may be made pursuant to this Agreement, each drawing honored by
the Issuing Lender, to the extent of the Availability, shall constitute a
request to the Lenders for a Revolving Credit Loan in such amount, bearing
interest at the Prime Rate pursuant to Sections 2.04 and 2.08. If a Revolving
Credit Loan in such amount may not be made pursuant to this Agreement, such
amount is to be paid by the Borrowers on the date of such notice.
Each Borrower hereby agrees at all times to protect, indemnify and
save harmless, and reimburse upon demand, the Issuing Lender and the Issuing
Lender's correspondents and agents and each L/C Participant from and against any
and all claims, actions, suits and other legal proceedings, and from and against
any and all losses, claims, demands, liabilities, damages, costs, charges,
reasonable counsel fees and other expenses which the Issuing Lender or the
Issuing Lender's correspondents or agents or such L/C Participant may, at any
time, sustain or incur by reason of or in consequence of or arising out of the
issuance of the Letters of Credit, it being the intention of the parties that
this Agreement shall be construed and applied to protect and indemnify the
Issuing Lender and the Issuing Lender's correspondents and agents and each L/C
Participant against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower, including without
limitation, any and all risks of the acts of omissions whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts and omissions, herein called the
"Government Acts"). The Issuing Lender and the L/C Participants shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to pay
any draft under any Letter of Credit as a result of any Government Acts any
other cause beyond the Issuing Lender's control or the control of the Issuing
Lender's correspondents or agents, or, if the Issuing Lender, in the Issuing
Lender's sole judgment, determines such payment would violate any applicable
Law. Notwithstanding anything to the contrary contained in this Agreement, the
Borrowers shall not be required to indemnify the Issuing Lender, its
correspondents or agents under the terms of this paragraph to the extent any
otherwise covered losses, claims, etc. arise from the gross negligence or
willful misconduct of any such indemnified party.
(1) Interest shall be payable at the Prime Rate, plus the Prime
Rate Applicable Margin (or, if any Event of Default shall have occurred and be
continuing, at the Default Rate) on any amount remaining unpaid by the Borrowers
under Section 3.04(a) from
32
the date such amount becomes payable until the earlier of (i) the date of
payment in full by the Borrowers of such amount, or (ii) the date any Revolving
Credit Loan is made with respect to such amount.
(2) Each payment made pursuant to this Article 3 shall be made to
the Issuing Lender at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such
other address as the Issuing Lender may indicate in writing for such purpose, in
Dollars and in immediately available funds.
Section 1.19 Obligations Absolute. (a) The Borrowers' obligations under
this Article 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrowers may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit.
(1) Each Borrower agrees with the Issuing Lender that the Issuing
Lender and the L/C Participants shall not be responsible for, and the Borrowers'
reimbursement obligations under this Article 3 shall not be affected by, among
other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among the
Borrowers and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred, or (iii) any claims whatsoever
of any of the Borrowers against any beneficiary of such Letter of Credit or any
such transferee, or (iv) any inability or failure of any Lender to make a
Revolving Credit Loan pursuant to Section 3.04(a).
(2) Notwithstanding anything to the contrary contained in this
Section 3.05 or otherwise in this Agreement, but subject to the specific
provisions of subsection (b) above, the Borrowers' obligations under this
Article 3 shall be subject to, and the Borrowers shall have no liability for,
any losses, claims, damages, costs, fees or expenses of Issuing Lender or any of
its correspondents or agents to the extent any such losses, etc. arise from, the
gross negligence or willful misconduct of Issuing Lender, its correspondents or
agents.
Section 1.20 Conflict. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Article 3, the provisions of this Article 3 shall apply.
Section 1.21 Documents. Except insofar as instructions to the contrary
have been previously given by Cross Media in writing to the Issuing Lender, the
Issuing Lender and any of its correspondents or agents may receive and accept as
"Bills of Lading" under any Letter of Credit any documents issued or purporting
to be issued by or on behalf of any carrier which acknowledges receipt of
property for transportation, whatever the specific provisions of such documents,
and the date of each such document shall be deemed the date of shipment of the
property mentioned therein; and the Issuing Lender may receive and accept as
documents of insurance either insurance policies or insurance certificates.
Commercial
33
invoices presented under any Letter of Credit may be referred to for the
description of the goods; unless otherwise specified in the related application,
wherever the goods are described in other documents, description in general
terms is acceptable.
Section 1.22 Partial Shipments. Except insofar as instructions to the
contrary have been previously given by a Borrower in writing to the Issuing
Lender, the Borrowers agree that partial shipments may be made under any
Documentary Letter of Credit and the Issuing Lender may honor the related
drafts; and if any Documentary Letter of Credit specifies shipments in
installments within stated periods, and the shipper fails to ship in any
designated period, such Documentary Letter of Credit shall cease to be available
for that or any subsequent installment at the Issuing Lender's discretion.
Section 1.23 Extensions, Increases and Other Modifications to Letters of
Credit. The Borrowers agree that in the event of (i) any extension of the
maturity or time for presentation of drafts, acceptances or documents, (ii) any
increase in the amount of any Letter of Credit or (iii) any other modification
of the terms of any Letter of Credit, in each case at the request of Cross Media
and whether with or without notification to any other Person, this Agreement
shall be binding upon the Borrowers with regard to the Letter of Credit so
extended, increased or otherwise modified, to drafts, documents and property
covered thereby, and to any action taken or omitted to be taken by the Issuing
Lender or any of the Issuing Lender's correspondents or agents in accordance
with such extension, increase or other modification. Any such extension,
increase or other modification shall, for purposes of this Agreement, be deemed
issuance of a new Letter of Credit.
Section 1.24 Limitations of Liability. The users of each Letter of Credit
shall be deemed to be the Borrowers' agents and the Borrowers assume all risks
of their acts and omissions and all risks of misuse of each Letter of Credit.
Neither the Issuing Lender nor the Issuing Lender's correspondents
or agents nor any L/C Participant shall be responsible for, and the Borrowers'
reimbursement obligations under this Article 3 shall not be affected by, among
other things, (i) the existence, character, quality, quantity, condition,
packing, value or delivery of the property purporting to be represented by
documents; (ii) for any difference in character, quality, quantity, condition,
packing or value of the property from that expressed in documents; (iii) for the
time, place, manner or order in which shipment is made; (iv) for partial or
incomplete shipment or failure or omission to ship any or all of the property
referred to in any Letter of Credit; (v) for the character, adequacy, validity,
or genuineness of any insurance; (vi) for the solvency or responsibility of any
insurer, or for any other risk connected with insurance; (vii) for any deviation
from instructions, delay, default or fraud by the shipper or anyone else in
connection with the property or the shipping thereof; (viii) for the solvency,
responsibility or relationship to the property of any party issuing any
documents in connection with the property; (ix) for delay in arrival or failure
to arrive of either the property or any of the documents relating thereto; (x)
for delay in giving or failure to give notice of arrival or any
34
other notice; (xi) for any breach of contract between the shippers or vendors
and any of the Borrowers; (xii) for any Laws which may be effective in
jurisdictions of negotiation and/or payment of any Letter of Credit; (xiii) for
failure of any draft to bear any reference or adequate reference to any Letter
of Credit, or failure of documents to accompany any draft at negotiation, or
failure of any Person to note the amount of any draft on the reverse of any
Letter of Credit or to surrender or take up any Letter of Credit (unless
specifically required on the face and by the terms of the Letter of Credit) or
to send forward documents apart from drafts as required by the terms of the
Letter of Credit; (xiv) for errors, omissions, interruptions or delays in
transmission, or delivery of any messages, by mail, cable, telegraph, wireless
or otherwise, whether or not they be in cipher; (xv) any error, neglect or
default of any of the Borrower's correspondents or agents; or (xvi) the
validity, accuracy or genuineness of drafts, documents or required statements,
even if such drafts, documents or statements should in fact prove to be in any
or all respects invalid, inaccurate, fraudulent or forged and notwithstanding
that a Borrower shall have notified the Issuing Lender or any L/C Participant
thereof.
If any Letter of Credit provides that payment is to be made by the
Issuing Lender's correspondent, neither the Issuing Lender nor such
correspondent shall be responsible for the failure of any of the documents
specified in such Letter of Credit to come into the Issuing Lender's hands or
for any delay in connection therewith, and the Borrowers' obligations shall not
be affected by such failure or delay in the receipt by the Issuing Lender of any
such documents. In furtherance and extension and not in limitation of the
specified provisions hereinbefore set forth, the Borrowers agree that any action
taken or omission to act by the Issuing Lender or by any correspondent or agent
of the Issuing Lender under or in connection with any Letter of Credit or the
relative drafts, documents or property, if taken or done in good faith, shall be
binding on the Borrower and shall not put the Issuing Lender or the Issuing
Lender's correspondents or agents under any resulting liability to the
Borrowers.
Section 1.25 Compliance with Regulations; Licenses; Insurance. Each
Borrower agrees to procure promptly any necessary import and export or other
licenses for the import or export or shipping of any property relating to any
Letter of Credit and to comply in all material respects with all applicable Laws
in regard to the shipment of the property or the financing thereof, and to
furnish such certificates in that respect as the Issuing Lender may at any time
require, and to keep the property adequately covered by insurance satisfactory
to the Issuing Lender, and to assign the policies or certificates of insurance
to the Issuing Lender, or to make the loss or adjustment, if any, payable to the
Issuing Lender, at the option of the Issuing Lender; and to furnish to the
Issuing Lender upon demand evidence of acceptance by the insurers of such
assignment. Should the insurance upon such property for any reason be
unsatisfactory to the Issuing Lender, the Issuing Lender may, at the Borrowers'
expense, obtain insurance on such property satisfactory to the Issuing Lender.
Section 1.26 Violations of Law. In the event that any action taken under
or in connection with any Letter of Credit could, in the Issuing Lender's sole
judgment, have the
35
effect of violating any applicable Law, the Issuing Lender may take or refuse to
take any action as it deems necessary, including dishonoring any draft or
acceptance presented hereunder, and the Issuing Lender shall be indemnified and
held harmless by the Borrowers from any claim arising out of such action or
inaction on the part of the Issuing Lender.
Section 1.27 Law and Regulations; Additional Payments. If any future Law
or the future interpretation of any existing or future law by any Governmental
Authority, or compliance by the Issuing Lender or any L/C Participant with any
future request or directive (whether or not having the force of law) of any such
Governmental Authority, or the Issuing Lender's or L/C Participant's reasonable
action in anticipation thereof to enable the Issuing Lender or L/C/ Participant
to comply therewith, either (i) imposes, modifies or deems applicable or results
in the application of, any reserve, special deposit, capital maintenance,
capital ratio or similar requirement against Letters of Credit (or
participations therein) or (ii) imposes on the Issuing Lender or any L/C
Participant any other condition regarding this Agreement or the Letters of
Credit, and the result thereof is to increase the cost to the Issuing Lender or
any L/C Participant of issuing or maintaining, or to impose or increase upon the
Issuing Lender or any L/C Participant any capital requirement applicable as a
result of the issue or maintenance of, any Letters of Credit (or participations
therein) or the reimbursement obligations of the Borrowers hereunder, or to
reduce the amounts receivable by the Issuing Lender or any L/C Participant
hereunder (which increase in cost or increase in or imposition of capital
requirements or reduction in amounts receivable may be determined by the Issuing
Lender's reasonable allocation of the aggregate of such costs increases, capital
increases or impositions or reductions in amounts receivable) then, provided
that the Issuing Lender or applicable L/C Participant demands similar increased
costs with respect to all other similarly affected letters of credit across the
portfolio of such Issuing Lender or L/C Participant, upon demand by the Issuing
Lender or such L/C Participant, the Borrowers shall immediately pay to the
Issuing Lender (for itself or for the benefit of any affected L/C Participant)
from time to time as specified by the Issuing Lender, additional commissions
which shall be sufficient to compensate the Issuing Lender or such L/C
Participant or such L/C Participant for such increased cost or increase in (or
imposition of) capital requirements or reduction in amounts receivable by the
Issuing Lender or such L/C Participant together with interest on each such
amount from the date demanded until payment in full thereof at the Prime Rate,
plus the Prime Rate Applicable Margin (or, if any Event of Default shall have
occurred and be continuing, at the Default Rate). Notwithstanding anything to
the contrary contained in this Agreement, the Borrowers shall have no liability
for any increased costs otherwise accruing more than 90 days prior to the
receipt by the Borrowers of written notice from the Issuing Lender or L/C
Participant concerning such increased costs. The Borrowers shall pay such
increased costs within five (5) Business Days of receipt of such a written
notice. A certificate setting forth in reasonable detail the increased cost,
reduction in all amounts receivable or amounts necessary to compensate the
Issuing Lender or L/C Participant as a result of an increase in (or imposition
of) capital requirements submitted by the Issuing Lender or such L/C Participant
to Cross Media shall be conclusive, absent manifest error, as to the amount
thereof. Notwithstanding anything to the contrary contained in this Agreement,
(a) nothing in
36
this section shall require the Borrowers to compensate the Issuing Lender or any
L/C Participant for any changes in tax law that would increase the amount of
general income taxes payable by such Issuing Lender or L/C Participant, and (b)
the Issuing Lender and each L/C Participant shall take all reasonable steps to
avoid such increased cost, etc., including where reasonable changing the office
handling the account.
Section 1.28 Compliance with Letters of Credit. Notwithstanding anything
to the contrary contained in this Article 3 or otherwise in this Agreement, but
subject to the specific provisions of Sections 3.05(b) and 3.10, the Issuing
Lender, its correspondents and its agents shall at all times be required to
comply with the facial requirements of each Letter of Credit, including, if
applicable, requiring the delivery of documents, which on their face comply with
the requirements of the face of the Letter of Credit before honoring any draws
on any Letter of Credit.
ARTICLE IV
YIELD PROTECTION; ILLEGALITY; ETC.
Section 1.29 Additional Costs.
(1) The Borrowers shall jointly and severally pay directly to each
Lender from time to time on demand such amounts as such Lender may determine to
be necessary to compensate it for any increased costs which such Lender
determines are attributable to its making or maintaining any Libor Rate Loans
under this Agreement or its Notes or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change relating to any such Loans or such
obligation which: (i) changes the basis (but not the rate) of taxation of any
amounts payable to such Lender under this Agreement or its Notes in respect of
any of such Loans (other than franchise, and capital, branch profits taxes or
taxes imposed with respect to the net income of such Lender or of its Lending
Office for any of such Loans by the jurisdiction in which such Lender is
organized or has its principal office or such Lending Office); or (ii) imposes
or modifies any reserve, special deposit, deposit insurance or assessment,
minimum capital, capital ratio or similar requirements relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including any of such Loans or any deposits
referred to in the definition of "Libor Rate" in Section 1.01); provided that no
such compensation shall be payable to the extent that the Libor Rate has been
adjusted to account for such increased cost; or (iii) imposes any other similar
condition affecting this Agreement or such Lender's Notes (or any of such
extensions of credit or liabilities); provided that such Lender demands similar
Additional Costs with respect to all other similarly affected loan facilities
across its portfolio. Each Lender will notify Cross Media in writing of any
event occurring after the date of this Agreement which will entitle such Lender
to compensation pursuant to this Section 4.01(a) as
37
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation provided that, the Borrowers shall have no liability
for any such Additional Costs otherwise accruing more than 90 days prior to the
receipt by Cross Media of the written notice concerning such Additional Costs.
