AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of March 31, 1998
By and Among
IT PARTNERS, INC.
as the Borrower,
THE LENDERS NAMED HEREIN,
CREDITANSTALT CORPORATE FINANCE, INC.,
as the LC Issuer,
CREDIT AGRICOLE INDOSUEZ,
as Co-Agent,
and
CREDITANSTALT CORPORATE FINANCE, INC.,
as the Collateral Agent and Administrative Agent
TABLE OF CONTENTS
1. DEFINITIONS AND REFERENCES 2
1.1 Certain Definitions 2
1.2 Use of Defined Terms 20
1.3 Accounting Terms; Calculations 20
1.4 Other Terms 20
1.5 Terminology 20
1.6 Exhibits 20
2. THE LOANS AND LETTERS OF CREDIT 20
2.1 Loans 20
2.2 Borrowing Procedures 21
2.3 Loan Account; Statements of Account 22
2.4 Use of Proceeds 22
2.5 Several Obligations of the Lenders;
Remedies Independent 25
2.6 Letters of Credit 25
2.7 Term; Termination 28
2.8 Loans in Excess of Limitations 28
2.9 Payments 29
2.10 Prorata Treatment 29
2.11 Sharing of Payments, Etc. 30
2.12 Prepayment; Commitment Reduction 31
2.13 Certain Notices; Minimum Amounts 32
3. FEES AND INTEREST 33
3.1 Interest 33
3.2 Interest Period 34
3.3 Limitations on Interest Periods 34
3.4 Conversions and Continuations 34
3.5 Commitment Fee 34
3.6 Letter of Credit Fees 34
3.7 Illegality 35
3.8 Inability to Determine Quoted Rate 35
3.9 Increased Costs and Reduced Return 35
3.10 Indemnity 36
3.11 Notice of Amounts Payable 36
3.12 Interest Savings Clause 36
4. SECURITY INTEREST - COLLATERAL 37
4.1 Security Interest 37
4.2 Additional Collateral 38
4.3 Perfection of Security Interest 38
4.4 Right to Inspect; Verifications 38
5. REPRESENTATIONS AND WARRANTIES 39
5.1 Corporate Existence and Qualification 39
5.2 Corporate Authority; Valid and Binding Effect 39
5.3 No Conflict 39
5.4 Governmental Action 39
5.5 No Litigation 40
5.6 Solvency 40
5.7 Taxes 40
5.8 Financial Information 40
5.9 Title to Property 41
5.10 Violations of Law 41
5.11 ERISA 41
5.12 Environmental Laws 42
5.13 Margin Stock 42
5.14 No Default 42
5.15 Chief Executive Office; Collateral Locations 43
5.16 Corporate and Trade or Fictitious Names 43
5.17 Accounts 43
5.18 Adequacy of Intangible Assets 44
5.19 Equipment 44
5.20 Inventory 44
5.21 Investment Property 44
5.22 Indebtedness 44
5.23 Existing Liens 44
5.24 Trade Relations 45
5.25 Broker's or Finder's Fees 45
5.26 Security Interest 45
5.27 Regulatory Matters 45
5.28 Disclosure 45
5.29 Burdensome Restrictions 45
5.30 Senior Indebtedness 45
5.31 Shell Subsidiaries 46
6. AFFIRMATIVE COVENANTS 46
6.1 Records Respecting Collateral;
Lockbox or Blocked Account Arrangement 46
6.2 Reporting Requirements 46
6.3 Tax Returns 48
6.4 Compliance With Laws 48
6.5 Environmental Laws 48
6.6 ERISA 48
6.7 Books and Records 49
6.8 Notifications to the Administrative
Agent and the Lenders 49
6.9 Insurance 49
6.10 Maintenance of Intellectual Property 50
6.11 Preservation of Corporate Existence 50
6.12 Equipment 50
6.13 Other Indebtedness 50
6.14 Year 2000 Compliance 51
6.15 Assignment of Leasehold Interests 51
6.16 Additional Documents 51
6.17 Upstream Payment of Dividends and Distributions 51
7.. NEGATIVE COVENANTS 51
7.1 Liens 52
7.2 Indebtedness 52
7.3 Asset Sales 52
7.4 Guaranties 52
7.5 Investments and Acquisitions 52
7.6 Prohibition of Fundamental Changes 53
7.7 Issuance of Stock 53
7.8 Fiscal Year 53
7.9 ERISA 53
7.10 Relocations; Use of Name 54
7.11 Arm's-Length Transactions 54
7.12 Amendments 54
8. FINANCIAL COVENANTS 54
8.1 Net Worth 54
8.2 Leverage Ratio 54
8.3 Senior Debt Leverage Ratio 55
8.4 Interest Coverage Ratio 55
8.5 Dividends 55
9. EVENTS OF DEFAULT 55
9.1 Obligations 55
9.2 Misrepresentations 56
9.3 Covenants 56
9.4 Other Covenants 56
9.5 Other Debts 56
9.6 Tax Lien 56
9.7 ERISA 56
9.8 Voluntary Bankruptcy 57
9.9 Involuntary Bankruptcy 57
9.10 Suspension of Business 57
9.11 Judgments 57
9.12 RICO 57
9.13 Failure of Security 57
9.14 Guaranty 58
9.15 Intercompany Loan Documents 58
9.16 Management 58
9.17 Change of Control 58
9.18 Exercise of Put Option 58
10. REMEDIES 58
10.1 Default Rate 59
10.2 Termination; Acceleration of the Obligations 59
10.3 Set-Off 59
10.4 Rights and Remedies of a Secured Party 59
10.5 Take Possession of Collateral 59
10.6 Sale of Collateral 59
10.7 Judicial Proceedings 60
10.8 Actions in Respect of the Letters of
Credit Upon Default 60
10.9 Notice 60
10.10 Appointment of the Collateral Agent
as the Borrower's Lawful Attorney 61
11. CONDITIONS PRECEDENT 61
11.1 Conditions Precedent to Effectiveness 61
11.2 All Loans 64
11.3 Delay in Satisfaction of Conditions Xxxxxxxxx 00
00. THE AGENT 65
12.1 Appointment, Powers and Immunities 65
12.2 Reliance by Agents 65
12.3 Defaults 66
12.4 Rights as a Lender 66
12.5 Indemnification 66
12.6 Non-Reliance on Administrative Agent
and the other Lenders 67
12.7 Failure to Act 67
12.8 Resignation or Removal of an Agent 67
12.9 Collateral Matters 68
12.10 The Borrower Not a Beneficiary 70
13. MISCELLANEOUS 71
13.1 Waiver 71
13.2 Survival 71
13.3 Assignments; Successors and Assigns 71
13.4 Counterparts 73
13.5 Expense Reimbursement 73
13.6 Severability 73
13.7 Notices 73
13.8 Entire Agreement; Amendment 74
13.9 Time of the Essence 74
13.10 Interpretation 75
13.11 Lenders Not Joint Venturers 75
13.12 Cure of Defaults by Lenders 75
13.13 Indemnity 75
13.14 Consequential Damages 76
13.15 Attorney-in-Fact 76
13.16 Financing Statements 76
13.17 Governing Law; Jurisdiction 76
13.18 Waiver of Jury Trial 2
Schedule 5.1 - Foreign Qualifications
Schedule 5.5 - Litigation and Related Proceedings
Schedule 5.7 - Taxes
Schedule 5.11 - ERISA Matters
Schedule 5.15 - Executive Offices; Business and Collateral
Locations
Schedule 5.16 - Corporate and Trade or Fictitious Names
Schedule 5.18 - Intangible Assets
Schedule 5.21 - Investments
Schedule 5.23 - Existing Liens
Schedule 5.22 - Existing Indebtedness
Exhibit A - Form of Intercompany Loan and Security Agreement
Exhibit B - Form of Master Contribution and Indemnity Agreement
Exhibit C - Form of Master Subsidiary Guaranty
Exhibit D - Form of Master Subsidiary Pledge Agreement
Exhibit E - Form of Master Subsidiary Security Agreement
Exhibit F - Form of Promissory Note
Exhibit G - Form of Opinion of Counsel (Intercompany Loans)
Exhibit H - Form of Request for Letter of Credit
Exhibit I - Form of Notice of Borrowing
Exhibit J - Form of Compliance Certificate
Exhibit K - Form of Borrowing Availability Certificate
Exhibit L - Form of Opinion of Xxxxxxx & Berlin, Chartered
Exhibit M - Form of Assignment
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the "Agreement")
is made and entered into as of the 31st day of March, 1998, by and among IT
PARTNERS, INC., a Delaware corporation (the "Borrower"), each of the Lenders
signatory hereto (hereinafter referred to individually as the "Lender" and
collectively as the "Lenders"), CREDITANSTALT CORPORATE FINANCE, INC., as the
letter of credit issuer (in such capacity, the "LC Issuer"), CREDIT AGRICOLE
INDOSUEZ, as co-agent for the Lenders (in such capacity, together with its
successors and assigns, the "Co-Agent") and CREDITANSTALT CORPORATE FINANCE,
INC., as collateral agent for the Lenders (in such capacity, together with its
successors and assigns, the "Collateral Agent") and administrative agent for
the Lenders (in such capacity, together with its successors and assigns, the
"Administrative Agent"; the Co-Agent, Collateral Agent and Administrative
Agent are collectively, the "Agents" and individually an "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower and Creditanstalt Corporate Finance, Inc. ("CCF"),
as agent and sole Lender, are a party to that certain Loan and Security
Agreement dated as of May 30, 1997, as
amended by that certain First Amendment to Loan and Security Agreement dated
as of October 17, 1997, that certain Second Amendment to Loan and Security
Agreement, dated as of December 16, 1997 and that certain Third Amendment to
Loan and Security Agreement, dated as of March 13, 1998 (as so amended, the
"Original Loan Agreement"), pursuant to which the lenders thereunder made
available to the Borrower a revolving credit facility permitting advances up
to Thirty-Five Million Dollars ($35,000,000) at any one time outstanding; and;
WHEREAS, the Borrower has requested that CCF further amend the Original
Loan Agreement (i) to increase the revolving credit facility by $35,000,000
to permit advances of up to Seventy Million Dollars ($70,000,000) at any one
time outstanding, and (ii) to add Credit Agricole Indosuez as a Lender and a
Co-Agent; and
WHEREAS, the Lenders are willing to extend such financing to the
Borrower, subject to the terms and conditions set forth herein; and
WHEREAS, the Borrower, the Lenders and the Agents have agreed, for the
sake of convenience, to amend and restate the Original Loan Agreement in its
entirety as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of
which are acknowledged by the
parties hereto, the Borrower, the Lenders, the LC Issuer and the Agents
hereby agree to amend and restate the Original Loan Agreement as follows:
1. DEFINITIONS AND REFERENCES
1.1 Certain Definitions. When used herein, the following terms
shall have the following respective meanings:
"Accounts" shall mean any "account," as such term is defined in
Section 9-106 of the UCC, now owned or hereafter acquired by the Borrower and,
in any event, shall include all of the accounts, contract rights, book debts
and other forms of obligations (other than forms of obligations evidenced by
Chattel Paper, Documents or Instruments) of the Borrower, whether now existing
or hereafter acquired or arising or in which the Borrower now has or hereafter
acquires any rights, including, without limitation, all present and future
rights to payments for goods, merchandise or Inventory sold or leased or for
services rendered, whether or not represented by invoices or other billing,
and whether or not earned by performance; proceeds of any letter of credit on
which the Borrower is a beneficiary and all forms of obligations whatsoever
owing to the Borrower, together with all instruments and documents of title
representing any of the foregoing, all rights in any goods, merchandise or
Inventory which any of the foregoing may represent, all rights in any
returned or repossessed goods, merchandise or Inventory, and all rights,
security and guaranties with respect to each of the foregoing, including,
without limitation, any rights of stoppage in transit.
"Account Debtor" shall mean any "account debtor," as such term is
defined in Section 9-105(1)(a) of the UCC and, in any event, shall include any
Person who is or may become obligated to the Borrower on any Account.
"Acquisition" shall mean any transaction, or any series of related
transactions by which (a) the Borrower acquires, directly or indirectly, the
business or all or substantially all of the assets of any Person, or any
division of any Person, whether through Investment, purchase of assets,
merger, capital contribution or otherwise or (b) any Person that was not
theretofore a Subsidiary of the Borrower becomes a Subsidiary of the Borrower.
"Administrative Agent" shall have the meaning given to such term
in the preamble of this Agreement.
"Adjusted Cash Flow" shall mean for any Person for any Calculation
Period, the sum of (a) such Person's Cash Flow for the Calculation Period,
plus (b) to the extent not included in
clause (a) above, the Cash Flow for the Calculation Period of any other Person
acquired by such Person subsequent to the first day of the Calculation Period
and prior to or simultaneously with the date of the Loan or Intercompany Loan
for which such calculation is made, adjusted to give effect to the Acquisition
of such Person on a pro forma basis as if such Acquisition occurred on the
first (1st) day of the Calculation Period; provided, however, that any such
adjustment that would increase the Cash Flow of such Person shall (x) be
reviewed by a firm of independent public accountants of nationally recognized
standing and (y) require approval of the Agents.
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, owns or controls, on an aggregate basis, including all
beneficial ownership and ownership or control as a trustee, guardian or other
fiduciary, at least ten percent (10%) of the outstanding shares of capital
stock having ordinary voting power to elect a majority of the board of
directors or other governing body (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) of such Person or
at least ten percent (10%) of the partnership or other ownership interest of
such Person; or which controls, is controlled by or is under common control
with such Person; provided, however, that in no event shall the Borrower and
the Lender be deemed or regarded as Affiliates of
each other. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Loan and Security Agreement, as
amended, modified or supplemented from time to time.
"Agents" shall have the meaning given to such term in the preamble
of this Agreement.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of any Governmental Authority applicable to a Person,
and all orders and decrees of all courts and arbitrators in proceedings or
actions in which the Person in question is a party.
"Applicable Margin" shall mean (a) with respect to Eurodollar
Loans, four percent (4%) per annum and (b) with respect to Base Rate Loans,
two percent (2%) per annum; provided however, that if on the last day of any
fiscal quarter, commencing with the quarter ending June 30, 1998, Borrower's
Senior Debt Leverage Ratio shall fall within any of the ranges set forth
below, then, subject to delivery by a senior financial
officer of Borrower of financial statements for that quarter, together with a
Compliance Certificate of the chief financial officer of Borrower certifying
as to Borrower's Senior Debt Leverage Ratio, in each case as required pursuant
to Section 6.2(e) hereof, the Applicable Margin payable on the Loans shall be
adjusted, from the date of Administrative Agent's receipt of such financial
statements and Compliance Certificate until the date on which the next
following quarterly financial statements are required to be delivered to the
Administrative Agent, to the rate, calculated daily on the basis of a 360-day
year and actual days elapsed, for the applicable type of Loan set forth
opposite such range in the schedule below:
Senior Debt Base Eurodollar Rate Letter of
Leverage Ratio Rate Loans Loans Credit
Credit
--------------------------------------------------------------------------
Less than 3.50:1.00 1.50% 3.50% 3.50%
but greater than or
equal to
3.00:1.00
--------------------------------------------------------------------------
Less than 3.00:1.00 1.25% 3.25% 3.25%
but greater than or
equal to
2.50:1.00
--------------------------------------------------------------------------
Less than 2.50:1.00 1.00% 3.00% 3.00%
but greater than or
equal to
2.00:1.00
--------------------------------------------------------------------------
Less than 2.00:1.00 0.75% 2.75% 2.75%
If Borrower does not qualify for an adjustment in interest rates as set forth
above for any given fiscal quarter of Borrower or if no Compliance Certificate
and quarterly financial statements are delivered by the required date, the
Applicable Margin shall be those set forth in clauses (a) and (b) above.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as
may be amended from time to time.
"Base Lending Rate" shall mean an interest rate per annum,
fluctuating daily, equal to the higher of (a) the rate announced by the
Reference Bank from time to time, as its prime rate for domestic (United
States) commercial loans in effect on such day; and (b) the Federal Funds Rate
in effect on such day plus one-half of one percent (1/2%). The Base Lending
Rate is not necessarily intended to be the lowest rate of interest charged by
the Reference Bank in connection with extensions of credit. Each change in
the Base Lending Rate shall result in a corresponding change in the interest
rate hereunder with respect to a Base Rate Loan and such change shall be
effective on the effective date of such change in the Base Lending Rate.
"Base Rate Loan" shall mean a Loan bearing interest at a rate
based on the Base Lending Rate.
"Borrower" shall have the meaning given to such term in the
preamble of this Agreement.
"Borrowing Availability" shall mean, for any Person, for (a) the
period beginning on the Effective Date and ending on May 30, 1998, the sum of
an amount equal to such Person's Adjusted Cash Flow for the twelve (12) month
period most recently ended multiplied by 4.0 minus the currently outstanding
aggregate amount of Indebtedness permitted pursuant to Section 7.2(c) hereof;
(b) the period beginning May 31, 1998 and ending on May 30, 1999, the sum of
an amount equal to such Person's Adjusted Cash Flow for the twelve (12) month
period most recently ended multiplied by 3.5 minus the currently outstanding
aggregate amount of Indebtedness permitted pursuant to Section 7.2(c) hereof;
and (c) thereafter, the sum of an amount equal to such Person's Adjusted Cash
Flow for the twelve-month period most recently ended multiplied by 3.0 minus
the currently outstanding aggregate amount of Indebtedness permitted pursuant
to Section 7.2(c) hereof.
"Borrowing Availability Certificate" shall have the meaning given
to such term in Section 6.2(e)(ii) hereof.
"Business Day" shall mean a day on which banks are not required or
authorized to close in Greenwich, Connecticut and New York, New York and, if
such day relates to a borrowing of, a payment or prepayment of principal or
interest on, a Continuation or Conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by the Borrower with respect to any such
borrowing, payment, prepayment, Continuation, Conversion or Interest Period,
which is also a day on which dealings by and between banks in U.S. dollar
deposits are carried out in the interbank Eurodollar market.
"Calculation Period" shall be the six (6) month period most
recently ended multiplied by two (2).
"Capital Expenditures" shall mean, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) incurred by the Borrower to acquire or construct fixed assets,
plants and equipment (including renewals, improvements and replacements, but
excluding repairs) during such period, computed on a consolidated basis for
the Borrower and its consolidated Subsidiaries in accordance with GAAP.
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property
which obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board) and, for the purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP
(including such Statement No. 13).
"Capital Stock" shall mean, as to any Person, any and all shares,
interests, warrants, participations or other equivalents (however designated)
of corporate stock of such Person.
"Cash Flow" shall mean, for any Person, for any period for which
the same is computed, the sum of (a) such Person's net income (loss) for such
period, plus (b) such Person's Interest Expense for such period, plus (c) such
Person's depreciation and amortization for financial reporting purposes for
such period, plus (d) income tax expense for such period, computed in each
case on a consolidated basis for such Person and its consolidated Subsidiaries
in accordance with GAAP.
"CCF" shall have the meaning given to such term in the preamble of
this Agreement.
"Chattel Paper" shall mean any "chattel paper," as such term is
defined in Section 9-105(1)(b) of the UCC, now owned or hereafter acquired by
the Borrower.
"Co-Agent" shall have the meaning given to such term in the
preamble of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder from time to time.
"Collateral" shall mean the property of the Borrower in which the
Collateral Agent has, or is to have, a Lien on or security interest in
pursuant to this Agreement or the Loan Documents, or any of them, as security
for payment of the Obligations.
"Collateral Agent" shall have the meaning given to such term in
the preamble of this Agreement.
"Commitment" shall mean the aggregate obligation of the Lenders to
make Loans and to incur Letter of Credit Obligations to the Borrower, subject
to the terms and conditions hereof, up to an aggregate principal amount not to
exceed at any one time outstanding as to all of the Lenders Seventy Million
Dollars ($70,000,000), subject to reduction as set forth in Section 2.12
hereof.
"Commitment Fee" shall mean that amount due and payable to the
Lenders from the Borrower pursuant to and in the amount specified in Section
3.5 hereof.
"Commitment Percentage" shall mean, as to each Lender, that
amount, expressed as a percentage, equal to the ratio of the amount set forth
opposite the name of such Lender on the signature pages hereto under the
heading "Commitment" to the aggregate amount of the Commitment; provided, that
the Commitment Percentage of each Lender shall be increased or decreased, as
appropriate, to reflect any assignments made by such Lender pursuant to
Section 13.3(c) hereof.
"Continue," "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.4 hereof of a Eurodollar Loan as a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Contracts" shall mean all contracts, undertakings, or other
agreements (other than rights evidenced by Chattel Paper, Documents or
Instruments) in or under which the Borrower may now or hereafter have any
right, title or interest, including, without limitation, with respect to an
Account, any agreement relating to the terms of payment or the terms of
performance thereof.
"Convert," "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.4 hereof of a Base Rate Loan into a
Eurodollar Loan or of a Eurodollar Loan into a Base Rate Loan.
"Copyrights" shall mean all of the following now or hereafter
acquired by the Borrower: (a) all copyrights, registrations and applications
therefor, (b) all renewals and extensions thereof, (c) all income, royalties,
damages and payments now and hereafter due or payable or both with respect
thereto, including, without limitation, damages and payments for past or
future infringements or misappropriations thereof, (d) all rights to xxx for
past, present and future infringements or misappropriations thereof, and (e)
all other rights corresponding thereto throughout the world.
"Current Assets" shall mean all assets which in accordance with
GAAP would be classified as current assets.
"Current Liabilities" shall mean all liabilities which, in
accordance with GAAP, would be classified as current liabilities.
"Default" shall mean the occurrence of any event or condition
which, after satisfaction of any requirement for the giving of notice or the
lapse of time, or both, would become an Event of Default.
"Default Rate" shall mean (a) with respect to any Loan or portion
thereof, an interest rate per annum equal to two percent (2%) above the
interest rate set forth for such Loan in Section 3.1(a)(i) or (ii) hereof or
(b) with respect to any portion of the Obligations other than Loans, two
percent (2%) above the rate set forth in Section 3.1(a)(ii) hereof.
"Documents" shall mean any "documents," as such term is defined in
Section 9-105(1)(f) of the UCC, now owned or hereafter acquired by the
Borrower.
"Effective Date" shall mean the date that this Agreement has been
signed by the Borrower, the Lenders and the Agents and all conditions
precedent set forth in Section 11.1 have been satisfied.
"Environmental Laws" shall mean all federal, state, local
and foreign laws relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of any Hazardous Substance into the environment (including without
limitation ambient air, surface water, ground water or land), or otherwise
relating to the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Hazardous Substances
and any and all regulations, codes, standards, plans, orders, decrees, writs,
judgments, injunctions, notices or demand letters issued, entered, promulgated
or approved thereunder.
"Equipment" shall mean any "equipment," as such term is defined in
Section 9-109(2) of the UCC, now owned or hereafter acquired by the Borrower,
and, in any event, shall include all of the equipment, fixtures and leasehold
improvements of the Borrower, whether now existing or hereafter acquired or
arising or in which the Borrower now has or hereafter acquires any rights,
including, without limitation, all furniture, machinery, vehicles and trade
fixtures, together with any and all accessories, accessions, parts and
appurtenances thereto, substitutions therefor and replacements thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules and regulations from time to
time issued or promulgated thereunder.
"ERISA Affiliate" shall mean each trade or business (whether or
not incorporated) which, together with the Borrower is treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean that portion of a Loan bearing
interest at a rate based on the Quoted Rate.
"Event of Default" shall mean any of the events or conditions
described in Article 9 hereof.
"Excess Cash Flow" shall mean, for any fiscal year of Borrower, an
amount equal to (a) Borrower's Cash Flow for such fiscal year, less (b)
Capital Expenditures by Borrower during such fiscal year, less (c) to the
extent not previously included in item (b) hereof, scheduled payments of
principal of Indebtedness of Borrower during such fiscal year less (d)
Borrower's Interest Expense paid in cash during such fiscal year, less (e)
Borrower's income tax expense paid in cash during such fiscal year less (f)
increases in Working Capital from the first of such fiscal year to the last
day of such fiscal year, plus (g) decreases in Working Capital from the first
of such fiscal year to the last day of such fiscal year, all as set forth on
the annual financial statements of Borrower delivered pursuant to Section
5.8(b) hereof and in each case computed on a consolidated basis for Borrower
and its Subsidiaries in accordance with GAAP.
"Federal Funds Rate" shall mean, for any day, the overnight
federal funds rate in New York City, New York, as published for such day (or,
if such day is not a New York Business Day, for the next preceding Business
Day) in the Federal Reserve Statistical Release H.15 (519) or any successor
publication, or if such rate is not so published for any day which is a New
York Business Day, the average of the quotations for such day on overnight
federal funds transactions in New York City received by the Administrative
Agent from three federal funds brokers of recognized standing selected by the
Administrative Agent.
"Fee Letter" shall mean that certain letter agreement dated March
17, 1998 between Borrower and CCF providing for the payment of certain fees by
the Borrower to CCF in its capacity as Administrative Agent and Collateral
Agent.
"Funded Debt" shall mean , for any Person, collectively, (a) the
aggregate principal amount of Indebtedness for borrowed money which would, in
accordance with GAAP, be classified as long-term debt, together with the
current maturities thereof; (b) all Indebtedness outstanding under any
revolving credit, line of credit or similar agreement providing for borrowings
(and any extensions or renewals thereof), notwithstanding that any such
Indebtedness is created within one year of the expiration of such agreement;
(c) the principal component of Capital Lease Obligations; (d) all
indebtedness, obligations or other liabilities of such Person with respect to
letters of credit issued for such Person's account; and (e) any other
Indebtedness bearing interest or carrying a similar payment requirement
(including (i) any outstanding Capital Stock constituting Indebtedness under
clause (d) of the definition thereof and (ii) any Indebtedness issued at a
discount to its face amount), calculated in all cases for such Person and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles
consistently applied and maintained throughout the period indicated and
consistent with the prior financial practice of the Borrower and its
Subsidiaries, as reflected in the financial information referred to in Section
5.8 hereof.
"General Intangibles" shall mean any "general intangibles," as
such term is defined in Section 9-106 of the UCC, now owned or hereafter
acquired by the Borrower, and, in any event shall include all general
intangibles of the Borrower, whether now existing or acquired or arising or in
which the Borrower now has or hereafter acquires any rights, including,
without limitation, all choses in action, causes of action, corporate or other
business records, inventions, designs, Patents, patent applications, service
marks, Trademarks, trade names, Trade Secrets, proprietary or confidential
information, inventions (whether patented or patentable or not) and technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processors, models, drawings, materials,
records, goodwill, Copyrights, registrations, Licenses, franchises, customer
lists, agency and other contracts, tax refund claims, computer programs, all
claims under guaranties, Liens or other security held by or granted to the
Borrower to secure payment of any of the Accounts by an Account Debtor, all
rights to indemnification, and all other intangible property of every kind and
nature (other than Accounts).
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of,
or otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of
such debtor's obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.
"Hazardous Substances" shall mean any pollutant, contaminant,
hazardous, toxic or dangerous waste, substance or material, or any other
substance or material regulated or controlled pursuant to any Environmental
Law, including, without limiting the generality of the foregoing, asbestos,
PCBs, petroleum products (including crude oil, natural gas, natural gas
liquids, liquified natural gas or synthetic gas) or any other substance
defined as a "hazardous substance," "extremely hazardous waste," "restricted
hazardous waste," "hazardous material," "hazardous chemical," "hazardous
waste," "regulated substance," "toxic chemical," "toxic substance" or other
similar term in any Environmental Law.
"Indebtedness" shall mean, as applied to any Person at any time,
(a) all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, and any accrued interest, fees and charges
relating thereto; (ii) under profit payment agreements or similar agreements;
(iii) with respect to letters of credit issued for such Person's account; (iv)
to pay the deferred purchase price of property or services, except unsecured
accounts payable and accrued expenses arising in the ordinary course of
business which are less than sixty (60) days past due; or (v) Capital Lease
Obligations; (b) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any property of such Person, whether or
not such indebtedness, obligations or liabilities are assumed by such Person,
all as of such time; (c) all indebtedness, obligations or other liabilities of
such Person in respect of any foreign exchange contract or Interest Hedge
Agreement, net of liabilities owed to such Person by the counterparties
thereon; (d) all Capital Stock of such Person subject (upon the occurrence of
any contingency or otherwise) to mandatory redemption prior to the first
anniversary of the Maturity Date; provided, however, that Indebtedness shall
not include (i) Borrower's Series A Preferred Stock, or (ii) the "Warrants,"
as such term is defined in the Preferred Stock and Warrant Purchase Agreement;
(e) indebtedness of others Guaranteed by such Person.
"Instruments" shall mean any "instrument," as such term is defined
in Section 9-105(1)(i) of the UCC, now owned or hereafter acquired by the
Borrower, other than instruments that constitute, or are a part of a group of
writings that constitute, Chattel Paper.
"Intercompany Contribution and Indemnity Agreement" shall mean the
Intercompany Contribution and Indemnity Agreement executed or to be executed
by and among each Subsidiary receiving an Intercompany Loan.
"Intercompany Loan and Security Agreement" shall mean a Loan and
Security Agreement substantially in the form of Exhibit A attached hereto, by
and between the Borrower, as the Lender, and a Subsidiary of the Borrower, as
the Borrower, providing for the making of revolving loans by the Borrower to
such Subsidiary and for the grant to the Borrower of a first priority lien and
security interest in all of the assets of such Subsidiary to secure the
Intercompany Loans thereunder.
"Intercompany Guaranties" shall mean the guaranties in favor of
the Borrower executed or to be executed by each Subsidiary receiving an
Intercompany Loan in favor of the Borrower guaranteeing the obligations of
each other Subsidiary of the Borrower under an Intercompany Loan and Security
Agreement.
