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AMENDED AND RESTATED CREDIT AGREEMENT
among
VDI MEDIA
as Borrower
THE LENDERS PARTIES HERETO,
and
UNION BANK OF CALIFORNIA, N.A.
as Agent
Dated as of November 17, 1998
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . .18
SECTION 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
2.1 Revolving Loans and Letters of Credit; Revolving Loan Commitment
Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
2.2 Term Loans; Term Loan Commitment . . . . . . . . . . . . . . . . . .21
2.3 Issuance of Letters of Credit. . . . . . . . . . . . . . . . . . . .22
2.4 Optional Prepayments.. . . . . . . . . . . . . . . . . . . . . . . .26
2.5 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . . . .26
2.6 Conversion and Continuation Options. . . . . . . . . . . . . . . . .26
2.7 Minimum Amounts of Tranches. . . . . . . . . . . . . . . . . . . . .27
2.8 Interest Rates and Payment Dates.. . . . . . . . . . . . . . . . . .27
2.9 Computation of Interest and Fees.. . . . . . . . . . . . . . . . . .28
2.10 Inability to Determine Interest Rate. . . . . . . . . . . . . .28
2.11 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . .29
2.12 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . .29
2.13 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . .30
2.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
2.15 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . .32
2.16 Mitigation of Costs . . . . . . . . . . . . . . . . . . . . . .33
SECTION 3. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . .33
3.1 Organization and Good Standing.. . . . . . . . . . . . . . . . . . .33
3.2 Power and Authority. . . . . . . . . . . . . . . . . . . . . . . . .33
3.3 Validity and Legal Effect. . . . . . . . . . . . . . . . . . . . . .33
3.4 No Violation of Laws or Agreements.. . . . . . . . . . . . . . . . .34
3.5 Title to Assets; Existing Encumbrances; Legal Names. . . . . . . . .34
3.6 Capital Structure; Equity Ownership. . . . . . . . . . . . . . . . .34
3.7 Subsidiaries and Affiliates. . . . . . . . . . . . . . . . . . . . .34
3.8 Material Contracts.. . . . . . . . . . . . . . . . . . . . . . . . .34
3.9 Taxes and Assessments. . . . . . . . . . . . . . . . . . . . . . . .35
3.10 Litigation and Legal Proceedings. . . . . . . . . . . . . . . .35
3.11 Accuracy of Financial Information . . . . . . . . . . . . . . .35
3.12 Accuracy of Other Information . . . . . . . . . . . . . . . . .36
3.13 Compliance with Laws Generally. . . . . . . . . . . . . . . . .36
3.14 ERISA Compliance. . . . . . . . . . . . . . . . . . . . . . . .36
3.15 Environmental Compliance. . . . . . . . . . . . . . . . . . . .37
3.16 Federal Regulations . . . . . . . . . . . . . . . . . . . . . .38
3.17 Fees and Commissions. . . . . . . . . . . . . . . . . . . . . .38
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3.18 Representations and Warranties in Acquisition Agreement . . . .38
3.19 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
3.20 Investment Company Act; Public Utility Holding Company Act. . .39
3.21 Nature of Business. . . . . . . . . . . . . . . . . . . . . . .39
3.22 Ranking of Loans. . . . . . . . . . . . . . . . . . . . . . . .39
SECTION 4. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . .39
4.1 Conditions to Restatement Date . . . . . . . . . . . . . . . . . . .39
4.2 Conditions to Each Loan or Letter of Credit. . . . . . . . . . . . .41
4.3 Conditions Subsequent. . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . .43
5.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . .43
5.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . .44
5.3 Payment of Obligations.. . . . . . . . . . . . . . . . . . . . . . .45
5.4 Conduct of Business and Maintenance of Existence . . . . . . . . . .45
5.5 Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . .46
5.6 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
5.7 Inspection of Property; Books and Records; Discussions . . . . . . .46
5.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . .46
5.9 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . .47
5.10 Compliance With Laws, Etc . . . . . . . . . . . . . . . . . . .47
5.11 Certain Obligations Respecting Subsidiaries; Prohibitions on
Certain Agreements. . . . . . . . . . . . . . . . . . . . . . .48
5.12 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . .49
6.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . .49
6.2 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . .49
6.3 Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . .50
6.4 Limitation on Fundamental Changes. . . . . . . . . . . . . . . . . .51
6.5 Limitation on Sale of Assets . . . . . . . . . . . . . . . . . . . .51
6.6 Limitation on Dividends. . . . . . . . . . . . . . . . . . . . . . .52
6.7 Limitation on Investments, Loans and Advances. . . . . . . . . . . .52
6.8 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . .53
6.9 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
6.10 Sale-Leaseback Transactions . . . . . . . . . . . . . . . . . .54
6.11 Lines of Business . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . .54
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . .57
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . .57
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . .58
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8.4 Reliance by the Agent. . . . . . . . . . . . . . . . . . . . . . . .58
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . .59
8.6 Non-Reliance on the Agent and Other Lenders. . . . . . . . . . . . .59
8.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . .59
8.8 The Agent in Its Individual Capacity . . . . . . . . . . . . . . . .60