The Borrowers shall pay any such Additional Costs within five (5) Business Days
of receipt of such a written notice. If any Lender requests compensation from
the Borrowers under this Section 4.01(a), or under Section 4.01(c), Cross Media
may, by notice to such Lender (with a copy to the Agent), require that such
Lender's affected Loans with respect to which such compensation is requested be
converted in accordance with Section 4.04. If any taxes are imposed for which
the Borrowers would be required to make a payment under this Section 4.01, the
Lender shall attempt to avoid or reduce such taxes by taking any appropriate
action (including, without limitation, assigning its rights hereunder to a
related entity or a different Lending Office) if such action will not, in the
reasonable judgment of the Lender, be disadvantageous to such Lender and
provided that the Borrowers pay any Additional Costs resulting from such action
and the out-of-pocket costs and expenses of such Lender in undertaking such
action. The term "Lender" as used in this Section 4.01(a) shall include, if
applicable, such Lender's parent holding company.
(2) Without limiting the effect of the foregoing provisions of
this Section 4.01 (but without duplication), in the event that, by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender which includes deposits by
reference to which the interest rate on Libor Rate Loans is determined as
provided in this Agreement or a category of extensions of credit or other assets
of such Lender which includes Libor Rate Loans or (ii) becomes subject to
restrictions on the amount of such a category of liabilities or assets which it
may hold, then, if such Lender so elects by notice to the Borrowers (with a copy
to the Agent), the obligation of such Lender to make or renew Libor Rate Loans
and to convert Prime Rate Loans hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect (and all affected Libor Rate Loans held
by such Lender then outstanding shall be converted in accordance with Section
4.04).
(3) Without limiting the effect of the foregoing provisions of
this Section 4.01 (but without duplication), the Borrowers shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender for any costs of capital
which it determines are attributable to the maintenance by it pursuant to the
adoption, effectiveness or implementation of, or any change in, any Law of any
jurisdiction or any written interpretation, directive or request (whether or not
having the force of law and whether in effect on the date of this Agreement or
thereafter) of any governmental authority in respect of its Loans hereunder or
its obligation to make Loans hereunder (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Lender to a level below that which it could have achieved but for such Law,
interpretation, directive or request). Each Lender will notify Cross Media in
writing if it is entitled to compensation pursuant to this Section 4.01(c) as
38
promptly as practicable after it determines to request such compensation, but in
no event shall a Lender be entitled to reasonable compensation for any period in
excess of 90 days prior to the date of such notice. The Borrower shall pay on
such additional compensation within five (5) Business Days of receipt of such
written notice.
(4) Determinations and allocations by a Lender for purposes of
this Section 4.01 of the effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained pursuant to subsection (c),
on its costs of making or maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it in respect of Loans or
such obligation, and of the additional amounts required to compensate such
Lender under this Section 4.01, shall be set forth in certificates, signed by an
officer of such Lender, delivered to Cross Media and the Agent. Such
certificates shall include the amount required to be paid by the Borrowers to
such Lender and the computations made by such Lender to determine such amount.
Any such determination and allocation shall be conclusive, absent demonstrable
error, provided that such determinations and allocations are made on a
reasonable basis.
Section 1.30 Limitation on Libor Rate Loans. Anything herein to the
contrary notwithstanding, if:
(1) the Agent reasonably determines (which determination shall be
conclusive, absent manifest error) that quotations of interest rates for the
relevant deposits referred to in the definition of "Libor Rate" in Section 1.01
are not being provided in the relevant amounts or for the relevant maturities
for purposes of determining the rate of interest for any Libor Rate Loans as
provided in this Agreement; or
(2) the Required Lenders reasonably determine (which determination
shall be conclusive, absent demonstrable error) and notify the Agent in writing
that the relevant rates of interest referred to in the definition of "Libor
Rate" in Section 1.01 upon the basis of which the rate of interest for any Libor
Rate Loans are to be determined do not adequately cover the cost to the Lenders
of making or maintaining such Loans;
then the Agent shall give Cross Media and such Lender prompt written notice
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make or renew affected Libor Rate Loans, or to convert
Prime Rate Loans into affected Libor Rate Loans and the Borrowers shall, on the
last day(s) of the then current Interest Period(s) for the outstanding affected
Libor Rate Loans, either prepay such Libor Rate Loans or convert such Libor Rate
Loans into another type of Loan in accordance with Section 2.05.
Section 1.31 Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its
39
obligation to make, maintain or renew Libor Rate Loans hereunder or convert
Prime Rate Loans into Libor Rate Loans, then such Lender shall promptly notify
Cross Media thereof in writing (with a copy to the Agent) and such Lender's
obligation to make, maintain or renew Libor Rate Loans and to convert Prime Rate
Loans into Libor Rate Loans hereunder shall be suspended until such time as such
Lender may again make, maintain or renew such Libor Rate Loans and convert Prime
Rate Loans into Libor Rate Loans, and such Lender's outstanding Libor Rate
Loans, as the case may be, shall be converted into Prime Rate Loans in
accordance with Section 4.04.
Section 1.32 Certain Conversions Pursuant to Sections 4.01 and Section
4.03. If Libor Rate Loans are to be converted pursuant to Section 4.01 or
Section 4.03, such Lender's Libor Rate Loans shall be automatically converted
into Prime Rate Loans on the last day(s) of the then current Interest Period(s)
for such Lender's Libor Rate Loans (or in the case of a conversion required by
Section 4.03, on such earlier date as such Lender may specify in writing to
Cross Media with a copy to the Agent) and, unless and until such Lender gives
notice as provided below that the circumstances specified in Section 4.01 or
Section 4.03 which gave rise to such conversion no longer exist:
(1) to the extent that such Lender's Libor Rate Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Libor Rate Loans shall be applied instead to its Prime
Rate Loans; and
(2) all Loans which would otherwise be made or renewed by such
Lender as Libor Rate Loans shall be made instead as Prime Rate Loans and all
Loans of such Lender which would otherwise be converted into Libor Rate Loans
shall not be so converted.
If such Lender gives written notice to Cross Media (with a copy to the Agent)
that the circumstances specified in Section 4.01 or Section 4.03 which gave rise
to the conversion of such Lender's Libor Rate Loans pursuant to this Section
4.04 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Libor Rate Loans are outstanding,
such Lender's Prime Rate Loans shall be automatically converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Libor Rate
Loans to the extent necessary so that, after giving effect thereto, all Libor
Rate Loans held by the Lenders holding Libor Rate Loans, and by such Lender are
held pro rata (as to principal amounts, types and Interest Periods) in
accordance with their respective Commitments.
Section 1.33 Certain Compensation. Subject to each Lender's reasonable
efforts to mitigate such losses, costs and expenses, the Borrowers shall jointly
and severally pay to the Agent for the account of each Lender, upon the request
of such Lender through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to
40
compensate it for any loss, cost or reasonable expense which such Lender
determines is attributable to:
(1) any payment, prepayment, conversion or renewal of a Libor Rate
Loan made by such Lender on a date other than the last day of an Interest Period
for such Loan (whether by reason of acceleration or otherwise); or
(2) any failure by the Borrowers to borrow, convert into or renew
a Libor Rate Loan to be made, converted into or renewed by such Lender on the
date specified therefor in the relevant notice under Sections 2.04, 2.05 or
2.07, as the case may be.
Without limiting the foregoing, such compensation shall include an amount equal
to the excess, if any, of: (i) the amount of interest which otherwise would have
accrued on the principal amount so paid, prepaid, converted or renewed or not
borrowed, converted or renewed for the period from and including the date of
such payment, prepayment or conversion or failure to borrow, convert or renew to
but excluding the last day of the then current Interest Period for such Libor
Rate Loan (or, in the case of a failure to borrow, convert or renew, to but
excluding the last day of the Interest Period for such Libor Rate Loan which
would have commenced on the date specified therefor in the relevant notice) at
the applicable rate of interest for such Libor Rate Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Lender) such
Lender would have bid in the London interbank market for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Lender as to the amounts payable pursuant to this
Section 4.05 shall be conclusive absent demonstrable error.
Section 1.34 Lending Office Designations. Before giving any notice to
Cross Media pursuant to Section 4.01, 4.02 or Section 4.03, a Lender shall, if
possible, designate a different Lending Office if such designation will avoid
the need for giving such notice and will not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.
ARTICLE V
CONDITIONS PRECEDENT
Section 1.35 Conditions Precedent to All Loans and Letters of Credit. The
obligations of the Lenders to make any Loan (including by means of conversion or
renewal of Loans), the obligations of the Issuing Lender to issue Letters of
Credit, and all other obligations of the Agent, the Lenders and the Issuing
Lender to the Borrowers, are subject to the satisfaction of the following
conditions precedent:
(1) the Agent shall have received a timely notice as required by
Section 2.04, or an Application as required by Section 3.01;
41
(2) each Lender that has not previously received an appropriate
Note shall have received a duly executed Note payable to its order and otherwise
complying with the provisions of this Agreement;
(3) the representations and warranties of the Obligors contained
in this Agreement and each other Facility Document shall be true and correct in
all material respects on the date of such Loan or issuance of such Letter of
Credit or performance of obligation as though made on and as of such date
(provided that any representations and warranties which speak to a specific date
shall remain true and correct in all material respects as of such specific
date);
(4) all agreements and conditions required to be performed and
complied with by any Obligor under this Agreement or any other Facility Document
by such date shall have been performed and complied with in all material
respects to the reasonable satisfaction of the Agent and its counsel by such
Obligor;
(5) the Agent shall have received all fees and other amounts due
and payable by the Obligors under the Facility Documents; and
(6) no Default or Event of Default shall have occurred and be
continuing, or would occur as a result of the making of such Loan, the issuance
of such Letter of Credit or the performance of such obligation.
Section 1.36 Documentary Conditions Precedent to Initial Loans and Initial
Letters of Credit. The obligations of the Lenders to make any initial Loan, the
obligation of the Issuing Lender to issue any Letter of Credit on the Closing
Date, and all other obligations of the Agent, the Lenders and the Issuing Lender
to the Borrowers on the Closing Date are subject to the satisfaction of the
following documentary conditions precedent:
The Agent shall have received, in form and substance satisfactory to the Agent
and its counsel:
(1) Credit Agreement: one counterpart of this Agreement for each
Lender, duly executed by the Borrowers;
(2) Notes: a Note for each Lender, duly executed by the Borrowers,
for each Loan to be made by such Lender;
(3) Guaranty: the Guaranty, duly executed by each of the
Guarantors;
(4) Pledge Agreement: the Pledge Agreement, duly executed by Cross
Media, together with (i) financing statements duly filed under the UCC of each
jurisdiction necessary or, in the opinion of the Agent, desirable to perfect the
Liens created by the Pledge Agreement, (ii) copies of searches identifying all
of the financing statements on file with
42
respect to Cross Media in all jurisdictions referred to under clause (i) of this
Section 5.02 (d) indicating that no party claims an interest in and to the
Collateral purported to be covered by the Pledge Agreement and (iii) stock
certificates representing all of the outstanding capital stock of the
Subsidiaries to be pledged by Cross Media pursuant to the Pledge Agreement
together with undated stock powers executed in blank;
(5) Security Agreement: the Security Agreement, duly executed by
each of the Borrowers and each of their respective Subsidiaries organized within
the United States of America, together with (i) financing statements duly filed
under the UCC of each jurisdiction necessary or, in the reasonable opinion of
the Agent, desirable to perfect the Liens created by the Security Agreement;
(ii) executed copies of the termination statements to be filed under the UCC of
each jurisdiction necessary to terminate the Liens of other Persons (other than
Persons having Permitted Liens) in and to the Collateral purported to be covered
by the Security Agreement; and (iii) copies of searches identifying all of the
financing statements on file with respect to the Borrowers and each of their
respective Subsidiaries in all jurisdictions referred to under clause (i) of
this Section 5.02(e);
(6) The Trademark Security Agreement: The Trademark Security
Agreement for each of Cross Media, Media, NSI and ▇▇▇▇▇▇▇▇.▇▇▇, Inc., duly
executed by each of them;
(7) NSI Employment Agreements: The Borrowers shall have delivered
to the Agent copies of the executed employment agreement of each of the senior
officers of NSI;
(8) Termination of Existing NSI Credit Facility, including Letter
of Credit. The outstanding obligations of NSI to Fleet National Bank with
respect to their existing credit facility shall have been repaid in full and the
letter of credit for the benefit of ▇▇. ▇▇▇ ▇▇▇▇▇▇▇, in the face amount of
$1,000,000, shall have been returned to the Agent for cancellation, and all
other documents reasonably requested by Fleet National Bank to effectuate the
cancellation and termination of such credit facility and letter of credit shall
have been executed by NSI and/or ▇▇. ▇▇▇▇▇▇▇ as the case may be;
(9) Lockbox Accounts: Agent shall have received a duly executed
Lockbox Agreement with respect to each Lockbox Account, for collecting or
servicing the Receivables;
(10) Other Facility Documents: each other Facility Document, duly
executed by the appropriate Borrowers, Subsidiaries and such other parties
thereto (other than the Agent or the Lenders), as the case may be;
(11) Possession Collateral: all Possession Collateral;
43
(12) Opinions: the legal opinion of Blank Rome ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, in form and substance reasonably acceptable to the Agent and its counsel;
(13) Consents and Acknowledgments: such consents or
acknowledgments, with respect to the transactions hereunder, from each of the
Borrowers, the Subsidiaries and such other Persons as the Agent may determine to
be necessary or appropriate;
(14) Officer's Certificate: a certificate of a duly authorized
officer of each of the Borrowers, dated the Closing Date, stating that the
representations and warranties contained in Article 6 and in the other Facility
Documents are true and correct on such date as though made on and as of such
date (provided that any representations and warranties which speak to a specific
date shall remain true and correct as of such specific date), all agreements and
conditions required to be performed and complied with by such date have been
performed and complied with and that no Default or Event of Default has occurred
and is continuing, or would occur as a result of the making of such Loan, the
issuance of such Letter of Credit, or performance of such other obligation of
the Lenders;
(15) Resolutions: copies, certified as of the Closing Date by the
Secretary or an Assistant Secretary of each Obligor, of resolutions of the Board
of Directors of such Obligor authorizing the execution, delivery and performance
by such Obligor of the Facility Documents to which it is a party and, if such
Obligor is a Borrower, the borrowings and other extensions of credit hereunder,
which certificate shall state that such resolutions have not been modified,
rescinded or amended and are in full force and effect on the date of such
certification;
(16) Organization Documents; Incumbency: (i) copies of the
certificate of incorporation or other formation documents of each Obligor, and
all amendments thereto, certified as of a recent date by the Secretary of State
of the state of organization of such Obligor; (ii) the certificate of said
Secretary of State as to the due incorporation, valid corporate existence, good
standing and charter documents on file of such Obligor, as of a recent date;
(iii) the certificate of the Secretary of State of each state in which such
Obligor is required to qualify to do business as to due qualification to do
business as a foreign entity and good standing of such Obligor, as of a recent
date; (iv) the certificate of the Secretary or Assistant Secretary of such
Obligor, dated the date hereof, certifying (A) that attached thereto is a true
and complete copy of the certificate of incorporation and by-laws or other
formation documents of such Obligor, as in effect on the date of such
certification, (B) that such certificate of incorporation has not been amended
since the date of the last amendment thereto indicated on the certificate of the
Secretary of State furnished pursuant to clause (i) above, and (C) the
incumbency and signatures of the officers of such Obligor executing this
Agreement or any other Facility Document on behalf of such Obligor; and (v) a
certificate of another officer as to the incumbency and specimen signature: of
the Secretary or Assistant Secretary executing the certificate pursuant to
clause (v) above;
44
(17) Insurance: evidence that the Borrowers and the Subsidiaries
have obtained such policies of insurance (including flood insurance policies)
with such insurance companies as are required to be maintained by Borrowers and
the Subsidiaries pursuant to this Agreement and the other Facility Documents;
(18) Evidence of Repayment and Termination of the Coast Business
Credit Facility: receipt of a pay-off letter with respect to the Coast Business
Credit Facility, and the termination of such facility and all Liens granted by
any Obligor pursuant thereto and the payment of all fees, commissions and
expenses payable in connection with such repayment and termination;
(19) Borrowing Notice; Application: (i) for any initial Loans an
initial Borrowing Notice of the Borrowers relating to the Loans to be made on
the Closing Date together with a letter from the Borrowers containing wire
transfer instructions and account information relating to the funds to be made
available by the Lenders to the Borrowers on the Closing Date; and (ii) for any
Letters of Credit to be issued on the Closing Date, an Application as required
by Section 3.01;
(20) Borrowing Base Certificate: a Borrowing Base Certificate
calculated on the basis of the Borrowers' Eligible Accounts Receivables and
Eligible Magazine Subscription Receivables as of a date not more than 30 days
prior to the Closing Date;
(21) Waiver of Lien Agreement: Agreement with respect to a waiver
of any lien by Fulfillment Plus of any inventory owned by NSI and located at
Fulfillment Plus' premises in Holtsville, New York; and
(22) Other Documents: such other approvals, opinions and
instruments, certificates and other documents as the Agent shall have requested
in its sole discretion.