"Intercompany Loan Documents" shall mean, with respect to the
Intercompany Loans made by the Borrower to any Subsidiary of the Borrower, the
Intercompany Loan and Security Agreements, the Intercompany Guaranties, the
Intercompany Pledge Agreements, the Intercompany Contribution and Indemnity
Agreement, the UCC-1 financing statements, and each of the other agreements,
documents and instruments to be executed and delivered in connection
therewith.
"Intercompany Loans" shall mean revolving loans made by the
Borrower to a Subsidiary of the Borrower from time to time in accordance with
the terms of an Intercompany Loan and Security Agreement.
"Intercompany Pledge Agreements" shall mean the pledge agreements
in favor of the Borrower executed or to be executed by each Subsidiary
receiving an Intercompany Loan (the "Pledging Subsidiary"), pledging to
Borrower all issued and outstanding shares of stock of each Subsidiary of such
Pledging Subsidiary as security for the obligations of each such Pledging
Subsidiary under an Intercompany Loan and Security Agreement and Intercompany
Guaranty.
"Interest Coverage Ratio" shall mean, as to any Person, for any
period, the ratio of (a) such Person's Cash Flow for such period to (b) such
Person's Interest Expense (excluding any amortization of original issue
discount related to the Subordinated Seller Notes) for such period, in each
case calculated in accordance with GAAP.
"Interest Expense" shall mean, for any period, as to any Person,
total interest expense, whether paid, accrued or capitalized (including the
interest component of Capital Lease Obligations), of such Person, including,
but not limited to, all origination and other fees, all amortization of
original issue discount and the net amount payable under any Interest Hedge
Agreement between such Person and any other Person, computed in each case on a
consolidated basis for such Person and its consolidated subsidiaries in
accordance with GAAP.
"Interest Hedge Agreement" shall mean, for any Person, an interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Interest Period" shall mean, in connection with any Eurodollar
Loan, the period beginning on the date such Eurodollar Loan is made, Continued
or Converted and continuing for one (1), two (2), three (3) or six (6) months
as selected by the Borrower in its Notice of Borrowing. Notwithstanding the
foregoing, however, (a) any applicable Interest Period which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the immediately
preceding Business Day; and (b) any applicable Interest Period which begins on
a day for which there is no numerically corresponding day in the calendar
month during which such Interest Period is to end shall (subject to clause (a)
above) end on the last day of such calendar month.
"Inventory" shall mean all "inventory," as such term is defined in
Section 9-109(4) of the UCC, owned or hereafter acquired by the Borrower, and,
in any event, shall include all of the inventory of the Borrower, whether now
existing or acquired or arising or in which the Borrower now has or hereafter
acquires any rights, including, without limitation, any and all goods,
merchandise and other personal property, wheresoever located and whether or
not in transit, which is or may at any time be held for sale or lease or to be
furnished under any contract of service or held as raw materials, work in
process, finished goods or materials, and supplies of any kind, nature or
description used or consumed in the business of the Borrower, including,
without limitation, all such property, the sale or other disposition of which
has given rise to an Account and which may have been returned to or
repossessed or stopped in transit by the Borrower.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, property, services or securities or otherwise) of Capital
Stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are now owned by the Person
entering into such short sale), (b) any deposit with, or advance, loan or
other extension of credit to, such Person (other than any such advance, loan
or extension of credit representing the purchase price of goods, intangibles
or services sold or supplied in the ordinary course of business) or Guarantee
of, or other contingent obligation with respect to, Indebtedness or other
liability of such Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person, (c) any Acquisition other than the
acquisition of goods, intangibles or services purchased in the ordinary course
of business and accounted for as an expense in accordance with GAAP or as a
Capital Expenditure or (d) the entering into of any Interest Hedge Agreement.
"Investment Property" shall mean all "investment property" of the
Borrower, as such term is defined in Section 9-115 of the UCC, whether now
owned or existing or hereafter acquired or arising, and, in any event, shall
include all of the following: (a) all securities of the Borrower, whether
certificated or uncertificated; (b) any share, participation or other interest
in a Person or in property or in an enterprise of a Person held directly or
indirectly by the Borrower which is, or is of a type, dealt in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment; (c) all commodity futures contracts of
the Borrower, options on any commodity futures contract held by the Borrower,
all commodity options or other contracts of the Borrower that are traded on,
or subject to the rules of, a board of trade that has been designated as a
contract market for such contracts pursuant to the federal commodities laws or
which are traded on one or more foreign commodity boards of trade, exchanges,
or markets and are carried on the books of registered futures commodity
merchant or on the books of a Person providing clearance or settlement
services for a board of trade that has been designated as a contract market
for such a contract pursuant to the federal commodities laws; (d) any of the
foregoing held, directly or indirectly, in the name of any other Person to the
extent such other Person has expressly agreed to treat the Borrower as the
Person entitled to exercise the rights comprising the foregoing; and (e) all
right, title and interest of the Borrower in any account to which any of the
foregoing have been credited.
"LC Issuer" shall have the meaning given to such term in the
preamble of this Agreement.
"Lenders" shall have the meaning given to such term in the
preamble of this Agreement.
"Letter of Credit" shall mean any documentary or standby letter of
credit issued at the request and for the account of the Borrower or for which
the Lenders have incurred Letter of Credit Obligations under Section 2.6 of
this Agreement.
"Letter of Credit Documents" shall mean, collectively, such
reimbursement agreements and other instruments, documents or agreements as
shall be executed by the Borrower with or in favor of the LC Issuer.
"Letter of Credit Obligations" shall mean all outstanding
obliga-tions incurred by the LC Issuer or any of its Affiliates at the request
of the Borrower, whether di-rect or indirect, contingent or otherwise, due or
not due, in con-nection with the issuance or deemed issuance by the LC Issuer
or any of its Affiliates, of Letters of Credit, including, without limitation,
the undrawn amount of any outstanding Letter of Credit and any amount
disbursed by the LC Issuer or any of its Affiliates pursuant to a Letter of
Credit for which the LC Issuer has not been reimbursed by the Borrower
pursuant to Section 2.6 hereof. The amount of such Letter of Credit
Obligations at any time shall equal the maxi-mum amount which may be payable
by the LC Issuer pursuant to the Letters of Credit at such time.
"Leverage Ratio" shall mean, as of the last day of any fiscal
quarter of Borrower, the ratio of (a) the aggregate amount of Borrower's
Funded Debt outstanding on such date, to (b) the Borrower's Adjusted Cash Flow
for the Calculation Period then ending, in each case computed on a
consolidated basis for Borrower and its Subsidiaries in accordance with GAAP.
"License" shall mean any Patent License, Trademark License or
other license as to which the Lender has been granted a security interest
hereunder.
"Lien" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any lease or title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the UCC or comparable law of any
jurisdiction).
"Loans" shall mean, collectively, the loans made pursuant to
Section 2.1 hereof and "Loan" shall mean any loan made pursuant to Section 2.1
hereof.
"Loan Documents" shall mean this Agreement, the Fee Letter, the
Notes, the Letter of Credit Documents, the Stock Pledge, the Master Subsidiary
Guaranty, the Master Subsidiary Security Agreement, the Master Subsidiary
Pledge Agreement, and the other instruments, documents or agreements executed
by the Borrower, any of its Affiliates or any other Person pursuant to
Sections 2.4(b), 4.2 or 11.1, hereof, any subordination agreement relating to
Subordinated Debt, any financing statements covering portions or all of the
Collateral and any and all other instruments, documents, and agreements now or
hereafter executed and/or delivered by the Borrower in connection herewith, or
any one, more, or all of the foregoing, as the context shall require, and
"Loan Document" shall mean any one of the Loan Documents.
"Majority Lenders" shall mean, at any time, the Lenders holding at
least sixty-seven percent (67%) of the aggregate outstanding amount of the
Commitments or, if the Commitments have been terminated, the Lenders holding
at least sixty-seven percent (67%) of the aggregate outstanding principal
amount of the Loans.
"Margin Stock" shall mean "margin stock," as such term is defined
from time to time in Regulations G, T, U or X of the Board of Governors of the
Federal Reserve System.
"Master Contribution and Indemnity Agreement" shall mean the
amended and restated master contribution and indemnity agreement,
substantially in the form of Exhibit B attached hereto and incorporated herein
by reference, executed by and among each Subsidiary of the Borrower.
"Master Subsidiary Guaranty" shall mean the amended and restated
master guaranty of the Obligations hereunder, substantially in the form of
Exhibit C attached hereto and incorporated herein by reference, executed by
each Subsidiary of the Borrower in favor of the Collateral Agent, for the
benefit of the Lenders.
"Master Subsidiary Pledge Agreement" shall mean the amended and
restated master pledge agreement, executed by each Subsidiary of Borrower in
favor of the Collateral Agent, for the benefit of the Lenders, substantially
in the form of Exhibit D attached hereto and incorporated herein by reference,
and pledging a second priority lien on and security interest in all of the
stock, partnership interest or other ownership interest held by such
Subsidiary in any other Subsidiary of Borrower to the Collateral Agent, for
the benefit of the Lenders, as security for the Obligations.
"Master Subsidiary Security Agreement" shall mean the amended and
restated master security agreement, substantially in the form of Exhibit E
attached hereto and incorporated herein by reference, executed and delivered
by each Subsidiary of Borrower in favor of the Collateral Agent, for the
benefit of the Lenders, and granting, respectively, a second priority security
interest in and lien on all of the assets of such Subsidiary to the Collateral
Agent, for the benefit of the Lenders.
"Material Adverse Effect" shall mean any event or condition which,
alone or when taken with other events or conditions occurring or existing
concurrently therewith, (a) has or is reasonably expected to have a material
adverse effect on the business, operations, condition (financial or
otherwise), assets, liabilities, prospects, or properties of the Borrower or
any of its Subsidiaries; (b) has or is reasonably expected to have any
material adverse effect on the validity or enforceability of this Agreement or
any Loan Document; (c) materially impairs or is reasonably expected to
materially impair the ability of the Borrower to pay and perform the
Obligations; (d) materially impairs or is reasonably expected to materially
impair the ability of the Lender to enforce its rights and remedies under this
Agreement and the Loan Documents; or (e) has or is reasonably expected to have
any material adverse effect on the Collateral, the Liens of the Lender in the
Collateral or the priority of such Liens.
"Maturity Date" shall mean November 30, 2001.
"MPPAA" shall mean the Multiemployer Pension Plan Amendments Act
of 1980, amending Title V of ERISA.
"Multiemployer Plan" shall have the same meaning as set forth in
Section 4001(a)(3) of ERISA.
"Net Income" shall mean, for any period and for any Person, the
income (or loss) of such Person for such period, after deducting therefrom all
operating expenses, provisions for all taxes and reserves and all other proper
deductions, all determined in accordance with GAAP.
"Net Worth" shall mean, as to any Person, at any time, the excess
of such Person's total assets over Total Liabilities, excluding, however, from
the definition of assets the amount of (a) any write-up in the book value of
any asset resulting from a revaluation thereof subsequent to the later to
occur of (i) the Effective Date and (ii) the date any such Person acquired
such asset; (b) treasury stock; (c) receivables from Affiliates of such
Person; and (d) unamortized debt discount and expense of such Person, all
determined in accordance with GAAP on a consolidated basis for such Person and
its Subsidiaries.
"Notes" shall have the meaning given such term in Section 2.1
hereof.
"Notice of Borrowing" shall have the meaning given such term in
Section 2.13(a) hereof.
"Obligations" shall mean the Loans, the Letter of Credit
Obligations and any and all other indebtedness, liabilities and obligations of
the Borrower to the Agents or any Lender of every kind and nature (including,
without limitation, interest, charges, expenses, attorneys' fees and other
sums chargeable to the Borrower by the Agents or any Lender and future
advances made to or for the benefit of the Borrower), arising under this
Agreement or under any of the other Loan Documents, or acquired by the Agents
from any other source, whether arising by reason of an extension of credit,
opening of a letter of credit, loan, lease, guaranty, indemnification,
Interest Hedge Agreement or in any other manner, in each case whether direct
or indirect, absolute or contingent, primary or secondary, due or to become
due, now existing or hereafter acquired or arising.
"Operating Lease" shall mean, as to any Person, any lease that is
not required to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board).
"Patent License" shall mean all of the following, whether now
owned or existing or hereafter acquired or arising or in which the Borrower
now has or hereafter acquires any rights: any written agreement granting any
right to make, use, sell, sublicense and/or practice any invention on which a
Patent is in existence.
"Patents" shall mean all of the following, whether now owned or
existing or hereafter acquired or arising or in which the Borrower now has or
hereafter acquires any rights: (a) all patents and patent applications, (b)
all inventions and improvements described and claimed therein, (c) all
reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (d) all income, royalties, damages and payments
now and hereafter due and/or payable to the Borrower with respect thereto,
including without limitation, damages and payments for past, present or future
infringements or misappropriations thereof, (e) all rights to xxx for past
present and future infringements or misappropriations thereof, and (f) all
other rights corresponding thereto throughout the world.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA, or any successor agency or Person performing
substantially the same functions.
"Permitted Liens" shall mean, collectively: (a) those Liens
existing on the date hereof with respect to specific items of Equipment and
described on Schedule 5.23 hereto; (b) Liens in favor of the Collateral Agent
arising under the Loan Documents; (c) Liens on assets of Borrower's
Subsidiaries in favor of the Collateral Agent, as assignee of the Borrower,
arising under the Intercompany Loan Documents; and (d) Liens for (i) property
taxes not delinquent, (ii) taxes not yet subject to penalties, (iii) pledges
or deposits made under Workmen's Compensation, Unemployment Insurance, Social
Security and similar legislation, or in connection with appeal or surety bonds
incident to litigation, or to secure statutory obligations, and (iv)
mechanics' and materialmen's Liens with respect to liabilities which are not
yet due or which are being contested in good faith.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, limited liability company, trust,
unincorporated organization, association, corporation, institution, entity,
party or government (whether national, federal, state, county, city,
municipal, or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan, program, arrangement,
practice or contract, maintained by or on behalf of the Borrower or an ERISA
Affiliate, which provides benefits or compensation to or on behalf of
employees or former employees, whether formal or informal, whether or not
written, including, but not limited to, the following types of plans:
(a) Executive Arrangements - any bonus, incentive compensation,
stock option, deferred compensation, commission, severance, "golden
parachute," "rabbi trust," or other executive compensation plan, program,
contract, arrangement or practice ("Executive Arrangements");
(b) ERISA Plans - any "employee benefit plan," except any
Multiemployer Plan, as defined in Section 3(3) of ERISA, whether maintained by
or for a single employee or by or for multiple employees, including, but not
limited to, any defined benefit pension plan, profit sharing plan, money
purchase plan, savings or thrift plan, stock bonus plan, employee stock
ownership plan, or any plan, fund, program, arrangement or practice providing
for medical (including post-retirement medical), hospitalization, accident,
sickness, disability, or life insurance benefits ("ERISA Plans");
(c) Other Employee Fringe Benefits - any stock purchase,
vacation, scholarship, day care, prepaid legal services, severance pay or
other fringe benefit plan, program, arrangement, contract or practice ("Fringe
Benefit Plans"); and
(d) Multiemployer Plan - any Multiemployer Plan.
"Preferred Stock and Warrant Purchase Agreement" shall mean that
certain Second Amended and Restated Preferred Stock and Warrant Purchase
Agreement dated as of the date hereof, by and among Borrower, CCF, FF-ITP,
L.P., Indosuez IT Partners, Wachovia Capital Associates, Inc. and each of the
other stockholders named on the signature pages thereto, as amended,
modified, supplemented and/or restated from time to time.
"Proceeds" shall mean "proceeds," as such term is defined in
Section 9-306(1) of the UCC and, in any event, shall include, without
limitation, (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to the Borrower from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to the Borrower from time to time in connection with any requisitions,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority (or any Person acting under color of
Governmental Authority) and (c) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Quoted Rate" shall mean, when used with respect to an Interest
Period for a Eurodollar Loan, the quotient of (i) the offered rate quoted by
the Reference Bank in the interbank Eurodollar market in New York, New York or
London, England on or about 11:00 a.m. (New York or London time, as the case
may be) two (2) Business Days prior to such Interest Period for U.S. dollar
deposits of an aggregate amount comparable to the principal amount of the
Eurodollar Loan to which the Quoted Rate is to be applicable and for a period
comparable to such Interest Period, divided by (ii) one (1) minus the Reserve
Percentage. For purposes of this definition, (a) "Reserve Percentage" shall
mean with respect to any Interest Period, the percentage which is in effect on
the first day of such Interest Period under Regulation D as the maximum
reserve requirement for member banks of the Federal Reserve System in New York
City with deposits comparable in amount to those of the Reference Bank against
Eurocurrency Liabilities and (b) "Eurocurrency Liabilities" has the meaning
assigned to that term in Regulation D, as in effect from time to time. The
Quoted Rate for the applicable period shall be adjusted automatically on and
as of the effective date of any change in the applicable Reserve Percentage.
"Reference Bank" shall mean Creditanstalt AG, an Austrian banking
corporation acting through its Connecticut Branch; provided, however, that in
the event the Creditanstalt AG no longer announces a prime rate or provides a
Quoted Rate, the Reference Bank shall be such other bank or other financial
institution, having rates substantially similar to Creditanstalt AG, as the
Administrative Agent, in consultation with the Borrower, shall reasonably
select.
"Regulation D" shall mean Regulation D of the Board of Governors
of the Federal Reserve System, as it may be amended from time to time.
"Reportable Event" shall have the meaning set forth in Section
4043 of ERISA.
"Request for a Letter of Credit" shall have the meaning given such
term in Section 2.13(a) hereof.
"Secured Indebtedness" shall mean, as applied to any Person, all
Indebtedness of such Person that is secured in whole or in part by a Lien on
any property of such Person.
"Senior Debt" shall mean all Funded Debt of the Borrower other
than Subordinated Debt.
"Senior Debt Leverage Ratio" shall mean, as of the last day of any
fiscal quarter of Borrower, the ratio of (a) the aggregate amount of
Borrower's Senior Debt outstanding on such date, to (b) the Borrower's
Adjusted Cash Flow for the Calculation Period then ending, in each case
computed on a consolidated Basis for Borrower and its Subsidiaries in
accordance with GAAP.
"Solvent" shall mean, as to any Person, that such Person (a) has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage, (b) is able to pay its debts
as they mature and (c) owns property whose fair salable value is greater than
the amount required to pay its debts (including contingent obligations).
"Stockholder Agreement" shall mean that certain Amended and
Restated Stockholder Agreement, dated as of the date hereof, by and among the
Borrower, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxx Xxxxx, Xxxxxxxx Xxxxx,
Xxxxxxx X. Nice, Xxxx Xxxxxxx, CCF FF-ITP, L.C., Indosuez IT Partners,
Wachovia Capital Associates, Inc. and the other stockholders of Borrower.
"Stock Pledge Agreement" shall mean that certain Stock Pledge
Agreement of even date herewith, as the same may be amended, restated,
supplemented or otherwise modified from time to time, by and between the
Borrower and the Collateral Agent, pursuant to which the Borrower pledges to
the Collateral Agent, for the benefit of the Lenders and the Agents, all of
the issued and outstanding Capital Stock of each Subsidiary of the Borrower.
"Subordinated Debt" shall mean collectively (a) the Subordinated
Seller Notes and (b) all other Indebtedness of the Borrower that is unsecured
and has been subordinated in right of payment to the payment in full of the
Obligations, all on terms and conditions satisfactory to the Agents and the
Majority Lenders.
"Subordinated Seller Notes" shall mean promissory notes issued by
Borrower as a portion of the consideration payable in connection with an
Acquisition permitted by, or consented to by the Majority Lenders in
accordance with, Section 7.5 hereof and which have been subordinated in right
of payment to the payment in full of the Obligations, all on terms and
conditions satisfactory to the Agents and the Majority Lenders.
"Subsidiary" shall mean, as to any Person, any other Person, of
which more than fifty percent (50%) of the outstanding shares of Capital Stock
or other ownership interest having ordinary voting power to elect a majority
of the board of directors of such corporation or similar governing body of
such other Person (irrespective of whether or not at the time stock or other
ownership interests of any other class or classes of such other Person shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person or by
one or more "Subsidiaries" of such Person.
"Tax" shall mean and include any present or future tax, levy,
cost or charge of any nature imposed by any government or any authority or
political subdivision thereof, excluding taxes on or measured by the net
income of the Lender imposed by any jurisdiction in which the principal or
relevant lending office of the Lender is located.
"Termination Date" shall mean the earliest of (a) the Maturity
Date; (b) the date the Commitment is reduced to zero pursuant to Section 2.12
hereof; and (c) the date the Commitment is terminated pursuant to Section 10.2
hereof.
"Total Liabilities" shall mean all Obligations, Indebtedness or
other liabilities of any kind or nature, fixed or contingent, due or not due,
which, in accordance with GAAP, would be classified as a liability on the
consolidated balance sheet of the Borrower and its consolidated Subsidiaries,
together with any obligation, indebtedness or other liability of any kind or
nature, fixed or contingent, due or not due, which, in accordance with GAAP,
would be classified as a liability on the balance sheet of any Person other
than the Borrower and its consolidated Subsidiaries and which has been
Guaranteed by the Borrower or any of its consolidated Subsidiaries.
"Trade Secrets" shall mean (a) trade secrets, along with any and
all (b) income, royalties, damages and payments now and hereafter due and/or
payable to the Borrower with respect thereto, including, without limitation,
damages and payments for past or future infringements or misappropriations
thereof, (c) rights to xxx for past, present and future infringements or
misappropriations thereof, and (d) all rights corresponding thereto throughout
the world.
"Trademark License" shall mean all of the following, whether now
owned or existing or hereafter acquired or arising or in which the Borrower
now has or hereafter acquires any rights: any written agreement granting any
right to use any Trademark or trademark registration.
"Trademarks" shall mean all of the following, whether now owned or
existing or hereafter acquired or arising or in which the Borrower now has or
hereafter acquires any rights: (a) all trademarks (including service marks and
trade names, whether registered or at common law), registrations and
applications therefor, and the entire product lines and goodwill of the
business of the Borrower connected therewith and symbolized thereby, (b) all
renewals thereof, (c) all income, royalties, damages and payments now and
hereafter due or payable or both with respect thereto, including, without
limitation, damages and payments for past, present or future infringements or
misappropriations thereof, (d) all rights to xxx for past, present and future
infringements or misappropriations thereof, and (e) all other rights
corresponding thereto throughout the world.
"UCC" shall mean the Uniform Commercial Code as in effect in the
State of New York.
"Working Capital" shall mean, as of any date, the amount by which
Borrower's Current Assets exceed Borrower's Current Liabilities.
1.2 Use of Defined Terms. All terms defined in this Agreement
and the Exhibits hereto shall have the same defined meanings when used in any
other Loan Document, unless the context shall require otherwise.
1.3 Accounting Terms; Calculations. All accounting terms not
specifically defined herein shall have the meanings generally attributed to
such terms under GAAP. Calculations hereunder shall be made and financial
data required hereby shall be prepared, both as to classification of items and
as to amounts, in accordance with GAAP, consistently applied (except as
otherwise specifically required herein).
1.4 Other Terms. All other terms used in this Agreement which
are not specifically defined herein but which are defined in the UCC shall
have the meanings set forth therein.
1.5 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural, and the plural shall
include the singular. Titles of Articles and Sections in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement, and all references in this Agreement to Articles, Sections,
subsections, paragraphs, clauses, subclauses, Exhibits or Schedules shall
refer to the corresponding Article, Section, subsection, paragraph, clause,
subclause of, Exhibit or Schedule attached to, this Agreement, unless specific
reference is made to the articles, sections or other subdivisions of, exhibits
or schedules to, another document or instrument. All references to any
instrument, document or agreement shall, unless the context otherwise
requires, refer to such instrument, document or agreement as the same may be,
from time to time, amended, modified, supplemented, renewed, extended,
replaced or restated.
1.6 Exhibits. All Exhibits and Schedules attached hereto are by
reference made a part hereof.
2. THE LOANS AND LETTERS OF CREDIT
2.1 Loans. Subject to the terms and conditions hereof and
provided that there exists no Default or Event of Default, each Lender
severally agrees to make one (1) or more loans (each a "Loan" and
collectively, the "Loans") to the Borrower, upon the Borrower's request
therefor made in accordance with the provisions of Section 2.2 hereof, from
time to time on any Business Day during the period from the date hereof and up
to, but not including, the Termination Date in an aggregate principal amount
not to exceed at any one time outstanding, an amount equal to (a) the lesser
of (i) the Commitment and (ii) the Borrowing Availability of the Borrower,
less (b) the aggregate Letter of Credit Obligations outstanding; provided,
however, that in the case of any Loan the proceeds of which are to be used for
the purpose of making an Acquisition, the principal amount of such Loan shall
not, unless the Majority Lenders otherwise agree, exceed the Borrowing
Availability of the business that is the subject of the Acquisition. The
Loans made by each Lender shall be evidenced by a promissory note,
substantially in the form of Exhibit F attached hereto, payable to the Lender
in the original principal face amount of such Lender's Commitment (together
with any and all amendments, modifications and supplements thereto, and any
renewals, replacements or extensions thereof, in whole or in part,
individually, a "Note" and collectively, the "Notes"). Prior to the
Termination Date, Loans may be borrowed, repaid and reborrowed in accordance
with the terms hereof. All Loans shall be payable in full on the Termination
Date.
2.2 Borrowing Procedures.
(a) The Borrower shall give the Administrative Agent notice of
each request for a Loan hereunder in accordance with Section 2.2 hereof. The
Administrative Agent shall promptly notify each Lender of any Notice of
Borrowing received hereunder. Not later than 11:00 a.m. (prevailing Eastern
time), on the date specified for each borrowing hereunder, each Lender shall
make available to the Administrative Agent the amount of the Loan to be made
by such Lender in accordance with such Lender's Commitment Percentage of the
Loan requested, in immediately available funds at an account of the
Administrative Agent designated by the Administrative Agent. The
Administrative Agent shall, subject to the terms and conditions of this
Agreement, not later than 2:00 p.m. (prevailing Eastern time) on the Business
Day specified for such borrowing, make such amount available to the Borrower
in same day funds at the office of Administrative Agent.
(b) Unless the Administrative Agent shall have been notified by
any Lender at least one (1) Business Day prior to the date on which any
Eurodollar Loan is to be made to the Borrower and not later than 11:00 a.m.
(prevailing Eastern time) on the date any Base Rate Loan is to be made, that
such Lender does not intend to make available to the Administrative Agent such
Lender's Commitment Percentage of such borrowing, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on the date of such Loan and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender,
which demand shall be made in a reasonably prompt manner. If such Lender does
not pay such a corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower
and the Borrower shall pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from such
Lender interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent
to the Borrower to the date such corresponding amount as recovered by the
Administrative Agent at a rate per annum equal to the Federal Funds Rate, for
the first two (2) Business Days, and thereafter at the rate per annum then in
effect with respect to Base Rate Loans. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment or to
prejudice any rights which the Administrative Agent or the Borrower may have
against any Lender as a result of any default by such Lender hereunder.
(c) Borrower agrees that, on the Effective Date, it shall borrow
Loans from the Lenders who are not party to the Original Loan Agreement and
repay Loans of the other Lenders such that, after giving effect thereto, the
Loans (including, without limitation, the principal amounts, types and (if
applicable) Interest Periods thereof) shall be held by the Lenders ratably in
accordance with their Commitment Percentage of the Commitment by reference to
the principal amounts of the Loans.
2.3 Loan Account; Statements of Account. The Administrative
Agent will maintain one or more loan accounts for the Borrower to which the
Administrative Agent will charge all amounts advanced to or for the benefit of
the Borrower hereunder or under any of the other Loan Documents and to which
the Administrative Agent will credit all amounts collected under each such
credit facility from or on behalf of the Borrower. The Administrative Agent
will account to the Borrower periodically with a statement of charges and
payments made pursuant to this Agreement, and each such account statement
shall be deemed final, binding and conclusive unless the Administrative Agent
is notified by the Borrower in writing to the contrary within thirty (30) days
of the date of each account statement. Any such notice shall only be deemed
an objection to those items specifically objected to therein. The unpaid
principal amount of the Loans, the unpaid interest accrued thereon, the
interest rate or rates applicable to such unpaid principal amount and the
accrued and unpaid fees, premiums and other amounts due hereunder shall at all
times be ascertained from the records of the Administrative Agent and such
records shall constitute prima facie evidence of the amounts so due and
payable.
2.4 Use of Proceeds.
(a) The proceeds of the Loans shall be used (i) for costs and
expenses related to the closing of Acquisitions, and (ii) for the purpose of
making one or more Intercompany Loans to Subsidiaries of Borrower; provided,
however, that the aggregate amount of such Intercompany Loans made to any
Subsidiary shall not exceed, at any one time outstanding, such Subsidiary's
Borrowing Availability.