8.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .60
8.10 Collateral Documents. . . . . . . . . . . . . . . . . . . . . .61
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . .61
9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . .61
9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
9.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . .63
9.4 Survival of Representations and Warranties . . . . . . . . . . . . .63
9.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . . . .63
9.6 Successors and Assigns; Participations; Purchasing Lenders . . . . .65
9.7 Adjustments; Set-Off . . . . . . . . . . . . . . . . . . . . . . . .67
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
9.9 Severability.. . . . . . . . . . . . . . . . . . . . . . . . . . . .68
9.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . .68
9.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . .69
9.12 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . .69
9.13 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .69
9.14 Copies of Certificates, Etc . . . . . . . . . . . . . . . . . .69
9.15 Treatment of Certain Information; Confidentiality . . . . . . .69
9.16 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . .70
9.17 Effect of Amendment and Restatement . . . . . . . . . . . . . .70
Exhibits
A-1 Form of Revolving Note
A-2 Form of Term Note
B Form of Assignment and Acceptance
C Form of Continuation Notice
D Form of Letter of Credit Request
E Form of Borrowing Notice
Schedules
2.1 Commitments
3.1 Business Qualification Jurisdictions
3.5 Legal and Trade Names
3.6 Capital Structure; Equity Ownership
3.7 Subsidiaries and Affiliates
3.10 Litigation
3.17 Certain Fees
4.1(g) Repayment of Certain Indebtedness
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4.3(c) Landlord Consents
6.2 Indebtedness
6.3 Liens
6.7 Investments
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 17,
1998, among (1) VDI MEDIA, a California corporation (the "BORROWER"), (2) the
several banks and other financial institutions from time to time parties to
this Agreement (the "LENDERS"), and (3) UNION BANK OF CALIFORNIA, N.A., as
Agent for the Lenders hereunder (in such capacity, the "AGENT").
RECITALS
A. The Borrower and Union Bank of California, N.A. ("UBOC") are
parties to that certain Loan Agreement dated as of December 23, 1997, as
amended by that certain First Amendment to Loan Agreement dated as of May 29,
1998 and that certain Second Amendment to Loan Agreement dated as of July 31,
1998 (the "EXISTING AGREEMENT"), pursuant to which UBOC has made available to
the Borrower a revolving loan facility with a letter of credit subfacility
upon the terms and conditions therein set forth.
B. The Borrower, as purchaser, and Dubs, Incorporated ("DUBS"),
▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇, as sellers, have entered into that certain
Asset Purchase Agreement dated as of November 9, 1998 (the "ACQUISITION
AGREEMENT") pursuant to which the Borrower will purchase certain assets of
Dubs (such acquisition, the "DUBS ACQUISITION") for a purchase price of not
more than $14,300,000 (as such price may be adjusted pursuant to the
Acquisition Agreement).
C. The Borrower has requested that UBOC modify various terms and
conditions of the Existing Agreement to extend the maturity date of the
Existing Revolving Loan (as defined below) to November 17, 1998 and to make
available to it a new revolving credit facility with a letter of credit
subfacility and a term loan facility, in an aggregate amount not exceeding
$35,000,000, for the purposes of (i) repaying all unpaid principal of and
interest on the Existing Revolving Loan, (ii) consummating the Dubs
Acquisition and additional Permitted Acquisitions (as defined below), (iii)
funding working capital and capital expenditures and (iv) funding general
corporate purposes, in each case on the terms and conditions set forth below.
D. In order to provide for the modification of various terms and
conditions of the Existing Agreement, the parties have agreed to amend and
restate the representations, warranties, covenants, agreements and
obligations of the Borrower in this Agreement, which completely amends,
restates and replaces the Existing Agreement, all upon the terms and
provisions and subject to the conditions hereinafter set forth.
E. The parties to the Existing Agreement desire to further modify the
Existing Agreement to create the ability to add additional Lenders as parties to
this Agreement
from time to time in accordance with the terms hereof, and to add as a party
to this Agreement the Agent, as agent for the Lenders hereunder.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the following meanings:
"ACCOUNTANTS": PricewaterhouseCoopers or such other firm of independent
certified public accountants of recognized national standing as shall be
selected by the Borrower.
"ACQUISITION AGREEMENT": as defined in the Recitals hereto.
"ADR AGREEMENT": that certain Alternative Dispute Resolution Agreement
dated as of November 17, 1998 among the Borrower, Fast Forward, Multi-Media,
the Lenders and the Agent.
"AFFILIATE": as to any Person, (a) any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person or (b) any Person who is a director, officer or partner (i)
of such Person or (ii) of any Subsidiary of such Person. For purposes of
this definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGENT": as defined in the preamble hereto.
"AGGREGATE AVAILABLE REVOLVING LOAN COMMITMENT": the sum of the
Available Revolving Loan Commitments of each Lender.
"AGGREGATE COMMITMENT": the sum of the Aggregate Revolving Loan
Commitment and the Aggregate Term Loan Commitment.