Section 1.37 Additional Conditions Precedent.
The obligations of the Lenders to make any initial Loan, and the
obligations of the Issuing Lender to issue any Letter of Credit on the Closing
Date, and all other obligations of the Agent, the Lenders and the Issuing Lender
to the Borrowers, are subject to the satisfaction of the following additional
conditions precedent:
(1) No Material Adverse Change: there shall have been no material
adverse change in the financial condition or business condition of the Borrowers
or any of their Subsidiaries since the date of the Borrowers' most recent
financial statement delivered to the Agent;
(2) Legal Matters all legal matters incident to this Agreement,
the other Facility Documents and the transactions contemplated hereby and
thereby shall be satisfactory to the Agent, the Lenders and their respective
counsel; and
45
(3) No Default or Event of Default: no Default or Event of Default
shall have occurred and be continuing, or would occur as a result of the making
of such Loan, the issuance of such Letter of Credit, or performance of such
other obligation of the Lenders.
Section 1.38 Deemed Representations. Each notice of borrowing hereunder
and acceptance by the Borrowers of the proceeds of such borrowing, and each
Application and acceptance by the Borrowers of any Letter of Credit, shall
constitute a representation and warranty that the statements contained in
Article 6 and in the other Facility Documents, except for representations and
warranties expressly made as of a specified earlier date, are true and correct
in all material respects both on the date of such notice or Application and,
unless Cross Media otherwise notifies the Agent prior to such borrowing or
issuance, as of the date of such borrowing or issuance.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES.
The Borrowers hereby jointly and severally represent and warrant that:
Section 1.39 Incorporation, Good Standing and Due Qualification. Each
Obligor is duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, has the
corporate or partnership power and authority to own or lease its Properties and
to transact the business in which it is now engaged or proposed to be engaged,
and is duly qualified as a foreign corporation or foreign partnership and in
good standing under the laws of each jurisdiction in which such qualification is
required, except to the extent that such failure to qualify would not cause a
Material Adverse Effect.
Section 1.40 Subsidiaries and Affiliates; Inactive Subsidiaries. As of the
Closing Date, Schedule 6.02 sets forth the name of (a) each Subsidiary, in each
case showing the jurisdiction of incorporation of such Subsidiary and the
percentage of Cross Media's ownership in such Subsidiary, (b) each Inactive
Subsidiary and (c) each Affiliate, in each case showing the nature of the
affiliation. Except as set forth in Schedule 6.02, neither any Borrower nor any
of the Subsidiaries owns or holds the right to acquire any shares of stock or
any other security or interest in any other Person.
Section 1.41 Capitalization. As of the Closing Date, the authorized
capital stock of each of the Borrowers and each of the Subsidiaries, the number
of shares of such capital stock of which are issued and outstanding and, except
for Cross Media, the record holder of such issued and outstanding capital stock
are as set forth on Schedule 6.03. There are no outstanding preemptive,
conversion or other rights, options or warrants granted or issued by or binding
upon the Borrowers or any of the Subsidiaries for the purchase or acquisition by
any other Person of any shares of capital stock of the Borrowers or any of the
Subsidiaries
46
(other than Cross Media) or any other securities convertible into, exchangeable
for or evidencing the right to subscribe for any shares of such capital stock.
None of the Borrowers nor any of the Subsidiaries is subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock or such other rights. None of the Borrowers nor any
of the Subsidiaries is a party to any agreement granting registration rights to
any person with respect to any of its equity or debt securities. None of the
Borrowers nor any of the Subsidiaries is a party to any agreement restricting
the voting or transfer of any shares of the capital stock of the Borrowers or
any Subsidiary.
Section 1.42 Owned Real Property. None of the Borrowers nor any of their
Subsidiaries own any real property.
Section 1.43 Leased Real Property. Schedule 6.05 sets forth, as of the
Closing Date, a complete and accurate list of all leases of real property under
which any of the Borrowers or any Subsidiary is the lessee, showing as of the
date hereof the street address, county or other relevant jurisdiction, state,
lessor, lessee, expiration date and annual rental cost thereof. To the
Borrowers' knowledge, each such lease is the legal, valid and binding obligation
of the lessor thereof, enforceable in accordance with its terms.
Section 1.44 Material Contracts. Schedule 6.06 sets forth, as of the
Closing Date, a complete and accurate list of all Material Contracts, showing as
of the date hereof the parties, subject matter and term thereof and listing any
amendments thereto. To the Borrowers' knowledge, each such Material Contract has
been duly authorized, executed and delivered by all parties thereto, has not
been amended or otherwise modified, is in full force and effect and is binding
upon and enforceable against all parties thereto in accordance with its terms,
and there exists no material default under any Material Contract by any party
thereto.
Section 1.45 Corporate Power and Authority. The execution, delivery and
performance by each Obligor of the Facility Documents to which it is a party
and, in the case of a Borrower, the borrowings and other extensions of credit
hereunder are within such Obligor's power and authority, have been duly
authorized by all necessary corporate or partnership action and do not and will
not: (a) contravene its certificate of incorporation or by-laws or other
organization documents; (b) violate any provision of, or require any filing
(other than the filing of the financing statements and assignments required
pursuant to the terms of the Security Documents), registration, consent or
approval under, any applicable Law (including, without limitation, Regulation T,
Regulation U and Regulation X); (c) result in a material breach of or constitute
a material default or require any consent under any Obligor Agreement; or (d)
result in, or require, the creation or imposition of any Lien (other than
Permitted Liens), upon or with respect to any of the Properties now owned or
hereafter acquired by any Obligor.
Section 1.46 Legally Enforceable Agreements. Each Facility Document to
which any Obligor is a party is, or when executed and delivered by such Obligor
and the other
47
parties thereto will be, a legal, valid and binding obligation of such Obligor
enforceable against such Obligor in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws affecting
creditors' rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
Section 1.47 No Violation. No Obligor is:
(1) in violation of its certificate of incorporation or by-laws or
other formation documents, as the case may be;
(2) in violation in any material respect of any applicable Law
(including, without limitation, Regulation T, Regulation U and Regulation X);
(3) in breach of or default under in any material respect any
Obligor Agreement; or
(4) in violation, breach or default of any Law or Obligor
Agreement where such violation, breach or default, individually or in the
aggregate, could reasonably be expected to result in
(1) any material restriction on its right to transact business or
any material restriction on its operations,
(2) the forfeiture or loss of any material Property of such
Obligor, or any substantial part thereof or interest therein, or
(3) any Material Adverse Effect.
Section 1.48 Licenses, Approvals, etc. All material licenses, permits and
other authorizations, and all material bonds, plans, consents to enter upon
leased property and other filings, required by applicable Law or any effective
restrictive covenant to be obtained or made in order to permit the operation and
conduct of the businesses of each of the Borrowers and the Subsidiaries as now
operated and conducted or proposed to be operated and conducted have been
obtained or made, except for any such authorizations or filings which are not
currently so required and which, in the reasonable judgment of the Borrowers,
can be obtained or made in the ordinary course of business prior to the time so
required without material cost or any significant delay.
Section 1.49 Litigation. Except as set forth on Schedule 6.11, there is no
action, suit or proceeding pending or, to the Knowledge of the Borrowers,
threatened against or affecting any of the Borrowers or any Subsidiary or any of
their respective Properties which (a) (i) involve (x) a claim for damages or
relief in an amount greater than $350,000, or (y) claims for damages or relief
in an aggregate amount which exceeds $1,000,000, (ii) has
48
resulted in a final judgment or judgments for the payment of money in an amount
greater than $350,000 which judgment or judgments have not been satisfied, (iii)
has resulted in an attachment or Liens on any Property of any of the Borrowers
or any of the Subsidiaries for an amount exceeding an aggregate of $350,000; (b)
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; or (c) question the legality, validity or
enforceability of any of the Facility Documents or the transactions contemplated
by any of the Facility Documents.
Section 1.50 Financial Statements.
(1) Cross Media has heretofore or on the Closing Date furnished to
the Agent its management prepared consolidated and consolidating balance sheets
and consolidated and consolidating income statement and statements of cash flows
and changes in stockholders' equity as of and for the Fiscal Year ended December
31, 2001 ("Financial Statements"). Such Financial Statements present fairly, in
all material respects, the consolidated and consolidating financial condition of
the Consolidated Entities as of such date and results of operations for such
period. Such financial statements were prepared in accordance with GAAP applied
on a consistent basis, except for the absence of footnotes.
(2) Except as set forth in the Financial Statements of the
Borrowers referred to in Section 6.12(a), to the Knowledge of the Borrowers, as
of the Closing Date, there are no liabilities of the Borrowers and/or the
Guarantors, fixed or contingent, which are material but are not reflected on
such financial statements and are required to be disclosed on such financial
statements in accordance with GAAP if such financial statements had been
audited, other than disclosures that would have been included in the footnotes
thereof. No information, exhibit or report furnished by the Borrowers, any
Subsidiary or any other Obligor to the Lenders in connection with the
negotiation of the Facility Documents contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statements contained therein not materially misleading, except as set forth in
Schedule 6.24, since December 31, 2001, there has been no change (other than
events affecting the general economy and financial markets of the United States)
which could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(3) Cross Media has heretofore furnished to the Agent its
projections for the Fiscal Years ending December 31, 2002 and December 31, 2003
and the assumptions used by Cross Media in making such projections were
reasonable under the circumstances.
Section 1.51 Taxes. All taxes, assessments, fees and other governmental
charges upon the Borrowers or any Subsidiary, or upon any of their respective
Properties, business,
49
income, profits or franchises, which are due and payable have been paid, except
to the extent permitted by Section 7.11. The Borrowers have established on their
books such charges, accruals and reserves in respect of taxes, assessments, fees
and other governmental charges for all fiscal periods as are required by GAAP.
To the Knowledge of the Borrowers, there are no proposed assessments for
material additional taxes, assessments, fees and other governmental charges for
any period.
Section 1.52 ERISA. Each Plan and, to the Knowledge of the Borrowers, each
Multiemployer Plan, if any, are in compliance in all material respects with, and
have been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable federal or
state law, and no event or condition is occurring or exists concerning which any
of the Borrowers or any of their Subsidiaries would be under an obligation to
furnish a report to the Lender in accordance with Section 7.09(i). To the
Knowledge of the Borrower, as of the Closing Date there exist no Unfunded
Benefit Liabilities.
Section 1.53 Environmental Matters. Except as provided in Schedule 6.15,
each of the Borrowers and each Subsidiary is in compliance in all material
respects with all applicable Environmental Laws. None of the Borrowers nor any
of their Subsidiaries is subject to any material liability under any
Environmental Law. As of the Closing Date, the Borrower has delivered such
notices and provided such information to the Agent with respect to environmental
matters as it would have been required to deliver or provide had this Agreement
been continuously in effect during the year immediately preceding the Closing
Date.
Section 1.54 Labor Disputes. None of the Borrowers nor any of their
Subsidiaries is (i) currently affected by any strike, lockout or other material
labor dispute or (ii) a party to any collective bargaining agreement.
Section 1.55 Investment Company Act of 1940; etc. None of the Borrowers
nor any of their Subsidiaries is subject to regulation under the Investment
Company Act of 1940, the Public Utility Holding Company Act of 1935 or any
statute or regulation limiting its ability in any material, respect to incur
indebtedness for money borrowed as contemplated hereby.
Section 1.56 No Forfeiture. None of the Borrowers nor any of their
Subsidiaries is subject to a Forfeiture Proceeding.
Section 1.57 Solvency.
(1) The present fair saleable value of the assets of each Obligor
after giving effect to all the transactions contemplated by the Facility
Documents exceeds the
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amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of such Obligor as they
mature.
(2) The Property of each Obligor does not constitute unreasonably
small capital for such Obligor to carry out its business as now conducted and as
proposed to be conducted including the capital needs of such Obligor.
(3) Each Obligor does not intend to, nor does such Obligor believe
that it will, incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by such
Obligor, and of amounts to be payable on or in respect of debt of such Obligor).
The cash available to such Obligor after taking into account all other
anticipated uses of the cash of such Obligor, is anticipated to be sufficient to
pay all such amounts on or in respect of debt of such Obligor when such amounts
are required to be paid.
Section 1.58 Patents, Trademarks, etc. Set forth on Schedule 6.20 is a
complete and accurate list of all rights, licenses, permits, franchises,
authorizations, patents, copyrights, trademarks, service marks and trade names
owned or possessed by the Borrowers or any of their Subsidiaries that are
material to the conduct of its business as presently conducted or proposed to be
conducted. Each of the Borrowers and each of their Subsidiaries owns or
possesses all such rights, licenses, permits, franchises, authorizations,
patents, copyrights, trademarks, service marks and trade names free from any
material restrictions.
Section 1.59 Offer of Notes. None of the Borrowers nor anyone acting on
their behalf has directly or indirectly offered the Notes, or any part thereof
or any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect of any of the same
with, anyone other than the Lenders and a limited number of other financial
institutions. None of the Borrowers nor anyone acting on their behalf will
directly or indirectly take any action which would subject the issue of the
Notes to the registration provisions of the Securities Act of 1933, as amended.
Section 1.60 Eligible Accounts Receivables. Each Eligible Account
Receivable and Eligible Magazine Subscription Receivable set forth in each
Borrowing Base Certificate now or hereafter furnished to the Agent meets or, as
of the date stated thereon, will meet all eligibility requirements specified in
the definition of Eligible Accounts Receivables set forth herein.
Section 1.61 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans and the other extensions of credit hereunder in accordance with Section
2.03. No such proceeds shall be used, whether directly or indirectly, or
immediate, incidental or ultimate, (i) for the purpose of buying or carrying
"margin stock" within the meaning of Regulation U, (ii) for the purpose of
extending credit to others for the purpose of purchasing or carrying any margin
stock or (iii) for any purpose which violates or is inconsistent with the
provisions of
51
Regulation T, Regulation U or Regulation X. None of the Borrowers is engaged in
purchasing or carrying any margin stock. None of the Borrowers is engaged in the
business of extending credit for the purpose of purchasing or carrying any
margin stock. At no time would more than 25% of the value of the assets of the
Borrowers or the Borrowers and any Subsidiary that are subject to any
"arrangement" (as such term is used in Section 221.2 (g) of Regulation U)
hereunder be represented by margin stock. No proceeds of the Loans, and none of
the Letters of Credit, shall be used to acquire any equity security of a class
that is registered pursuant to Section 12 of the Securities Exchange Act of
1934.