(b) As a condition to the making of the initial Intercompany
Loan to each Subsidiary of the Borrower, the Borrower and/or such Subsidiary
shall execute and deliver to the Collateral Agent each of the following
instruments, documents and agreements, each in form and substance satisfactory
to the Collateral Agent in its sole discretion:
(i) an Intercompany Loan and Security Agreement;
(ii) an Intercompany Guaranty;
(iii) if such Subsidiary has Subsidiaries of its own, an Intercompany
Pledge Agreement, pledging to the Borrower, as security for such Intercompany
Loan, all of the issued and outstanding shares of Capital Stock or other
ownership interests in all Subsidiaries of such Subsidiary;
(iv) UCC-1 Financing Statements for each jurisdiction in which
such Subsidiary maintains or is deemed to maintain any personal property,
which UCC-1 Financing Statements names such Subsidiary as the debtor, the
Borrower as the secured party, and the Collateral Agent as assignee of the
secured party;
(v) an Addendum to Master Subsidiary Guaranty, pursuant to which such
Subsidiary becomes a party to the Master Subsidiary Guaranty and guarantees
the payment and performance of the Obligations (as defined in the Master
Subsidiary Guaranty);
(vi) an Addendum to Master Subsidiary Security Agreement, pursuant to
which such Subsidiary becomes a party to the Master Subsidiary Security
Agreement and grants a Lien on all of its assets as security for the
Obligations (as defined in the Master Subsidiary Security Agreement);
(vii) an Addendum to Master Subsidiary Pledge Agreement, amending the
Master Subsidiary Pledge Agreement to pledge all of the issued and outstanding
shares of Capital Stock or other ownership interest in such Subsidiary and in
all Subsidiaries of such Subsidiary, if any, to the Collateral Agent as
security for the Obligations;
(viii) an Addendum to Master Contribution and Indemnity Agreement,
amending the Master Contribution and Indemnity Agreement executed by and
between the Subsidiaries of the Borrower with respect to the Obligations of
such Subsidiaries (as defined in the Master Contribution and Indemnity
Agreement);
(ix) an amendment to the Stock Pledge Agreement, amending the Stock
Pledge Agreement to pledge all of the issued and outstanding shares of Capital
Stock or other ownership interest in such Subsidiary to the Collateral Agent
as security for the Obligations;
(x) copies of all filing receipts or acknowledgments issued by
any Governmental Authority to evidence any filing or recordation necessary to
perfect the security interests of the Borrower or the Collateral Agent in the
personal property of such Subsidiary and evidence in a form acceptable to the
Collateral Agent that such security interests constitute valid and perfected
first priority security interests;
(xi) one or more assignments executed by the Borrower in favor of
the Collateral Agent assigning all of the Borrower's right, title and interest
in, to and under such Intercompany Loan Documents to which such Subsidiary is
a party to the Collateral Agent as security for the Obligations in accordance
with Section 4.2 hereof;
(xii) a certificate of the chief financial officer of the
Borrower
certifying that:
(A) both before and after giving effect to the making of
such Intercompany Loan, the representations and warranties set forth in
Article 5 of this Agreement and the applicable Intercompany Loan and Security
Agreement are true and correct in all material respects; and
(B) both before and after giving effect to the making of
such Intercompany Loan, no Default or Event of Default has occurred or is
continuing;
(xiii) a certificate of the Secretary of such Subsidiary
dated as of the closing date of the Intercompany Loan and Security Agreement
certifying (A) that attached thereto is a true and correct copy of the By-laws
of such Subsidiary, as in effect on the date of such certification, (B) that
attached thereto is a true and complete copy of Resolutions adopted by the
Board of Directors of such Subsidiary, authorizing the execution, delivery and
performance of such Intercompany Loan and Security Agreement, Intercompany
Guaranty and the agreements, documents and instruments executed and delivered
in connection therewith; and (C) as to the incumbency and genuineness of the
signatures of the officers of such Subsidiary executing such Intercompany Loan
Agreement, Intercompany Guaranty or any of the agreements, documents or
instruments to be executed in connection therewith;
(xiv) an opinion of counsel to such Subsidiary and the Borrower,
substantially in the form of Exhibit G hereto; and
(xv) such other instruments, documents and agreements as the Collateral
Agent may reasonably request.
(c) No portion of the proceeds of any Loan may be used by the
Borrower in any manner which would cause such Loan or the application of the
proceeds thereof to violate any of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
2.5 Several Obligations of the Lenders; Remedies Independent.
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 any Loan to be made by it on such date, but neither any Lender nor any
Agent shall be responsible for the failure of any other Lender to make a Loan
to be made by such other Lender. The amounts payable by the Borrower at any
time hereunder and under the Note to each Lender shall be a separate and
independent debt and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and its Note, and it shall not be
necessary for any other Lender or Agent to consent to, or be joined as an
additional party in, any proceeding for such purposes.
2.6 Letters of Credit.
(a) Subject to the terms and conditions hereof and provided that
there exists no Default or Event of Default, at any time and from time to time
from the Effective Date to (but not including) the Maturity Date, the LC
Issuer agrees, in reliance upon the agreement of the Lenders set forth in
Section 2.6(c) below, to issue, for the account of the Borrower, such Letters
of Credit as the Borrower may request by a Request for Letter of Credit (in
the manner described in Section 2.6(b)), each in such form as may be requested
from time to time by the Borrower and agreed to by the LC Issuer; provided,
however, that after giving effect to the issuance of any such Letter of
Credit, (i) the aggregate amount of all Letter of Credit Obligations of the
Borrower outstanding at any one time does not exceed $1,000,000, and (ii) the
aggregate amount of all outstanding Loans, together with all outstanding
Letter of Credit Obligations, will not exceed the lesser of (A) the Commitment
and (B) the Borrowing Availability of the Borrower. No Letter of Credit shall
be issued by the LC Issuer under this Section 2.6(a) except to the extent
reasonably necessary in connection with transactions in the ordinary course of
business of the Borrower and its Subsidiaries. The expiration date of any
such Letter of Credit shall not extend beyond the earliest of (i) one (1) year
from the date of issuance thereof, (ii) the Maturity Date, and (iii) any date
fixed for termination of the Commitment pursuant to Section 2.12 hereof.
(b) Each request by the Borrower to the LC Issuer for a Letter of
Credit shall either be oral, with prompt written confirmation, which may be by
telecopy; or in writing, with such written confirmation or writing to be
substantially in the form of Exhibit H attached hereto (a "Request for Letter
of Credit") and shall be effective only if received by LC Issuer prior to
10:00 a.m. (prevailing Eastern time) at least three (3) Business Days prior to
the date when such Letter of Credit is required, accompanied by an appropriate
letter of credit application on the LC Issuer's customary form and such other
Letter of Credit Documents (including, without limitation, a reimbursement
agreement) in such form and containing such terms and conditions as the LC
Issuer requires, executed by the chief executive officer of the Borrower.
Promptly upon receipt of a Request for a Letter of Credit, the LC Issuer will
notify the Administrative Agent and each Lender of such request.
(c) Simultaneously with the issuance by the LC Issuer of any
Letter of Credit under Section 2.6(a) above, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the LC
Issuer, without recourse or warranty, an undivided interest and participation
in such Letter of Credit (including, without limitation, all obligations of
the Borrower with respect thereto) and any security therefor or guaranty
pertaining thereto, equal to such Lender's Commitment Percentage of such
Letter of Credit. Each Lender severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of such Lender's
Commitment Percentage, to reimburse the LC Issuer on demand for the amount of
each draft paid by the LC Issuer under such Letter of Credit to the extent
that such amount is not reimbursed by the Borrower. The failure of any Lender
to make available to the LC Issuer its Commitment Percentage of the
unreimbursed amount of any such payment shall not relieve any other Lender of
its obligation hereunder to make available to the LC Issuer its Commitment
Percentage of the unreimbursed amount of any payment on the date such payment
is to be made. The obligations of each Lender to make payments to the LC
Issuer with respect to any Letter of Credit and its participations therein
pursuant to the provisions of this Section or otherwise and the obligations of
the Borrower to make payments to the LC Issuer with respect to any Letter of
Credit shall be irrevocable, and shall not be subject to any qualification or
exception whatsoever.
In the event that any payment by the Borrower received by the LC
Issuer with respect to a Letter of Credit and distributed by the LC Issuer to
the Lenders on account of their participations is thereafter set aside,
avoided or recovered from the LC Issuer in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which
received such distribution shall, upon demand by the LC Issuer, contribute
such Lender's Commitment Percentage of the amount set aside, avoided or
recovered, together with interest at the rate required to be paid by the LC
Issuer upon the amount required to be repaid by it. Each Lender shall share,
pro rata, in accordance with its participating interest, in any interest (but
not in the processing, administration and similar fees charged by the LC
Issuer, which fees shall be solely for the account of the LC Issuer) which
accrues to the LC Issuer pursuant to any applicable reimbursement agreement.
(d) The Borrower hereby agrees to reimburse, within five (5)
Business Days after demand therefor, a principal amount equal to any payment
made by the LC Issuer in respect of any Letter of Credit, together with
interest on such amount from the date of any payment through the date of
payment by the Borrower at the per annum rate applicable to Base Rate Loans;
provided, however, that subject to the terms and conditions hereof the
Borrower may substitute for such payment a request made within the time
permitted hereunder for a Loan (which shall be a Base Rate Loan) in accordance
with Section 2.13. The principal amount of any such payment made by the
Borrower to the LC Issuer shall be used to reimburse the LC Issuer, or the
Lenders, as the case may be, for the payment made by it in respect of such
Letter of Credit.
(e) If the Borrower fails to make any payment as and when
required by Section 2.6(d), or if the Borrower fails to request a Loan in an
amount sufficient to pay the outstanding Letter of Credit Obligations, the LC
Issuer may, without notice to or the consent of the Borrower, deliver a Notice
of Borrowing to the Administrative Agent for a Loan in an aggregate amount
equal to the amount paid by the LC Issuer in respect of its Letter of Credit
Obligations pursuant to Section 2.6(c) above and, for this purpose, the
conditions precedent to the making of a Loan under this Agreement shall not
apply. The proceeds of such Loan shall be paid to the LC Issuer to reimburse
it for any pay-ments made by it in respect of such Letter of Credit
Obligations.
(f) The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all
respects the same as the issuance of a new Letter of Credit, and each such
Letter of Credit, and all Letter of Credit Obliga-tions in respect thereof,
shall in each case remain subject to this Section 2.6.
(g) If any draft shall be presented or other demand for payment
shall be made under any Letter of Credit, the LC Issuer shall notify the
Administrative Agent and the Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to
pay such draft or honor such demand for payment. If the Borrower fails to
reimburse the LC Issuer pursuant to the applicable reimbursement agreement as
provided in Section 2.6(d) above, the LC Issuer may at any time thereafter
notify the Administrative Agent and its Lenders of the amount of any such
unpaid reimbursement obligation. No later than 3:00 p.m. (prevailing Eastern
time) on the Business Day next following the receipt of such notice, each
Lender shall make available to the LC Issuer at the LC Issuer's principal
office in Greenwich, Connecticut, in immediately available funds, such
Lender's Commitment Percentage of such unpaid reimbursement obligation,
together with an amount equal to the product of (i) the average, computed for
the period referred to in clause (iii) below, of the weighted average interest
rate paid by the LC Issuer for federal funds acquired by the LC Issuer during
each day included in such period, times (ii) an amount equal to such Lender's
Commitment Percentage of such unpaid reimbursement obligation, times (iii) a
fraction, the numerator of which is the number of days that elapse from and
including the date the LC Issuer paid the draft presented for honor or
otherwise made payment to the date on which such Lender's Commitment
Percentage of such unpaid reimbursement obligation shall become immediately
available to the LC Issuer and the denominator of which is 360; provided,
however, that if the LC Issuer fails to give the Lenders notice the Borrower's
failure to reimburse the LC Issuer, as the case may be, within three (3)
Business Days following such failure, the Lenders shall be required to pay
interest only for the period from and including the date the LC Issuer made
payment through and including the third Business Day
following such failure. The responsibility of the LC Issuer to the Borrower,
the Agents and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection
with such presentment shall be in conformity in all material respects with
such Letter of Credit.
(h) The Borrower's obligations under this Section 2.6 shall be
absolute and unconditional under any and all circumstances and irrespective of
the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the LC Issuer, the Agents, any Lender or
any beneficiary of a Letter of Credit. The Borrower further agrees with the
LC Issuer, the Agents and the Lenders that the LC Issuer, the Agents and the
Lenders shall not be responsible for, and the Borrower's reimbursement
obligations under Section 2.6(d) shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
if such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other
party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrower against the beneficiary of any Letter of
Credit or any such transferee. Neither the LC Issuer, the Agents nor the
Lenders shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees
that any action taken or omitted by the LC Issuer, the Agents or any Lender
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith and without gross negligence, shall be
binding upon the Borrower and shall not result in any liability on the part of
the LC Issuer, the Agents or any Lender to the Borrower.
(i) The LC Issuer shall be entitled to rely, and shall be fully
protected in relying, upon any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document
believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the LC Issuer. The LC Issuer shall be fully justified in failing
or refusing to take any action under this Agreement unless it shall first have
received such advice or concurrence of the Majority Lenders as it reasonably
deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action.
(j) As between the Borrower, on the one hand, and the Agents and
the Lenders, on the other, the provisions of this Agreement, to the extent in
conflict with any provision of any Letter of Credit Documents, shall control.
2.7 Term; Termination. This Agreement shall terminate upon the
latest to occur of (a) the Termination Date; (b) the repayment and
satisfaction of all Obligations; and (c) the termination or expiration of all
Letters of Credit.
2.8 Loans in Excess of Limitations. The Borrower acknowledges
that neither the Lenders nor the LC Issuer are obligated and do not presently
intend to make Loans, incur Letter of Credit Obligations, or make other
extensions of credit to the Borrower the principal amount of which, in the
aggregate, at any time would exceed (a) the Commitment, (b) the Borrowing
Availability of the Borrower, or (c) with respect to advances for the purpose
of making an Acquisition, the Borrowing Availability of the business that is
the subject of the Acquisition. However, it is agreed that, should the Loans,
Letter of Credit Obligations or other extensions of credit incurred hereunder
exceed any of such limitations, all of the obligations of the Borrower to the
LC Issuer and the Lenders with respect to such Loans, Letter of Credit
Obligations and
extensions of credit shall nevertheless constitute Obligations under this
Agreement and shall be entitled to the benefit of all Liens granted under this
Agreement and all other Loan Documents. Notwithstanding the foregoing, if any
amounts outstanding hereunder shall exceed any of such limitations, the
Borrower shall immediately repay such excess amounts to the Administrative
Agent.
2.9 Payments.
(a) Each payment by the Borrower on the Loans shall be made
prior to 1:00 p.m. (prevailing Eastern time) on the date due and shall be made
without set-off or counterclaim to the Administrative Agent at its principal
U.S. office located at 0 Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000 or at such other place or places as the Administrative Agent may
designate from time to time in writing to the Borrower. Each such payment
shall be in lawful currency of the United States of America and in immediately
available funds. The Administrative Agent shall promptly remit to each Lender
such Lender's share of any payment received by the Administrative Agent from
the Borrower.
(b) Each payment made by the Borrower hereunder to the LC
Issuer, any Agent or any Lender shall either (i) be exempt from, and be made
without reduction by reason of, any Tax or (ii) to the extent that any such
payment shall be subject to any Tax, be accompanied by an additional payment
by the Borrower of such amount as may be necessary so that the net amount
received by the LC Issuer, each Agent and each Lender (after deducting all
applicable Taxes) is the same as the LC Issuer, each Agent and each such
Lender would have received had such payment not been subject to such Tax.
Upon any payment of Tax by the Borrower, the Borrower shall promptly (and in
any event within thirty (30) days) furnish to the Administrative Agent such
tax receipts, certificates and other evidence of such payment as the Borrower
may have or any Agent, the LC Issuer or any Lender may reasonably request.
(c) If the due date of any payment hereunder or under the Note
would otherwise fall on a day which is not a Business Day, then such payment
shall be due on the next succeeding Business Day and interest shall be payable
on the principal amount of such payment for the period of such extension. If
the Administrative Agent has not received any payment due hereunder by the
close of business on the date such payment is due, the Borrower authorizes the
Administrative Agent, at its option, to submit, on Borrower's behalf, a Notice
of Borrowing for the amount of such payment, to cause the Lenders to make a
Loan in the amount of such payment and to apply the proceeds of such Loan to
such payment.
2.10 Prorata Treatment. Except to the extent otherwise provided
herein: (a) each borrowing from the Lenders under Sections 2.1 hereof shall be
made from the Lenders and each payment of its Commitment Fee under Section 3.5
hereof and of the Letter of Credit fee under Section 3.6 hereof shall be made
to the Administrative Agent for the account of the Lenders pro rata according
to their respective Commitment Percentages; (b) each termination or reduction
of the amount of the Commitments under Section 2.12 hereof shall be applied to
the Lenders, pro rata according to their respective Commitment Percentages;
(c) the making, Conversion and Continuation of Loans of a particular type
shall be made pro rata among the Lenders according to their respective
Commitment Percentages and then current Interest Period for each Eurodollar
Loan shall be coterminous; (d) each payment or prepayment of principal of
Loans by the Borrower shall be made for the account of the Lenders pro rata in
accordance with their respective Commitment
Percentages; provided, that if immediately prior to giving effect to any such
payment in respect of any Loans the outstanding principal amount of the Loans
shall not be held by the Lenders pro rata in accordance with their respective
Commitment Percentages in effect at the time such Loans were made (by reason
of a failure of a Lender to make a Loan hereunder in the circumstances
described in the last paragraph of Section 13.8 hereof), then such payment
shall be applied to the Loans in such manner as shall result, as nearly as is
practicable in the judgment of the Administrative Agent, in the outstanding
principal amount of the Loans being held by the Lenders prorata in accordance
with their respective Commitment Percentages; and (e) each payment of interest
on Loans by the Borrower shall be made for account of the Lenders prorata in
accordance with the amounts of interest on such Loans then due and payable to
the respective the Lenders.
2.11 Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender
may otherwise have, each Lender shall be entitled, at its option, to offset
balances held by it for account of the Borrower at any of its offices, in
dollars or in any other currency, against any principal of or interest on any
of such Lender's Loans or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such balances are then due to
the Borrower), in which case it shall promptly notify the Borrower and the
Administrative Agent thereof; provided that such Lender's failure to give such
notice shall not affect the validity thereof.
(b) If any Lender shall obtain from the Borrower payment of any
principal of or interest on any Loan owing to it or payment of any other
amount under this Agreement through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise (other than from
the Administrative Agent as provided herein), and, as a result of such
payment, such Lender shall have received more than its Commitment Percentage
of the principal of or interest on the Loans or such other amounts then due
hereunder by such Borrower, it shall promptly notify the Administrative Agent
of such payment and promptly purchase from such other the Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or such other amounts, respectively, owing to such
other the Lenders (or in interest due thereon, as the case may be) 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
excess payment (net of any expenses that may be incurred by such Lender in
obtaining or preserving such excess payment) prorata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders; provided, that if at the time of
such payment the outstanding principal amount of the Loans shall not be held
by the Lenders in accordance with their respective Commitment Percentages in
effect at the time such Loans were made (by reason of a failure of a Lender to
make a Loan hereunder in the circumstances described in the last paragraph of
Section 13.8 hereof), then such purchases of participations and/or direct
interests shall be made in such manner as will result, as nearly as is
practicable in the judgment of the Administrative Agent, in the outstanding
principal amount of the Loans being held by the Lenders according to each
Lender's Commitment Percentage. To such end all 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.
(c) The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or
other amounts (as the case may be) owing to such Lender in the amount of such
participation.
(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any
other indebtedness or obligation of the Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 2.11 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section 2.11 to share in the benefits of any recovery on such
secured claim.
2.12 Prepayment; Commitment Reduction.
(a) On April 1 of each fiscal year, commencing with the fiscal
year following the fiscal year in which the sum of the aggregate outstanding
principal balance of the Loans and aggregate outstanding Letter of Credit
Obligations first equals or exceeds Sixty-Five Million Dollars ($65,000,000),
the aggregate amount of the Commitments shall be reduced by an amount equal
to, and the Borrower shall prepay the outstanding Loans in an amount equal to,
sixty percent (60%) of Borrower's Excess Cash Flow for the immediately
preceding fiscal year; provided, however, that Borrower shall not be required
to reduce the Commitments below $10,000,000 pursuant to this Section 2.12(a).
(b) Concurrently with the closing of any sale by Borrower of
shares of its Capital Stock in an offering registered under the Securities Act
of 1933, as amended, Borrower shall prepay the Loans in an amount equal to
(i) the net cash proceeds received by the Borrower from the sale of such
shares of Capital Stock less (ii) any prepayments of Subordinated Seller Notes
made currently with such closing, to the extent such prepayments are permitted
by Section 7.12 hereof.
(c) Subject to the other terms and conditions hereof, upon
written notice to the Administrative Agent in accordance with Section 13.7,
the Borrower may, at its option, reduce the Commitment, in whole or in part,
in integral multiples of $500,000, on the date specified in such notice, by
paying to the Lender the accrued amount of the Commitment Fee applicable to
the amount of the Commitment reduction.
(d) In no event may the Borrower reduce the Commitment below the
sum of (i) the principal amount of Loans outstanding hereunder and (ii) the
Letter of Credit Obligations.
(e) The Commitment shall be automatically reduced to zero on the
Maturity Date.
(f) The Commitment, once terminated or reduced, may not be
reinstated or increased.
(g) The Borrower may prepay the Loan, in whole or in part, as
provided in Section 2.13, provided, however, that the Borrower may not prepay
any Loan which is a Eurodollar Loan prior to the last day of the Interest
Period applicable to such Eurodollar Loan unless the Borrower pays to the
Administrative Agent, for the benefit of the Lenders, concurrently with such
prepayment, all amounts payable to the Lenders pursuant to Section 3.10
hereof.
2.13 Certain Notices; Minimum Amounts.
(a) All notices given by the Borrower to the Administrative
Agent hereunder of terminations or reductions of the Commitment, or of
borrowings, Conversions, Continuations or prepayments of Loans hereunder shall
either be oral, with prompt written confirmation, which may be by telecopy; or
in writing, with such written confirmation or writing, in the case of a
borrowing, to be substantially in the form of Exhibit I attached hereto (a
"Notice of Borrowing"); shall be irrevocable; shall be effective only if
received by the Administrative Agent prior to 10:00 a.m. (prevailing Eastern
time) on a Business Day which is: (i) at least fifteen (15) days prior to any
such termination or reduction of the Commitment; (ii) not later than one (1)
Business Day prior to the date such Loan is to be made as, Converted to or
Continued as a Base Rate Loan; (iii) at least three (3) Business Days prior to
the date such Loan is to be made as, Converted to or Continued as a Eurodollar
Loan; (iv) at least five (5) days prior to any such prepayment, in the case of
a prepayment of a Eurodollar Loan; and (v) not later than the date of any such
prepayment, in the case of a prepayment of a Base Rate Loan. Each such notice
to reduce the Commitment or to prepay the Loans shall specify the amount of
the Commitment to be reduced or of the Loans to be prepaid and the date of
such reduction or prepayment. Each such notice of borrowing, Conversion or
Continuation shall specify: (1) the amount of such borrowing, Conversion or
Continuation; (2) that the amount of the Loan to be made, Converted or
Continued, when aggregated with all other Loans to be outstanding following
the funding, Conversion or Continuation of such Loan, does not exceed the
Borrowing Availability; (3) whether such Loan will be made, Converted or
Continued as a Eurodollar Loan or as a Base Rate Loan; (4) the date such Loan
is to be made, Converted or Continued (which shall be a Business Day and, if
such Loan is to Convert or Continue a Eurodollar Loan then outstanding, shall
not be prior to the last day of then current Interest Period for such
outstanding Loan); and (5) if such Loan is a Eurodollar Loan, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify
the duration of the Interest Period for any Eurodollar Loan, the Borrower
shall instead be deemed to have requested that such Loan be made as, Converted
to or Continued as a Base Rate Loan. Each request for a borrowing, Conversion
or Continuation of a Loan, for the issuance of a Letter of Credit or for any
other financial accommodation by the Borrower pursuant to this Agreement or
the other Loan Documents shall constitute (x) an automatic warranty and
representation by the Borrower to each Lender that there does not then exist a
Default or Event of Default or any event or condition which, with the making
of such Loan or the issuance of such Letter of Credit, would constitute a
Default or Event of Default and (y) an affirmation that as of the date of such
request all of the representations and warranties of the Borrower contained in
this Agreement and
the other Loan Documents are true and correct in all material respects, both
before and after giving effect to the making of such Loan or the issuance of
such Letter of Credit. If on the last day of the Interest Period of any
Eurodollar Loan hereunder, the Administrative Agent has not received a timely
notice hereunder to Convert, Continue or prepay such Loan, the Borrower shall
be deemed to have submitted a notice to Convert such Loan to a Base Rate Loan.
(b) Except for mandatory prepayments made pursuant to Section
2.8 hereof and Conversions or prepayments made pursuant to Section 3.7 hereof,
each borrowing, Conversion and partial prepayment of principal of Loans shall
be in a minimum principal amount of $100,000 and shall be in an integral
multiple of $100,000 (borrowings, Conversions or prepayments of or into Loans
of different types or, in the case of Eurodollar Loans, having different
Interest Periods at the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one for each type
of Loan or Interest Period).
3. FEES AND INTEREST
3.1 Interest.
(a) Subject to modification pursuant to Section 10.1 hereof, the
average daily outstanding principal amount of the Obligations (other than
Obligations representing the undrawn amount of outstanding Letters of Credit)
shall bear interest from the date thereof until paid in full at the following
rates:
(i) the outstanding principal amount of each Eurodollar
Loan shall bear interest at a fixed rate of interest per annum equal to the
Quoted Rate for then-current Interest Period for such Loan plus the Applicable
Margin for Eurodollar Loans, calculated daily on the basis of a 360-day year
and actual days elapsed; or
(ii) the outstanding principal amount of each Base Rate
Loan, Letter of Credit Obligations and all other sums payable by the Borrower
hereunder shall bear interest at a fluctuating rate per annum equal to the
Base Lending Rate plus the Applicable Margin for Base Rate Loans, calculated
daily on the basis of a 360-day year and actual days elapsed; and
(iii) the amount of any payment of principal and, to the
extent permitted by Applicable Law, interest or other amount payable hereunder
which is not paid when due, shall, at the election of the Administrative
Agent, bear interest at the Default Rate.
(b) Accrued interest shall be payable (i) in the case of Base
Rate Loans, monthly on the first day of each month hereafter for the previous
month, commencing April 1, 1998; (ii) in the case of a Eurodollar Loan, on the
last day of each Interest Period, provided, however, that if any Interest
Period in respect of a Eurodollar Loan is longer than three (3) months, such
interest prior to maturity shall be paid on the last Business Day of each
three (3) month interval within such Interest Period as well as on the last
day of such Interest Period; (iii) in the case of any Loan, upon the payment
or prepayment thereof; (iv) in the case of any other sum payable hereunder as
set forth elsewhere in this Agreement or, if not so set forth, on demand; and
(i) in the case of interest payable at the Default Rate, on demand.
3.2 Interest Period. The Interest Period for any Eurodollar
Loan shall commence on the date such Loan is made, Converted or Continued as
specified in the notice delivered pursuant to Section 2.13 hereof applicable
thereto and shall continue for a period of one (1), two (2), three (3) or six
(6) months, as specified in such notice for such Eurodollar Loan. If the
Borrower fails to specify the duration of the Interest Period for any
Eurodollar Loan in the notice therefor delivered pursuant to Section 2.13
hereof, such Loan shall instead be made or Converted, as appropriate, as a
Base Rate Loan.
3.3 Limitations on Interest Periods. The Borrower may not
select any Interest Period for any Eurodollar Loan which extends beyond the
Maturity Date. Notwithstanding any other provision hereof to the contrary,
the Borrower shall not have, in the aggregate for all Loans outstanding, more
than four (4) different Interest Periods at any given time during the term of
this Agreement (for which purpose Base Rate Loans shall be counted as an
Interest Period).
3.4 Conversions and Continuations. So long as there then
exists no Default or Event of Default hereunder, the Borrower shall have the
right, on any Business Day, from time to time, upon written notice in
accordance with Section 2.13 hereof, to Convert Loans of one type to Loans of
the other type and to Continue Loans of one type as Loans of the same type;
provided that a Eurodollar Loan may not be Converted to a Base Rate Loan prior
to the end of the Interest Period applicable thereto. The Borrower agrees
that, if it shall fail to repay any Loan or portion thereof when due (whether
by acceleration or otherwise) and the Loan at such maturity is being
maintained as a Eurodollar Loan, the Administrative Agent, without limiting
the rights of the Agents or the Lenders hereunder or under the Note evidencing
such Loan, may at any time and from time to time after such due date Convert
to another type of Loan or Continue such Loan as a Loan of the same type.
3.5 Commitment Fee. The Borrower hereby agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"Commitment Fee"), calculated on the basis of a 360-day year and actual days
elapsed, equal to one-half of one percent (1/2 of 1%) per annum of the average
daily amount by which the Commitment exceeds the sum of the aggregate
principal amount of the outstanding Loans plus the aggregate outstanding
Letter of Credit Obligations, payable on the first day of each calendar
quarter thereafter for the previous calendar quarter or portion thereof
(commencing with the first such date following the Effective Date) and on the
Termination Date.
3.6 Letter of Credit Fees. As additional consideration for the
issuance of any Letters of Credit pursuant to Section 2.6 hereof, the Borrower
hereby agrees to pay to the Administrative Agent for the account of each
Lender, in addition to the processing, administrative and similar fees charged
by the LC Issuer in connection with the issuance of Letters of Credit and any
other sums due pursuant to Section 2.6 hereof, a letter of credit fee on the
average daily aggregate undrawn amount of the Letters of Credit at a per annum
rate equal to the Applicable Margin for Letter of Credit, calculated on the
basis of a 360-day year and actual days elapsed, payable on the first day of
each calendar quarter for the previous calendar quarter or portion thereof
(commencing with the first such date following the Effective Date) and on the
Termination Date.