Section 1.62 Disclosure; No Material Adverse Effect. No Facility Document
nor any certificate or other document furnished to the Agent or the Lenders by
or on behalf of the Borrowers or any other Obligor pursuant to any Facility
Document contains, as of its date, any untrue statement of a material fact or
omits to state or will omit to state, as of its date, a material fact necessary
in order to make the statements contained herein and therein, under the
circumstances under which they were made, not misleading. Except as indicated on
Schedule 6.24, the Borrowers have no knowledge of any facts or circumstances
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 1.63 Location of Books and Records. The books and records of the
Borrowers and each of the Subsidiaries are located at the locations listed on
Schedule 6.25.
Section 1.64 Fiscal Year. The Fiscal Year of the Borrowers ends on
December 31 of each year.
ARTICLE VII
AFFIRMATIVE COVENANTS.
So long as any Obligation shall remain unpaid or any Lender shall
have any Revolving Credit Commitment, each of the Borrowers shall, and shall
cause each of their respective Subsidiaries to:
Section 1.65 Maintenance of Existence; Preservation of Rights, Licenses
etc.
(1) Preserve and maintain its corporate or partnership existence
and good standing in the jurisdiction of its incorporation or formation, and
qualify and remain qualified as a foreign corporation or partnership in each
jurisdiction in which such qualification is required, except where the failure
to maintain such foreign qualification would not have a Material Adverse Effect.
(2) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks, service
marks and trade names material to the
52
conduct of its business, except in any such case where the failure to do so
would not have a Material Adverse Effect.
Section 1.66 Conduct of Business. Continue to engage in the Business and
no other business.
Section 1.67 Maintenance of Properties. Maintain, keep and preserve all of
its Properties necessary or useful in the conduct of the Business in good
working order and condition, ordinary wear, tear and obsolescence excepted.
Section 1.68 Maintenance of Records. Keep adequate records and books of
account in which true and correct entries will be made reflecting all financial
transactions and the assets and business of the Borrowers and each Subsidiary,
and which shall be in such form which will allow the Borrowers to prepare their
consolidated financial statements in accordance with GAAP. Except with the prior
written consent of the Agent, keep the books and records of the Borrowers and
the Subsidiaries at the locations set forth in Section 6.25.
Section 1.69 Maintenance of Insurance. Without limiting any obligation
under any Facility Document, maintain insurance with financially sound and
reputable insurance companies or associations accorded a rating by A.M. Best
Company of "A" or better and a size rating of "Xi" or better. Maintain casualty
insurance policies covering all of the Property subject to the Lien of the Agent
under the Security Documents with appropriate loss payable endorsements
indicating assignment of proceeds thereunder to the Agent and certificates or
other evidence of liability insurance with appropriate endorsements indicating
the coverage of the Agent as an additional insured. All insurance shall be in
amounts, cover such risks, and have such deductibles as is customary for
reputable companies engaged primarily in the same business as the Business.
Section 1.70 Compliance with Laws. Comply in all material respects with
all applicable Laws (including, without limitation, all applicable Environmental
Laws).
Section 1.71 Right of Inspection; Field Examinations. At any reasonable
time and from time to time, but not more often then one time per Fiscal Quarter,
unless a Default or an Event of Default has occurred and is continuing, upon
prior written notice and during normal business hours (but no prior notice shall
be required if a Default or an Event of Default has occurred and is continuing),
permit the Agent or any agent or representative thereof, to conduct field
examinations, examine and make copies and abstracts from the records and books
of, and visit the Properties of, the Borrowers and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrowers and each Subsidiary
with their respective officers and directors and independent accountants;
provided that the Agent agrees that it shall use its reasonable best efforts to
minimize interference with the Borrowers' or such Subsidiary's business. The
Agent (and its representatives) are hereby authorized to deliver a
53
copy of any information delivered to it if so requested by any regulatory body
having jurisdiction over it.
The cost of such examinations to be borne by the Borrowers, provided
that (so long as no Default or Event of Default has occurred and is continuing)
the cost of the first field examination conducted by the Agent shall not exceed
$20,000, and the cost of each additional field examination conducted by the
Agent shall not exceed $10,000. The Agent shall provide a copy of any reports
relating to field examinations to the Lenders; in no event shall the Agent have
any liability to the Lenders with respect to the contents of such reports.
Section 1.72 Lockbox Account. The Borrowers and each applicable Subsidiary
will maintain one or more Lockbox Accounts with Agent and execute a Lockbox
Agreement and will notify all account debtors paying other than by means of
credit cards or debit cards to make payments of Receivables directly to such
Lockbox Accounts. Payments received in the Lockbox Account will be processed by
Agent under the terms and conditions of the Lockbox Agreement and all proceeds
of and/or funds representing such payments shall be deposited into an operating
account of Borrowers maintained with Agent but under the sole control and
dominion of Borrowers, all subject to the terms and conditions of the Lockbox
Agreement.
Section 1.73 Reporting Requirements. Furnish copies to the Agent (one copy
for each of the Lenders) of the following:
(1) as soon as available and in any event within 105 days after
the end of each Fiscal Year, (i) consolidated balance sheets of the Consolidated
Entities as of the end of such Fiscal Year and consolidated income statements
and statements of cash flows and changes in stockholders' equity of the
Consolidated Entities for such Fiscal Year, all in reasonable detail and stating
in comparative form the respective figures for the corresponding date and period
in the prior Fiscal Year and all prepared in accordance with GAAP and
accompanied by an opinion thereon by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent
accountants of national standing selected by the Borrowers, which opinion will
be unqualified and will (A) state that such accountants audited such
consolidated financial statements in accordance with generally accepted auditing
standards, that such accountants believe that such audit provides a reasonable
basis for their opinion, and that in their opinion such consolidated financial
statements present fairly, in all material respects, the consolidated financial
condition of the Consolidated Entities as at the end of such Fiscal Year and the
consolidated results of their operations and cash flows for such Fiscal Year in
conformity with GAAP, or (B) contain such statements as are customarily included
in unqualified reports of independent accountants in conformity with the
recommendations and requirements of the American Institute of Certified Public
Accountants (or any successor organization) and (ii) management prepared
consolidating balance sheets of the Consolidated Entities as of the end of each
such Fiscal Year and consolidating income statements and statement of cash flows
and changes in stockholders' equity of the Consolidated Entities for such Fiscal
Year.
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(2) as soon as available and in any event within 60 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, management
prepared consolidated and consolidating balance sheets of the Consolidated
Entities as of the end of such Fiscal Quarter and consolidated and consolidating
income statements and statements of cash flows and changes in stockholders'
equity of the Consolidated Entities for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the previous Fiscal Year and all prepared in
accordance with GAAP (subject to year-end and normal audit adjustments and the
fact that there are no footnotes thereto) and certified as to fairness of
presentation by the chief financial officer or the chief accounting officer of
Cross Media and as having been prepaid in accordance with GAAP (subject to
year-end and normal audit adjustments and without footnotes);
(3) as soon as available and in any event within 15 days after the
end of each calendar month, (i) a Borrowing Base Certificate as of the end of
such calendar month and (ii) a trial balance of existing receivables, as of the
end of such calendar month;
(4) simultaneously with the delivery of the financial statements
referred to in Section 7.09(a) and Section 7.09(b), a Compliance Certificate of
the chief financial officer or the chief accounting officer of Cross Media,
under a cover letter identifying it as such, certifying that no Default or Event
of Default has occurred and is continuing or, if a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action which is proposed to be taken with respect thereto;
(5) simultaneously with the delivery of the annual financial
statements referred to in Section 7.09(a), a certificate of the independent
public accountants who audited such statements to the effect that in making the
examination necessary for the audit of such statements, they have obtained no
knowledge of any condition or event which constitutes a Default or Event of
Default, or if such accountants shall have obtained knowledge of any such
condition or event, specifying in such certificate each such condition or event
of which they have knowledge and the nature and status thereof;
(6) as soon as available, but not later than 60 days after the
first day of each Fiscal Year, projections on an annual basis for the Borrowers
and their Subsidiaries in form and substance reasonably acceptable to the Agent,
prepared in reasonable detail with appropriate presentation and disclosure of
the principal assumption upon which such projections are based, accompanied by a
statement of the chief financial officer of Cross Media to the effect that, to
the best of his knowledge, the projections are reasonable.
(7) promptly after obtaining knowledge thereof, notice of any
action or omission of the Borrowers or any Subsidiary, or any other event, which
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
55
(8) as soon as possible and in any event within five Business Days
after any of the Borrowers obtains knowledge of the occurrence of any Default or
Event of Default, a written notice setting forth the details of such Default or
Event of Default and the action which is proposed to be taken by the Borrowers
with respect thereto;
(9) as soon as possible, and in any event within ten days after
any of the Borrowers or any Subsidiary has knowledge that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan has
occurred or exists, a statement signed by a senior financial officer of Cross
Media setting forth details respecting such event or condition and the action,
if any, which such Borrower or Subsidiary or ERISA Affiliate proposes to take
with respect thereto (and a copy of any report or notice required to be filed
with or given to PBGC by the Borrower or such Subsidiary or an ERISA Affiliate
with respect to such event or condition): (i) any reportable event, as defined
in Section 4043 (b) of ERISA, with respect to a Plan with Unfunded Benefit
Liabilities in excess of $250,000, as to which PBGC has not by regulation waived
the requirement of Section 4043 (a) of ERISA that it be notified within 30 days
of the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Code or Section 302 of ERISA including,
without limitation, the failure to make on or before its due date a required
installment under Section 412 (m) of the Code or Section 302 (e) of ERISA, shall
be a reportable event regardless of the issuance of any waivers in accordance
with Section 412 (d) of the Code) and any request for a waiver under Section 412
(d) of the Code for any such Plan; (ii) the distribution under Section 4041 of
ERISA of a notice of intent to terminate any Plan or any action taken by the
Borrower or such Subsidiary or an ERISA Affiliate to terminate any Plan;
provided that as a result of such termination, the Borrower or such Subsidiary
or such ERISA Affiliate will incur liability in excess of $250,000; (iii) the
institution by PBGC of proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan with
Unfunded Benefit Liabilities in excess of $250,000, or the receipt by the
Borrowers or such Subsidiary or any ERISA Affiliate of a notice from a similarly
underfunded Multiemployer Plan that such action has been taken by PBGC with
respect to such Multiemployer Plan; (iv) the complete or partial withdrawal from
a Multiemployer Plan by any of the Borrowers or such Subsidiary or any ERISA
Affiliate that results in a current payment obligation in excess of $250,000
under Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the receipt by any of
the Borrowers or such Subsidiary or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvent pursuant to Section
4241 or 4245 of ERISA or that it intends to terminate or has terminated under
Section 4041 A of ERISA; (v) the adoption of an amendment to any Plan that
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
any of the Borrowers or such Subsidiary or an ERISA Affiliate fails to timely
provide security in excess of $250,000 to such Plan in accordance with the
provisions of said Sections; (vi) any event or circumstance exists which may
reasonably be expected to constitute grounds for any of the Borrowers or such
Subsidiary or any ERISA Affiliate to incur liability in excess of $250,000 under
Title IV
56
of ERISA or under Sections 412(c)(1) or 412 (n) of the Code with respect to any
Plan; or (vii) the Unfunded Benefit Liabilities of one or more Plans increase
after the date of this Agreement in an amount which is material in relation to
the financial condition of the Borrowers and the Subsidiaries, taken as a whole;
(10) promptly after the sending thereof, copies of all final proxy
statements, quarterly financial statements and reports which any of the
Borrowers or any Subsidiary sends or has made generally available to its
stockholders, and copies of all regular, periodic and special reports, and after
the effective date thereof, all registration statements, which any of the
Borrowers or any Subsidiary files with the Securities and Exchange Commission or
any Governmental Authority which may be substituted therefor, or with any
national securities exchange;
(11) promptly after having knowledge of (i) the existence of any
violation or alleged violation of any Environmental Law by the Borrower or any
Subsidiary; (ii) the receipt of any notice or claim to the effect that any of
the Borrowers or any Subsidiary is a potentially responsible party for response
costs incurred or to be incurred at any Property under any Environmental Law;
(iii) any of the operations or facilities of any of the Borrowers or any
Subsidiary have becoming the subject of any state or federal investigation
evaluating whether any remedial action pursuant to the National Contingency
Plan, or any state equivalent, is needed to respond to a release or threatened
release of a Hazardous Material into the environment; or (iv) any of the
operations or facilities of the any of the Borrowers or any Subsidiary becoming
listed or are proposed for listing on the National Priorities List in accordance
with 40 C.F.R., Part 300, Appendix B, or any state equivalent; prompt written
notice thereof, what action such Borrower or Subsidiary is taking or proposes to
take with respect thereto and, when known, any action taken, or proposed to be
taken, by any Governmental Authority with respect thereto;
(12) as soon as possible and, in any event, within ten days after
any Borrower or any Subsidiary receives written notice of the commencement
thereof, notice of all actions, suits, investigations, litigation and
proceedings before any Governmental Authority against or involving any of the
Borrowers or any Subsidiary of the type and size/amount described in Section
6.11 and thereafter, promptly after the occurrence thereof, notice of any
material adverse change in the status or the financial effect on any of the
Borrowers or any Subsidiary of such actions, suits, investigations, litigation
and proceedings;
(13) promptly after the commencement thereof or promptly after any
of the Borrowers or any Subsidiary knows of the commencement or threat thereof,
notice of any Forfeiture Proceeding; and
57
(14) such other information respecting the condition or operations,
financial or otherwise, of the Borrower or any Subsidiary as the Agent or any
Lender may from time to time reasonably request.
Section 1.74 Additional Subsidiaries. Promptly upon any Person becoming a
Subsidiary, (i) cause such Subsidiary to (A) guarantee the obligations, pursuant
to a guaranty substantially in the form of the Guaranty and (B) secure such
guaranty by granting a security interest in all of its personal Property to the
Agent for the benefit of the Lenders, pursuant to a security agreement
substantially in the form of the Security Agreement, (ii) pledge, or cause the
pledge, all of the equity securities of such Subsidiary (or 65% of the equity
securities of such Subsidiary if it is organized in any jurisdiction other than
the United States of America, any state thereof or the District of Columbia)
owned by any of the Borrowers or any Subsidiary to the Agent for the benefit of
the Lenders, pursuant to a pledge agreement in form substantially similar to the
Pledge Agreement, (iii) deliver the stock certificates representing such equity
securities with undated executed stock powers therefor in blank, and (iv)
deliver such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by the
Borrowers pursuant to Article 5 or as the Agent shall have reasonably requested.
Section 1.75 Payment of Taxes and Claims. File all United States federal
income tax returns and all other foreign, state and local tax returns which are
required to be filed by it, and pay all taxes shown as due thereon, prior to the
date on which any material penalties would attach thereto and pay and discharge
any assessments or governmental charges imposed in connection therewith;
provided, that the Borrowers and any Subsidiary shall not be required to pay any
such tax, assessment, charge or claim that are being contested by the Borrower
in good faith by appropriate proceedings, diligently prosecuted, provided that,
at the time of the commencement and during the pendency of such proceedings (i)
no Default or Event of Default shall exist and be continuing, (ii) adequate
reserves have been established on the Borrower's books in accordance with GAAP
(including reserves for any penalty for late payment) and (iii) such non-payment
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Notwithstanding the foregoing, the Borrowers shall, and
shall cause each Subsidiary to, pay in full all of its wage obligations to its
employees in accordance with the Fair Labor Standards Act (29 U.S.C. Sections
206-207) and any comparable provisions of any applicable law.
Section 1.76 Bank Accounts. Use its best efforts to maintain all primary
deposit and other bank accounts with the Agent or a Lender.
Section 1.77 Material Contracts. Perform and observe in all material
respects, all the terms and provisions of each Material Contract to be performed
or observed by it, unless any failure to perform or observe any term or
provision could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
58
Section 1.78 Implementation of New Accounting Software System. The
Borrowers shall have implemented a new accounting software system reasonably
satisfactory to Agent on or before September 30, 2002. Compliance with this
Section 7.14 shall be determined by Agent in its sole discretion during a
scheduled field exam completed by Agent on or before December 31, 2002.
Section 1.79 Interest Rate Protection. Within thirty (30) days after the
Closing Date, enter into an Interest Rate Protection Agreement with a Lender
providing protection against interest rates with respect to the lesser of (i)
$10,000,000 and (ii) the amount of the initial Loans made to the Borrowers on
the Closing Date.
Section 1.80 Trade Payables. The Borrowers shall pay accounts payable to
trade creditors for goods or services in the ordinary course of business and in
no event shall accounts payables to trade creditors in an aggregate amount of
$100,000 or more be more than 120 days past due from the billing date thereof,
unless contested by a Borrower or a Subsidiary in good faith by appropriate
proceedings, diligently prosecuted, provided that, at the time of the
commencement and during the pendency of such proceedings, (i) adequate reserves
have been established on the Borrowers' books in accordance with GAAP (including
reserves for any penalty for late payment) and (ii) such non - payment could
not, individually, or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
ARTICLE VIII
NEGATIVE COVENANTS.
So long as any Obligation shall remain unpaid or any Lender shall have any
Revolving Credit Commitment, the Borrowers shall not, and shall not permit any
Subsidiary to:
Section 1.81 Debt. Create, incur, assume or suffer to exist any Debt,
except:
(1) Debt of the Borrowers under this Agreement, the Notes and the
other Facility Documents;
(2) Debt consisting of Guaranties permitted pursuant to Section
8.02;
(3) Debt consisting of standby letters of credit (other than
Letters of Credit issued hereunder) issued to replace the standby letters of
credit existing on the Closing Date and listed on Schedule 8.01(g) and issued to
secure obligations of Borrowers and/or their Subsidiaries for Operating Leases
in an aggregate unpaid face amount at any one time outstanding not to exceed
$500,000;
59
(4) Debt incurred or assumed in connection with any Acquisition
permitted by Section 8.11 or on terms and conditions approved by all of the
Lenders in writing, provided, that, such Debt has been subordinated to the
Obligations in favor of the Lenders in form and substance reasonably acceptable
to all of the Lenders; and
(5) Purchase Money Debt incurred in connection with Capital
Expenditures and Capital Leases permitted by Section 8.04(b) not to exceed in
the aggregate at any time outstanding (i) $5,000,000 during Fiscal Year 2002 and
(ii) $7,500,000 during any Fiscal Year thereafter;
(6) Seller Debt listed on Schedule 8.01(e);
(7) Existing Debt listed in Schedule 8.01(g);
(8) Unfunded Benefit Liabilities in an amount not to exceed
$2,000,000 at any time outstanding; and
(9) Debt under Interest Rate Protection Agreements required by
Section 7.15; and
(10) Inercompany Debt owing any Obligors.
Section 1.82 Guaranties. Create, incur, assume or suffer to exist any
guaranty, except:
(1) guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(2) guaranties of the Obligations by the Subsidiaries; and
(3) guaranties by any Borrower or any Subsidiary of Debt or other
obligations of one or more of the other Borrowers or Subsidiaries (formed in any
jurisdiction located within the United States of America) provided that the
incurrence of such Debt or obligation is permitted by Section 8.01.
Section 1.83 Liens. Create, incur, assume or suffer to exist any Lien upon
or with respect to any of its Property (including without limitation motor
vehicles) now owned or hereafter acquired, except for Permitted Liens.
Section 1.84 Leases. Create, incur, assume or suffer to exist any
obligation as lessee for the rental or hire of any Property, except:
(1) leases existing on the date of this Agreement and any
extensions, supplements or renewals thereof;
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(2) Capital Leases (including taxes, insurance, maintenance and
similar expenses which the Borrowers or any Subsidiary are required to pay under
the terms of any such lease) not to exceed, together with Debt permitted under
Section 8.01(e), in the aggregate at any time outstanding (i) $5,000,000 during
Fiscal Year 2002 and (ii) $7,500,000 during any Fiscal Year thereafter;
(3) leases (other than Capital Leases), the rental payments for
which do not exceed in the aggregate $2,750,000 during any Fiscal Year; and
(4) licenses of intellectual property (such as copyrights,
patents, trademarks and software) used in the operation of the Business.
Section 1.85 Investments. Make any Investment, except for:
(1) Investments in cash and Cash Equivalents;
(2) Investments in Property to be used or useful in the ordinary
course of business of the Borrower or any Subsidiary that is not an Inactive
Subsidiary;
(3) Investments in stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing to the
Borrowers or any Subsidiary;
(4) Investments which are (i) travel, vacation and similar
advances to employees of the Borrowers or any Subsidiary that is not an Inactive
Subsidiary for the reimbursement of expenses made or incurred in the ordinary
course of business and (ii) loans and other advances to employees of the
Borrowers and any Subsidiary that is not an Inactive Subsidiary not covered in
clause (i) above in an aggregate amount not to exceed $500,000 at any time
outstanding;
(5) Interest Rate Protection Agreements as required by Section
7.5;
(6) Existing Investments listed on Schedule 8.05(f); and
(7) Intercompany Debt owing Obligors.
Section 1.86 Distributions. Make any Distribution, except that
(1) the Borrowers and any Subsidiary may make Distributions
payable solely in its common stock (and cash for fractional shares);
(2) any Subsidiary of any of the Borrowers (including a Subsidiary
of a Borrower that is also a Borrower) may make Distributions to a Borrower or
any Wholly-Owned Subsidiary of any of the Borrowers; and
61
(3) Cross Media may make discretionary repurchases of its
publically held common stock in an amount not to exceed $3,000,000 for the term
of this Agreement.
Section 1.87 Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of any of its now owned or hereafter acquired Property (including,
without limitation, shares of stock and indebtedness, and receivables), except:
(1) sales of inventory in the ordinary course of business;
(2) licenses of intellectual property (such as copyrights,
trademarks, patents and software) in the ordinary course of the Business;
(3) any sale, lease, assignment, transfer or other disposition of
Property during each Fiscal Year for fair market value in cash so long as the
aggregate consideration for such disposition and all other disposition
considerations made during such Fiscal Year does not exceed $250,000 and no
Default or Event of Default has occurred and is continuing or would occur and be
continuing after giving effect to such disposition;
(4) the sale or other disposition of assets no longer used or
useful in the conduct of its Business;
(5) the sale, transfer, disposition or exchange of any of the
Investments permitted by Sections 8.05(a) and (c); and
(6) transfers of Property among Obligors unless otherwise
specifically prohibited under this Agreement or any other Facility Document.
Nothing in this Section 8.07 shall be construed to permit the sale, lease,
assignment, transfer or other disposition of any of the Borrowers' or any of
their Subsidiaries' now owned or hereafter acquired Property in which the Agent
for the benefit of the Lenders holds a Lien pursuant to any of the Security
Documents in violation of the requirements of any of the Security Documents
(provided that the foregoing shall not be construed to prohibit, and all
Security Documents shall be deemed to permit, transfers permitted under clause
(e) above, provided that such transfers shall continue to be subject to any Lien
in favor of the Agent).
Section 1.88 Transactions with Affiliates.
(1) Make any Investment in an Affiliate;
(2) transfer, sell, lease, assign or otherwise dispose of any
Property to any Affiliate;
(3) merge into or consolidate with or purchase or acquire Property
from any Affiliate; or
62
(4) enter into any other transaction directly or indirectly with
or for the benefit of any Affiliate (including, without limitation, guaranties
and assumption of obligations of any Affiliate); provided that (w) any Affiliate
who is an individual may serve as a director, officer or employee of any of the
Borrowers or any Subsidiary that is not an Inactive Subsidiary and receive
reasonable compensation for his or her services in such capacity; and (x) the
Borrowers or any Subsidiary that is not an Inactive Subsidiary may enter into
other transactions (other than Investments by the Borrowers or any Subsidiary in
any Affiliate) providing for the rendering or receipt of goods or services in
the ordinary course of business; provided that in each case in the foregoing
clause (x) the monetary or business consideration arising therefrom would be
substantially as advantageous to such Borrower or such Subsidiary as the
monetary or business consideration which would be obtained in a comparable arm's
length transaction with a Person not an Affiliate and provided further, that if
any transaction or a series of related transactions involves an amount in excess
of $100,000 on or in any given Fiscal Year, such transaction or transactions
shall be approved by the Board of Directors of Cross Media.
Notwithstanding any of the foregoing or anything to the contrary contained
in this Agreement, nothing in this Section 8.08 shall be construed to prohibit
any transaction between one or more Borrowers and/or Subsidiaries formed in a
jurisdiction located within the United States (other than Inactive
Subsidiaries), unless any other Section of this Agreement would prohibit such
transaction.
Section 1.89 Mergers; Organization of New Subsidiaries. Merge or
consolidate with, or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of related transactions) all or substantially all of
its assets (whether now owned or hereafter acquired) to, any Person; or organize
new Subsidiaries except that any Wholly-Owned Subsidiary of any of the Borrowers
may merge into or consolidate with or transfer substantially all of its assets
to any of the Borrowers or any other Wholly-Owned Subsidiary of any of the
Borrowers.
Notwithstanding any of the foregoing or anything else to the contrary
contained in this Agreement, (i) the Borrowers, either directly or through any
Wholly-Owned Subsidiary, may form and organize new Wholly-Owned Subsidiaries,
provided that within five (5) Business Days of the formation of any such
newly-formed Subsidiary, the provisions of Section 7.10 have been complied with
in regard to such new Wholly-Owned Subsidiary, and (ii) none of the foregoing or
anything else to the contrary contained in this Agreement shall be construed to
prohibit the formation of Wholly-Owned Inactive Subsidiaries solely for the
purpose of facilitating an Acquisition as permitted by clause (b) of the last
sentence of Section 8.19 without satisfying the provisions of Section 7.10.
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Section 1.90 Subsidiaries' Stock and Debt.
(1) Directly or indirectly sell, assign, pledge or otherwise
dispose of any Debt of, or claim against, or any shares of stock or similar
interests or other securities of (or warrants, rights or options to acquire
stock or similar interests or other securities of), any Subsidiary, except to
the Agent for the benefit of the Lenders pursuant to any of the Security
Documents, or as directors' qualifying shares if required by applicable law;
(2) permit any Subsidiary directly or indirectly to sell, assign,
pledge or otherwise dispose of any Debt of, or claim against, or any shares of
stock or similar interests or other securities of (or warrants, rights or
options to acquire stock or similar interests or other securities of), any other
Subsidiary, except to the Agent for the benefit of the Lenders pursuant to any
of the Security Documents, or as directors' qualifying shares if required by
applicable law;
(3) permit any Subsidiary to have outstanding any shares of
preferred stock, or any other type of capital stock other than a single class of
common stock; or
(4) permit any Subsidiary directly or indirectly to issue or sell
any shares of its stock or similar interests or other securities (or warrants,
rights or options to acquire stock or similar interests or other securities)
except to a Borrower or any Wholly-Owned Subsidiary of a Borrower and pledged to
the Agent for the benefit of the Lenders pursuant to the Pledge Agreement or as
directors' qualifying shares if required by applicable law.
Section 1.91 Acquisitions. Make any Acquisition; provided, however, that
any Borrower or Subsidiary may make an Acquisition if: (a) such Acquisition
relates to the Business and has been approved in good faith by the Board of
Directors of Cross Media as well as the target's Board of Directors or other
organizational governance body (in the case of Acquisitions of a Wholly-Owned
Subsidiary) or the Board of Directors or other organizational governance body of
the other parties to the joint venture (in the case of Acquisitions in a joint
venture); (b) no Default or Event of Default exists or would exist after giving
effect to such Acquisition; (c) after considering the pro forma position of the
Consolidated Entities subsequent to such Acquisition, the Borrowers will
continue to be in compliance with the financial covenants contained in Article
9, and the chief financial officer of Cross Media has delivered a Compliance
Certificate to the Agent demonstrating such compliance; (d) the assets to be
acquired shall not be subject to any lien or encumbrance, except Permitted
Liens; (e) the Borrowers shall have furnished the Agent with such additional
documents and information (including without limitation appraisals and
environmental reports), in each case at the Borrowers' sole cost, as the Agent
shall have reasonably requested in connection with such Acquisition; (f) with
respect to Acquisitions of Wholly-Owned Subsidiaries only, and not Acquisitions
in joint ventures, the Borrowers have complied with Section 7.10 (unless such
Acquisition transaction shall comply with the provisions of clause (b) of the
last sentence of Section 8.19), and (g) either (i) each such
64
entity so acquired (other than with respect to investments in joint ventures)
will immediately after such Acquisition either become or be merged into a
Wholly-Owned Subsidiary that is or becomes an Obligor or (ii) in the case of
investments in joint ventures, either one of the Borrowers or a Wholly-Owned
Subsidiary thereof will be a party to such joint venture; provided, that for any
Acquisition pursuant to which the Person making such Acquisition pays more than
$2,500,000 in consideration (including the assumption of Debt) in any Fiscal
Year or if, after giving effect to the consummation of such Acquisition, the
Borrowers and the Subsidiaries will have paid more than an aggregate of
$5,000,000 in consideration (including the assumption of Debt) with respect to
such Acquisition and all other Acquisitions consummated after the Closing Date,
such Acquisition shall have received the prior written consent of all of the
Lenders, and the conditions set forth in clauses (a) through (e) of this
definition have been satisfied. The $5,000,000 maximum amount of consideration
which Borrowers and their Subsidiaries may expend on Acquisitions in accordance
herewith shall be increased by an amount equal to 75% of the net cash proceeds
received by Borrowers for the sale of their equity securities (gross cash
proceeds less reasonable expenses incurred in connection with such
transactions), up to a maximum of $15,000,000.
Section 1.92 Fiscal Year. Change its fiscal year without the prior written
consent of the Agent.
Section 1.93 Restrictions. Enter into, or suffer to exist, any agreement
with any Person other than the Agent or the Lenders that (a) prohibits, requires
the consent of such Person for or limits the ability of the Borrowers or any
Subsidiary (i) to make Distributions or pay liabilities, or make loans or
advances (ii) to create, incur, assume or suffer to exist any Lien upon any of
its Property in favor of the Agent or (iii) to enter into any modification or
supplement of the Facility Documents; or (b) contains financial covenants which,
taken as a whole, are more restrictive on the Borrowers or any Subsidiary than
the financial covenants contained in Article 9.
Section 1.94 Sale-Leaseback Transactions. 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.
Section 1.95 Seller Debt. Make any payments with respect to the Seller
Debt, except scheduled payments of principal and interest in accordance with the
terms in effect on the date hereof.
Section 1.96 Accounting Change. Make or permit any change in its
accounting policies or financial reporting practices and procedures, except
changes in accounting policies which are required or permitted by GAAP and
changes in financial reporting practices and procedures which are required or
permitted by GAAP, in each case as to which Cross Media
65
shall have delivered to the Agent prior to the effectiveness of any such change
a report prepared by a responsible financial officer of Cross Media describing
such change and explaining in reasonable detail the basis therefor and expected
effect thereof.