3.7 Illegality. Notwithstanding any other provision of this
Agreement to the contrary, in the event that it shall become unlawful for any
Lender to obtain funds in the London interbank market or for any Lender to
maintain a Eurodollar Loan, then such Lender shall promptly notify the
Administrative Agent and the Borrower whereupon (a) the right of Borrower to
request any Eurodollar Loan shall thereupon terminate and (b) any Eurodollar
Loan then outstanding shall commence to bear interest at the rate applicable
to Base Rate Loans on the last day of the then applicable Interest Period or
at such earlier time as may be required by Applicable Law.
3.8 Inability to Determine Quoted Rate. In the event that
Administrative Agent determines (which determination shall be conclusive
absent manifest error) that, by reason of circumstances affecting the London
interbank market, quotation of interest rates for the relevant deposits
referred to in the definition of the "Quoted Rate" herein are not being
provided in the relevant amounts or for the relevant maturities for the
purpose of determining rates of interest for a Eurodollar Loan, Administrative
Agent will give notice of such determination to Borrower and each Lender at
least one day prior to the date specified in such
notice of borrowing, Conversion or Continuation for such Loan to be made. If
any such notice is given, no Lender shall have any obligation to make
available, maintain, Convert or Continue Eurodollar Loans. Until the earlier
of the date any such notice has been withdrawn by Administrative Agent or the
date when Administrative Agent, the Lenders and Borrower have mutually agreed
upon an alternate method of determining the rates of interest payable on a
Eurodollar Loan, as the case may be, Borrower shall not have the right to have
or maintain any Eurodollar Loan.
3.9 Increased Costs and Reduced Return.
(a) If any event shall occur (whether in the form of a reserve
requirement (not included in the definition of the Quoted Rate), exchange
control regulations, governmental charges, compliance with any guideline or
request from any central bank or other Governmental Authority, changes in the
interbank eurodollar market or the position of any Lender in such market or
otherwise) and the result of any such event is, in any Lender's reasonable
judgment, to increase the costs which such Lender determines are attributable
to its making or maintaining any Eurodollar Loan, or its obligation to make
available any Eurodollar Loan or to reduce the amount of any sum received or
receivable by such Lender under this Agreement or the Note with respect to any
Eurodollar Loan, then, within ten (10) days after demand by such Lender, the
Borrower hereby agrees to pay to such Lender such additional amount or amounts
as will compensate such Lender for such increased cost or reduction.
(b) In addition to any amounts payable pursuant to Section
3.9(a) above, if the LC Issuer or any Lender shall have determined that the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
enforcement or interpretation or administration of any of the foregoing by any
court or any central bank or other Governmental Authority, charged with the
enforcement or interpretation or administration thereof, or compliance by the
LC Issuer or any Lender (or any lending office of any Lender) or the LC
Issuer's or such Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the LC Issuer's or such Lender's
capital or on the capital of the LC Issuer's or such Lender's holding company,
if any, as a consequence of its making or maintaining any Loan, its incurring
any Letter of Credit Obligations, or its incurring any obligations under this
Agreement to a level below that which the LC Issuer or such Lender or the LC
Issuer's or such Lender's holding company could have achieved but for such
applicability, adoption, change or compliance (taking into consideration the
LC Issuer's or such Lender's policies and the policies of the LC Issuer's or
such Lender's holding company with respect to capital adequacy) by an amount
deemed by the LC Issuer or such Lender to be material, then, upon demand by
the LC Issuer or such Lender, the Borrower hereby agrees to pay to the LC
Issuer or such Lender from time to time such additional amount or amounts as
will compensate the LC Issuer or such Lender or the LC Issuer's or such
Lender's holding company for any such reduction suffered.
3.10 Indemnity. The Borrower hereby indemnifies and agrees to
hold harmless each Agent and each Lender from and against any and all losses
or expenses which it may sustain or incur as a consequence of failure by the
Borrower to consummate any notice of prepayment, borrowing, Conversion or
Continuation made by the Borrower, including, without limitation, any such
loss or expense arising from interest or fees payable by any Lender to lenders
of funds obtained by it in order to maintain any Eurodollar Loan. The
Borrower hereby further indemnifies and agrees to hold harmless each Agent and
each Lender from and against any and all losses or expenses which it may
sustain or incur as a consequence of prepayment of any Eurodollar Loan on
other than the last day of the Interest Period for such Loan (including,
without limitation, any prepayment pursuant to Sections 2.12, 3.7 and 3.12).
The Borrower's obligations under this Section shall survive the termination of
this Agreement and the repayment of the Obligations.
3.11 Notice of Amounts Payable. If any Agent, the LC Issuer or
any Lender shall seek payment of any amounts from the Borrower pursuant to
Sections 2.9(b), 3.9 or 3.10 hereof, it shall notify the Administrative Agent
and the Borrower of the amount payable by the Borrower thereunder. A
certificate of such Agent, the LC Issuer or such Lender seeking payment
pursuant to Sections 2.9(b), 3.9 or 3.10 hereof, setting forth in reasonable
detail the factual basis for and the computation of the amounts specified,
shall be conclusive and binding on all parties for all purposes, absent
manifest error, as to the amounts owed. The Borrower's obligations under this
Section shall survive the termination of this Agreement and the repayment of
the Obligations.
3.12 Interest Savings Clause. Nothing contained in this
Agreement or in the Notes or in any Letter of Credit Documents or in any of
the other Loan Documents shall be construed to permit any Lender to receive at
any time interest, fees or other charges in excess of the amounts which such
Lender is legally entitled to charge and receive under any law to which such
interest, fees or charges are subject. In no contingency or event whatsoever
shall the compensation payable to such Lender by the Borrower, howsoever
characterized or computed, hereunder or under the Note or under any other
agreement or instrument evidencing or relating to the Obligations, exceed the
highest rate permissible under any law to which such compensation is subject.
There is no intention that any Lender shall contract for, charge or receive
compensation in excess of the highest lawful rate, and, in the event it should
be determined that any excess has been charged or received, then, ipso facto,
such rate shall be reduced to the highest lawful rate so that no amounts shall
be charged which are in excess thereof; and such Lender shall apply such
excess against the Loans then outstanding (with such application being made
first against the Base Rate Loans, to the extent thereof, second against the
Eurodollar Loans, to the extent thereof, and then to any other Obligations
hereunder) and, to the extent of any amounts remaining thereafter, refund such
excess to the Borrower.
4. SECURITY INTEREST - COLLATERAL
4.1 Security Interest. As security for the Obligations, the
Borrower hereby reconfirms its grant made pursuant to the Original Loan
Agreement, and hereby grants to the Collateral Agent, for the benefit of the
Lenders, a continuing, first priority Lien (except for Permitted Liens) on and
security interest in and to the following described property of the Borrower,
whether now owned or existing or hereafter acquired or arising or in which the
Borrower now has or hereafter acquires any rights and wheresoever located
(sometimes herein collectively referred to as "Collateral"):
(a) Accounts;
(b) Chattel Paper;
(c) Contracts;
(d) Documents;
(e) Equipment;
(f) General Intangibles;
(g) Investment Property;
(h) Instruments;
(i) Inventory;
(j) All Intercompany Loan and Security Agreements and all other
Loan Documents entered into from time to time and the rights of the Borrower
thereunder, including, without limitation, any security interest in any and
all assets of each Subsidiary of the Borrower granted to the Borrower by such
Subsidiary pursuant to an Intercompany Loan and Security Agreement;
(k) all monies, residues and property of any kind of the
Borrower now or at any time or times hereafter, in the possession or under the
control of any Agent or any Lender or a bailee of the Collateral Agent, the
Co-Agent or any Lender;
(l) all books and records (including, without limitation,
customer lists, credit files, computer programs, print-outs and other computer
materials and records) of the Borrower pertaining to any of the foregoing;
(m) all accessions to, substitutions for and all replacements,
products and Proceeds of the foregoing, including, without limitation,
proceeds of insurance policies insuring the Collateral; and
(n) any and all other property of the Borrower.
4.2 Additional Collateral. As additional security for the
Obligations, the Borrower shall pledge to the Collateral Agent, for the
benefit of the Lenders, (i) pursuant to the terms and conditions of the Stock
Pledge Agreement, all of the issued and outstanding shares of Capital Stock of
each Subsidiary which it currently holds or holds subsequent to the Effective
Date, (ii) each Intercompany Loan and Security Agreement that it may become a
party to subsequent to the Effective Date and all Intercompany Loan Documents
executed in connection with such Intercompany Loan. The Borrower agrees that
all of such additional security described in this Section 4.2 shall be
included in the "Collateral."
4.3 Perfection of Security Interest. Until the termination of
this Agreement in accordance with the terms of Section 2.7 hereof, the
Collateral Agent's Lien in the Collateral and all products and Proceeds
thereof, shall continue in full force and effect. The Borrower shall perform,
and shall cause each of its Subsidiaries to perform, any and all steps
requested by the Collateral Agent or the Majority Lenders to perfect, maintain
and protect the Collateral's Lien in the Collateral including, without
limitation, executing and filing financing or continuation statements, or
amendments thereof, in form and substance satisfactory to the Collateral
Agent; delivering to the Collateral Agent upon the Collateral Agent's request
therefor all Documents, Instruments, Investment Property or Chattel Paper
included in the Collateral, the possession of which is necessary or
appropriate to perfect the Collateral Agent's Liens therein; delivering to the
Collateral Agent all letters of credit on which the Borrower or any of its
Subsidiaries is named as a beneficiary; and using best efforts to obtain and
deliver such consents and waivers from such landlords, developers or other
Persons as the Collateral Agent may request. The Collateral Agent may file
one or more financing statements disclosing the Collateral Agent's Liens under
this Agreement without the Borrower's signature appearing thereon and the
Borrower shall pay the costs of, or incidental to, any recording or filing of
any financing statements concerning the Collateral. The Borrower agrees that
a carbon, photographic, photostatic, or other reproduction of this Agreement
or of a financing statement is sufficient as a financing statement.
4.4 Right to Inspect; Verifications. Each Agent and each Lender
(or any person or persons designated by it), in its sole discretion, shall
have the right to call at any place of business or property location of the
Borrower or any of its Subsidiaries at any reasonable time during business
hours, and, without hindrance or delay, to inspect the Collateral and to
inspect, audit, check and make extracts from the books, records, journals,
orders, receipts and any correspondence and other data of the Borrower or any
of its Subsidiaries relating to the Collateral, to the business of the
Borrower or such Subsidiary, or to any other transactions between the parties
hereto and to discuss any of the foregoing with any of the
employees, officers and directors of the Borrower or any of its Subsidiaries
and with the independent accountants for the Borrower. Additionally, the
Collateral Agent may, at any time and from time to time in its sole
discretion, require the Borrower to verify the individual Accounts immediately
upon its request therefor.
5. REPRESENTATIONS AND WARRANTIES
In order to induce the Agents, the LC Issuer and the Lenders to enter
into this Agreement and to make Loans hereunder, the Borrower hereby makes the
following representations and warranties to the Agents and the Lenders, which
shall be true and correct in all material respects on the date hereof and
shall continue to be true and correct in all material respects at the time of
the making of any Loan and until the Loans have been repaid in full:
5.1 Corporate Existence and Qualification. The Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Borrower is duly qualified as a foreign
corporation in good standing in each state wherein the conduct of its business
or the ownership of its property requires such qualification. Schedule 5.1 is
a listing of each state where the Borrower or any of its Subsidiaries is duly
qualified as a foreign corporation.
5.2 Corporate Authority; Valid and Binding Effect. The Borrower
has the corporate power and authority to execute, deliver and perform under
this Agreement and the other Loan Documents, and to borrow hereunder, and has
taken all necessary and appropriate corporate action to authorize the
execution, delivery and performance of this Agreement and such other Loan
Documents. This Agreement and the other Loan Documents constitute the valid
and legally binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms; except that enforceability
may be limited by bankruptcy, insolvency and other laws affecting creditor's
rights generally and except that the availability of certain remedies may be
limited by general principles of equity.
5.3 No Conflict. The execution, delivery and performance by the
Borrower of this Agreement and the other Loan Documents (a) are not in
contravention of any provisions of Applicable Law applicable to the Borrower;
(b) will not violate or result in a default under any agreement or indenture
to which the Borrower is a party or by which the Borrower is bound; (c) do not
contravene the Articles of Incorporation or By-laws of the Borrower; and (d)
will not result in or require the creation or imposition of any Lien on any of
the property or assets of the Borrower or any of its Subsidiaries other than
Liens in favor of the Lender created by this Agreement or the Loan Documents.
5.4 Governmental Action. The execution, delivery and
performance of this Agreement and the other Loan Documents by the Borrower do
not require any registration with, consent or approval of, or any notice to,
or other action to, with or by any Governmental Authority except (a) filings,
consent or notices which have been obtained and a copy thereof furnished to
the Lender; and (b) filings necessary to perfect the Liens granted by this
Agreement and the Loan Documents.
5.5 No Litigation. Except as set forth on Schedule 5.5 hereto,
there are no proceedings pending or threatened against the Borrower or any of
its Subsidiaries before or by any court or administrative agency.
5.6 Solvency. After giving effect to the execution and delivery
of this Agreement and the Loan Documents, the consummation of the transactions
contemplated hereby and thereby and the making of each Loan and Intercompany
Loans hereunder, the Borrower and each of its Subsidiaries are Solvent.
5.7 Taxes. Except as set forth on Schedule 5.7 hereof, the
Borrower and each of its Subsidiaries has filed all federal, state, local and
foreign tax returns, reports and estimates which are required to be filed by
it and all taxes (including penalties and interest, if any) shown on such
returns, reports and estimates as being due and payable or which are otherwise
due and payable have been fully paid. Such tax returns properly and correctly
reflect the income and taxes of the Borrower or such Subsidiary for the
periods covered thereby. The federal tax identification number of Borrower
and each of its Subsidiaries is set forth on Schedule 5.7 attached hereto.
5.8 Financial Information.
(a) The audited consolidated financial statements of Borrower
and its consolidated Subsidiaries for the fiscal year ending December 31, 1997
(the "Audited Financial Statements"), and the unaudited, interim consolidated
financial statements of Borrower and its consolidated Subsidiaries for the
one-month period ending January 31, 1998, including consolidated balance
sheets, consolidated income statements and consolidated statements of cash
flow, copies of which have been delivered by Borrower to the Administrative
Agent, are true and correct in all material respects and contain no material
misstatement or omission, and fairly present the consolidated financial
position, assets and liabilities of Borrower and its consolidated Subsidiaries
as of the respective dates thereof and the consolidated results of operations
of Borrower and its consolidated Subsidiaries for the respective periods then
ended, and as of the date thereof there were no liabilities of Borrower or its
consolidated Subsidiaries, fixed or contingent, which are material that were
not reflected in such financial statements.
(b) The forecasted financial statements of Borrower and its
Subsidiaries, consisting of balance sheets, income statements and cash flow
statements for Borrower and its Subsidiaries, and the projected schedules of
excess availability, giving effect to the consummation of the transactions
contemplated by this Agreement, covering the five-year period commencing on
January 31, 1997 and prepared on an annual basis (the "Projections"): (i) are
based on reasonable estimates and assumptions; and (ii) reflected, as of the
date prepared, and continue to reflect, as of the date of this Agreement, the
reasonable estimate of Borrower of the results of operations and other
information projected therein for the periods covered thereby.
(c) Since the date of the financial statements referred to in
Section 5.8(a), except as set forth in the financial statements referred to in
Section (b), there has been no material adverse change in the consolidated
assets, liabilities, financial position or results of operations of the
Borrower and its consolidated Subsidiaries, and neither the Borrower nor any
of its Subsidiaries have (i) incurred any obligation or liability, fixed or
contingent, which would materially and adversely affect its business,
operations, prospects or financial condition; (ii) incurred any Indebtedness
or Capital Lease Obligations other than the Obligations; or (iii) Guaranteed
the obligations of any other Person.
5.9 Title to Property. The Borrower and each of its
Subsidiaries has good and marketable title to or a valid leasehold interest in
all its real estate and valid and legal title to or a valid leasehold interest
in all the Collateral and all of its other assets, free and clear of any and
all Liens whatsoever except for Permitted Liens.
5.10 Violations of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any applicable statute, rule, regulation or
ordinance of any Governmental Authority, the violation of which might have a
Material Adverse Effect.
5.11 ERISA. Except as disclosed on Schedule 5.11 attached hereto
and incorporated herein by reference:
(a) Identification of Plans. Neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has maintained or contributed to,
any Plan or Multiemployer Plan that is subject to regulation by Title IV of
ERISA;
(b) Compliance. Each Plan has at all times been maintained, by
its terms and in operation, in accordance with all Applicable Laws; except for
such noncompliance (when taken as a whole) that will not have a Material
Adverse Effect;
(c) Liabilities. Neither the Borrower nor any ERISA Affiliate
is currently or, to the best knowledge of the Borrower or any ERISA Affiliate,
will become subject to any liability (including withdrawal liability), tax or
penalty whatsoever to any person whomsoever with respect to any Plan,
including, but not limited to, any tax, penalty or liability arising under
Title I or Title IV of ERISA or Chapter 43 of the Code, except such
liabilities (when taken as a whole) as will not have a Material Adverse
Effect;
(d) Funding. The Borrower and each ERISA Affiliate has made
full and timely payment of (i) all amounts required to be contributed under
the terms of each Plan and Applicable Law and (ii) all material amounts
required to be paid as expenses of each Plan. No
Plan has any "amount of unfunded benefit liabilities" (as defined in Section
4001(a)(18) of ERISA); and
(e) Insolvency; Reorganization. No Plan is insolvent (within
the meaning of Section 4245 of ERISA) or in reorganization (within the meaning
of Section 4241 of ERISA).
5.12 Environmental Laws.
(a) The Borrower and each of its Subsidiaries has obtained all
permits, licenses and other authorizations, if any, which are required under
Environmental Laws for the operation of the Borrower's or such Subsidiary's
business and the Borrower and each of its Subsidiaries is in compliance with
all terms and conditions of required permits, licenses and authorizations, and
is also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, notifications, schedules
and timetables contained in the Environmental Laws;
(b) Neither the Borrower nor any of its Subsidiaries is aware of
or has received notice of, the disposal or release or presence of Hazardous
Substances on any of its properties, or of any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
which may interfere with or prevent compliance or continued compliance on the
part of the Borrower or any such Subsidiary with Environmental Laws, or may
give rise to any common law or legal liability, or otherwise form the basis of
any claim, action, demand, suit, Lien, proceeding, hearing, study or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or
the emission, discharge, release or threatened release into the environment,
of any Hazardous Substance;
(c) All assets of the Borrower and its Subsidiaries are free
from Hazardous Substances except for Hazardous Substances used, maintained or
handled by the Borrower or such Subsidiary in the ordinary course of business
and the use and disposal of any and all such Hazardous Substances is effected
by the Borrower or such Subsidiary in compliance with all applicable
Environmental Laws; and
(d) There is not pending or threatened against the Borrower or
any of its Subsidiaries and neither the Borrower nor any of its Subsidiaries
knows of any facts or circumstances that might give rise to, any civil,
criminal or administrative action, suit, demand, claim, hearing, notice or
demand letter, notice of violation, environmental Lien, investigation, or
proceeding relating in any way to Environmental Laws.
5.13 Margin Stock. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for buying or carrying Margin Stock, and no
part of the proceeds of any Loan shall be used, directly or indirectly, to
purchase or carry Margin Stock.
5.14 No Default. Neither the Borrower nor any of its
Subsidiaries is in default with respect to (a) any note, indenture, loan
agreement, mortgage, lease, deed or other similar agreement relating to
Indebtedness to which the Borrower or such Subsidiary is a party or by which
the Borrower or such Subsidiary is bound or (b) any other instrument, document
or agreement to which the Borrower or any of its Subsidiaries is a party or by
which the Borrower or any of its Subsidiaries or any of their respective
properties are bound, the default of which would have a Material Adverse
Effect.
5.15 Chief Executive Office; Collateral Locations. The
Borrower's and each of its Subsidiaries' principal place of business, chief
executive office and location of its books and records is set forth on
Schedule 5.15 attached hereto and neither the Borrower, any of its
Subsidiaries nor any of their respective predecessors has had any other chief
executive office or principal place of business except as set forth on
Schedule 5.15 during the five (5) years immediately preceding the date hereof.
Schedule 5.15 attached hereto and incorporated herein by reference sets forth
a true, correct and complete list of all places of business and all locations
at which any Collateral is located.
5.16 Corporate and Trade or Fictitious Names. Except as set
forth on Schedule 5.16 hereof, during the five (5) years immediately preceding
the date of this Agreement, neither the Borrower, any of its Subsidiaries, nor
any of their respective predecessors has been known as or used any corporate,
trade or fictitious name other than its current corporate or individual name
as such name is set forth in this Agreement.
5.17 Accounts. With regard to each Account now or hereafter
shown on any schedule or aging of Accounts provided to the Lender hereunder:
(a) Such Account arises or will arise under a contract between
the Borrower or a Subsidiary of the Borrower and an Account Debtor in each
case providing for the bona fide sale of goods or performance of services by
the Borrower or its Subsidiaries in the ordinary course of its business for or
on behalf of the Account Debtor except to the extent otherwise expressly
indicated on such schedule or aging of accounts;
(b) The Borrower or a Subsidiary of the Borrower has made
delivery of the goods or has rendered the services ordered to which such
Account relates and the Account Debtor has accepted such goods and/or services
except to the extent otherwise expressly indicated on such schedule or aging
of accounts;
(c) Except to the extent otherwise expressly indicated on such
schedule or aging of accounts, the amount of the face value of such Accounts
is actually and absolutely owing to the Borrower or a Subsidiary of the
Borrower, is not contingent for any bona fide reason, and there are no
setoffs, counterclaims, disputes or deductions existing or asserted with
respect thereto (except to the extent, if any, that such Account Debtor(s) may
be entitled to normal trade discounts, warranties, adjustments, returns and
al-lowances).
(d) The Borrower or the applicable Subsidiary of the Borrower
will have preserved and will continue to preserve any Liens and any rights to
Liens available by virtue of the sales giving rise to such Account;
(e) Such Account is free and clear of all Liens other than
Permitted Liens; and
(f) The Borrower or the applicable Subsidiary has full right,
power and authority to collaterally assign such Account.
5.18 Adequacy of Intangible Assets. The Borrower and each of its
Subsidiaries possesses all intellectual property licenses, patents, patent
applications, copyrights, Trademarks, Trademark Licenses, trademark
applications, and trade names and all governmental registrations and licenses
reasonably necessary to continue to conduct its business as heretofore
conducted by it, and all such intellectual property licenses, patents, patent
applications, copyrights, Trademarks, Trademark Licenses, trademark
applications, trade names, licenses and registrations which have been
registered with any Governmental Authority are listed on Schedule 5.18 hereto.
5.19 Equipment. The Equipment is and shall remain in good
condition, normal wear and tear excepted, meets all standards imposed by any
Governmental Authority having regulatory authority over such Equipment and its
use and is currently usable in the normal course of business of the Borrower
or any of its Subsidiaries.
5.20 Inventory. The Inventory is and shall remain in good
condition, meets all standards imposed by any Governmental Authority having
regulatory authority over such goods, their use and/or sale, is either
currently usable or currently salable in the normal course of the Borrower's
business and is not subject to any output contract or similar agreement
between the Borrower and any other Person.
5.21 Investment Property. Schedule 5.21 is a complete list of
all Subsidiaries, Investment Property and other Investments in any Person,
including but not limited to, all interests in any partnership or joint
venture. Except as otherwise disclosed on Schedule 5.21, all shares of stock
in any corporation held by Borrower or any of its Subsidiaries are evidenced
by stock certificates issued in the name of Borrower or such Subsidiary and
all other Investment Property of Borrower or any Subsidiary is held directly
in the name of Borrower or such Subsidiary and is not held in any brokerage or
similar account, in the name of any financial institution or in any nominee
name.
5.22 Indebtedness. Schedule 5.22 hereto is a complete and
correct list, as of the date of this Agreement, of each credit agreement, loan
agreement, indenture, note purchase agreement, guarantee, Interest Hedge
Agreement or other arrangement providing for or otherwise relating to any
Indebtedness to, or guarantee by, the Borrower or any of its Subsidiaries and
the aggregate principal or face amount outstanding as of the date hereof or
which may become outstanding under each such arrangement is correctly
described in said Schedule 5.22. The Borrower has no Indebtedness other than
as set forth on Schedule 5.22 or as permitted by Section 7.2 hereof.
5.23 Existing Liens. Schedule 5.23 hereto is a complete and
correct list, as of the date of this Agreement, of each Lien existing on the
date hereof securing Indebtedness and the aggregate principal amount of
Indebtedness secured by each such Lien is correctly described in such Schedule
5.22.
5.24 Trade Relations. There exists no actual nor, to the best of
the Borrower's knowledge, threatened limitation of the business relationship
of the Borrower or any of its Subsidiaries with any material customer,
supplier, landlord or with any company whose contracts or projected contracts
with the Borrower or such Subsidiary could be material to the operations of
the Borrower or such Subsidiary; and there exists no condition or state of
facts or circumstances which could have a Material Adverse Effect on the
Borrower or any of its
Subsidiaries or prevent the Borrower or any of its Subsidiaries from
conducting its business after the consummation of the transactions
contemplated by this Agreement as such business is conducted or proposed to be
conducted in the Projection and other information furnished to the
Administrative Agent by the Borrower or such Subsidiary.
5.25 Broker's or Finder's Fees. No broker's or finder's fees or
commissions have been incurred or will be payable by the Borrower or any of
its Subsidiaries to any Person in connection with the transactions
contemplated by this Agreement.
5.26 Security Interest. This Agreement creates a valid Lien on
the Collateral securing payment of the Obligations, subject only to Permitted
Liens, and all filings and other actions necessary or desirable to perfect and
protect such Lien have been taken, and the Collateral Agent has a valid and
perfected first priority Lien in the Collateral subject only to Permitted
Liens.
5.27 Regulatory Matters. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Federal Power Act, the Interstate Commerce Act or any other federal or
state statute or regulation which limits its ability to incur Indebtedness or
its ability to consummate the transactions contemplated hereby.
5.28 Disclosure. Neither this Agreement nor any other
instrument, document, agreement, financial statement or certificate furnished
to the Lender by or on behalf of the Borrower or any of its Subsidiaries in
connection herewith or therewith contains an untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or omits to state any fact which may in the future have a Material
Adverse Effect.
5.29 Burdensome Restrictions. Neither any contract, lease,
indenture, agreement or other instrument, or corporate restriction, judgment,
decree, or order to which the Borrower or any of its Subsidiaries is a party
or by which the Borrower or any of its Subsidiaries is bound, nor any
provision of Applicable Law, has or can reasonably be expected to have a
Material Adverse Effect.
5.30 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness," as such term is defined in each of the subordination agreements
relating to the Subordinated Seller Notes.
5.31 Shell Subsidiaries. As of the date hereof, each of ITP
No. 5, Inc., a Delaware corporation; ITP No. 6, Inc., a Delaware corporation;
ITP No. 7, Inc., a Delaware corporation; ITP No. 8, Inc., a Delaware
corporation; and ITP No. 9, Inc., a Delaware corporation, (a) is a
wholly-owned Subsidiary of the Borrower; (b) was formed solely for the purpose
of effecting a proposed Acquisition by the Borrower, which Acquisition has not
yet been consummated; (c) does not own or hold any material assets or
properties; and (d) has neither conducted any business nor engaged in any
activities other than the business of negotiating and closing the Acquisition
to be entered into by it.
6. AFFIRMATIVE COVENANTS
The Borrower hereby covenants to the Agents and the Lenders that from
and after the date hereof, and until the termination of this Agreement in
accordance with Section 2.7 hereof, unless the Majority Lenders otherwise
consent in writing:
6.1 Records Respecting Collateral; Lockbox or Blocked Account
Arrangement. The Borrower shall, and shall cause each of its Subsidiaries to,
keep all records with respect to the Collateral at its respective office set
forth on Schedule 5.15 hereof and not remove such records from such addresses
without the prior written consent of the Collateral Agent and, upon request of
the Collateral Agent or the Majority Lenders, following the occurrence of an
Event of
Default, enter into such lockbox or blocked account arrangement with respect
to collection of the Accounts and execute and deliver such documents in
connection therewith as Collateral Agent or the Majority Lenders may
reasonably require.