Section 1.97 Charter Amendments. Amend its certificate or articles of
incorporation or bylaws or other organization documents, in such a way that
would materially and adversely affect the rights of the Agent and the Lenders
under the Facility Documents.
Section 1.98 Amendment, Modification and Termination of Material
Contracts. Cancel or terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any Material
Contract or give any consent, waiver or approval thereunder, waive any default
under or any breach of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any Material
Contract, or take any action that would cause such Material Contract to cease to
be in full force and effect, in each case if such action could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 1.99 Inactive Subsidiaries. Notwithstanding anything contained in
this Agreement to the contrary, (i) cause or suffer any Inactive Subsidiary to
own or lease any Property, engage in any business or become a party to any
agreement except any Facility Document, (ii) transfer, sell, lease, assign or
otherwise dispose of any Property to, make any Investment in or make any payment
or Distribution to, any Inactive Subsidiary, (iii) create, incur, assume or
suffer to exist any Debt to any Inactive Subsidiary, (iv) create, incur, assume
or suffer to exist any guaranty for the benefit of any Inactive Subsidiary, (v)
permit any Inactive Subsidiary to make any Acquisition or (vi) merge or
consolidate with, or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of related transactions) all or substantially all of
its assets (whether now owned or, hereafter acquired) to, any Inactive
Subsidiary. Notwithstanding any of the foregoing or anything else to the
contrary contained in this Agreement, (a) none of the foregoing shall apply to
any Inactive Subsidiary with respect to which the Borrowers and such Inactive
Subsidiary have first complied with the provisions of Section 7.10, after which
such Subsidiary shall no longer be considered to be an Inactive Subsidiary
hereunder; (b) any Inactive Subsidiary may engage in any of the foregoing
activities or transaction as a part of a related series of transactions pursuant
to an Acquisition otherwise permitted hereunder if, at the final conclusion of
such transaction, such Inactive Subsidiary will merge with a Borrower or
Subsidiary that is not an Inactive Subsidiary and is or becomes an Obligor
hereunder; and (c) any one or more Inactive Subsidiaries may merge or
consolidate with one another or into a Borrower or Subsidiary that is not an
Inactive Subsidiary.
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ARTICLE IX
FINANCIAL COVENANTS
Section 1.100 Leverage Ratio. The Borrowers shall maintain, as determined
at the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending on
March 31, 2002), a Leverage Ratio of not greater than 2.00 to 1.00.
Section 1.101 Consolidated Net Worth. The Borrowers shall maintain, as
determined at the end of each Fiscal Quarter (commencing with the Fiscal Quarter
ending on March 31, 2002), Consolidated Net Worth of not less than the
Consolidated Net Worth of Borrowers as of December 31, 2001, plus 50% of the
Consolidated Net Income of Borrowers and their Subsidiaries for each Fiscal Year
(commencing with the Fiscal Year ending December 31, 2002) on a cumulative basis
(without any deduction for loss), plus 100% of the net cash proceeds received by
Borrowers from the sale of any of their equity securities, less 100% of the
amount paid by Cross Media to repurchase its publicly held common stock as
permitted by Section 8.06(c).
Section 1.102 Fixed Charge Coverage Ratio. The Borrowers shall maintain,
as determined as at the end of each Fiscal Quarter (commencing with the Fiscal
Quarter ending on March 31, 2002), a Fixed Charge Coverage Ratio of not less
than 1.25 to 1.00.
Section 1.103 Minimum EBITDA. The Borrowers shall maintain, as determined
as at the end of each Fiscal Quarter (commencing with the Fiscal Quarter ending
on March 31, 2002), for the four Fiscal Quarter period ending on such date of
determination, Consolidated EBITDA of not less than $15,000,000; such
$15,000,000 amount to be increased by an amount equal to 75% of the EBITDA of
any entity that is the subject of an Acquisition during such four Fiscal Quarter
measurement period (provided that, with respect to an Acquisition of a joint
venture, such joint venture becomes, upon consummation of the Acquisition, a
Consolidated Entity) for the same four Fiscal Quarter period during which the
Acquisition of such entity occurred, including the EBITDA of such entity for the
portions of such four Fiscal Quarter period occurring both before and after the
consummation of the Acquisition.
ARTICLE X
EVENTS OF DEFAULT.
Section X.1 Events of Default. Any of the following events shall be an
"Event of Default":
(1) (i) the Borrowers shall fail to pay the principal of, or
interest on, any Note on or before the date when due and payable; (ii) any
Obligor shall fail to pay any fee or other amount due the Agent or any Lender
hereunder or under any other Facility Document on or before the fifth Business
Day after the date when due and payable; or (iii) the Borrowers shall fail to
pay any fee or other amount due the Issuing Lender or any Interest
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Rate Protection Agreement Counterparty on or before the fifth Business Day after
the date when due and payable;
(2) any representation or warranty made or deemed made by any
Obligor in this Agreement or in any other Facility Document or which is
contained in any written certificate, document, opinion, financial or other
statement furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made or furnished;
(3) (i) any Obligor shall fail to perform or observe any term,
covenant or agreement contained in Section 2.03, Section 7.05 (to the extent
that the failure to perform involves the failure to maintain insurance), Section
7.09, Section 7.10, Section 7.14, Article 8 or Article 9; or (ii) any Obligor
shall fail to perform or observe any term, covenant or agreement on its part to
be performed or observed (other than the obligations specifically referred to
elsewhere in this Section 10.01) in any Facility Document to which it is a party
and, in each such case, such failure shall continue for fifteen (15) consecutive
days after it has obtained Knowledge thereof;
(4) any Obligor shall: (i) fail to pay any Debt in an aggregate
principal amount exceeding $250,000 (other than the payment obligations
described in (a) above), or any interest or premium thereon, or any other amount
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), taking into account any applicable grace
periods; (ii) fail to perform or observe any term, covenant or condition on its
part to be performed or observed under any agreement or instrument relating to
any such Debt, when required to be performed or observed, taking into account
any applicable grace periods, if the effect of such failure to perform or
observe is to accelerate, or to permit the acceleration of, after the giving of
notice or passage of time, or both, the maturity of such Debt or any other Debt
of any Obligor, unless such failure to perform or observe shall be waived in
writing by the holder of such Debt; or any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(5) any Obligor generally does not pay its debts as such debts
become due, or admits in writing its inability to pay its debts generally; any
Obligor commences a voluntary case concerning it under Title 11 of the United
States Code entitled "Bankruptcy" as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against any Obligor under the Bankruptcy Code and an order for relief is entered
or the petition is controverted but remains undismissed for 60 days after the
commencement of the case; or any Obligor commences any other proceeding under
any reorganization, arrangement, readjustment of debt, relief of debtors,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Obligor; or there is commenced against any
Obligor in a court of competent jurisdiction any such proceeding which is
consented to or acquiesced in by such Obligor or which remains
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undismissed for a period of 60 days after the commencement thereof; or any
Obligor consents to the appointment pursuant to a decree or order of a court in
any such proceeding of a custodian (as defined in the Bankruptcy Code) for, or
to take charge of, all or substantially all of its property or any Obligor
suffers any such appointment by a court of competent jurisdiction to continue
undischarged or unstayed for a period of 60 days after such appointment; or any
Obligor makes a general assignment for the benefit of creditors; or any Obligor
takes any action authorizing the taking of any of the foregoing actions to be
taken by it;
(6) one or more judgments, decrees or orders for the payment of
money in excess of $350,000 in the aggregate shall be rendered against any
Obligor and (i) any action shall be taken by a judgment creditor to levy upon
any of the Properties of any Obligor to enforce any such judgment and (ii) such
judgments, decrees or orders shall continue unsatisfied and in effect for a
period of 30 consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal.
(7) any nonmonetary judgment or order shall be rendered against
any Obligor that could reasonably be expected to have a Material Adverse Effect,
and (i) enforcement proceedings shall have been commenced by any person upon
such judgment or order, and (ii) there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
(8) any event or condition shall occur or exist with respect to
any Plan or Multiemployer Plan concerning which the Borrower or any Subsidiary
is under an obligation to furnish a report to the Lenders in accordance with
Section 7.09 (i) and as a result of such event or condition, together with all
other such events or conditions, the Borrower or such Subsidiary has incurred or
is reasonably likely to incur an obligation to pay in excess of $250,000 to a
Plan, a Multiemployer Plan, the PBGC, or a Section 4042 Trustee (as defined in
ERISA) (or any combination of the foregoing);
(9) the Unfunded Benefit Liabilities of one or more Plans have
increased after the date of this Agreement by an amount in excess of $2,000,000
or the Borrowers make payments or other distributions pursuant to such Plans in
an aggregate of $500,000 or more during any Fiscal Year;
(10) an "Event of Default" under and as defined in any other
Facility Document shall have occurred and be continuing;
(11) events occur that, in the good faith business judgment of the
Agent or the Required Lenders, could reasonably be expected to have a Material
Adverse Effect;
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(12) any of the Security Documents shall at any time after its
execution and delivery and for any reason other than pursuant to the terms
hereof and thereof cease: (i) (A) to create a valid and perfected security
interest in and to the Property (not consisting of vehicles) purported to be
subject to such Security Document or (B) to create a valid security interest in
and to the Property consisting of vehicles purported to be subject to such
Security Document; or (ii) to be in full force and effect or shall be declared
null and void, or the validity or enforceability thereof shall be contested by
any Obligor or such Obligor shall deny it has any further liability or
obligation under the Security Documents or such Person shall fail to perform any
of its material obligations thereunder and such default shall have continued for
a period of 30 days after such Obligor has obtained Knowledge thereof; or
(13) a Change of Control shall have occurred.
Section 1.104 Remedies. If any Event of Default shall occur and be
continuing, the Agent may, and shall upon the request of the Required Lenders,
by notice to the Borrowers,
(1) declare the Revolving Credit Commitments to be terminated,
whereupon the same shall forthwith terminate,
(2) declare the outstanding principal of the Notes, all interest
thereon and all other amounts payable under this Agreement, the Notes and the
other Facility Documents to be forthwith due and payable, whereupon the Notes,
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrowers; and/or
(3) irrespective of whether it is taking any of the actions
described in this Section 10.02 or otherwise, make demand upon the Borrowers to,
and forthwith upon such demand the Borrower will, pay to the Agent on behalf of
the L/C Participants in same day funds at the Agent's office designated in such
demand, for deposit in the L/C Cash Collateral Account, an amount equal to the
aggregate L/C Obligations. If at any time the Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agent and the L/C Participants or that the total amount of
such funds is less than the aggregate L/C Obligations, the Borrowers will,
forthwith upon demand by the Agent, pay to the Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate L/C Obligations over (b) the total amount of funds,
if any, then held in the L/C Cash Collateral Account that the Agent determines
to be free and clear of any such right and claim;
(4) notify account debtors of each Borrower and/or Subsidiary that
Receivables have been assigned to the Agent and collect such Receivables
directly in its own name and charge to the Borrowers the collection costs and
expenses incurred by the Agent or the Lenders, including reasonable attorneys'
fees;
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provided that, in the case of an Event of Default referred to in Section
10.01(e), the Revolving Credit Commitments shall be immediately terminated, and
the Notes, all interest thereon and all other amounts payable under this
Agreement, the Notes, and the other Facility Documents shall be immediately due
and payable without notice, presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the Borrowers.
Section 1.105 Remedies Cumulative. All remedies set forth in this
Agreement and the other Facility Documents, or provided at law or in equity, are
cumulative.
Section 1.106 Application of Proceeds. All monies received by the Agent or
any Lender or other holder or holders of any of the Notes from the exercise of
remedies hereunder or under any other Facility Documents or under any applicable
law, shall, unless otherwise required by the terms of the Facility Documents or
by applicable. law, be applied as follows:
First: to the payment of all expenses (to the extent not paid by the
Borrowers, any Subsidiary or any other Obligor) incurred by the Agent in
connection with the exercise of such rights and remedies;
Second: to the payment of all expenses (to the extent provided for
under this Agreement or in any Facility Document not paid by the Borrowers, any
Subsidiary or any other Obligor) incurred by the Lenders in connection with the
exercise of such rights and remedies;
Third: to the payment of the interest then accrued on the Revolving
Credit Loans (pro rata based on Revolving Credit Commitment Percentages);
Fourth: to the payment of all remaining Obligations to the Agent,
the Lenders, the Issuing Lender and Interest Rate Protection Agreement
Counterparties (each such Person, a "Payee") (pro rata based on the proportion
that the Obligations payable to such Payee bear to the aggregate amount of all
remaining Obligations); and
Fifth: to the Borrowers or whomever else is entitled thereto.
ARTICLE XI
THE AGENT
Section XI.1 Appointment, Powers and Immunities of Agent. Each Lender
hereby irrevocably (but subject to removal by the Required Lenders pursuant to
Section 11.09) appoints and authorizes the Agent to act as its agent hereunder
and under each other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this
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Agreement and any other Facility Document, together with such other powers as
are reasonably incidental thereto. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and any
other Facility Document, and shall not by reason of this Agreement or any other
Facility Document be a trustee for any Lender. The Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrowers, any Subsidiary or any other Obligor or any of
their respective officers and officials or by any other Person contained in this
Agreement or any other Facility Document, or in any certificate or other
document or instrument referred to or provided for in, or received by any of
them under, this Agreement or any other Facility Document, or for the value,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Facility Document or any other document or
instrument referred to or provided for herein or therein, or for the perfection
or priority of any collateral security for the Loans or for any failure by the
Borrowers, any Subsidiary or any other Obligor to perform any of its obligations
hereunder or thereunder. The Agent may employ agents and attorneys-in-fact and
shall not be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct.
Section 1.107 Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) reasonably believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Lender as the holder of the Obligations attributable to it for all
purposes hereof unless and until a notice of the assignment or transfer thereof
satisfactory to the Agent signed by such Lender shall have been furnished to the
Agent but the Agent shall not be required to deal with any Person who has
acquired a participation in any obligation from a Lender. As to any matters not
expressly provided for by this Agreement or any other Facility Document, the
Agent in its capacity as such shall in all cases be fully protected in acting,
or in refraining from acting, hereunder in accordance with instructions signed
by the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and any other holder of all or any portion of any Obligation.
Section 1.108 Defaults. The Agent shall not be deemed to have Knowledge,
or any other constructive knowledge, of the occurrence of a Default or Event of
Default (other than the non-payment of principal of or interest on the Loans to
the extent the same is required to be paid to the Agent for the account of the
Lenders) unless the Agent has received notice from a Lender or the Borrowers of
such Default or Event of Default. In the event that the
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Agent receives such a notice of the occurrence of a Default or Event of Default,
the Agent shall give prompt notice thereof to the Lenders (and shall give each
Lender prompt notice of each such non-payment). The Agent shall (subject to
Section 11.08 and Section 12.01) take such action with respect to such Default
or Event of Default which is continuing as shall be directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders; and provided further that the Agent shall not
be required to take any such action which it determines to be contrary to law.
Section 1.109 Rights of Agent as a Lender. With respect to its Commitments
and the Obligations held by it, the Person which is the Agent in its capacity as
a Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Person which is the Agent in its capacity as a Lender. The Person
which is the Agent and its affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrowers, any Subsidiary or any other Obligor (and any of their
respective affiliates) as if it were not acting as the Agent, and the Person
which is the Agent may accept fees and other consideration from the Borrowers,
any Subsidiary and any other Obligor (and any of their respective affiliates)
for services in connection with this Agreement or otherwise without having to
account for the same to the Lenders. Although the Person which is the Agent and
its affiliates may in the course of such relationships and relationships with
other Persons acquire information about the Borrowers, any Subsidiary and any
other Obligor (and any of their respective affiliates), the Person which is the
Agent shall have no duty to disclose such information to the Lenders.
Section 1.110 Indemnification of Agent. The Lenders agree to indemnify the
Agent (to the extent not reimbursed under Section 12.03 or under the applicable
provisions of any other Facility Document, but without limiting the obligations
of the Borrowers under Section 12.03 or such provisions), ratably in accordance
with the aggregate unpaid principal amount of the Obligations attributable to
the Lenders (without giving effect to any participations, in all or any portion
of the Obligations, sold by them to any other Person) (or, if no Obligations are
at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, reasonable costs, reasonable expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement, any other Facility Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which the
Borrowers are obligated to pay under Section 12.03 or under the applicable
provisions of any other Facility Document but excluding, unless a Default or
Event of Default has occurred, normal administrative costs
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and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
Agent.
Section 1.111 Documents. The Agent will forward to each Lender, promptly
after the Agent's receipt thereof, a copy of each report, notice or other
document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender, including without limitation the
reports, notices and other documents delivered pursuant to Sections 5.02 and
7.09.
Section 1.112 Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers, the Subsidiaries and
the other obligors and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analyses and decisions in taking or not taking action
under this Agreement or any other Facility Document. Except as expressly
required hereby, the Agent shall not be required to keep itself informed as to
the performance or observance by the Borrowers, the Subsidiaries or the other
Obligors of this Agreement or any other Facility Document or any other document
referred to or provided for herein or therein or to inspect the Properties or
books of the Borrowers, any Subsidiary or any other Obligor. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrowers, any
Subsidiary or any other Obligor (or any of their respective affiliates) which
may come into the possession of the Agent or any of its affiliates. The Agent
shall not, except as provided in Section 11.18, be required to file this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, for record or give notice of this Agreement, any other
Facility Document or any document or instrument referred to herein or therein,
to anyone.
Section 1.113 Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 11.05 in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 1.114 Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving 30 days prior written notice thereof to the Lenders and Cross
Media, and the Agent
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may be removed at any time with or without cause by the Required Lenders;
provided that Cross Media and the other Lenders shall be promptly notified
thereof. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor Agent, with the consent of Cross Media, which
consent will not be unreasonably withhold or delayed, provided that Cross
Media's consent shall not be required in the event that a Default or an Event of
Default has occurred and is continuing. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the Agent, then the retiring Agent or the removed
Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
Lender which has an office in the State of New York. The Required Lenders or the
retiring or removed Agent, as the case may be, shall upon the appointment of a
successor Agent promptly so notify Cross Media and the other Lenders. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent, and the
retiring or removed Agent shall be discharged from its duties and obligations
hereunder. After any Agent's resignation or removal hereunder as Agent, the
provisions of this Article 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
Section 1.115 Amendments Concerning Agency Function. The Agent shall not
be bound by any waiver, amendment, supplement or modification of this Agreement
or any other Facility Document which affects its rights or duties hereunder or
thereunder unless it shall have given its prior written consent thereto.
Section 1.116 Liability of Agent. The Agent shall not have any liabilities
or responsibilities to the Borrowers, any Subsidiary or any other Obligor on
account of the failure of any Lender to perform its obligations hereunder,
except with respect to any claim arising out of the gross negligence or willful
misconduct of the Agent, or to any Lender on account of the failure of the
Borrowers, any Subsidiary or any other Obligor to perform its obligations
hereunder or under any other Facility Document.
Section 1.117 Transfer of Agency Function. Without the consent of the
Borrowers or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify Cross Media and the Lenders
thereof and such transfer shall not impose any additional costs on the Borrowers
or any Obligor.
Section 1.118 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Lender or Cross Media (either one as appropriate being
the "Payor") prior to the date on which such Lender is to make payment hereunder
to the Agent of the proceeds of a Loan or the Borrowers is to make payment to
the Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the
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Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment (and, if such
recipient is the Borrowers and the Payor Lender fails to pay the amount thereof
to the Agent forthwith upon demand, the Borrowers) shall, on demand, repay to
the Agent the amount made available to it together with interest thereon for the
period from the date such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the average
daily Federal Funds Rate for such period.
Section 1.119 Withholding Taxes. Each Lender represents to the Agent and
the Borrowers that it is entitled to receive any payments to be made to it
hereunder without the withholding of any tax and will furnish, prior to becoming
a Lender hereunder, one copy to Cross Media and one copy to the Agent such
forms, certifications, statements and other documents as the Agent or the
Borrowers may reasonably request from time to time to evidence such Lender's
exemption from the withholding of any tax imposed by any Governmental Authority
or to enable the Agent or the Borrowers to comply with any applicable Laws
relating thereto. Without limiting the effect of the foregoing, if any Lender is
not created or organized under the laws of the United States of America or any
state thereof, in the event that the payment of interest by the Borrowers is
treated for United States income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the Agent Form
4224 or Form W-8BEN of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of United
States tax with respect thereto. Until such Lender shall have furnished to the
Agent and the Borrowers any requested form, certification, statement or
document, the Agent or the Borrowers may withhold taxes from any payment to such
Lender at applicable rates.
Section 1.120 Several Obligations and Rights of Lenders. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and, except
where action of the Required Lenders is expressly required hereunder, each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 1.121 Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided: (a) each borrowing under Section 2.01 shall be made from the
Lenders and each payment of commitment fee accruing under Section 2.11 shall be
made for the account of the Lenders, pro rata according to the amounts of their
respective unused Commitments; (b) each
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conversion of Loans under Section 2.05 shall be made pro rata among the Lenders
holding Loans of such type according to the respective principal amounts of such
Loans by such Lenders; and (c) each prepayment and payment of principal of or
interest on Loans of a particular type, a particular class and a particular
Interest Period shall be made to the Agent for the account of the Lenders
holding Loans of such type, class and Interest Period pro rata in accordance
with the respective unpaid principal amounts of such Loans held by such Lenders.
Section 1.122 Sharing of Payments Among Lenders. If a Lender shall obtain
payment of any principal of or interest on any Obligation held by it through the
exercise of any right of setoff, banker's lien, counterclaim, or any other
means, it shall promptly purchase from the other Lenders participations in (or,
if and to the extent specified by such Lender, direct interests in) the
Obligations of the other Lenders in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all the
Lenders shall share the benefit of such payment (net of any expenses which may
be incurred by such Lender in obtaining or preserving such benefit) pro rata in
accordance with the unpaid principal and interest on the Obligations held by
each of them. To such end the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored.
Section 1.123 Security Documents. Subject to the foregoing provisions of
this Article 11, the Agent shall, on behalf of the Lenders: (a) execute any and
all of the Security Documents on behalf of the Lenders; (b) hold and apply any
and all Collateral, and the proceeds thereof, at any time received by it, in
accordance with the provisions of the Security Documents and this Agreement; (c)
exercise any and all rights, powers and remedies of the Lenders under this
Agreement or any of the Security Documents, including the giving of any consent
or waiver or the entering into of any amendment, subject to the provisions of
Sections 10.02, 11.03, 11.08 and Section 12.01; (d) execute, deliver and file
financing statements and other such agreements, and possess instruments on
behalf of any or all of the Lenders; and (e) in the event of acceleration of the
Borrowers' obligations hereunder, use its best efforts to sell or otherwise
liquidate or dispose of the Collateral and otherwise exercise the rights of the
Lenders thereunder upon the direction of the Required Lenders.
Section 1.124 Collateral. The Agent acknowledges to the Lenders that it is
acting in an agency capacity hereunder and that the security interest in the
Collateral granted under the Security Documents secures the Obligations held by
all of the Lenders. In the event of any Default or Event of Default, the Agent
will apply and/or pay over to the Lenders any net proceeds derived from the
Collateral pro rata on the basis of the aggregate unpaid principal amount of the
Obligations held by the Lenders. The Agent will be reimbursed or properly
indemnified by the Lenders in the event the Agent is requested by the Lenders to
take or omit to take any action with respect to the Collateral (any such
reimbursement or indemnification to be as provided in Section 11.05). The Agent
shall have the right to retain counsel to advise it as to any action or decision
with respect to the Collateral and shall be reimbursed by the
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Lenders for the reasonable cost of the same (to the extent the Agent is not
reimbursed by the Borrowers) prior to distributing any of the Collateral or any
proceeds thereof (any such reimbursement to be pro rata as aforesaid).
Section 1.125 Amendment of Article 11. Each Borrower hereby agrees that
the foregoing provisions of this Article 11 constitute an agreement among the
Agent and the Lenders and that any and all of the provisions of this Article 11,
other than Section 11.09, Section 11.11, Section 11.12 and Section 11.14 or any
other provision the amendment of which would adversely affect the rights and
interests of the Borrowers, may be amended at any time by the Required Lenders
without the consent or approval of, or notice to, Cross Media.
ARTICLE XII
MISCELLANEOUS.
Section XII.1 Amendments and Waivers; Remedies Cumulative. Except as
otherwise expressly provided in this Agreement or in any other Facility
Document, any provision of this Agreement or any other Facility Document may be
amended or modified only by an instrument in writing signed by the Borrowers,
the Agent and the Required Lenders, or by the Borrowers and the Agent acting
with the consent of the Required Lenders and any provision of this Agreement or
any other Facility Document may be waived by the Required Lenders or by the
Agent acting with the consent of the Required Lenders; provided that no such
amendment, modification or waiver shall, unless by an instrument signed by all
of the Lenders (excluding a Lender who at such time has failed or is refusing to
make a Revolving Credit Loan as required by this Agreement) or by the Agent
acting with the consent of all of the Lenders: (a) increase or extend the term,
or extend the time or waive any requirement for the reduction or termination, of
the Commitments; (b) extend the date fixed for the payment of principal of or
interest on any Loan or any fee payable hereunder, or extend the date of payment
of any L/C Obligation to a date that is after the Revolving Credit Termination
Date or result in an expiration date of any Letter of Credit being after the
Revolving Credit Termination Date; (c) reduce the amount of any payment of
principal thereof or the rate at which interest is payable thereon or any fee
payable hereunder or any L/C Obligation, (d) alter the terms of this Section
12.01; (e) amend the definition of the term "Required Lenders" or any provision
requiring the consent, approval or satisfaction of all of the Lenders; (f) waive
any of the conditions precedent set forth in Article 5; (g) discharge any
Obligor from its guaranty of the obligations (unless the stock of such Obligor
is sold in accordance with the terms of this Agreement); (h) amend the
definition of the Revolving Credit Borrowing Base or any of the terms therein
contained; or (i) release all or any part of the Collateral other than pursuant
to a disposition of Property permitted under Section 8.07, and provided,
further, that any amendment of Article 11 hereof or any amendment which
increases the obligations of the Agent hereunder shall require the prior written
consent of the Agent. No failure on the part of the Agent or any Lender to
exercise, and no delay in exercising, any right hereunder shall
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operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 1.126 Usury. All agreements among Borrowers and Guarantor(s) and
Agent or any Lender are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Agent or any Lender for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof; provided, however, that in the event there is a change in
the law which results in a higher permissible rate of interest, then this
Agreement or any Note shall be governed by such new law as of its effective
date. In this regard, it is expressly agreed that it is the intent of Borrowers
and Agent and the Lenders in the execution, delivery and acceptance of this
Agreement to contract in strict compliance with the laws of New York State from
time to time in effect. If, under or from any circumstances whatsoever,
fulfilment of any provision hereof or of any of the other Facility Documents at
the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from circumstances whatsoever Agent or any Lender
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of all agreements
among Borrowers, Guarantors, the Agent and/or any Lender.
Section 1.127 Costs; Expenses; Taxes; Indemnification. The Borrowers agree
jointly and severally to pay or reimburse (a) the Agent for all its costs and
expenses (including, without limitation, the reasonable fees and expenses of
attorneys for the Agent) incurred in connection with the preparation and
administration of this Agreement and the Facility Documents and (b) the Agent
and each Lender for all costs and expenses (including, without limitation, the
reasonable fees and expenses of attorneys for the Agent and each Lender)
incurred in connection with the default, collection, waiver or amendment of this
Agreement or any of the Facility Documents, or in connection with Agent's or any
Lender's exercise, preservation or enforcement of any of their rights, remedies
or options hereunder, including without limitation in connection with (i) the
enforcement or preservation of any rights under this Agreement or any Note or
any other Facility Document or any other instrument or agreement entered into in
connection herewith or therewith including, without limitation, the reasonable
fees and disbursements of attorneys for the Agent; (ii) any claim or action
threatened, made or brought against the Agent or any Lender arising out of or
relating to any extent to this Agreement, the Security Agreement, any Note or
any other Facility Documents or any instrument or agreement entered into in
connection with the transactions contemplated hereby or thereby; (iii) the
perfection of any security interest in the Collateral or
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in the maintenance of the Collateral; (iv) any amendment or modification of any
Facility Document; (v) the payment of any tax, assessment, recording fee or
similar charge; (vi) any waiver of any right of the Agent or any Lender under
any Facility Document and (vii) the reasonable fees and disbursements of any
outside counsel to the Agent or any Lender and/or the allocated costs of
in-house legal counsel incurred from time to time in connection with the
transactions contemplated by this Agreement, accounting, consulting, brokerage
or other similar professional fees or expenses, and any fees or expenses
associated with travel or other costs relating to any appraisals or examinations
conducted in connection with the Obligations or any Collateral therefor. All
such fees and expenses shall be Obligations secured by the Collateral and,
commencing ten days after demand therefor, shall, until paid, bear interest at
the rate applicable to Loans upon the occurrence of an Event of Default. In
addition, the Borrowers shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing and recording of any of the Security Agreement and all related and/or
necessary financing statements, and agree to save the Agent and the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees. The Borrowers
agree to jointly and severally indemnify the Agent and each Lender and their
respective directors, officers, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or
out-of-pocket expenses incurred by any of them arising out of or by reason of
any investigation of or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings against the Agent or
such Lender) arising out of or relating to this Agreement or any other Facility
Document or to any actual or proposed use by any Borrower of the proceeds of the
Loans or other extensions of credit hereunder or to the performance or
enforcement of this Agreement or the other Facility Documents, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings.
Notwithstanding anything to the contrary contained herein, this Section 12.03
shall not be applicable with respect to the Agent or any Lender to the extent
any cost or expense arises solely as a result of the gross negligence or willful
misconduct of the Agent or such Lender.
Section 1.128 Survival. The obligations of the Borrowers under Article 3
and Sections 4.01, 4.05, 12.03 and 12.14, and the obligations of the Lenders
under Section 11.05, shall survive the repayment of the Loans and the
termination of the Commitments and continue after the Revolving Credit
Termination Date.
Section 1.129 Assignment; Participations.