6.2 Reporting Requirements. The Borrower shall, and shall cause
each of its Subsidiaries to, furnish or cause to be furnished to the Agents
and each Lender:
(a) As soon as practicable, and in any event within forty-five
(45) days after the end of each month, interim unaudited financial statements
of the Borrower and its consolidated Subsidiaries, prepared on a consolidated
basis for the Borrower and its consolidated Subsidiaries, including a balance
sheet, income statements and statements of cash flow, for the month and
year-to-date period then ended, prepared in accordance with GAAP and certified
as to truth and accuracy thereof by the chief financial officer of the
Borrower;
(b) As soon as available, and in any event within ninety (90)
days after the end of each fiscal year, audited consolidated annual financial
statements of the Borrower and its consolidated Subsidiaries, including
consolidated balance sheets, consolidated income statements and consolidated
statements of cash flow for the fiscal year then ended, prepared in accordance
with GAAP, in comparative form and accompanied by the unqualified opinion of a
nationally recognized firm of independent certified public accountants
retained by the Borrower and its Subsidiaries and acceptable to the
Administrative Agent and the Majority Lenders;
(c) Together with the annual financial statements referred to in
clause (b) above, a statement from such independent certified public
accountants that, in making their examination of such financial statements,
they obtained no knowledge of any Default or Event of Default or, in lieu
thereof, a statement specifying the nature and period of existence of any such
Default or Event of Default disclosed by their examination;
(d) Not later than the first day of each fiscal year, (i) a
projected operating budget for Borrower and its Subsidiaries for such fiscal
year, consisting of projected monthly balance sheets, income statements and a
statement of cash flows and (ii) a list of the beginning and ending dates of
each monthly and quarterly accounting periods of such fiscal year;
(e) Together with the financial statements referred to in
clauses (a) and (b) above, (i) a compliance certificate of the chief financial
officer of the Borrower, in substantially the forms of Exhibit J hereto (the
"Compliance Certificate"), setting forth the calculations for determining
compliance with the financial covenants set forth in Article 8 hereof and
certifying that such calculations are true and accurate and that, to the best
of his knowledge, 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; and (ii) a Borrowing Availability
Certificate, in substantially the form of Exhibit K attached hereto (a
"Borrowing Availability Certificate"), setting forth the Adjusted Cash Flow of
the Borrower as of the end of the immediately preceding month and signed by
the chief financial officer of the Borrower; provided, however, that the
Borrower may, at its option, in connection with its request for approval of an
Acquisition pursuant to Section 7.5 hereof, deliver to the Administrative
Agent a Borrowing Availability Certificate, prepared on a pro forma basis,
giving effect to such Acquisition;
(f) As soon as available, and in any event within thirty (30)
days after the end of each month, an accounts receivable aging, showing
separately for the Borrower and each Subsidiary, in summary form the aggregate
dollar value of the Accounts of each and indicating the aggregate value of the
Accounts that are past due and whether such Accounts are thirty (30), sixty
(60) or ninety (90) or more days past due and containing such other
information regarding such Accounts as the Lender may request, all as of the
last day of the preceding month;
(g) Promptly after the sending or filing thereof, as the case
may be, copies of any definitive proxy statements, financial statements or
reports which the Borrower sends to its shareholders and copies of any regular
periodic and special reports or registration statements which the Borrower
files with the Securities and Exchange Commission (or any Governmental
Authority substituted therefor), including, but not limited to, all Form 10-K
and Form 10-Q reports, if any, or any report or registration statement which
the Borrower files with any national securities exchange;
(h) At least fifteen (15) Business Days prior to the time any
consent by the Majority Lenders will be necessary, the Borrower shall furnish
to the Agents and the Lenders all pertinent information regarding any proposed
Acquisition by the Borrower hereunder which is reasonably necessary or
appropriate to permit the Lenders to evaluate such Acquisition in a manner
consistent with prudent banking standards; and
(i) Such other information respecting the condition or
operations, financial or otherwise, of the Borrower and its Subsidiaries as
the Lenders may from time to time reasonably request.
6.3 Tax Returns. The Borrower shall, and shall cause each of
its Subsidiaries to, file all federal, state and local tax returns and other
reports that the Borrower and its Subsidiaries are required by law to file,
maintain adequate reserves for the payment of all taxes, assessments,
governmental charges and levies imposed upon its income, or its profits, or
upon any property belonging to it, and pay and discharge all such taxes,
assessments, governmental charges and levies prior to the date on which
penalties attach thereto, except where the same may be contested in good faith
by appropriate proceedings and for which adequate reserves have been
established.
6.4 Compliance With Laws. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all laws, statutes, rules,
regulations and ordinances of any Governmental Authority applicable to the
Borrower or its Subsidiaries, including, without limitation, any such laws,
statutes, rules, regulations or ordinances regarding the collection, payment,
and deposit of employees' income, unemployment, and Social Security taxes and
with respect to pension liabilities, the violation of which might have a
Material Adverse Effect.
6.5 Environmental Laws. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all Environmental Laws and, in the
event of any "release" or "threatened release" of any Hazardous Substance
onto, at or under the property of any the Borrower or any of its Subsidiaries
which requires or may require notification, response, assessment,
investigation or remedial action pursuant to any Environmental Law, notify the
Lender and all appropriate Governmental Authorities thereof, and proceed with
due diligence and, at the cost and expense of the Borrower or such Subsidiary,
to respond appropriately, in accordance with all requirements of the
Environmental Laws.
6.6 ERISA. The Borrower shall, and shall cause each ERISA
Affiliate to:
(a) At all times make prompt payment of contributions required
to meet the minimum funding standards set forth in Sections 302 and 305 of
ERISA with respect to each Plan and otherwise comply with ERISA and all rules
and regulations promulgated thereunder;
(b) Promptly after the occurrence thereof with respect to any
Plan, or any trust established thereunder, notify the Administrative Agent and
the Lenders of (i) a "reportable event" described in Section 4043 of ERISA and
the regulations issued from time to time thereunder (other than a "reportable
event" not subject to the provisions for 30-day notice to the PBGC under such
regulations), or (ii) any other event which could subject the Borrower or any
ERISA Affiliate to any material tax, penalty or liability under Title I or
Title IV of ERISA or Chapter 43 of the Code;
(c) At the same time and in the same manner as such notice must
be provided to the PBGC, or to a Plan participant, beneficiary or alternative
payee, give the Administrative Agent and the Lenders any notice required under
Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or 4041(c)(1)(A) or ERISA
or under Section 401(a)(29) or 412 of the Code with respect to any Plan;
(d) Furnish to the Administrative Agent or any Lender, promptly
upon the request of the Administrative Agent or such Lender, (i) true and
complete copies of any and all documents, government reports and determination
or opinion letters for any Plan; and (ii) a current statement of withdrawal
liability, if any, for each Multiemployer Plan; and
(e) Furnish to the Administrative Agent or any Lender, promptly
upon the request of the Administrative Agent or such Lender therefor, such
additional information concerning any Plan as may be reasonably requested.
6.7 Books and Records. The Borrower shall, and shall cause each
of its Subsidiaries to, keep adequate records and books of account with
respect to its business activities in which proper entries are made in
accordance with GAAP reflecting all its financial transactions.
6.8 Notifications to the Administrative Agent and the Lenders.
The Borrower shall notify the Administrative Agent and the Lenders immediately
by telephone (with each such notice to be confirmed in writing within three
(3) Business Days): (a) upon the Borrower's learning thereof, of any
litigation affecting the Borrower or any of its Subsidiaries claiming damages
of $100,000 or more, individually or when aggregated with other litigation
pending against the Borrower or its Subsidiaries, whether or not covered by
insurance, and of the threat or institution of any suit or administrative
proceeding against the Borrower or any of its Subsidiaries which, if adversely
determined, might have a Material Adverse Effect, and establish such
reasonable reserves with respect thereto as the Majority Lender may request in
accordance with GAAP; (b) upon occurrence thereof, of any Default or Event of
Default hereunder; (c) upon occurrence thereof, of any event or condition
which could have a Material Adverse Effect; and (d) upon the occurrence
thereof, of the Borrower's or any of its Subsidiaries' default under (i) any
note, indenture, loan agreement, mortgage, lease, deed or other similar
agreement relating to any Indebtedness of the Borrower or such Subsidiary or
(ii) any other instrument, document or agreement to which the Borrower or any
of its Subsidiaries is a party or by which the Borrower or any of its
Subsidiaries or any of their respective properties is bound, the default of
which could have a Material Adverse Effect.
6.9 Insurance. The Borrower shall, and shall cause each of its
Subsidiaries to:
(a) keep all of its property insured by insurance companies (i)
acceptable to the Majority Lenders; and (ii) licensed to do business in all
jurisdictions in which the Collateral is located against loss or damage by
fire or other risk usually insured against under extended coverage endorsement
and theft, burglary, and pilferage, together with such other hazards as the
Majority Lenders may reasonably from time to time request, in amounts
satisfactory to the Majority Lenders and naming the Collateral Agent as loss
payee thereon pursuant to a loss payee clause satisfactory to the Collateral
Agent;
(b) maintain at all times liability insurance coverage against
such risks and in such amounts as are customarily maintained by others in
similar businesses, such insurance to be carried by insurance companies (i)
acceptable to the Majority Lenders and (ii) licensed to do business in the
states in which the Borrower and its Subsidiaries conduct business; and
(c) deliver certificates of insurance for such policy or
policies to the Collateral Agent, containing endorsements, in form
satisfactory to the Lenders, providing that the insurance shall not be
cancelable, except upon thirty (30) days' prior written notice to the
Collateral Agent. In the event of any termination or notice of non-payment by
any insurer with respect to any policy or any lapse in the coverage
thereunder, the Borrower shall cause such insurer to give prompt written
notice to Xxxxxxx Xxxxxx, Senior Vice President, Creditanstalt Corporate
Finance, Inc., 0 Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 of
the occurrence of such termination, nonpayment or lapse.
6.10 Maintenance of Intellectual Property. The Borrower shall,
and shall cause each of its Subsidiaries to, keep all General Intangibles in
full force and effect except for immaterial General Intangibles allowed to
lapse by the Borrower or any of its Subsidiaries in the ordinary course of its
business and any other General Intangible for which the Borrower or any of its
Subsidiaries has obtained a substantially similar substitution or the lapse of
which, because of such substitution, will not have a Material Adverse Effect
on the business or operations of the Borrower or such Subsidiary, as the case
may be, and maintain all of its other property necessary or useful in the
proper conduct of its respective business in good working condition, ordinary
wear and tear excepted.
6.11 Preservation of Corporate Existence. The Borrower shall,
and shall cause each of its Subsidiaries to, preserve and maintain its
corporate existence, rights, franchises and privileges in the jurisdiction of
its incorporation, and qualify and remain qualified as a foreign corporation
in each jurisdiction in which such qualification is necessary in view of its
business and operations or the ownership of its properties.
6.12 Equipment. The Borrower shall, and shall cause each of its
Subsidiaries to, keep and maintain the Equipment in good operating condition,
reasonable wear and tear excepted, repair and make all necessary replacements,
renewals, additions or improvements thereto so that the value and operating
efficiency thereof shall at all times be maintained and preserved and not
permit any item of Equipment to become a fixture to real estate or accession
to other personal property unless the Collateral Agent has a first priority
Lien on such real estate or other personal property. The Borrower shall,
immediately on demand therefor by the Collateral Agent, deliver to the
Collateral Agent any and all existing evidence of ownership of any of the
Equipment (including, without limitation, certificates of title and
applications for title, together with any necessary applications to have the
Collateral Agent's Lien noted thereon, in the case of vehicles).
6.13 Other Indebtedness. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain all of its Indebtedness in whatsoever
manner incurred, including, but not limited to, Indebtedness for borrowed
money or for services or goods purchased, in a current status.
6.14 Year 2000 Compliance. Borrower and each of its Subsidiaries
shall cause, on or prior to December 31, 1998 and at all times thereafter, all
software and other processing capabilities of Borrower and its Subsidiaries to
have the ability to correctly interpret and manipulate all data, in whatever
form, including, but not limited to, printed form, screen
displays, financial records, calculations and loan-related data, so as to
avoid errors in processing that may otherwise occur because of the inability
of the software or other processing capabilities to recognize accurately the
year 2000 or subsequent dates, except to the extent the failure to have such
ability would not be reasonably expected to have a Material Adverse Effect.
6.15 Assignment of Leasehold Interests. Upon request of the
Collateral Agent, execute and deliver to the Collateral Agent (a) such fee
mortgages, leasehold mortgages or other appropriate security instruments, as
and in such form as the Collateral Agent requests, in respect of any real
property owned or leased by the Borrower or any Subsidiary, and (b) any and
all environmental assessments, surveys, title insurance policies, opinions,
certificates, instruments, documents and agreements as the Collateral Agent or
the Majority Lenders may reasonably request in connection therewith.
6.16 Additional Documents. Upon formation or Acquisition by the
Borrower or any Subsidiary of the Borrower of any new Subsidiary, the Borrower
shall deliver, or cause to be delivered to the Collateral Agent, for the
benefit of the Lenders, each in form and substance satisfactory to the
Collateral Agent, (a) an addendum to the Master Subsidiary Guaranty executed
by such new Subsidiary, guaranteeing the Obligations, (b) an amendment to the
Stock Pledge Agreement or an addendum to the Master Subsidiary Pledge
Agreement, as applicable, pledging the ownership interest in such new
Subsidiary, (c) an addendum to the Master Subsidiary Security Agreement
executed by such new Subsidiary, and (d) all other instruments, documents or
agreements reasonably necessary or desirable to create, evidence or perfect a
lien on or security interest in favor of the Collateral Agent, for the benefit
of the Lenders, in the assets of such new Subsidiary and/or to reaffirm the
obligations of the Borrower and its Subsidiaries; provided, however, that the
Borrower may cause any newly-formed Subsidiary to delay executing and
delivering the documents required by this Section 6.16 until the closing of an
Acquisition by such Subsidiary so long as (i) such Subsidiary was formed for
the sole purpose of consummating an Acquisition that is subject to the terms
of Section 7.5 hereof; (ii) such Subsidiary has no material assets or
properties; and (iii) such Subsidiary conducts no business and engages in no
activities other than the business of negotiating and closing an Acquisition.
6.17 Upstream Payment of Dividends and Distributions. In the
event that any wholly owned Subsidiary receives a dividend or other
distribution (other than a dividend paid in stock) from a Subsidiary of such
Subsidiary, the Subsidiary receiving such dividend or other distribution shall
promptly, and in any event within ten (10) days of its receipt of such
dividend or distribution, pay such dividend or distribution to the Borrower.
7. NEGATIVE COVENANTS
The Borrower hereby covenants with the Agents and the Lenders that from
and after the date hereof and until the termination of this Agreement in
accordance with Section 2.7 hereof, without the prior written consent of the
Majority Lenders:
7.1 Liens. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume, or suffer to exist any Lien of any
kind in any of the Collateral or their other assets other than Permitted
Liens.
7.2 Indebtedness. The Borrower shall not, and shall not permit
any of its Subsidiaries to, incur, assume, or suffer to exist any Indebtedness
except for (a) the Obligations; (b) Indebtedness listed on Schedule 5.22; (c)
other purchase money Indebtedness or unsecured Indebtedness in an aggregate
principal amount which, when aggregated with the aggregate outstanding
principal amount of the Indebtedness on Schedule 5.22 which is not
Subordinated Debt, does not exceed $3,500,000; and (d) the Subordinated Debt.
7.3 Asset Sales. The Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, lease, transfer or otherwise dispose of any
or all of the Collateral or any interest therein or any of their other assets
other than (a) the sale of Inventory in the ordinary course of business; and
(b) the sale of other assets no longer used or usable in the business of the
Borrower or such Subsidiary and which have a value which does not exceed
$250,000 in the aggregate for all such assets so sold.
7.4 Guaranties. The Borrower shall not, and shall not permit
any of its Subsidiaries to, Guarantee the obligations of any other Person
except (a) pursuant to the Master Subsidiary Guaranty and the Intercompany
Guaranties and (b) by endorsement of negotiable instruments for deposit or
collection and similar transactions in the ordinary course of business.
7.5 Investments and Acquisitions. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Investment or
Acquisitions except for the following:
(a) The Borrower may make Intercompany Loans to any Subsidiary
of the Borrower pursuant to an Intercompany Loan and Security Agreement, in
accordance with the terms of such Intercompany Loan and Security Agreement,
for the working capital purposes of such Subsidiary; provided, that, as a
condition to the making of any such advance to a Subsidiary pursuant to an
Intercompany Loan Agreement, all requirements of Section 2.4 hereof are
satisfied to the satisfaction of the Administrative Agent and the Collateral
Agent; provided, further, that at the time of each such Intercompany Loan,
both before and after giving effect thereto, there does not exist a Default or
an Event of Default hereunder.
(b) Borrower or any Subsidiary of Borrower may make intercompany
loans to other Subsidiaries of Borrower other than out of proceeds from Loans.
The Borrower acknowledges and agrees that, without limiting any right of
approval granted to the Agents or the Lenders or any of them elsewhere in this
Agreement or the Loan Documents, any approval to an Acquisition required of
the Majority Lenders may be given or withheld by the Majority Lenders in their
discretion. The Agents and the Lenders agree to respond to any request by the
Borrower for approval of any proposed Acquisition as promptly as practical
after receiving all pertinent information regarding such proposed Acquisition
and the completion of all due diligence deemed necessary by the Lenders in
order to evaluate such Acquisition in a manner consistent with prudent banking
standards.
7.6 Prohibition of Fundamental Changes. The Borrower shall not,
and shall not permit any of its Subsidiaries to, enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) or make any substantial
change in the basic type of business conducted by the Borrower or such
Subsidiary as of the date hereof except that:
(a) The Borrower may merge with any Person to consummate an
Acquisition permitted by, or consented to by the Majority Lenders pursuant to,
Section 7.5 hereof; provided, however, that (i) the Borrower is the
corporation surviving such merger and (ii) there then exists no Default or
Event of Default nor any event or conditions which, with the consummation of
such merger, would constitute a Default or Event of Default.
(b) Any Subsidiary of the Borrower may be merged or consolidated
with or into: (i) the Borrower if the Borrower shall be the continuing or
surviving corporation; or (ii) any other Person to consummate an Acquisition
permitted, or consented to by the Majority Lenders pursuant to, by Section 7.5
hereof; provided that, after giving effect to such merger or consolidation,
the Person surviving the merger or consolidation is a wholly-owned Subsidiary
of Borrower; or (iii) any other Subsidiary; provided that if any such
transaction shall be between a Subsidiary and a wholly-owned Subsidiary, the
wholly-owned Subsidiary shall be the continuing or surviving corporation;
(c) Any wholly-owned Subsidiary of Borrower may be dissolved
into its parent corporation.
7.7 Issuance of Stock. The Borrower shall not, and shall not
permit any of its Subsidiaries to, issue any shares of Capital Stock or other
ownership interests in the Borrower or any of its Subsidiaries, except that
the Borrower may issue (a) shares of common stock of a class currently
authorized by Borrower's Certificate of Incorporation; (b) shares of Series B
Preferred Stock of the Borrower; and (c) additional shares of Borrower's
Series A Preferred Stock as dividends on outstanding shares of Series A
Preferred Stock as provided in the terms of said Series A Preferred Stock as
in effect on the date hereof.
7.8 Fiscal Year. The Borrower shall not, and shall not permit
any of its Subsidiaries to, change its fiscal year end from December 31.
7.9 ERISA. The Borrower shall not, and shall not permit any of
its Subsidiaries to, take, or fail to take, or permit any ERISA Affiliate to
take, or fail to take, any action with respect to a Plan including, but not
limited to, (a) amending any Plan, (b) terminating or withdrawing from any
Plan, or (c) incurring an amount of unfunded benefit liabilities, as defined
in Section 4001(a)(18) of ERISA, where such action or failure could have a
Material Adverse Effect, result in a Lien on the property of the Borrower or
any of its Subsidiaries or require the Borrower or any of its Subsidiaries to
provide any security.
7.10 Relocations; Use of Name. The Borrower shall not, and shall
not permit any of its Subsidiaries to, relocate its executive offices, open
new places of business or relocate existing places of business; maintain any
Collateral or records with respect to Collateral at any other locations than
those locations presently kept or maintained, as set forth on Schedule 5.15
hereto; or use any corporate name (other than its own) or any fictitious name,
in each case, except upon thirty (30) days prior written notice to the
Collateral Agent and after the delivery to the Collateral Agent of financing
statements, if required by the Collateral Agent, in form satisfactory to the
Collateral Agent.
7.11 Arm's-Length Transactions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, the purchase, sale or exchange of property or the
rendering of any service or the payment of management or other service fees,
with any Affiliate except in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms which are fully disclosed to the Administrative
Agent and the Lenders in writing and which are no less favorable to the
Borrower than those which would prevail in a comparable arm's-length
transaction with a Person not an Affiliate.
7.12 Amendments. The Borrower shall not (a) amend, supplement or
otherwise modify the Preferred Stock and Warrant Purchase Agreement or the
Subordinated Seller Notes or (b) prepay any Subordinated Debt; provided,
however, that Borrower may prepay not more than $11,000,000 of Subordinated
Seller Notes concurrently with the closing of a offering of its common stock,
registered under the Securities Act of 1933, as amended, resulting in cash
proceeds, net of underwriter commissions and discounts, to the Company of not
less than $80,000,000.
8. FINANCIAL COVENANTS
The Borrower hereby covenants with the Agents and the Lenders that from
and after the date hereof and until the termination of this Agreement in
accordance with Section 2.7 hereof unless the Majority Lenders otherwise
consent in writing:
8.1 Net Worth. The Borrower shall maintain a Net Worth at all
times of not less than the sum of (i) $6,427,526, plus (ii) one hundred
percent (100%) of the amount by which the Borrower's shareholders' equity is
increased as a result of the issuance of equity securities, plus (iii)
seventy-five percent (75%) of Net Income from the period beginning on January
1, 1998 through the date of determination.
8.2 Leverage Ratio. Borrower and its consolidated Subsidiaries
shall maintain, on a consolidated basis, as of the end of each fiscal quarter
of Borrower during the applicable periods set forth below a Leverage Ratio for
each such quarter of not greater than the ratio set forth below opposite the
applicable period during which such quarter occurs:
Applicable Period Ratio
Effective Date - 06/30/98 6.0:1.0
07/01/98 -06/30/99 5.5:1.0
At all times thereafter 5.0:1.0
8.3 Senior Debt Leverage Ratio. Borrower and its consolidated
Subsidiaries shall maintain, on a consolidated basis, as of the end of each
fiscal quarter of Borrower during the applicable periods set forth below a
Senior Debt Leverage Ratio for each such quarter of not greater than the ratio
set forth below opposite the applicable period during which such quarter
occurs:
Applicable Period Ratio
Effective Date - 06/30/98 4.0:1.0
07/01/98 - 06/30/99 3.5:1.0
At all times thereafter 3.0:1.0
8.4 Interest Coverage Ratio. Borrower and its consolidated
Subsidiaries shall maintain, on a consolidated basis, as of the end of each
fiscal quarter of Borrower during the applicable periods set forth below, an
Interest Coverage Ratio for such fiscal quarter of not less than the ratio set
forth below opposite each such applicable period:
Applicable Period Ratio
Effective Date - 06/30/98 2.00:1.00
07/01/98 - 06/30/99 2.50:1.00
07/01/98 - 12/31/00 2.75:1:00
At all times thereafter 3.00:1.00
8.5 Dividends. Neither the Borrower nor any of its Subsidiaries
shall declare or pay any dividends on, or make any distribution with respect
to, the shares of any class of their Capital Stock, or purchase, redeem,
acquire, defease or retire any shares of their Capital Stock, or take any
action having an effect equivalent to the foregoing except (i) Borrower may
declare and pay dividends to holders of Series A Preferred Stock payable
solely in additional shares of Series A Preferred Stock and (ii) any
Subsidiary of the Borrower may declare and pay dividends to the Borrower or to
any wholly-owned Subsidiary of the Borrower.
9. EVENTS OF DEFAULT
The occurrence of any of the following events or conditions shall
constitute an Event of Default hereunder:
9.1 Obligations. The Borrower shall fail to make any payments
of principal of or interest on any Loan or any other Obligation when due.
9.2 Misrepresentations. The Borrower or any of its Subsidiaries
shall make any representation or warranty in this Agreement or any of the
other Loan Documents or in any certificate or statement furnished at any time
hereunder or in connection with this Agreement or any of the other Loan
Documents which proves to have been untrue or misleading in any material
respect when made or furnished and which continues to be untrue or misleading
in any material respect.
9.3 Covenants. The Borrower or any of its Subsidiaries shall
default in the observance or performance of any covenant in Article 6 hereof
(other than Section 6.8 hereof) applicable to the Borrower or such Subsidiary
and such default continues for thirty (30) days after notice thereof.
9.4 Other Covenants. The Borrower or any of its Subsidiaries
shall default in observance or performance of any other covenant applicable to
the Borrower or such Subsidiary under this Agreement or any of the other Loan
Documents.
9.5 Other Debts. (a) The Borrower or any of its Subsidiaries
shall fail to pay any principal of or premium or interest on any of its
Indebtedness, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace or cure period, if any,
specified in the agreement, mortgage, indenture or instrument relating to such
Indebtedness; or (b) any other event shall occur or condition shall exist
under any agreement, mortgage, indenture or instrument relating to any such
Indebtedness and shall continue after the applicable grace or cure period, if
any, specified in such agreement, mortgage, indenture or instrument, if the
effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (c) any such
Indebtedness shall be accelerated or otherwise declared to be due and payable
prior to the stated maturity thereof, or (d) any such Indebtedness shall be
required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Indebtedness shall be required to be made, in each
case prior to the stated maturity thereof.
9.6 Tax Lien. A notice of Lien, levy or assessment is filed of
record with respect to all or any assets of the Borrower or any of its
Subsidiaries by the United States or any other Governmental Authority,
including, without limitation, the PBGC, which adversely affects the priority
of the Liens granted to the Collateral Agent hereunder or under any of the
other Loan Documents.
9.7 ERISA. The occurrence of any of the following events: (a)
the happening of a Reportable Event with respect to any Plan; (b) the
disqualification or involuntary termination of a Plan for any reason; (c) the
voluntary termination of any Plan while such Plan has a funding deficiency (as
determined under Section 412 of the Code); (d) the appointment of a trustee by
an appropriate United States district court to administer any such Plan; (e)
the institution of any proceedings by the PBGC to terminate any such Plan or
to appoint a trustee to administer any such Plan; (f) the failure of the
Borrower to notify the Administrative Agent promptly upon receipt by the
Borrower or any of its ERISA Affiliates of any notice of the institution of
any proceeding or other actions which may result in the termination of any
such Plan.
9.8 Voluntary Bankruptcy. The Borrower or any of its
Subsidiaries shall: (a) file a voluntary petition or assignment in bankruptcy
or a voluntary petition or assignment or answer seeking liquidation,
reorganization, arrangement, readjustment of its debts, or any other relief
under the Bankruptcy Code, or under any other act or law pertaining to
insolvency or debtor relief, whether State, Federal, or foreign, now or
hereafter existing; (b) enter into any agreement indicating consent to,
approval of, or acquiescence in, any such petition or proceeding; (c) apply
for or permit the appointment, by consent or acquiescence, of a receiver,
custodian or trustee of itself or themselves or for all or a substantial part
of its or their property; (d) make an assignment for the benefit of creditors;
or (e) be unable or shall fail to
pay its or their debts generally as such debts become due, admit in writing
its or their inability or failure to pay its or their debts generally as such
debts become due, or otherwise cease to be Solvent.
9.9 Involuntary Bankruptcy. There occurs (a) a filing or
issuance against the Borrower or any of its Subsidiaries an involuntary
petition in bankruptcy or seeking liquidation of the Borrower or such
Subsidiary, reorganization, arrangement, readjustment of its or their debts or
any other relief under the Bankruptcy Code, or under any other act or law
pertaining to insolvency or debtor relief, whether State, Federal or foreign,
now or hereafter existing and either such proceeding shall continue in effect
for a period of sixty (60) days or more or an order for relief against the
Borrower or any of its Subsidiaries shall be entered therein; (b) the
involuntary appointment of a receiver, liquidator, custodian or trustee of the
Borrower or any of its Subsidiaries or for all or a substantial part of its or
their property; or (c) the issuance of a warrant of attachment, execution or
similar process against all or any substantial part of the property of the
Borrower or any of its Subsidiaries.
9.10 Suspension of Business. The suspension of the transaction
of the usual business of the Borrower or any of its Subsidiaries or the
dissolution of the Borrower.
9.11 Judgments. Any judgment, decree or order for the payment of
money which, when aggregated with all other judgments, decrees or orders for
the payment of money pending against the Borrower or any of its Subsidiaries
exceeds the sum of One Hundred Thousand Dollars ($100,000), shall be rendered
against the Borrower or any of its Subsidiaries and remain unsatisfied and in
effect for a period of sixty (60) consecutive days or more without being
vacated, discharged, satisfied or stayed or bonded pending appeal.
9.12 RICO. The Borrower, any of its Subsidiaries, or any of
their respective directors, shareholders or executive officers shall be
indicted under the Racketeer Influenced and Corrupt Organizations Act of 1970
(18 U.S.C. Section 1961 et seq.) or the Majority Lenders otherwise reasonably
believe in good faith that all or any portion of the Borrower's or any of its
Subsidiaries' assets are subject to forfeiture pursuant to Applicable Law.
9.13 Failure of Security. At any time (a) Liens in favor of the
Collateral Agent contemplated by the Loan Documents shall, at any time, for
any reason (except by reason of an affirmative act or omission of the
Collateral Agent), be invalidated or otherwise cease to be in full force and
effect; (b) such Liens shall be subordinated or shall not have the priority
contemplated by this Agreement or the other Loan Documents; or (c) the
Borrower or other Borrower under any such Loan Document seeks to repudiate its
or his obligations thereunder.
9.14 Guaranty. At any time, for any reason other than the
consent of the Majority Lenders, any guaranty of the Obligations ceases to be
in full force and effect in any material respect or guarantor thereunder seeks
to repudiate its obligations thereunder and the Liens intended to be created
thereby or in connection therewith are, or such guarantor seeks to render such
Liens, invalid and unperfected.
9.15 Intercompany Loan Documents. There shall occur any event of
default under any one or more of the Intercompany Loan and Security Agreements
or Intercompany Guaranties or any other Intercompany Loan Document, or the
Borrower shall amend, modify, or otherwise change any Intercompany Loan and
Security Agreement, Intercompany Guaranty or any other Intercompany Loan
Document, fail to exercise any of its rights, privileges or option thereunder,
release any party thereto from the performance of such party's obligations
thereunder, or grant any waiver, consent or indulgence thereunder to any other
party thereto, except where such amendment, modification or change would not
have an adverse effect upon the Collateral Agent's rights therein.
9.16 Management. Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx cease to be
the chief executive officer and president, respectively, of the Borrower and
the vacancy so created is not filled by another Person reasonably acceptable
to the Majority Lenders.
9.17 Change of Control. Either (a) a Person or "group" (within
the meaning of the Securities Exchange Act of 1934), other than Xxxxxx X.
Xxxxx and Xxxxx X. Xxxxx, acquires or obtains beneficial ownership of
securities (including options) of the Borrower representing a percentage of
the ordinary voting power of the Borrower that is greater than the percentage
of the ordinary voting power represented by the shares of Capital Stock owned,
beneficially and of record, with power to vote, by Xxxxxx X. Xxxxx and Xxxxx
X. Xxxxx, or (b) there shall occur a change in the composition of the Board of
Directors of the Borrower such that the current directors (or directors
designated or approved by such directors) shall not have a majority of the
ordinary voting power of the Borrower.
9.18 Exercise of Put Option. The Borrower (a) shall default in
the observance or performance of any covenant applicable to Borrower under the
Preferred Stock and Warrant Purchase Agreement, and (b) such default results
in the exercise of or an attempt at exercising any Put Option (as such term is
defined in Section 4.05 of the Stockholder Agreement).
10. REMEDIES
Upon the occurrence or existence of any Event of Default, and during the
continuation thereof, without prejudice to the rights of the Agents or the
Lenders to enforce their claims against the Borrower for damages or failure by
the Borrower to fulfill any of the obligations hereunder, the Agents and the
Lenders shall have the following rights and remedies, in addition to any other
rights and remedies available to the Agents and the Lenders at law, in equity
or otherwise:
10.1 Default Rate. At the election of the Administrative Agent,
evidenced by written notice to the Borrower, the outstanding principal balance
of the Obligations, and to the extent permitted by Applicable Law, accrued and
unpaid interest thereon, shall bear interest at the Default Rate until paid in
full.
10.2 Termination; Acceleration of the Obligations. In the event
of an Event of Default set forth in Sections 9.8 or 9.9 hereof, the Commitment
shall automatically and immediately terminate and in the event of any other
Event of Default, the Majority Lenders, at their option, may terminate the
Commitment, whereupon in either case all of the Obligations shall become
immediately due and payable, without presentment, demand, protest, notice of
non-payment or any other notice required by law relative thereto, all of which
are hereby expressly waived by the Borrower, anything contained herein to the
contrary notwithstanding.
10.3 Set-Off. The right of each Lender to set-off, without
notice to the Borrower or any of its Subsidiaries, any and all deposits at any
time credited by or due from such Lender to the Borrower or such Subsidiary,
whether in a general or special, time or demand, final or provisional account
or any other account or represented by a certificate of deposit and whether or
not unmatured or contingent against any or all of the Obligations of the
Borrower or such Subsidiary, now existing or hereafter arising, whether or not
such Lender shall have made any demand under this Agreement or any of the Loan
Documents.
10.4 Rights and Remedies of a Secured Party. All of the rights
and remedies of a secured party under the UCC or under other Applicable Law,
all of which rights and remedies shall be cumulative, and none of which shall
be exclusive, to the extent permitted by law, in addition to any other rights
and remedies contained in this Agreement, and in any of the other Loan
Documents.
10.5 Take Possession of Collateral. The right of the Collateral
Agent's to (a) enter upon the premises of the Borrower or any of its
Subsidiaries, or any other place or places where the Collateral is located and
kept, through self-help and without judicial process, without first obtaining
a final judgment or giving the Borrower or any of its Subsidiaries notice and
opportunity for a hearing on the validity of the Collateral Agent's claim and
without any obligation to pay rent to the Borrower or any of its Subsidiaries,
and remove the Collateral therefrom to the premises of the Collateral Agent or
any agent of the Collateral Agent, for such time as the Collateral Agent may
desire, in order to effectively collect or liquidate the Collateral; and/or
(b) require the Borrower to assemble the Collateral and make it available to
the Collateral Agent at a place to be designated by the Collateral Agent, in
its sole discretion.
10.6 Sale of Collateral. The right of the Collateral Agent to
sell or to otherwise dispose of all or any of the Collateral, at public or
private sale or sales, with such notice as may be required by law, in lots or
in bulk, for cash or on credit, all as the Collateral Agent, in its sole
discretion, may deem advisable. Such sales may be adjourned from time to time
with or without notice. The Collateral Agent shall have the right to conduct
such sales on the premises of the Borrower or any of its Subsidiaries or
elsewhere and shall have the right to use the premises of the Borrower or any
of its Subsidiaries, without charge for such sales for such time or times as
the Collateral Agent may see fit. The Collateral Agent is hereby granted a
license or other right to use, without charge, the labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks,
service marks and advertising matter, or any property of a similar nature,
whether owned by the Borrower or with respect to which the Borrower has rights
under license, sublicense or other agreements, as it pertains to the
Collateral, in preparing for sale (including, without limitation, finishing
any unfinished Inventory of the Borrower), advertising for sale and selling
any Collateral and the rights of the Borrower under all licenses and all
franchise agreements shall inure to the benefit of the Agents and the Lenders.
The Collateral Agent shall have the right to sell, lease or otherwise dispose
of the Collateral, or any part thereof, for cash, credit or any combination
thereof, and the Collateral Agent or any Lender may purchase all or any part
of the Collateral at public or, if permitted by law, private sale and, in lieu
of actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale of any
Collateral shall be applied first to the costs, expenses and attorneys' fees
and expenses incurred by the Collateral Agent for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of
the Collateral; second to interest due upon any of the Obligations; and third
to the principal of the Obligations. Any remaining proceeds shall be remitted
to the Borrower or other Person legally entitled thereto. If any deficiency
shall arise, the Borrower shall remain liable to the Lenders therefor.
10.7 Judicial Proceedings. The right to proceed by an action or
actions at law or in equity to obtain possession of the Collateral, to recover
the Obligations and amounts secured hereunder or to foreclose under this
Agreement and sell the Collateral or any portion thereof, pursuant to a
judgment or decree of a court or courts of competent jurisdiction, all without
the necessity of posting any bond.
10.8 Actions in Respect of the Letters of Credit Upon Default.
If any Event of Default shall have occurred and be continuing, the LC Issuer
may, irrespective of whether the Agents or the Lenders are taking any of the
other actions described in this Article 10 or otherwise, make demand upon the
Borrower to, and forthwith upon such demand the Borrower will, pay to the LC
Issuer in accordance with Section 2.8, for deposit in a cash collateral
account, an amount equal to the aggregate face amount of all Letters of Credit
then outstanding. If at any time the LC Issuer determines that any funds held
in any such cash collateral account are subject to any right or claim of any
Person other than the LC Issuer or that the total amount of such funds is less
than the aggregate face amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the LC Issuer, pay to the LC Issuer, as additional
funds to be deposited and held in such cash collateral account, an amount
equal to the excess of (a) such aggregate face amount of all outstanding
Letters of Credit over (b) the total amount of funds, if any, then held in
such cash collateral account that the LC Issuer determines to be free and
clear of any such right and claim.
10.9 Notice. Any notice required to be given by the Collateral
Agent of a sale, lease, or other disposition of the Collateral or any other
intended action by the Lender, given to the Borrower in the manner set forth
in Section 13.7 below, at least ten (10) days prior to such proposed action,
shall constitute commercially reasonable and fair notice thereof to the
Borrower.
10.10 Appointment of the Collateral Agent as the Borrower's
Lawful
Attorney. The Borrower irrevocably designates, makes, constitutes and
appoints the Collateral Agent (and all persons designated by the Collateral
Agent) as the true and lawful attorney of the Borrower and the Collateral
Agent or the Collateral Agent's Agent, may, without notice to the Borrower and
at such time or times following an Event of Default as the Collateral Agent or
said Collateral Agent, in its sole discretion, may determine, in the name of
the Borrower or in the Collateral Agent's name:(a) demand payment of the
Accounts; (b) enforce payment of the Accounts, by legal proceedings or
otherwise; (c) exercise all of the rights and remedies of the Borrower with
respect to the collection of the Accounts; (d) settle, adjust, compromise,
extend or renew the Accounts; (e) settle, adjust or compromise any legal
proceedings brought to collect the Accounts; (f) notify the postal authorities
to change the address and delivery of mail addressed to the Borrower to such
address as the Collateral Agent may designate; (g) if permitted by Applicable
Law, sell or assign the Accounts upon such terms, for such amounts and at such
time or times as the Collateral Agent deems advisable; (h) discharge and
release the Accounts; (i) take control, in any manner, of any item of payment
or proceeds on the Accounts; (j) prepare, file and sign the names of the
Borrower on a Proof of Claim in Bankruptcy or similar document against any
Account Debtor; (k) prepare, file and sign the names of the Borrower on any
notice of Lien, assignment or satisfaction of Lien or similar document in
connection with the Accounts; (l) do all acts and things necessary, in the
Collateral Agent's sole discretion, to fulfill the obligations of the Borrower
under this Agreement; (m) endorse the name of the Borrower upon any of the
items of payment or proceeds on any Account, and deposit the same to the
account of the Lenders on account of the Obligations; (n) endorse the name of
the Borrower upon any chattel paper, document, instrument, invoice, freight
xxxx, xxxx of lading or similar document or agreement relating to the Accounts
or Inventory; (o) use the stationery of the Borrower and sign the name of the
Borrower to verifications of the Accounts and notices thereof to Account
Debtors; and (p) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Accounts and Inventory to which the Borrower has access.
11. CONDITIONS PRECEDENT
11.1 Conditions Precedent to Effectiveness. Notwithstanding any
other provision of this Agreement, it is understood and agreed that this
Agreement shall not be effective unless and until the following conditions
have been met, to the sole and complete satisfaction of the Lenders, the
Agents and their respective counsel:
(a) Litigation. No action, suit, litigation, proceeding,
investigation, regulation or legislation, including, but not limited to, any
arising under the Environmental Laws, shall have been instituted, threatened
or proposed before any court, governmental agency or legislative body which
(i) seeks to enjoin, restrain, or prohibit, or to obtain substantial
damages in respect of, or which is related to or arises out of this Agreement
or the making of any Loan hereunder; or (ii) if decided adversely to the
Borrower or any of its Subsidiaries may result in a Material Adverse Effect.
(b) -Equity Transaction. The Agents shall have received
evidence satisfactory to them that Borrower has received, on or immediately
prior to the Effective Date, not less than $5,000,000 in cash proceeds from
the sales of shares of Borrower's common stock and/or Series B Preferred
Stock.
(c) Subordinated Seller Notes. The Agents shall have received
evidence satisfactory to them that any and all promissory notes issued on or
prior to the Effective Date in connection with Acquisitions are unsecured and
have been subordinated in right of payment to the Obligations on terms and
conditions satisfactory to the Agents and the Lenders and otherwise are on
terms and conditions satisfactory to the Lenders and the Agents.
(d) Financial Reports. The Agents shall have received each of
the following: (i) the Audited Financial Statements and (ii) the Projections.
(e) Loan Conditions. All conditions precedent set forth in
Section 11.2 hereof have been fulfilled.
(f) Fee Letter. All amounts required to be paid on the
Effective Date pursuant to the Fee Letter have either been paid or
arrangements for the payment thereof have been made to the satisfaction of the
Administrative Agent and the Collateral Agent.
(g) Documentation. The Administrative Agent and the Lenders
shall have received the following documents, each dated the Effective Date
(unless otherwise specified), each duly executed and delivered to the
Administrative Agent and the Lenders, and each to be satisfactory in form and
substance to the Administrative Agent and their respective and its counsel:
(i) this Agreement;
(ii) the Notes;
(iii) the Amendment to the Master Agreements, executed by
each of the Subsidiaries of Borrower;
(iv) an Amended & Restated Collateral Assignment of Rights
Agreement executed by the Borrower in favor of the Collateral Agent with
respect to the Intercompany Loan Documents;
(v) a certificate signed by the President or chief
financial officer of the Borrower certifying that (A) the representations and
warranties set forth in Article 5 hereof are true and correct in all respects
on and as of such date with the same effect as though made on and as of such
date; (B) the Borrower is on such date in compliance with all the terms and
conditions set forth in this Agreement on its part to be observed and
performed; and (C) on the Effective Date, after giving effect to the making of
the initial Loan, no Default or Event of Default has occurred or is
continuing;
(vi) a certificate executed by the President or chief
financial officer of the Borrower certifying as to the Equipment owned by the
Borrower and the locations at which such Equipment is maintained;
(vii) a certificate of the Secretary of the Borrower
certifying (A) that attached thereto is a true and complete copy of the
By-Laws of the Borrower, as in effect on the date of such certification; (B)
that attached thereto is a true and complete copy of Resolutions adopted by
the Board of Directors of the Borrower, authorizing the execution, delivery
and performance of this Agreement and the other Loan Documents; and (C) as to
the incumbency and genuineness of the signatures of the officers of the
Borrower executing this Agreement or any of the other Loan Documents;
(viii) a certificate of the Secretary of each
Subsidiary the Borrower certifying (A) that attached thereto is a true and
complete copy of the By-Laws of each Subsidiary of the Borrower, as in effect
on the date of such certification; (B) that attached thereto is a true and
complete copy of Resolutions adopted by the Board of Directors of each
Subsidiary of the Borrower, authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents; and (C) as to the
incumbency and genuineness of the signatures of the officers of each
Subsidiary of the Borrower executing this Agreement or any of the other Loan
Documents;
(ix) a Borrowing Availability Certificate completed and
signed by the chief financial officer of the Borrower and satisfactory to the
Administrative Agent;
(x) a copy of the Articles or Certificate of Incorporation
of the Borrower and its Subsidiaries, and all restatements thereof or
amendments thereto, certified as of a date close to the Effective Date by the
Secretary of State of the State of each Person's incorporation;
(xi) good standing certificates for the Borrower, certified
as to a date close to the Effective Date, issued by the Secretaries of State
of those states listed on Schedule 5.1 hereof in respect of Borrower;
(xii) good standing certificates for the Subsidiaries of
the
Borrower, certified as of a date close to the Effective Date, and issued in
each case by the Secretary of State of the states set forth on Schedule 5.15
hereto.
(xiii) the written opinion of Xxxxxxx & Berlin,
Chartered, counsel to the Borrower and its Subsidiaries, in the form attached
hereto as Exhibit L, as to the transactions contemplated by this Agreement;
(xiv) such other documents, instruments and agreements with
respect to the transactions contemplated by this Agreement, in each case in
such form and containing such additional terms and conditions as may be
satisfactory to the Administrative Agent, the Collateral Agent and the
Majority Lenders, containing, without limitation, representations and
warranties which are customary and usual in such documents.
11.2 All Loans. The obligation of each Lender to make any Loan
hereunder (including the initial Loan) and to issue any Letter of Credit
(including the initial Letter of Credit) shall be subject to fulfillment of
the following conditions:
(a) No Injunction. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to
obtain substantial damages in respect of, or which is related to or arises out
of this Agreement, such Loan or such Letter of Credit or which in the sole
discretion of the Administrative Agent and the Majority Lenders, would make it
inadvisable to make such Loan or such Letter of Credit;
(b) No Material Adverse Change. Since December 31, 1997, there
shall not have occurred any material adverse change in the assets,
liabilities, business, operations or condition (financial or otherwise) of the
Borrower, or any event, condition, or state of facts which would be expected
materially and adversely to affect the prospects of the Borrower or any of its
Subsidiaries subsequent to the making of such Loan to the Borrower, as
determined by the Administrative Agent and the Lenders in their sole
discretion.
(c) Solvency. The Lenders and the Administrative Agent shall
be satisfied that, giving effect to the making of such Loan, or the issuance
of such Letter of Credit, the Borrower and each of its Subsidiaries will be
Solvent.
(d) No Default or Event of Default. There shall exist no
Default or Event of Default or any event or condition which, with the making
of such Loan or the issuance of such Letter of Credit, would constitute a
Default or Event of Default.
(e) Representations and Warranties. All representations and
warranties made by the Borrower and its Subsidiaries hereunder shall be true
and correct in all respects as of the date of such Loan or Letter of Credit
with the same force and effect as if made on and as of such date.
(f) Regulatory Restrictions. Neither the Borrower nor any of
its Subsidiaries shall be subject to any statute, rule, regulation, order,
writ or injunction of any Governmental Authority which would restrict or
hinder the conduct of the Borrower's or such Subsidiary's business as
conducted or proposed to be conducted and which could have a Material Adverse
Effect. In addition, the Administrative Agent, Collateral Agent and the
Majority Lenders shall have reasonably satisfied itself that the Borrower and
each of its Subsidiaries is in compliance with all Applicable Laws of any
Governmental Authority the failure to comply with which, in the opinion of the
Lender, could have a Material Adverse Effect.
(g) Regulatory Approvals. The Borrower shall have received all
required regulatory and other approvals or consents with regard to this
Agreement and the other Loan Documents, such Loan or in respect of any
Collateral being pledged in connection with such Loan.
11.3 Delay in Satisfaction of Conditions Precedent. If the
Lenders make a Loan or issue a Letter of Credit prior to the fulfillment of
any condition precedent set forth in this Article 11, the making of such Loan
or issuance of such Letter of Credit shall constitute only an extension of
time for the fulfillment of such condition and not a waiver thereof. The
failure of the Borrower, for any reason, to satisfy or cause to be satisfied
any such condition precedent within thirty (30) days after the date thereof
shall constitute an Event of Default for all purposes under this Agreement and
the other Loan Documents, unless such failure is waived in writing by the
Lenders.
12. THE AGENT
12.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes each of the Agents to each act as its
agent hereunder with such powers as are specifically delegated to such Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. No Agent (which term as used in this sentence
and in Section 12.5 hereof and the first sentence of Section 12.6 hereof shall
include reference to its Affiliates and its own and its Affiliates' officers,
directors, employees and agents): (a) shall have any duties or
responsibilities except those expressly set forth in this Agreement with
respect to such Agent, and shall not by reason of this Agreement be a trustee
for any Lender; (b) shall be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or any
of the other Loan Documents, or in any certificate or other instrument,
document or agreement referred to or provided for in, or received by any of
them under, this Agreement or any of the other Loan Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, any Note or any of the other Loan Documents or for any failure
by either Borrower or any other Person to perform any of its obligations
hereunder or thereunder; (c) subject to Section 12.3 hereof, shall be required
to initiate or conduct any litigation or collection proceedings hereunder; and
(d) shall be responsible for any action taken or omitted to be taken by it
hereunder or under any other agreement, document or instrument referred to or
provided for herein or in connection herewith, except for its own gross
negligence or willful misconduct. The Administrative Agent and Collateral
Agent may each employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or transfer
complying with the terms and conditions of Section 13.3 hereof.
12.2 Reliance by Agents. Each Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof
by telephone, telex, facsimile, telegram or cable) 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 such Agent. As to any
matters not expressly provided for by this Agreement, each Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Majority Lenders (unless the
instructions of or consent of all of the Lenders is required hereunder), and
such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders; provided, however, no Agent shall be
required to take any action which (a) such Agent reasonably believes will
expose it to personal liability unless such Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (b) is
contrary to this Agreement, the Notes, the other Loan Documents or Applicable
Law.
12.3 Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on Loans or of
Commitment Fees) unless the Administrative Agent has received notice from a
Lender or the Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default." In the event that the
Administrative Agent receives such a notice of the occurrence of a Default or
Event of Default, the Administrative Agent shall give prompt notice thereof to
the Lenders (and shall give each Lender prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section 12.7 hereof)
take such action with respect to such Default or Event of Default as shall be
directed by the Majority Lenders (unless the directions of or consent of all
of the Lenders is required hereunder), provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of the Lenders.
12.4 Rights as a Lender. With respect to its Commitment and the
Loans made by it, CCF (and any successor acting as Administrative Agent or
Collateral 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 Administrative Agent and/or Collateral Agent,
and the term "the Lender" or "the Lenders" shall, unless the context otherwise
indicates, include each in its individual capacity. CCF (and any successor
acting as Administrative Agent or Collateral Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Borrower (and any of its Affiliates) as if it were not acting as the
Administrative Agent or Collateral Agent, and CCF and its Affiliates may
accept fees and other consideration from the Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to the Lenders.
12.5 Indemnification. The Lenders agree to indemnify the
Administrative Agent, Collateral Agent, Co-Agent and the LC Issuer (to the
extent not reimbursed under Sections 13.5 or 3.10 hereof, but without limiting
the obligations of the Borrower under said Sections 13.5 and 3.10), for their
respective Commitment Percentages of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Administrative Agent, Collateral Agent,
Co-Agent or the LC Issuer in any way relating to or arising out of this
Agreement or any other instruments, documents or agreements contemplated by or
referred to herein or the transactions contemplated hereby (including, without
limitation, the costs and expenses which the Borrower is are obligated to pay
under Section 13.5 hereof but excluding, unless an Event of Default has
occurred and is continuing, normal administrative costs and expenses of the
Administrative Agent, the Collateral Agent and the Co-Agent incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or of any such other instruments, documents or agreements,
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 party to be
indemnified. The obligations of the Lenders under this Section 12.5 shall
survive the termination of this Agreement.
12.6 Non-Reliance on Administrative Agent and the other Lenders.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent, the Collateral Agent, the Co-Agent, the LC Issuer or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and the Subsidiaries
of the Borrower and its own decision to enter into this Agreement and that it
will, independently and without reliance upon the Administrative Agent, the
Collateral Agent, the Co-Agent, the LC Issuer or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement. Neither the Administrative Agent, the Collateral Agent
nor the Co-Agent shall be required to keep itself informed as to the
performance or observance by the Borrower of this Agreement or any other
instrument, document or agreement referred to or provided for herein or to
inspect the properties or books of the Borrower. Except for notice, reports
and other documents and information expressly required to be furnished to the
Lenders by the Administrative Agent or the Collateral Agent hereunder, neither
the Administrative Agent, the Collateral Agent, any Co-Agent nor the LC Issuer
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of
the Borrower (or any of its Affiliates) which may come into the possession of
the Administrative Agent, the Collateral Agent, any Co-Agent nor the LC Issuer
or any of their respective Affiliates.
12.7 Failure to Act. Except for action expressly required of the
Administrative Agent, Collateral Agent, Co-Agent or LC Issuer hereunder, such
Administrative Agent, Collateral Agent, Co-Agent or LC Issuer, as applicable
shall in all cases be fully justified in failing or refusing to act hereunder
unless it shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 12.5 hereof against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
12.8 Resignation or Removal of an Agent.
(a) Subject to the appointment and acceptance of a successor Agent as
provided below, an Agent may resign at any time by giving notice thereof to
the Lenders and the Borrower, and an Agent may be removed at any time with
cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders and shall
have accepted such appointment with thirty (30) days after the retiring
Agent's giving of notice of resignation or the Majority Lender's removal of
the retiring Agent, the retiring Agent may, on behalf of the Lenders, appoint
a successor Agent, which shall be a bank which has a combined capital and
surplus of at least Three Hundred Million Dollars ($300,000,000). Upon the
acceptance of any appointment as Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's resignation
or removal hereunder as Agent, the provisions of this Section 12.8 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 an Agent.
(b) In the event that Applicable Law imposes any restrictions on the
identity of an agent such as the Administrative Agent or Collateral Agent or
requires the appointment of any co-agent in connection therewith, the
Administrative Agent or Collateral Agent, as the case may be, may, in its
discretion, for the purpose of complying with such restrictions, appoint one
or more subagents or co-agents hereunder. Any such subagent(s) or co-agent(s)
shall have the same rights, powers, privileges and obligations as the
Administrative Agent or Collateral Agent, as the case may be, and shall be
subject to and entitled to the benefits of all provisions of this Agreement
and the Loan Documents relative to such Agent. In addition to any rights of
the Majority Lenders set forth in subsection (a) above, any such subagent or
co-agent may be removed at any time by Agent which appointed such subagent or
co-agent.
12.9 Collateral Matters.
(a) Authority. Each Lender authorizes and directs the
Collateral Agent to enter into the Loan Documents relating to the Collateral
for the benefit of the Lenders. Each Lender agrees that any action taken by
the Collateral Agent or the Majority Lenders (or, where required by the
express terms of this Agreement, a greater proportion of the Lenders) in
accordance with the provisions of this Agreement or the other Loan Documents,
and the exercise by the Collateral Agent or the Majority Lenders (or, where so
required, such greater proportion) of the powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. Without
limiting the generality of the foregoing, the Collateral Agent shall have the
sole and exclusive right and authority to (i) act as the disbursing and
collecting agent for the Lenders with respect to all payments and collections
arising in connection with this Agreement and the Loan Documents relating to
the Collateral; (ii) execute and deliver each Loan Document relating to the
Collateral and accept delivery of each such agreement delivered by the
Borrower or any of its Subsidiaries; (iii) act as collateral agent for the
Lenders for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein, provided,
however, the Collateral Agent hereby appoints, authorizes and directs the
Lenders to act as collateral sub-agents for the Collateral Agent and the
Lenders for purposes of the perfection of all security interests and Liens
with respect to the Borrower's and its Subsidiaries' respective deposit
accounts maintained with, and cash and other property held by, such Lender;
(iv) manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or desirable to maintain the perfection and priority of
the security interest and Liens created or purported to be created by the Loan
Documents, and (vi) except as may be otherwise specifically restricted by the
terms of this Agreement or any other Loan Document, exercise all remedies
given to the Collateral Agent or the Lenders with respect to the Collateral
under the Loan Documents, Applicable Law or otherwise.
(b) Each Lender hereby directs, in accordance with the terms of
this Agreement, the Collateral Agent to release or to subordinate any Lien
held by the Collateral Agent for the benefit of the Lenders:
(i) against all of the Collateral, upon final and
indefeasible payment in full of the Obligations and termination of this
Agreement;
(ii) against any part of the Collateral sold or disposed of
by the Borrower or any of its Subsidiaries, if such sale or disposition is
permitted by Section 7.3 hereof or is otherwise consented to by the Majority
Lenders, as certified to the Collateral Agent by the Borrower in an Officer's
Certificate;
(iii) against any part of the Collateral constituting
property in which the Borrower owned no interest at the time the Lien was
granted or at any time thereafter; or
(iv) if approved, authorized or ratified in writing by the
Collateral Agent at the direction of Majority Lenders.
Each Lender hereby directs the Collateral Agent to execute and deliver or file
such termination and partial release statements and do such other things as
are necessary to release Liens to be released pursuant to Section 12.9(b)
hereof promptly upon the effectiveness of any such release.
(c) Each Lender hereby directs, in accordance with the terms of
this Agreement, the Collateral Agent to release any Subsidiary of Borrower
from any Guarantee provided by such Subsidiary in favor by the Collateral
Agent for the benefit of the Lenders:
(i) upon final and indefeasible payment in full of the
Obligations and termination of this Agreement;
(ii) upon the sale or other disposition of all of the
issued and outstanding shares of capital stock of such Subsidiary if such sale
or disposition is permitted by Section 7.3 hereof or is otherwise consented to
by the Majority Lenders, as certified to the Collateral Agent by the Borrower
in an Officer's Certificate;
(iii) if approved, authorized or ratified in writing by the
Collateral Agent at the direction of Majority Lenders.
Each Lender hereby directs the Collateral Agent to execute and deliver or file
such releases and do such other things as are necessary to release Guarantees
to be released pursuant to Section 12.9(c) hereof promptly upon the
effectiveness of any such release.
(d) Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by
Majority Lenders (as set for in Sections 12.9(b) or (c) hereof), each Lender
agrees to confirm in writing, upon request by the Borrower, the authority to
release Collateral conferred upon the Collateral Agent under clauses (i)
through (iv) of Section 12.9(b) hereof or the authority to release Guarantees
conferred upon the Collateral Agent under clause (i) through (iii) of Section
12.9(c) hereof. So long as no Default or Event of Default is then continuing,
upon receipt by the Collateral Agent of any such written confirmation from the
Majority Lenders of its authority to release any particular items or types of
Collateral, and in any event upon any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Agreement, and upon at least
five (5) Business Days prior written request by the Borrower, the Collateral
Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to
evidence the release of the Liens granted to the Collateral Agent for the
benefit of the Lenders herein or pursuant hereto upon such Collateral;
provided, that (i) the Collateral Agent shall not be required to execute any
such document on terms which, in the Collateral Agent's opinion, would expose
the Collateral Agent to liability or create any obligation or entail any
consequence other that the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of the Borrower in respect of)
all interests retained by the Borrower, including without limitation the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(e) The Collateral Agent shall have no obligation whatsoever to
the Lenders or to any other Person to assure that the Collateral exists or is
owned by the Borrower or any of its Subsidiaries or is cared for, protected or
insured or has been encumbered or that the Liens granted to the Collateral
Agent pursuant to this Agreement or any of the Loan Documents have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 12.9 or in any of the Loan
Documents, it being understood and agreed that in respect of the Collateral,
or in any act, omission or event related thereto, the Collateral Agent may act
in any manner it may deem appropriate, in its sole discretion, given its own
interest in the Collateral as one of the Lenders and that the Collateral Agent
shall have no duty or liability whatsoever to any Lender.
12.10 The Borrower Not a Beneficiary. The provisions of this
Article 12 are solely for the benefit of the Agents, the LC Issuer and the
Lenders and neither the Borrower nor any Subsidiary of the Borrower shall have
any right to rely on or enforce any of the provisions hereof. In performing
their functions and duties under this Agreement, the Agents shall act solely
as the Agents of the Lenders and do not assume and shall not be deemed to have
assumed any obligations or relationship of agency, trustee or fiduciary with
or for the Borrower or any Subsidiary of the Borrower.