(1) This Agreement shall be binding upon, and shall inure to the
benefit of, the Borrowers, the Agent, the Lenders and their respective
successors and assigns, except that no Borrower may assign or transfer its
rights or obligations hereunder, without prior written consent of the Agent and
the Lenders (any of such assignment or transfer without such consent shall be
null and void). Each Lender shall have the unrestricted right at any time or
from time to time, and without Borrowers' or any Guarantor's consent, to assign
or
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sell participations in all of its rights and obligations hereunder or any part
of its rights and obligations hereunder to another bank or other financial
institution provided that (i) except in the case of an assignment to a Lender,
each such assignment shall be in a minimum amount equal to $3,000,000 and an
integral multiple of $1,000,000 in excess thereof (unless such amount
constitutes the entire remaining amount of such Lender's Commitment), (ii) each
such assignment of a Lender's Revolving Credit Commitment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and in respect
of such Lender's Revolving Credit Commitment, and (iii) each such assignment of
Lender's Revolving Credit Commitment shall be subject to the consent of the
Borrowers, which consent will not be unreasonably withheld or delayed (provided
that such consent shall not be required if a Default or an Event of Default has
occurred and is continuing); in which event (x) in the case of an assignment,
upon notice thereof by such Lender to the Borrowers with a copy to the Agent,
the assignee shall have, to the extent of such assignment (unless otherwise
provided therein), the same rights, benefits and obligations as it would have if
it were a Lender hereunder; and (y) in the case of a participation, the
participant shall have no rights under the Facility Documents and all amounts
payable by the Borrowers under the Facility Documents, including, without
limitation, under Article 4, shall be determined as if such Lender had not sold
such participation. The agreement executed by such Lender in favor of the
participant shall not give the participant the right to require such Lender to
take or omit to take any action hereunder except action directly relating to (i)
the extension of a payment date with respect to any portion of the principal of
or interest on any amount outstanding hereunder allocated to such participant,
(ii) the reduction of the principal amount outstanding hereunder allocated to
such participant or (iii) the reduction of the rate of interest payable on such
amount or any amount of fees payable hereunder to a rate or amount, as the case
may be, below that which the participant is entitled to receive under its
agreement with such Lender. Such Lender may furnish any information concerning
the Borrowers, any Subsidiary or any other Obligor (or any of their respective
affiliates) in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall require any such prospective assignee or such participant
(prospective or otherwise) to agree in writing to maintain the confidentiality
of such information in accordance with the provisions of Section 12.14. In
connection with any assignment pursuant to this paragraph (a), the assigning
Lender shall pay the Agent an administrative fee for processing such assignment
in the amount of $2,500.
(2) In addition to the assignments and participations permitted
under paragraph (a) above, any Lender may assign and pledge all or any portion
of the Facility Documents, including any portion of the Notes, held by it to (i)
any affiliate of such Lender or (ii) any Federal Reserve Bank organized under
Section 4 of the Federal Reserve Act, 12 U.S.C., Section 341, as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such pledge or assignment or enforcement thereof shall
release the assigning Lender from its obligations hereunder.
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(3) The assignor or selling Lender shall be solely responsible for
obtaining from any participant or assignee and providing to the Agent and
Borrowers all forms required under Section 11.14. If, pursuant to this Section
12.05, any interest in this Agreement is transferred to any assignee that is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the Lender transferring such interest (the "Transferor Lender")
shall cause such assignee concurrently with the effectiveness of such transfer,
(a) to represent to the Transferor Lender (for the benefit of the Transferor
Lender, the Agent and the Borrowers) that it is either (i) entitled to the
benefits of an income tax treaty with the United States that provides for an
exemption from United States withholding tax on interest and other payments
which may be made by the Borrowers under this Agreement; or (ii) is engaged in a
trade or business within the United States and such Loan is effectively
connected with such trade or business, (b) to furnish to the Transferor Lender,
the Agent and the Borrowers either Internal Revenue Service Form 4224 or
Internal Revenue Service Form W-8BEN (wherein such assignee claims entitlement
to complete exemption from federal withholding tax of the United States of
America on all payments hereunder) and (c) to agree (for the benefit of the
Transferor Lender, the Agent and the Borrowers) to provide to the Transferor
Lender, Agent and Borrowers such forms or documentation as may be required from
time to time, including a new Form 4224 or Form W-8BEN upon the obsolescence of
any previously delivered form, in accordance with applicable Laws of the United
States of America establishing the current status of such assignee with regard
to continued entitlement to such complete withholding tax exemption.
(4) In the event an assignment is permitted under paragraph (a)
above, each Borrower and each Guarantor agrees that it shall execute, or cause
to be executed, such documents, including, without limitation, amendments to
this Agreement and to any other documents, instruments and agreements executed
in connection herewith as the assigning Lender shall deem necessary to effect
the foregoing. In addition, at the request of the assigning Lender, and any such
assignee, Borrowers shall issue one or more new promissory notes, as applicable,
to any such assignee and if the assigning Lender has retained any of its rights
and obligations hereunder following such assignment, to such Lender which new
promissory notes shall be issued in replacement of but not in discharge of, the
liability evidenced by the promissory note held by such Lender prior to such
assignment and shall reflect the amount of the respective commitments and loans
held by such assignee and such Lender after giving effect to such assignment.
Upon the execution and delivery of appropriate assignment documentation,
amendments and any other documentation required by an assigning Lender in
connection with such assignment, and the payment by assignee of the purchase
price agreed to by such Lender and such assignee, such assignee shall be a party
to this Agreement and shall have all of the rights and obligations of a Lender
hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and
obligations have been assigned by Lender pursuant to the assignment
documentation between such assigning Lender and such assignee, and such
assigning Lender shall be released from its obligations hereunder and thereunder
to a corresponding extent.
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Section 1.130 Notices. 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:
(1) if to the Borrowers, to:
Cross Media Marketing Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Blank Rome Comisky & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(2) if to the Agent, to:
Fleet National Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Singer & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(3) if to a Lender, to it at its address (or telecopy number) set
forth in Schedule 12.06.
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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 if delivered by hand or overnight courier service or sent by
telecopy, or on the date five Business Days after dispatch by certified or
registered mail, in each case delivered, sent or mailed (properly addressed) to
such party as provided in this Section 12.06 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 12.06.
Section 1.131 Joint and Several Liability.
(1) Each of the Borrowers is accepting joint and several liability
for all Obligations (as a Borrower) with respect to the Loans and the Letters of
Credit hereunder and under the other applicable Facility Documents, in
consideration of the financial accommodations to be provided by the Agent, the
Lenders and the Issuing Lender under this Agreement, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of the
undertakings of each other Borrower to accept joint and several liability for
such Obligations.
(2) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of such Obligations with respect to the Loans
and the Letters of Credit (including obligations arising under this Section
12.07), it being the intention of the parties hereto that all such Obligations
shall be the joint and several obligations of each of the Borrowers without
preference or distinction among them.
(3) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of such Obligations as and when due or to
perform any of such Obligations in accordance with the terms thereof, then in
each such event each of the other Borrowers will make such payment with respect
to, or perform, such Obligation.
(4) The Obligations with respect to the Loans and the Letters of
Credit of each of the Borrowers under the provisions of this Section 12.07
constitute full recourse obligations of each of the Borrowers enforceable
against each such Person to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Agreement or
any other circumstances whatsoever.
(5) Except as otherwise expressly provided in this Agreement, each
of the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Loans made or Letters of Credit issued under this
Agreement, notice of any action at any time taken or omitted by the Agent, any
of the Lenders or the Issuing Lender under or in respect of any of such
Obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement and
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the other Facility Documents. Each of the Borrowers hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of such Obligations, the acceptance of any payment of any of such
Obligations, the acceptance of any partial payment thereon, any waiver, consent
or other action or acquiescence by the Agent, any of the Lenders or the Issuing
Lender at any time or times in respect of any default by any of the Borrowers or
any other Obligor in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Agent, any of the Lenders or the Issuing Lender, in respect of
any of such Obligations, and the taking, addition, substitution or release, in
whole or in part, at any time or times, of any security for any of such
obligations or the addition, substitution or release, in whole or in part, of
any of the Borrowers. Without limiting the generality of the foregoing, each of
the Borrowers assents to any other action or delay in acting or failure to act
on the part of the Agent, any of the Lenders or the Issuing Lender with respect
to the failure by any of the Borrowers or any other Obligor to comply with any
of its respective obligations, including any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder, which might, but for the provisions of this Section
12.07 afford grounds for terminating, discharging or relieving any of the
Borrowers, in whole or in part, from any of its obligations under this Section
12.07, it being the intention of each of the Borrowers that, so long a any of
such Obligations hereunder remain unsatisfied, the obligations of the Borrowers
under this Section 12.07 shall not be discharged except by performance and then
only to the extent of such performance. Such obligations of each of the
Borrowers under this Section 12.07 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
re-construction or similar proceeding with respect to any of the Borrowers, any
other Obligor, any of the Agent, the Lenders or the Issuing Lender. The joint
and several liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place of formation of
any of the Borrowers, any other Obligor, any of the Agent, the Lenders or the
Issuing Lender.
(6) The provisions of this Section 12.07 are made for the benefit
of the Agent, the Lenders and the Issuing Lender and their respective successors
and assigns, and may be enforced in good faith from time to time against any and
all of the Borrowers as often as occasion therefor may arise and without
requirement on the part of the Agent, any of the Lenders or the Issuing Lender
first to marshal any of their claims or to exercise any of their rights against
any other Borrower or any other Obligor, or to exhaust any remedies available to
them against any other Borrower or any other Obligor, or to resort to any other
source or means of obtaining payment of any of the Obligations with respect to
the Loans or the Letters of Credit hereunder or to elect any other remedy. The
provisions of this Section 12.07 shall remain in effect until all of such
Obligations shall have been paid in full or otherwise fully performed or
satisfied. If at any time, any payment, or any part thereof, made in respect of
any of such Obligations, is rescinded or must otherwise be restored or returned
by any of the Agent, the Lenders or the Issuing Lender upon the insolvency,
bankruptcy or reorganization
85
of any of the Borrowers, or otherwise, the provisions of this Section 12.07 will
forthwith be reinstated in effect, as though such payment had not been made.
Section 1.132 Setoff. Each Borrower hereby grants to the Lenders a
continuing lien, security interest and right of setoff as security for all
liabilities and obligations to the Lenders whether now existing or hereafter
arising, upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of the Lenders or
any entity under the control of FleetBoston Financial Corporation and its
successors and assigns or in transit to any of them. At any time, without demand
or notice (any such notice being expressly waived by Borrowers), any Lender may
set off the same or any part thereof and apply the same to any liability or
obligation of Borrowers and any Guarantor even though unmatured and regardless
of the adequacy of any other collateral securing the Loans. ANY AND ALL RIGHTS
TO REQUIRE LENDERS TO EXERCISE RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOANS PRIOR TO EXERCISING ITS RIGHT OF SET OFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWERS OR ANY
GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
Section 1.133 JURISDICTION; IMMUNITIES. (a) EACH OF THE BORROWERS, THE
AGENT AND EACH OF THE LENDERS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY
NOTE OR ANY OTHER FACILITY DOCUMENT, AND EACH OF THE BORROWERS, THE AGENT AND
EACH OF THE LENDERS HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR
FEDERAL COURT. EACH OF THE BORROWER, THE AGENT AND EACH OF THE LENDERS
IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON IN THE MANNER
PROVIDED IN SECTION 12.06 FOR THE GIVING OF NOTICES. EACH OF THE BORROWERS, THE
AGENT AND EACH OF THE LENDERS 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. EACH OF THE
BORROWERS, THE AGENT AND THE LENDERS FURTHER WAIVES ANY OBJECTION TO VENUE IN
SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE
BASIS OF FORUM NON CONVENIENS. EACH BORROWER FURTHER AGREES THAT ANY ACTION OR
PROCEEDING BROUGHT AGAINST THE AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A
NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY.
86
(1) EACH OF THE BORROWERS, THE AGENT AND EACH OF THE LENDERS (BY
ACCEPTANCE OF THE NOTES) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO TRAIL BY JURY, AND EACH BORROWER WAIVES THE
RIGHT TO INTERPOSE ANY NON-COMPULSORY COUNTERCLAIM, IN EACH CASE IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, THE NOTES AND/OR ANY OTHER FACILITY DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF THE AGENT OR THE LENDERS RELATING TO THE ADMINISTRATION OF THE LOANS
OR ENFORCEMENT OF THE FACILITY DOCUMENTS AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATED ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. EACH BORROWER CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE AGENT AND THE LENDERS TO ENTER INTO THIS AGREEMENT, ACCEPT
THE NOTE AND MAKE THE LOANS.
(2) Nothing in this Section 12.09 shall affect the right of the
Borrowers, the Agent or any Lender to serve legal process in any other manner
permitted by law or affect the right of the Agent or any Lender to bring any
action or proceeding against the Borrower or its Property in the courts of any
other jurisdictions.
(3) To the extent that any Borrower has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
from service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its Property, each
Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Agreement, the Notes and the other Facility Documents.
Section 1.134 Table of Contents; Headings. The table of contents and the
headings and captions hereunder are for convenience only and shall not affect
the interpretation or construction of this Agreement.
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Section 1.135 Severability. The provisions of this Agreement are intended
to be severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 1.136 Entire Agreement. The Facility Documents, and the letter
agreement, dated March 19, 2002, among the Agent and the Borrowers (but only
with respect to fees and expenses payable by the Borrowers to the Agent and not
to the Lenders) are intended by the parties as the final, complete and exclusive
statement of the transactions evidenced thereby. All prior or contemporaneous
promises, agreements and understandings, whether oral or written, are deemed to
be superceded by this Agreement and such other Facility Documents, and no party
is relying on any promise, agreement or understanding not set forth in this
Agreement or such other Facility Documents.
Section 1.137 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF, BUT THE
LETTERS OF CREDIT SHALL BE SUBJECT TO THE UNIFORM CUSTOMS, THE PROVISIONS OF
WHICH SHALL BE CONTROLLING IN THE EVENT OF A CONFLICT.
Section 1.138 Confidentiality. Each Lender and the Agent agrees (on behalf
of itself and each of its respective affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrowers, the Subsidiaries or any other Obligors pursuant
to the Facility Documents, provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by applicable Law,
(ii) to counsel for any of the Lenders or the Agent, (iii) to bank examiners,
and such Lender's auditors or accountants, (iv) to the extent that such
information is already publicly known not as result of any breach of this
Section, (v) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) agrees in writing to use reasonable precautions to keep such
information confidential as provided herein, or (vi) in connection with any
litigation to which such Lender or the Agent is a party; and provided finally
that in no event shall any Lender or the Agent be obligated or required to
return any materials furnished by the Borrowers, the Subsidiaries or any other
Obligors.
Section 1.139 Replacement Notes, Etc. Upon receipt of an affidavit of an
officer of any Lender as to the loss, theft, destruction or mutilation of any
Note or any other security documents which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon cancellation of
such Note or other security document, the
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Borrowers will issue, in lieu thereof, a replacement note or other security
document in the same principal amount thereof and other wise of like tenor.
Section 1.140 Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it in connection with
actions to be taken under this Agreement and the other Facility Documents by
each Lender or by one or more of their respective subsidiaries or affiliates and
(b) acknowledges that information delivered to each Lender by the Borrowers, any
Subsidiary or any other Obligor (or any of their respective affiliates) may be
provided to each such subsidiary and affiliate; so long as, in each case, each
such subsidiary or affiliate agrees to use reasonable precautions to keep such
information confidential as provided in Section 12.14.
Section 1.141 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWERS:
CROSS MEDIA MARKETING CORPORATION
BY: ____________________________________
Name:
Title:
MEDIA OUTSOURCING, INC.
BY: ____________________________________
Name:
Title:
NATIONAL SYNDICATIONS, INC.
BY: ____________________________________
Name:
Title:
PREFERRED CONSUMER MARKETING, INC.
BY:_____________________________________
Name:
Title:
AGENT:
FLEET NATIONAL BANK, as Agent
By: ____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
LENDERS:
FLEET NATIONAL BANK
By:_____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Lending Office:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
KEYBANK NATIONAL ASSOCIATION
By: ____________________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By: ____________________________________
Name:
Title:
SIGNATURE BANK
By: ____________________________________
Name:
Title:
ISSUING LENDER:
FLEET NATIONAL BANK, as Issuing Lender
By: ____________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