13. MISCELLANEOUS
13.1 Waiver. Each and every right and remedy granted to the
Agents, the LC Issuer and the Lenders under this Agreement, the other Loan
Documents or any other document delivered hereunder or in connection herewith
or allowed them by law or in equity, shall be cumulative and may be exercised
from time to time. No failure on the part of the Agents, the LC Issuer or any
Lender to exercise, and no delay in exercising, any right or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Agents or any Lender of any right or remedy preclude any other or future
exercise thereof or the exercise of any other right or remedy. No waiver by
the Agents or the Lenders of any Default or Event of Default shall
constitute a waiver of any subsequent Default or Event of Default.
13.2 Survival. All representations, warranties and covenants
made herein shall survive the execution and delivery of all of the Loan
Documents. The terms and provisions of this Agreement shall continue in full
force and effect until the termination of this Agreement in accordance with
Section 2.7 hereof; provided, further, that the Borrower's obligations under
Sections 2.9(b), 3.9, 3.10, 13.5 and 13.13 shall survive the repayment of the
Obligations and the termination of this Agreement.
13.3 Assignments; Successors and Assigns.
(a) This Agreement is a continuing obligation and binds, and the
benefits hereof shall inure to, the Borrower, the Agents, the LC Issuer and
each Lender and their respective successors and assigns; provided, that the
Borrower may not transfer or assign any or all of its rights or obligations
hereunder without the prior written consent of all of the Lenders.
(b) Any Lender may, in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions
("Participants") participating interests in any Loans owing to such Lender,
any of the Notes held by such Lender, any Commitment held by such Lender
hereunder or any other interests of such Lender hereunder. The Borrower
agrees that each Participant shall be entitled to the benefits of Sections
2.9(b), 3.9, 3.10 and 13.13 hereof with respect to its participation; provided
that no Participant shall be entitled to receive any greater amount pursuant
to such Section than such Lender would have been entitled to receive in
respect of the amount of the participation transferred by such Lender to such
Participant had no such transfer occurred.
(c) Each Lender may, with the Administrative Agent's consent and in
accordance with Applicable Law, at any time assign, pursuant to an assignment
substantially in the form of Exhibit M attached hereto and incorporated herein
by reference, without the Borrower's consent to one or more banks having
unimpaired capital and surplus of Two Hundred Fifty Million Dollars
($250,000,000) or more or may assign with the Borrower's consent (which shall
not be unreasonably withheld) to any other financial institution (in either
case, "Eligible Assignees") all or any part of any Loans owing to such Lender,
any of the Notes held by such Lender, such Lender's reimbursement and other
rights and obligations in connection with any Letter of Credit issued
hereunder, the portion of the Commitment held by such Lender or any other
interest of such Lender hereunder; provided, however, that (i) unless Borrower
and the Administrative Agent consent otherwise, and except in the case of an
assignment to another Lender, any such partial assignment shall be in a
minimum principal amount of Five Million Dollars ($5,000,000) and (ii) each
such assignment by a Lender of its Loans, Notes, Commitment, or Letter of
Credit Obligations shall be made in such manner so that the same portion of
its Loans, Notes, Commitment, and Letter of Credit Obligations is assigned to
the respective assignee. The Borrower and the Lenders agree that to the
extent of any assignment the Assignee shall be deemed to have the same rights
and benefits with respect to the Borrower under this Agreement and any of the
Notes and any Letter of Credit as it would have had if it were a Lender
hereunder on the Effective Date and the assigning Lender shall be released
from its Commitment and other obligations hereunder, to the extent of such
assignment. Upon the making of an assignment, the assigning Lender shall pay
to the Administrative Agent an assignment fee of $3,000.
(d) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 13.3, any Lender may assign and
pledge all or any portion of its Loans and its Note to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
(e) The Borrower authorizes each Lender to disclose to any
Participant or Eligible Assignee ("Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Borrower or any of its Subsidiaries which has been delivered to such Lender by
the Borrower or the Administrative Agent pursuant to this Agreement or which
has been delivered to such Lender by the Borrower in connection with such
Lender's credit evaluation of the Borrower prior to entering into this
Agreement.
(f) Any Lender shall be entitled to have any Note held by it
subdivided in connection with a permitted assignment of all or any portion of
such Note and the respective Loans evidenced thereby pursuant to Section
13.3(c) above. In the case of any such subdivision, the new Note (the "New
Note") issued in exchange for a Note (the "Old Note") previously issued
hereunder (i) shall be substantially in the form of Exhibit F hereto, as
appropriate, (ii) shall be dated the date of such assignment, (iii) shall be
otherwise duly completed and (iv) shall bear a legend, to the effect that such
New Note is issued in exchange for such Old Note and that the indebtedness
represented by such Old Note shall not have been extinguished by reason of
such exchange. Without limiting the obligations of the Borrower under Section
13.5 hereof, the Lenders shall use reasonable best efforts to ensure that any
such assignment does not result in the imposition of any intangibles,
documentary stamp and other taxes, if any, which may be payable in connection
with the execution and delivery of any such New Note.
(g) Anything in this Section 13.3 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan
held by it hereunder to the Borrower or any of its respective Affiliates or
Subsidiaries without the prior written consent of each Lender.
13.4 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which when fully executed shall be an original, and
all of said counterparts taken together shall be deemed to constitute one and
the same agreement. Any signature page to this Agreement may be witnessed by
a telecopy or other facsimile of any original signature page and any signature
page of any counterpart hereof may be appended to any other counterpart hereof
to form a completely executed counterpart hereof.
13.5 Expense Reimbursement. The Borrower agrees to reimburse the
Administrative Agent, the Collateral Agent and the Co-Agent for all of their
respective expenses incurred in connection with the negotiation, preparation,
execution, delivery, modification, and enforcement of this Agreement, the
Notes and the other Loan Documents, including, without limitation, audit
costs, appraisal costs, the cost of searches, filings and filing fees, taxes
and the fees and disbursements of the Agents' counsel, and all costs and
expenses incurred by the Administrative Agent, Collateral Agent, the Co-Agent
and the Lenders (including, without limitation, attorneys' fees and
disbursements) to: (a) commence, defend or intervene in any court proceeding;
(b) file a petition, complaint, answer, motion or other pleading, or to take
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) relating to the Collateral, any Letter of Credit or this Agreement,
the Notes or any of the other Loan Documents; (c) protect, collect, lease,
sell, take possession of, or liquidate any of the Collateral; (d) attempt to
enforce any Lien in any of the Collateral or to seek any advice with respect
to such enforcement; and (e) enforce any of the Agents' and the Lenders'
rights to collect any of the Obligations. The Borrower also agrees to pay,
and to save harmless the Agents and the Lenders from any delay in paying, any
intangibles, documentary stamp and other taxes, if any, which may be payable
in connection with the execution and delivery of this Agreement, the Notes, or
any of the other Loan Documents, or the recording of any thereof, the issuance
of any Letter of Credit or in any modification hereof or thereof.
Additionally, the Borrower agrees to pay to the Lender on demand any and all
fees, costs and expenses which the Administrative Agent or such Lender pays to
a bank or other similar institution arising out of or in connection with (i)
the forwarding to the Borrower or any other Person, on behalf of the Borrower,
by the
Administrative Agent or such Lender of proceeds of any Loan and (ii) the
depositing for collection by the Administrative Agent and each Lender of any
check or item of payment received by or delivered to the Administrative Agent
or such Lender on account of the Obligations. All fees, costs and expenses
provided for in this Section 13.5 may, at the option of the Majority Lenders,
be charged as Loans to the loan account of the Borrower with the
Administrative Agent provided for in Section 2.3 hereof. The Borrower's
obligations under this Section 13.5 shall survive the termination of this
Agreement and the repayment of the Obligations.
13.6 Severability. If any provision of this Agreement or any of
the other Loan Documents or the application thereof to any party thereto or
circumstances shall be invalid, illegal or unenforceable to any extent, the
remainder of this Agreement or such Loan Document and the application of such
provisions to any other party thereto or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
13.7 Notices. Except as otherwise provided herein, all notices,
requests, demands and other communications under this Agreement shall be in
writing and shall be deemed to have been given or made when (a) delivered by
hand, (b) sent by telex or facsimile transmitter (with receipt confirmed),
provided that a copy is mailed by certified mail, return receipt requested, or
(c) when received by the addressee, if sent by Express Mail, Federal Express
or other overnight delivery service (receipt requested), in each case to the
appropriate addresses, telex numbers, facsimile numbers designated for a party
at the "Address for Notices" specified below its name on the signature pages
hereto or to such other addresses as may be designated hereafter in writing by
the respective parties hereto.
13.8 Entire Agreement; Amendment. This Agreement and the other
Loan Documents constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior negotiations,
understandings and agreements between such parties in respect of such subject
matter. Neither this Agreement nor any provision hereof may be changed,
waived, discharged, modified or terminated except pursuant to a written
instrument signed by the Borrower, the Administrative Agent and the Majority
Lenders or by the Borrower and the Administrative Agent acting with the
consent of the Majority Lenders; provided, however, that no such amendment,
waiver, discharge, modification or termination shall, except pursuant to an
instrument signed by the Borrower, the Agents and all of the Lenders or by the
Borrower and the Administrative Agent acting with the consent of all of the
Lenders, (a) increase the amount of, extend the term of, or extend the time or
waive any requirement for the termination of the Commitments; (b) extend the
date fixed for the scheduled payment of principal of, or interest on, any
Loan; (c) reduce the amount of any scheduled payment of principal of, or the
rate of interest on, any Loan; (d) reduce any fee payable hereunder; (e) alter
the terms of this Section 13.8; (f) except as permitted by Section 12.9(c)
hereof, release any guarantor of the Obligations; (g) reduce the Commitment of
any Lender in any manner which would change such Lender's Commitment
Percentage; or (h) amend the definitions of the term "Majority Lenders" or
"Borrowing Availability" set forth in Section 1.1 hereof; provided, further,
that any amendment, waiver, discharge modification or termination of any
provision of Section 12 hereof, or which increases the obligations of any
Agent hereunder and under the Loan Documents, shall require the written
consent of the such Agent.
Anything in this Agreement to the contrary notwithstanding, if any
Lender shall fail to fulfill its obligations to make any Loan hereunder then,
for so long as such failure shall continue, such Lender shall (unless the
Majority Lenders, determined as if such Lender were not a " Lender" hereunder,
shall otherwise consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under this Agreement or the
Notes (including, without limitation, under this Section 13.8) to have no
Loans, no Commitment, shall not be treated as a "Lender" hereunder when
performing the computation of Majority Lenders, and shall have no rights under
the preceding paragraph of this Section 13.8; provided that any action taken
by the other Lenders with respect to the matters referred to in clauses (a)
through (h) of the preceding paragraph shall not be effective as against such
Lender.
13.9 Time of the Essence. Time is of the essence in this
Agreement and the other Loan Documents.
13.10 Interpretation. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by
any court or other Governmental Authority by reason of such party having or
being deemed to have structured or dictated such provision.
13.11 Lenders Not Joint Venturers. Neither this Agreement, the
other Loan Documents, any agreements, instruments, documents executed and
delivered pursuant hereto or thereto or in connection herewith or therewith,
nor any of the transactions contemplated hereby or thereby shall in any
respect be interpreted, deemed or construed as making any Agent or any Lender
a partner or joint venturer with the Borrower or any of its Subsidiaries or as
creating any similar relationship or entity, and the Borrower agrees that it
will not make, and will not permit any of its Subsidiaries to make, any
assertion, contention, claim or counterclaim to the contrary in any action,
suit or other legal proceeding involving an Agent or the Lenders and the
Borrower or any of its Subsidiaries.
13.12 Cure of Defaults by Lenders. If, hereafter, the Borrower
or
any of its Subsidiaries defaults in the performance of any duty or obligation
to any third party, any Lender may, at its option, but without obligation,
cure such default and any costs, fees and expenses incurred by such Lender in
connection therewith including, without limitation, for payment on mortgage or
note obligations, for the purchase of insurance, the payment of taxes and the
removal or settlement of Liens and claims, and such costs, fees and expenses
shall be included in the Obligations and be secured by the Collateral.
13.13 Indemnity. In addition to any other indemnity provided
for
herein, the Borrower hereby indemnifies the Agents, the LC Issuer and each
Lender from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, fees and
disbursements of counsel) which may be imposed on, incurred by, or asserted
against the Agents, the LC Issuer or such Lender in any litigation, proceeding
or investigation instituted or conducted by any Governmental Authority or any
other Person (other than the Borrower) with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement or the other Loan Documents, whether or not the Agents, the LC
Issuer or such Lender is a party thereto, except to the extent that any of the
foregoing arises out of gross negligence, willful misconduct or a material
breach of this Agreement by the Agents, the LC Issuer or such Lender, as the
case may be. Additionally, the Borrower hereby indemnifies and holds the
Agents, the LC Issuer and each Lender harmless from all loss, cost (including,
without limitation, fees and disbursements of counsel), liability and damage
whatsoever incurred by the Agents, the LC Issuer or such Lender by reason of
any violation of any applicable Environmental Laws for which the Borrower, any
of its Subsidiaries or any of their respective predecessors has any liability
or which occurs upon any real estate owned by or under the control of the
Borrower or any of its Subsidiaries, or by reason of the imposition of any
governmental Lien for the recovery of environmental cleanup costs expended by
reason of such violation. The Borrower's obligations under this Section 13.13
shall survive the termination of this Agreement and the repayment of the
Obligations.
13.14 Consequential Damages. NEITHER ANY AGENT, THE LC ISSUER
NOR
ANY LENDER SHALL BE RESPONSIBLE OR LIABLE TO THE BORROWER, ANY OF ITS
SUBSIDIARIES, OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
13.15 Attorney-in-Fact. The Borrower hereby designates, appoints
and empowers the Administrative Agent irrevocably as its attorney-in-fact, at
the Borrower's cost and expense, to do in the name of the Borrower any and all
actions which the Administrative Agent may deem necessary or advisable to
carry out the terms hereof upon the failure, refusal or inability of the
Borrower to do so, and the Borrower hereby agrees to indemnify and hold the
Administrative Agent harmless from any costs, damages, expenses or liabilities
arising against or incurred by the Administrative Agent in connection
therewith except to the extent that any of such costs, damages, expenses or
liabilities arise out of the Administrative Agent's gross negligence or
willful misconduct.
13.16 Financing Statements.
(a) Borrower hereby ratifies and confirms that all financing
statements filed under the Uniform Commercial Code in connection with the
Original Loan Agreement, showing "IT Partners, Inc." as the debtor and CCF, as
agent, as the secured party, shall be sufficient to perfect the Liens
continued and granted to the Collateral Agent pursuant to this Agreement and
the Loan Documents, to the extent such Liens may be perfected by the filing of
financing statements and Borrower hereby agrees that it shall not make any
assertion, contention, claim or counterclaim to the contrary in any action,
suit or other legal proceeding involving any Agent or the Lenders and
Borrower.
(b) The Borrower acknowledges and agrees that it is the
Borrower's intent that all financing statements filed against the Borrower or
any of its Subsidiaries in connection with this Agreement or the Original Loan
Agreement shall remain in full force and effect until the Commitment shall
have been terminated in accordance with the provisions hereof, even if, at any
time or times prior to such termination, no Loans or Letters of Credit shall
be outstanding hereunder. Accordingly, the Borrower waives any right which it
may have under Section 9-404(1) of the UCC to demand the filing of termination
statements with respect to the Collateral, and agrees that the Collateral
Agent shall not be required to send such termination statements to the
Borrower or any of its Subsidiaries, or to file them with any filing office,
unless and until the Commitment shall have been terminated in accordance with
the terms of this Agreement and all Obligations paid in full in immediately
available funds and until the termination or expiration of all Letters of
Credit. Upon such termination and payment in full, the Collateral Agent shall
execute appropriate termination statements and deliver the same to the
Borrower.
13.17 Governing Law; Jurisdiction. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
THE BORROWER, THE AGENTS, THE LC ISSUER AND EACH LENDER HEREBY (A) SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT, THE LETTERS OF CREDIT, THE NOTES, OR THE OTHER LOAN
DOCUMENTS; (B) AGREES THAT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK SHALL APPLY TO THIS AGREEMENT AND THE
LOAN DOCUMENTS; AND (C) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, NOTHING HEREIN SHALL
LIMIT THE RIGHT OF ANY AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
13.18 Waiver of Jury Trial. AFTER REVIEWING THIS PROVISION
SPECIFICALLY WITH ITS RESPECTIVE COUNSEL, THE BORROWER, EACH AGENT, THE LC
ISSUER AND EACH LENDER HEREBY KNOWINGLY, INTELLIGENTLY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LEGAL PROCEEDING BASED ON OR ARISING OUT OF, UNDER, IN CONNECTION WITH, OR
RELATING TO THIS AGREEMENT, THE LETTERS OF CREDIT, ANY OF THE NOTES, ANY OF
THE OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF THE BORROWER, ANY AGENT OR ANY LENDER. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDERS TO MAKE THE LOANS TO THE BORROWER.
DK
------
Initials
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Collateral Agent, the Co-Agent, the LC Issuer and the Lenders have caused
their duly authorized officers to set their hands and seals as of the day and
year first above written.
"Borrower"
IT PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Secretary
[CORPORATE SEAL]
Address for Notices:
IT Partners, Inc.
0000 Xxxxxx Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxxx & Berlin, Chartered
0000 X Xxxxxx
Xxxxxxxxxx, XX 00000
Attn.: Xxxxxx X. Xxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
"Administrative Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
------------------
Xxxx X. Xxxxx
Vice President
Address for Notices:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Facsimile No: (000) 000-0000
with copies to:
Creditanstalt Corporate Finance, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Facsimile No: (000) 000-0000
and
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
"Collateral Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
------------------
Xxxx X. Xxxxx
Vice President
Address for Notices:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Facsimile No: (000) 000-0000
with copies to:
Creditanstalt Corporate Finance, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Facsimile No: (000) 000-0000
and
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
"Co-Agent"
CREDIT AGRICOLE INDOSUEZ
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
Address for Notices:
Credit Agricole Indosuez
0000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Facsimile No: (000) 000-0000
with copies to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
"Lenders"
Commitment: CREDITANSTALT CORPORATE FINANCE, INC.
$35,000,000
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
------------------
Xxxx X. Xxxxx
Vice President
Address for Notices:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Facsimile No: (000) 000-0000
with copies to:
Creditanstalt Corporate Finance, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Facsimile No: (000) 000-0000
and
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
Commitment: CREDIT AGRICOLE INDOSUEZ
$35,000,000
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
Address for Notices:
Credit Agricole Indosuez
0000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
Facsimile No: (000) 000-0000
with copies to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
[Signatures continued on following page]
[Signatures continued from previous page]
"LC Issuer"
CREDITANSTALT CORPORATE FINANCE, INC.
By:/s/ Xxxxxx X. Bitiringer
Xxxxxx X. Xxxxxxxx
Executive Vice President
By:/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice President
Address for Notices:
Creditanstalt Corporate Finance, Inc.
Two Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx Xxxxx
Facsimile No: (000) 000-0000
with copies to:
Creditanstalt Corporate Finance, Inc.
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
Facsimile No: (000) 000-0000
and
Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Facsimile No: (000) 000-0000
FIRST AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(the "First Amendment") is made and entered into as of the 2nd day of July,
1998, by and among IT PARTNERS, INC., a Delaware corporation (the "Borrower"),
each of the Lenders signatory hereto (hereinafter referred to individually as
a "Lender" and collectively as the "Lenders"), CREDITANSTALT CORPORATE
FINANCE, INC., as the letter of credit issuer (in such capacity, the "LC
Issuer"), CREDIT AGRICOLE INDOSUEZ, as co-agent for the Lenders (in such
capacity, together with its successors and assigns, the "Co-Agent") and
CREDITANSTALT CORPORATE FINANCE, INC., as collateral agent for the Lenders (in
such capacity, together with its successors and assigns, the "Collateral
Agent") and administrative agent for the Lenders (in such capacity, together
with its successors and assigns, the "Administrative Agent"; the Co-Agent,
Collateral Agent and Administrative Agent are collectively referred to as the
"Agents" and individually referred to as an "Agent").
W I T N E S S E T H:
WHEREAS, Borrower, the Lenders, LC Issuer and the Agents are parties to
that certain Amended and Restated Loan and Security Agreement dated as of
March 31, 1998 (as the same may be amended, restated and supplemented from
time to time, the "Loan Agreement"), which currently provides for a revolving
credit facility (the "Loan" or "Loans") in the aggregate principal amount of
up to Seventy Million Dollars ($70,000,000) at any one time outstanding; and
WHEREAS, the Borrower has requested that the Lenders, LC Issuer and the
Agents amend the Loan Agreement in order to amend certain definitions and
covenants, and to make certain other changes as provided herein; and
WHEREAS, the Lenders, LC Issuer and the Agent are willing to agree to
such request, subject to the terms and conditions of this First Amendment;
NOW, THEREFORE, for and in consideration of the premises, the terms and
conditions set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Defined terms used herein, as indicated by the
initial capitalization thereof, shall have the same respective meanings
ascribed to such terms in the Loan Agreement unless otherwise specifically
defined herein.
2. Amendments.
2.1. The definition of "Applicable Margin" contained in Section 1.1 of
the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Applicable
Margin" to read as follows:
"Applicable Margin" shall mean (a) with respect to Eurodollar Loans,
four percent (4%) per annum and (b) with respect to Base Rate Loans, two
percent (2%) per annum; provided however, that if on the last day of any
fiscal quarter, commencing with the earlier of (i) the fiscal quarter during
which Borrower completes a registered public offering of shares of its common
stock which results in the repayment of not less than $25,000,000 in principal
amount of Loans from the proceeds of such offering and (ii) the fiscal quarter
ending December 31, 1998, Borrower's Senior Debt Leverage Ratio shall fall
within any of the ranges set forth below, then, subject to delivery by a
senior financial officer of Borrower of financial statements for that quarter,
together with a Compliance Certificate of the chief financial officer of
Borrower certifying as to Borrower's Senior Debt Leverage Ratio, in each case
as required pursuant to Section 6.2(e) hereof, the Applicable Margin payable
on the Loans shall be adjusted, from the date of Administrative Agent's
receipt of such financial statements and Compliance Certificate until the date
on which the next following quarterly financial statements are required to be
delivered to the Administrative Agent, to the rate, calculated daily on the
basis of a 360-day year and actual days elapsed, for the applicable type of
Loan set forth opposite such range in the schedule below:
Senior Debt Base Eurodollar Rate Letter of
Leverage Ratio Rate Loans Loans Credit
-------------------------------------------------------------------------
Less than 3.50:1.00 1.50% 3.50% 3.50%
but greater than or
equal to 3.00:1.00
-------------------------------------------------------------------------
Less than 3.00:1.00 1.25% 3.25% 3.25%
but greater than or
equal to 2.50:1.00
------------------------------------------------------------------------
Less than 2.50:1.00 1.00% 3.00% 3.00%
but greater than or
equal to 2.00:1.00
------------------------------------------------------------------------
Less than 2.00:1.00 0.75% 2.75% 2.75%
If Borrower does not qualify for an adjustment in interest rates as set forth
above for any given fiscal quarter of Borrower or if no Compliance Certificate
and quarterly financial statements are delivered by the required date, the
Applicable Margin shall be those set forth in clauses (a) and (b) above.
2.2. The definition of "Borrowing Availability" contained in Section
1.1 of the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Borrowing
Availability" to read as follows:
"Borrowing Availability" shall mean, for any Person, an amount equal to
(a) (i) for the period beginning on the Effective Date and ending on the
earlier of (A) December 31, 1998, and (B) the date immediately preceding the
closing of a public offering of shares of common stock of the Borrower
registered under the Securities Act of 1933, as amended, an amount equal to
such Person's Adjusted Cash Flow for the twelve (12) month period most
recently ended multiplied by 4.0; (ii) for the period beginning on the earlier
of (A) January 1, 1999, and (B) the closing of a public offering of shares of
common stock of the Borrower registered under the Securities Act of 1933, as
amended, and ending on May 31, 1999, an amount equal to such Person's Adjusted
Cash Flow for the twelve (12) month period most recently ended multiplied by
3.5; and (iii) thereafter, an amount equal to such Person's Adjusted Cash Flow
for the twelve-month period most recently ended multiplied by 3.0; minus (b)
the currently outstanding aggregate amount of Indebtedness permitted pursuant
to Section 7.2(c) hereof.
2.3. The definition of "Cash Flow" contained in Section 1.1 of the Loan
Agreement is hereby amended by deleting such definition in its entirety and
substituting in lieu thereof a new definition of "Cash Flow" to read as
follows:
"Cash Flow" shall mean, for any Person, for any period for which
the same is computed, the sum of (a) such Person's net income (loss) for such
period, plus (b) such Person's Interest Expense for such period, plus (c) such
Person's depreciation and amortization for financial reporting purposes for
such period, plus (d) income tax expense for such period, plus (e) with
respect to the Borrower, to the extent deducted from the Borrower's net income
(loss) for such period, any costs, not to exceed One Million Two Hundred
Fifty-Two Thousand One Hundred Forty-Five Dollars ($1,252,145) in the
aggregate, related to Information Technology Partners, Inc., which was merged
with and into a Subsidiary of the Borrower, computed in each case on a
consolidated basis for such Person and its consolidated Subsidiaries in
accordance with GAAP.
2.4. The definition of "Calculation Period" contained in Section 1.1 of
the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Calculation
Period" to read as follows:
"Calculation Period" shall mean the twelve month period most
recently ended.
2.5. The definition of "Indebtedness" contained in Section 1.1 of the
Loan Agreement is hereby amended by deleting such definition in its entirety
and substituting in lieu thereof a new definition of "Indebtedness" to read as
follows:
"Indebtedness" shall mean, as applied to any Person at any time,
(a) all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, and any accrued interest, fees and charges
relating thereto; (ii) under profit payment agreements or similar agreements;
(iii) with respect to letters of credit issued for such Person's account; (iv)
to pay the deferred purchase price of property or services, except (A)
unsecured accounts payable and
accrued expenses arising in the ordinary course of business which are less
than sixty (60) days past due; and (B) the deferred portion of the purchase
price, in connection with Acquisitions, which is contingent on the
post-acquisition financial performance of the Person that is the subject of
such Acquisition; or (v) Capital Lease Obligations; (b) all indebtedness,
obligations or other liabilities of such Person or others secured by a Lien on
any property of such Person, whether or not such indebtedness, obligations or
liabilities are assumed by such Person, all as of such time; (c) all
indebtedness, obligations or other liabilities of such Person in respect of
any foreign exchange contract or Interest Hedge Agreement, net of liabilities
owed to such Person by the counterparties thereon; (d) all Capital Stock
(other than (i) Borrower's Series A Preferred Stock, (ii) Borrower's Series C
Preferred Stock, or (iii) any warrants issued in connection with Borrower's
Series A Preferred Stock or Borrower's Series C Preferred Stock or which are
otherwise outstanding on July __, 1998) of such Person subject (upon the
occurrence of any contingency or otherwise) to mandatory redemption prior to
the first anniversary of the Maturity Date; and (e) indebtedness of others
Guaranteed by such Person.
2.6. The definition of "Interest Coverage Ratio" contained in Section
1.1 of the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Interest
Coverage Ratio" to read as follows:
"Interest Coverage Ratio" shall mean, as to any Person, for any
period, the ratio of (a) such Person's Cash Flow for such period to (b) such
Person's Interest Expense (excluding from Interest Expense any non-cash
Interest Expense (whether positive or negative) resulting from (i) the
imputation, for financial reporting purposes, of an interest rate to any
Subordinated Seller Note that is higher than the applicable interest rate set
forth in such Subordinated Seller Note; (ii) any adjustment, whether positive
or negative, made for financial reporting purposes to the value of any warrant
for the purchase of Capital Stock of the Borrower caused by a change in the
value of the shares of common stock of the Borrower; (iii) any accretion to
the value of the Series A Preferred Stock and the Series C Preferred Stock
required in accordance with GAAP and resulting from a book value of such
preferred stock that is less than the redemption price for such preferred
stock; and (iv) non-cash Interest Expense associated with deferred financing
fees of $710,000 paid to Credit Agricole Indosuez) for such period, in each
case calculated in accordance with GAAP.
2.7. Section 1.1 of the Loan Agreement is hereby amended by inserting,
in appropriate alphabetical order, a new definition of "Series C Preferred
Stock" to read as follows:
"Series C Preferred Stock" shall mean the contemplated Series C
Preferred Stock of Borrower.
2.8. Section 2.6(a) of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
2.6(a) to read as follows:
2.6 Letters of Credit.
(a) Subject to the terms and conditions hereof and provided that
there exists no Default or Event of Default, at any time and from time to time
from the Effective Date to (but not including) the Maturity Date, the LC
Issuer agrees, in reliance upon the agreement of the Lenders set forth in
Section 2.6(c) below, to issue, for the account of the Borrower, such Letters
of Credit as the Borrower may request by a Request for Letter of Credit (in
the manner described in Section 2.6(b)), each in such form as may be requested
from time to time by the Borrower and agreed to by the LC Issuer; provided,
however, that after giving effect to the issuance of any such Letter of
Credit, (i) the aggregate amount of all Letter of Credit Obligations of the
Borrower outstanding at any one time does not exceed $2,500,000, and (ii) the
aggregate amount of all outstanding Loans, together with all outstanding
Letter of Credit Obligations, will not exceed the lesser of (A) the Commitment
and (B) the Borrowing Availability of the Borrower. No Letter of Credit shall
be issued by the LC Issuer under this Section 2.6(a) except to the extent
reasonably necessary in connection with transactions in the ordinary course of
business of the Borrower and its Subsidiaries. The expiration date of any
such Letter of Credit shall not extend beyond the earliest of (i) one (1) year
from the date of issuance thereof, (ii) the Maturity Date, and (iii) any date
fixed for termination of the Commitment pursuant to Section 2.12 hereof.
2.9. Section 8.1 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
8.1 to read as follows:
8.1 Net Worth. The Borrower shall maintain, commencing April 1, 1998
and at all times thereafter, a Net Worth of not less than the sum of (a)
$27,500,000, plus (b) effective upon the closing of any issuance of equity
securities of Borrower, eighty percent (80%) of the amount by which Borrower's
shareholders' equity is increased as a result of such issuance of equity
securities, plus (c) effective January 1 of each year, an amount equal to the
greater of (A) zero, and (B) seventy-five percent (75%) of Net Income of
Borrower and its consolidated Subsidiaries for the immediately preceding
fiscal year.
2.10. Section 8.2 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
8.2 to read as follows:
8.2 Leverage Ratio. Borrower and its consolidated Subsidiaries shall
maintain, on a consolidated basis, as of the end of each fiscal quarter of
Borrower during the applicable periods set forth below a Leverage Ratio for
each such quarter of not greater than the ratio set forth below opposite the
applicable period during which such quarter occurs:
Applicable Period Ratio
Effective Date - 12/31/98 6.0:1.0
01/01/99 - 06/30/99 5.5:1.0
At all times thereafter 5.0:1.0
2.11. Section 8.3 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
8.3 to read as follows:
8.3 Senior Debt Leverage Ratio. Borrower and its consolidated
Subsidiaries shall maintain, on a consolidated basis, as of the end of each
fiscal quarter of Borrower during the applicable periods set forth below a
Senior Debt Leverage Ratio for each such quarter of not greater than the ratio
set forth below opposite the applicable period during which such quarter
occurs:
Applicable Period Ratio
Effective Date - 12/31/98 4.0:1.0
01/01/99 - 06/30/99 3.5:1.0
At all times thereafter 3.0:1.0
2.12. Section 8.4 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
8.4 to read as follows:
8.4 Interest Coverage Ratio. Borrower and its consolidated
Subsidiaries shall maintain, on a consolidated basis, as of the end of each
fiscal quarter of Borrower during the applicable periods set forth below, an
Interest Coverage Ratio for such fiscal quarter of not less than the ratio set
forth below opposite each such applicable period:
Applicable Period Ratio
Effective Date - 12/31/98 2.00:1.00
01/01/99 - 06/30/99 2.50:1.00
07/01/99 - 12/31/00 2.75:1:00
At all times thereafter 3.00:1.00
3. Representations and Warranties; No Default. Borrower hereby
represents and warrants to the Lenders and the Agents that all of Borrower's
representations and warranties contained in the Loan Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
date hereof as fully as though such representations and warranties had been
made on the date hereof (except for changes therein occurring since the
Effective Date in the ordinary course of business which do not constitute a
Default or Event of Default hereunder, which are not, individually or in the
aggregate, materially adverse to the assets, liabilities, financial conditions
or results of operations of Obligors, or either of them, and which have, to
the extent required, been disclosed to the Agents and/or the Majority Lenders
pursuant to Section 6.8 of the Loan Agreement or otherwise) and with specific
reference to this First Amendment and any and all documents executed in
connection herewith. To induce the Lenders and the Agents to enter into this
First Amendment and to continue to make advances to Borrower pursuant to the
Loan Agreement, as amended hereby, Borrower and hereby represents and warrants
that, on and as of the date of this First Amendment, no Event of Default, nor
any event or condition which, with notice, lapse of time, or both, would
constitute an Event of Default has occurred and is continuing under the Loan
Agreement. As a further inducement of the Lenders and the Agents to enter
into this First Amendment and to continue to make advances to Borrower
pursuant to the Loan Agreement, as amended hereby, Borrower hereby represents
and warrants to the Agents and the Lenders as follows:
(a) Borrower has the power and authority to enter into this
First Amendment and the other instruments, documents or agreements executed by
Borrower pursuant hereto or in connection herewith (the "Amendment Documents")
and to perform all of its respective obligations hereunder and thereunder;
(b) the execution and delivery of this First Amendment and the
Amendment Documents to which it is a party have been duly authorized by all
necessary action (corporate or otherwise) on the part of Borrower;
(c) the execution and delivery of this First Amendment and the
Amendment Documents and performance thereof by the Borrower does not and will
not violate the Articles or Certificate of Incorporation, By-laws or other
organizational documents of Borrower and does not and will not violate or
conflict with any law, order, writ, injunction, or decree of any court,
administrative agency or other governmental authority applicable to Borrower
or its properties; and
(d) the First Amendment and the Amendment Documents have been
duly executed and delivered by Borrower and constitute the legal, valid and
binding obligations of the Borrower, enforceable in accordance with their
respective terms.
4. Waiver. The Agents and Lenders hereby waive any Default or Event
of Default arising under the Loan Agreement solely as a result of Borrower's
failure for the period commencing January 1, 1998 through April 1, 1998, to
maintain the Net Worth required by Section 8.1 of the Loan Agreement (as in
effect prior to the First Amendment).
5. Expenses. Borrower agrees to pay, immediately upon demand by
Lenders and Agents, all costs, expenses, attorneys' fees, and other charges
and expenses incurred by Lenders and Agents in connection with the
negotiation, preparation, execution and delivery of this First Amendment.
6. Defaults Hereunder. The breach of any representation, warranty or
covenant contained herein or in any document executed in connection herewith,
or the failure to observe or comply with any term or agreement contained
herein or in any document executed in conjunction herewith, shall constitute
an Event of Default under the Loan Documents and the Lenders and the Agents
shall be entitled to exercise all rights and remedies they may have under the
Loan Agreement, any of the other Loan Documents and applicable law.
7. Conditions Precedent. Subject to the other terms and conditions
of this First Amendment, the amendments and waivers set forth herein shall not
become effective, and the Lenders shall have no obligation to fund any Loans,
unless and until (a) the Administrative Agent shall have received this First
Amendment, duly executed and delivered by Borrower, the Lenders,
the Agents and the LC Issuer, and (b) the Administrative Agent shall have
received a reaffirmation of each of the Loan Documents executed by each of the
Subsidiaries and Affiliates of Borrower party to the Loan Documents, duly
executed and delivered to the Lenders and the Agents, in form and substance
satisfactory to the Administrative Agent and its counsel. Once all the
conditions precedent set forth above have been fulfilled, this First Amendment
will be deemed effective as of April 1, 1998.
8. References in Loan Documents. All references in the Loan
Agreement and the other Loan Documents to the Loan Agreement shall hereafter
be deemed to be references to the Loan Agreement as amended hereby and as the
same may hereafter be amended from time to time.
9. No Claims, Offset. Borrower hereby represents, warrants,
acknowledges and agrees to and with the Lenders and the Agents that (a)
Borrower does not hold or claim any right of action, claim, cause of action or
damages, either at law or in equity, against the Lenders or the Agents which
arises from, may arise from, allegedly arise from, is based upon or is related
in any manner whatsoever to the Loan Agreement and the Loan Documents or which
is based upon acts or omissions of the Lenders or the Agents in connection
therewith and (b) the Obligations are absolutely owed to the Agents and the
Lenders, without offset, deduction or counterclaim.
10. No Novation. The terms of this First Amendment are not intended
to and do not serve to effect a novation as to the Loan Agreement. The
parties hereto expressly do not intend to extinguish any debt or security
interest created pursuant to the Loan Agreement. Instead, it is the express
intention of the parties hereto to affirm the Loan Agreement and the security
created pursuant thereto.
11. Limitation of First Amendment. Except as expressly set forth
herein, this First Amendment shall not be deemed to waive, amend or modify any
term or condition of the Loan Agreement or any of the other Loan Documents,
each of which is hereby ratified and reaffirmed in all respects, and which
shall remain in full force and effect without modification or waiver, nor to
serve as a consent to any matter prohibited by the terms and conditions
thereof.
12. Counterparts. This First Amendment may be executed in any number
of counterparts, and any party hereto may execute any counterpart, each of
which, when executed and delivered, will be deemed to be an original and all
of which, taken together, will be deemed to be but one and the same agreement.
13. Successors and Assigns. This First Amendment shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
parties hereto. Notwithstanding any other language in this First Amendment or
the Loan Agreement, any one of the Lenders may at any time assign all or any
portion of its rights under the Loan Agreement, as amended hereby, in
accordance with Section 12.3 of the Loan Agreement.
14. Section References. Section titles and references used in this
First Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
15. Further Assurances. Borrower agrees to take such further action as
the Lenders and the Agents shall reasonably request in connection herewith to
evidence the amendments herein contained to the Loan Agreement.
16. Governing Law. This First Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to principles of conflicts of law.
[Signatures on Following Page]
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Collateral Agent, the Co-Agent, the LC Issuer and the Lenders have caused
their duly authorized officers to set their hands and seals as of the day and
year first above written.
"Borrower"
IT PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxx X. Xxxxx
----------------
Xxxxx X. Xxxxx
Secretary
[CORPORATE SEAL]
[Signatures continued on following page]
[Signatures continued from previous page]
"Administrative Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Collateral Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
--------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Co-Agent"
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Lenders"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"LC Issuer"
CREDITANSTALT CORPORATE FINANCE, INC.
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By:/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice President
[Signatures Continued on Following Page]
[Signatures Continued from Previous Page]
ACKNOWLEDGED AND AGREED:
C.N.S., INC.; XXXXX DATA PRODUCTS, INC.;
A-COM, INC.; FINANCIAL SYSTEM CONSULTING,
INC.; SEQUOIA DIVERSIFIED PRODUCTS, INC.;
INCLINE CORP.; CALL BUSINESS SYSTEMS, INC.;
SERVINET CONSULTING GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Secretary
PAGE>
SECOND AMENDMENT TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT (the "Second Amendment") is made and entered into as of the 27th day
of July, 1998, by and among IT PARTNERS, INC., a Delaware corporation (the
"Borrower"), each of the Lenders signatory hereto (hereinafter referred to
individually as a "Lender" and collectively as the "Lenders"), CREDITANSTALT
CORPORATE FINANCE, INC., as the letter of credit issuer (in such capacity, the
"LC Issuer"), CREDIT AGRICOLE INDOSUEZ, as co-agent for the Lenders (in such
capacity, together with its successors and assigns, the "Co-Agent") and
CREDITANSTALT CORPORATE FINANCE, INC., as collateral agent for the Lenders (in
such capacity, together with its successors and assigns, the "Collateral
Agent") and administrative agent for the Lenders (in such capacity, together
with its successors and assigns, the "Administrative Agent"; the Co-Agent,
Collateral Agent and Administrative Agent are collectively referred to as the
"Agents" and individually referred to as an "Agent").
W I T N E S S E T H:
WHEREAS, Borrower, the Lenders, the LC Issuer and the Agents are parties
to that certain Amended and Restated Loan and Security Agreement dated as of
March 31, 1998 (as the same has been and may be further amended, restated and
supplemented from time to time, the "Loan Agreement"), which currently
provides for a revolving credit facility (the "Loan" or "Loans") in the
aggregate principal amount of up to Seventy Million Dollars ($70,000,000) at
any one time outstanding; and
WHEREAS, the Borrower has requested that the Lenders, the LC Issuer and
the Agents amend the Loan Agreement as provided herein; and
WHEREAS, the Lenders, the LC Issuer and the Agent are willing to agree
to such request, subject to the terms and conditions of this Second Amendment;
NOW, THEREFORE, for and in consideration of the premises, the terms and
conditions set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Defined terms used herein, as indicated by the
initial capitalization thereof, shall have the same respective meanings
ascribed to such terms in the Loan Agreement unless otherwise specifically
defined herein.
2. Amendments.
2.1. The definition of "Interest Expense" contained in Section 1.1 of
the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Interest
Expense" to read as follows:
"Interest Expense" shall mean, for any period, as to any Person,
the sum of (a) total interest expense, whether paid, accrued or capitalized
(including the interest component of Capital Lease Obligations), of such
Person, including, but not limited to, all origination and other fees, all
amortization of original issue discount, the net amount payable under any
Interest Hedge Agreement between such Person and any other Person, plus (b)
with respect to the Borrower, dividends on the Series C Preferred Stock of the
Borrower, to the extent paid in cash during such period, computed in each case
on a consolidated basis for such Person and its consolidated Subsidiaries in
accordance with GAAP.
2.2. The definition of "Series C Preferred Stock" contained in Section
1.1 of the Loan Agreement is hereby amended by deleting such definition in its
entirety and substituting in lieu thereof a new definition of "Series C
Preferred Stock" to read as follows:
"Series C Preferred Stock" shall mean the 12% Series C Senior
Redeemable Preferred Stock of the Borrower.
2.3. Section 1.1 of the Loan Agreement is hereby amended by inserting,
in appropriate alphabetical order, new definitions of "Qualified Stock,"
"Qualifying IPO," "Second Amendment Effective Date," "Series A Preferred
Stock," "Series B Preferred Stock," "Series C Certificate of Designation,"
"Series C Investor" and "Series C Stock Purchase Agreement" to read as
follows:
"Qualified Stock" shall mean collectively (a) shares of common
stock of Borrower of a class currently authorized by Borrower's Certificate of
Incorporation; (b) the Series B Preferred Stock; and (c) other preferred stock
of Borrower provided that (i) dividends and/or distributions do not accrue or
cumulate on such stock, and (ii) such stock is not redeemable at the option of
the holder thereof (whether upon the happening of any contingency or
otherwise) on or prior that date which is one year after the Maturity Date.
The Series A Preferred Stock and Series C Preferred Stock shall not constitute
Qualified Stock hereunder.
"Qualifying IPO" shall mean the sale of common stock of Borrower
which (a) is registered under the Securities Act of 1933, as amended; and (b)
results in proceeds to Borrower of not less than $40,000,000, net of
underwriter discounts and commissions.
"Second Amendment Effective Date" shall mean the date on which all
conditions precedent to the effectiveness to the Second Amendment to Amended
and Restated Loan and Security Agreement have been fulfilled and such Second
Amendment has become effective in accordance with its terms.
"Series A Preferred Stock" shall mean the Series A Preferred Stock
of the Borrower.
"Series B Preferred Stock" shall mean the Series B Preferred Stock
of the Borrower.
"Series C Certificate of Designation" shall mean that certain
Certificate of Designation of Preferences and Rights of 12% Series C Senior
Redeemable Preferred Stock of IT Partners, Inc., adopted by the Board of
Directors of the Borrower on July 27, 1998.
"Series C Investor" shall mean FBR Business Development Capital, a
Delaware business trust, and, if more than seven hundred (700) shares of
Series C Preferred Stock are issued, Wachovia Capital Associates, Inc.
"Series C Stock Purchase Agreement" shall mean that certain 12%
Series C Senior Redeemable Preferred Stock and Warrant Purchase Agreement,
dated as of July 27, 1998, by and between the Borrower and the Series C
Investor.
2.4. Section 5 of the Loan Agreement is hereby amended by inserting a
new Section 5.32 to read as follows:
5.32 Purchase Agreement; Issuance of Preferred Stock
(a) The Series C Purchase Agreement is in full force and effect
as of the Second Amendment Effective Date, has not been terminated, rescinded
or withdrawn, and no portion thereof has been amended or waived by any party.
All representations and warranties of Borrower, and to the best of Borrower's
knowledge, all representations and warranties of the Series C Investor
contained in the Series C Stock Purchase Agreement are true and correct in all
material respects as of the date hereof with the same effect as though made on
and as of the date hereof. As of the date hereof, and giving effect to the
transactions contemplated hereby, there does not exist any default, event of
default or any event or conditions which, with notice, lapse of time or both,
would constitute such a default or event of default under the Series C Stock
Purchase Agreement.
(b) The creation and the issuance of the Series C Preferred
Stock has been duly authorized by all corporate action necessary on the part
of Borrower, 354,169.571 shares of Series A Preferred Stock have been duly and
validly issued and remain outstanding, no shares of Series B Preferred Stock
have been issued or are outstanding and 700 shares of Series C Preferred Stock
have been duly and validly issued to the Series C Investor. Such issuance of
shares of the Series C Preferred Stock complied with all applicable laws,
rules, regulations applicable thereto, including, but not limited to, the
Securities Act of 1933, as amended, the rules and regulations promulgated
thereunder, and all applicable state securities or Blue Sky laws.
(c) Borrower has received aggregate gross cash proceeds of not
less than $7,000,000 from the issuance of 700 shares, or $10,000,000 from the
issuance of 1,000 shares, of the Series C Preferred Stock and from the
issuance of the warrants described in the Series C Stock Purchase Agreement.
2.5. Section 6.2 of the Loan Agreement is hereby amended by deleting
subsection (g) thereof in its entirety and substituting in lieu thereof a new
subsection (g) to read as follows:
(g) Promptly after the sending or filing thereof, as the case
may be, copies of any definitive proxy statements, financial statements or
reports which the Borrower sends to its shareholders (including, but not
limited to, any such statements or reports required to be delivered to the
Series C Investor pursuant to the Series C Stock Purchase Agreement or the
Series C Certificate of Designation) and copies of any regular periodic and
special reports or registration statements which the Borrower files with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor), including, but not limited to, all Form 10-K and Form 10-Q reports,
if any, or any report or registration statement which the Borrower files with
any national securities exchange;
2.6. Section 7.7 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
7.7 to read as follows:
7.7 Issuance of Stock. The Borrower shall not, and shall not
permit any of its Subsidiaries to, issue any shares of Capital Stock or other
ownership interests in the Borrower or any of its Subsidiaries, except that
the Borrower may issue (a) shares of common stock of a class currently
authorized by Borrower's Certificate of Incorporation; (b) shares of Series B
Preferred Stock of the Borrower; (c) additional shares of Borrower's Series A
Preferred Stock as dividends on outstanding shares of Series A Preferred Stock
as provided in the terms of said Series A Preferred Stock as in effect on the
date hereof; and (d) up to 1,000 shares of Series C Preferred Stock; provided,
however, that the Borrower shall use the proceeds of the sale of such Series C
Preferred Stock for repayment of the Obligations, costs and expenses relating
to the closing of Acquisitions, general working capital needs, and for costs,
fees and expenses in connection with the issuance or sale of Capital Stock of
the Borrower that is or is to be registered under the Securities Act of 1933,
as amended; provided, further, that commencing on the date of the initial
issuance of the Series C Preferred Stock, the Borrower shall not use the
proceeds of the sale of such Series C Preferred Stock, the proceeds of Loans
or any combination thereof, to pay more than Two Million Dollars
($2,000,000.00) of costs, fees or expenses (including, but not limited to,
audit, legal and printing costs) arising from any proposed initial public
offering of shares of Capital Stock of the Borrower that is or is to be
registered under the Securities Act of 1933, as amended, whether or not such
public offering is ultimately consummated.
2.7. Section 7.12 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
7.12 to read as follows:
7.12 Amendments and Prepayments. The Borrower shall not (a)
amend, supplement or otherwise modify (i) the Preferred Stock and Warrant
Purchase Agreement; (ii) the Subordinated Seller Notes; (iii) the Series C
Stock Purchase Agreement; or (iv) the Series C Certificate of Designation; or
(b) prepay any Subordinated Debt; provided, however, that Borrower may prepay
not more than $10,500,000 of Subordinated Seller Notes concurrently with the
closing of a Qualifying IPO.
2.8. Section 8.5 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
8.5 to read as follows:
8.5 Dividends. Neither the Borrower nor any of its Subsidiaries shall
declare or pay any dividends on, or make any distribution with respect to, the
shares of any class of their Capital Stock, or purchase, redeem, acquire,
defease or retire any shares of their Capital Stock, or take any action having
an effect equivalent to the foregoing except (i) Borrower may declare and pay
dividends to holders of Series A Preferred Stock payable solely in additional
shares of Series A Preferred Stock; (ii) Borrower may, commencing 18 months
after the Second Amendment Effective Date, declare and pay cash dividends to
holders of Series C Preferred Stock; provided, however, that at the time such
payment is made, there exists no Default or Event of Default nor any event or
condition which, giving effect to the payment of such dividend (both as if
such payment and been made on the last day of the fiscal quarter most recently
ended and as if made on the actual date of payment) would result in a Default
or Event of Default; (iii) (A) upon the closing of a Qualifying IPO, Borrower
may redeem the outstanding shares of Series C Preferred Stock to the extent
such redemption is required by Section 4(a)(i) of the Series C Certificate of
Designation; and (B) if a Qualifying IPO has not occurred by the third (3rd)
anniversary of the issuance of the Series C Preferred Stock, Borrower may
redeem the outstanding shares of the Series C Preferred Stock, provided that,
after giving effect to such redemption, there exists no Default or Event of
Default; provided, further, that solely for purposes of determining whether a
Default or Event of Default exists for purposes of this Section 8.5(ii) and
(iii)(B), any amendment to Articles 8 or 9 of this Agreement closing after the
Second Amendment Effective Date shall not be given effect; and (iv) any
Subsidiary of the Borrower may declare and pay dividends to the Borrower or to
any wholly-owned Subsidiary of the Borrower.
2.9. Section 9.17 of the Loan Agreement is hereby amended by deleting
such section in its entirety and substituting in lieu thereof a new Section
9.17 to read as follows:
9.17 Change of Control. Either (a) a Person or "group" (within the
meaning of the Securities Exchange Act of 1934), other than Xxxxxx X. Xxxxx
and Xxxxx X. Xxxxx, acquires or obtains beneficial ownership of securities
(including options) of the Borrower representing a percentage of the ordinary
voting power of the Borrower that is greater than the percentage of the
ordinary voting power represented by the shares of Capital Stock owned,
beneficially and of
record, with power to vote, by Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx; (b) there
shall occur a change in the composition of the Board of Directors of the
Borrower such that the current directors (or directors designated or approved
by such directors) shall not have a majority of the ordinary voting power of
the Borrower; or (c) there shall occur a "Change in Control" (as such term is
defined in the Series C Certificate of Designation).
2.10. Section 9 of the Loan Agreement is hereby amended by inserting
a
new Section 9.19 to read as follows:
9.19 Event of Noncompliance. Any "Event of Noncompliance" (as
such term is defined in the Series C Stock Purchase Agreement) shall occur.
3. Representations and Warranties; No Default. Borrower hereby
represents and warrants to the Lenders and the Agents that all of Borrower's
representations and warranties contained in the Loan Agreement and the other
Loan Documents are true and correct in all material respects on and as of the
date hereof as fully as though such representations and warranties had been
made on the date hereof (except for changes therein occurring since the
Effective Date in the ordinary course of business which do not constitute a
Default or Event of Default hereunder, which are not, individually or in the
aggregate, materially adverse to the assets, liabilities, financial conditions
or results of operations of Obligors, or either of them, and which have, to
the extent required, been disclosed to the Agents and/or the Majority Lenders
pursuant to Section 6.8 of the Loan Agreement or otherwise) and with specific
reference to this Second Amendment and any and all documents executed in
connection herewith. To induce the Lenders and the Agents to enter into this
Second Amendment and to continue to make advances to Borrower pursuant to the
Loan Agreement, as amended hereby, Borrower and hereby represents and warrants
that, on and as of the date of this Second Amendment, no Event of Default, nor
any event or condition which, with notice, lapse of time, or both, would
constitute an Event of Default has occurred and is continuing under the Loan
Agreement. As a further inducement of the Lenders and the Agents to enter
into this Second Amendment and to continue to make advances to Borrower
pursuant to the Loan Agreement, as amended hereby, Borrower hereby represents
and warrants to the Agents and the Lenders as follows:
(a) Borrower has the power and authority to enter into this
Second Amendment and the other instruments, documents or agreements executed
by Borrower pursuant hereto or in connection herewith (the "Amendment
Documents") and to perform all of its respective obligations hereunder and
thereunder;
(b) the execution and delivery of this Second Amendment and the
Amendment Documents to which it is a party have been duly authorized by all
necessary action (corporate or otherwise) on the part of Borrower;
(c) the execution and delivery of this Second Amendment and the
Amendment Documents and performance thereof by the Borrower does not and will
not violate the Articles or Certificate of Incorporation, By-laws or other
organizational documents of Borrower and does not and will not violate or
conflict with any law, order, writ, injunction, or decree of any court,
administrative agency or other governmental authority applicable to Borrower
or its properties; and
(d) the Second Amendment and the Amendment Documents have been
duly executed and delivered by Borrower and constitute the legal, valid and
binding obligations of the Borrower, enforceable in accordance with their
respective terms.
4. Expenses. Borrower agrees to pay, immediately upon demand by
Lenders and Agents, all costs, expenses, attorneys' fees, and other charges
and expenses incurred by Lenders and Agents in connection with the
negotiation, preparation, execution and delivery of this Second Amendment.
5. Defaults Hereunder. The breach of any representation, warranty or
covenant contained herein or in any document executed in connection herewith,
or the failure to observe or comply with any term or agreement contained
herein or in any document executed in conjunction herewith, shall constitute
an Event of Default under the Loan Documents and the Lenders and the Agents
shall be entitled to exercise all rights and remedies they may have under the
Loan Agreement, any of the other Loan Documents and applicable law.
6. Conditions Precedent. Subject to the other terms and conditions
of this Second Amendment, the amendments set forth herein shall not become
effective, and the Lenders shall have no obligation to fund any Loans, unless
and until (a) the Administrative Agent shall have received this Second
Amendment, duly executed and delivered by Borrower, the Lenders, the Agents
and the LC Issuer, (b) the Administrative Agent shall have received a
reaffirmation of each of the Loan Documents executed by each of the
Subsidiaries and Affiliates of Borrower party to the Loan Documents, duly
executed and delivered to the Lenders and the Agents, in form and substance
satisfactory to the Administrative Agent and its counsel, and (c) Borrower
shall have issued the Series C Preferred Stock to the Series C Investor on
terms and conditions acceptable to the Majority Lenders.
7. References in Loan Documents. All references in the Loan
Agreement and the other Loan Documents to the Loan Agreement shall hereafter
be deemed to be references to the Loan Agreement as amended hereby and as the
same may hereafter be amended from time to time.
8. No Claims, Offset. Borrower hereby represents, warrants,
acknowledges and agrees to and with the Lenders and the Agents that (a)
Borrower does not hold or claim any right of action, claim, cause of action or
damages, either at law or in equity, against the Lenders or the Agents which
arises from, may arise from, allegedly arise from, is based upon or is related
in any manner whatsoever to the Loan Agreement and the Loan Documents or which
is based upon acts or omissions of the Lenders or the Agents in connection
therewith and (b) the Obligations are absolutely owed to the Agents and the
Lenders, without offset, deduction or counterclaim.
9. No Novation. The terms of this Second Amendment are not intended
to and do not serve to effect a novation as to the Loan Agreement. The
parties hereto expressly do not intend to extinguish any debt or security
interest created pursuant to the Loan Agreement. Instead, it is the express
intention of the parties hereto to affirm the Loan Agreement and the security
created pursuant thereto.
10. Limitation of Second Amendment. Except as expressly set forth
herein, this Second Amendment shall not be deemed to waive, amend or modify
any term or condition of the Loan Agreement or any of the other Loan
Documents, each of which is hereby ratified and reaffirmed in all respects,
and which shall remain in full force and effect without modification or
waiver, nor to serve as a consent to any matter prohibited by the terms and
conditions thereof.
11. Counterparts. This Second Amendment may be executed in any number
of counterparts, and any party hereto may execute any counterpart, each of
which, when executed and delivered, will be deemed to be an original and all
of which, taken together, will be deemed to be but one and the same agreement.
12. Successors and Assigns. This Second Amendment shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
parties hereto. Notwithstanding any other language in this Second Amendment
or the Loan Agreement, any one of the Lenders may at any time assign all or
any portion of its rights under the Loan Agreement, as amended hereby, in
accordance with Section 12.3 of the Loan Agreement.
13. Section References. Section titles and references used in this
Second Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
14. Further Assurances. Borrower agrees to take such further action as
the Lenders and the Agents shall reasonably request in connection herewith to
evidence the amendments herein contained to the Loan Agreement.
15. Governing Law. This Second Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to principles of conflicts of law.
[Signatures on Following Page]
IN WITNESS WHEREOF, the Borrower, the Administrative Agent, the
Collateral Agent, the Co-Agent, the LC Issuer and the Lenders have caused
their duly authorized officers to set their hands and seals as of the day and
year first above written.
"Borrower"
IT PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxx X. Xxxxx
-------------------
Xxxxx X. Xxxxx
Secretary
[CORPORATE SEAL]
[Signatures continued from previous page]
"Administrative Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Collateral Agent"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
--------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Co-Agent"
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"Lenders"
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By: /s/ Xxxx X. Xxxxx
---------------------
Xxxx X. Xxxxx
Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxxxxxx Xxxxxxxxx
--------------------------
Name:Xxxxxxxx Xxxxxxxxx
Title:Vice President
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------
Name:Xxxxxxxx Xxxxxxx
Title:First Vice President
[Signatures continued on following page]
[Signatures continued from previous page]
"LC Issuer"
CREDITANSTALT CORPORATE FINANCE, INC.
By:/s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Executive Vice President
By:/s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice President
[Signatures Continued on Following Page]
[Signatures Continued from Previous Page]
ACKNOWLEDGED AND AGREED:
C.N.S., INC.; XXXXX DATA PRODUCTS, INC.;
A-COM, INC.; FINANCIAL SYSTEM CONSULTING,
INC.; SEQUOIA DIVERSIFIED PRODUCTS, INC.;
INCLINE CORP.; CALL BUSINESS SYSTEMS, INC.;
SERVINET CONSULTING GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Chairman and Chief Executive Officer
Attest: /s/ Xxxxx X. Xxxxx
------------------
Xxxxx X. Xxxxx
Secretary