"AGGREGATE REVOLVING LOAN COMMITMENT": the sum of the Revolving Loan
Commitments set forth on the signature pages hereto, as the same may be
adjusted from time to time pursuant to the provisions hereof.
"AGGREGATE TERM LOAN COMMITMENT": the sum of the Term Loan Commitments
set forth on the signature pages hereto.
"AGREEMENT": this Amended and Restated Credit Agreement, as amended,
waived, supplemented or otherwise modified from time to time.
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"APPLICABLE LENDING OFFICE": for any Lender, its offices for LIBOR
Loans, Reference Rate Loans and participations in Letters of Credit,
specified below its signature on the signature pages hereof or in the
Assignment and Acceptance pursuant to which it became a party hereto, as the
case may be, any of which offices may, upon 10 days' prior written notice to
the Agent and the Borrower, be changed by such Lender.
"APPLICABLE REVOLVING LOAN MARGIN": with respect to Revolving Loans,
for each LIBOR Loan, 1.25%.
"APPLICABLE TERM LOAN MARGIN": with respect to Term Loans, for each
LIBOR Loan, 1.25%.
"APPLICABLE MARGIN": the Applicable Revolving Loan Margin or the
Applicable Term Loan Margin, as applicable.
"ASSET DISPOSITION": the sale, sale and leaseback, transfer,
conveyance, exchange, long-term lease accorded sales treatment under GAAP or
similar disposition (including by means of a merger, consolidation,
amalgamation, joint venture or other substantive combination) of any of the
Properties, business or assets (other than marketable securities, including
"margin stock" within the meaning of Regulation U, liquid investments and
other financial instruments but, including, without limitation, the
assignment of any lease, license or permit relating to the Properties) of the
Borrower or any of its Subsidiaries to any Person or Persons other than to
the Borrower or any of its Wholly Owned Subsidiaries; PROVIDED THAT Asset
Dispositions shall not include the sale or other disposition in the ordinary
course of business and on ordinary business terms of assets in an aggregate
amount not exceeding $1,000,000.
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance substantially
in the form of Exhibit B to this Agreement.
"AVAILABLE REVOLVING LOAN COMMITMENT": with respect to each Lender
having a Revolving Loan Commitment on the date of determination thereof, the
amount by which (a) the Revolving Loan Commitment of such Lender on such date
exceeds (b) the principal sum of such Lender's (i) Revolving Loans
outstanding, (ii) Revolving Loan Commitment Percentage of the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (iii)
Revolving Loan Commitment Percentage of the aggregate amount of unreimbursed
drawings under all Letters of Credit on such date.
"BORROWER": as defined in the preamble hereto.
"BORROWING NOTICE": a notice from the Borrower to the Agent requesting
a borrowing of Loans, substantially in the form of Exhibit E hereto.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on which
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commercial banks in the State of California are authorized or required by law
to close and which, in the case of a LIBOR Loan, is a Eurodollar Business Day.
"CAPITAL EXPENDITURES": for any period, expenditures (including,
without limitation, the aggregate amount of Capitalized Lease Obligations
incurred during such period) made by the Borrower or any of its Subsidiaries
to acquire or construct fixed assets, plant and equipment (including
renewals, improvements and replacements, but excluding repairs and excluding
also the Dubs Acquisition or any Permitted Acquisition) during such period
computed in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS": obligations for the payment of rent
for any real or personal property under leases or agreements to lease that,
in accordance with GAAP, have been or should be capitalized on the books of
the lessee and, for purposes hereof, the amount of any such obligation shall
be the capitalized amount thereof determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and
all equivalent ownership interests in a Person (other than a corporation),
any and all warrants, options or rights to purchase any of the foregoing or
any other securities convertible into any of the foregoing.
"CASH COLLATERAL DEPOSIT": cash deposits made by the Borrower to the
Agent, to be held by the Agent as Collateral in the Collateral Account
pursuant to the Security Agreement, for the reimbursement of drawings under
Letters of Credit.
"CASH INCOME TAXES": cash income taxes paid by the Borrower and its
Subsidiaries during the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters.
"CODE": the Internal Revenue Code of 1986, as amended from time to time.
"COLLATERAL": all of the property (tangible or intangible) purported to
be subject to the lien or security interest purported to be created by any
mortgage, deed of trust, security agreement, pledge agreement, assignment or
other security document heretofore or hereafter executed by the Borrower as
security for all or part of the Obligations.
"COLLATERAL ACCOUNT": as defined in Section 4 of the Security Agreement.
"COLLATERAL DOCUMENTS": the Security Agreement, all notices of security
interests in deposit accounts requested by the Agent pursuant to the Security
Agreement, all Form UCC-1 Financing Statements and amendments thereto and any
other document encumbering the Collateral or evidencing or perfecting a
security interest therein for the benefit of the Lenders executed by the
Borrower.
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"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
of the Aggregate Commitment then constituted by such Lender's Commitments.
"COMMITMENTS": as to any Lender, any Revolving Loan Commitment and any
Term Loan Commitment held by it hereunder.
"COMMONLY CONTROLLED ENTITY": as to any Person, an entity, whether or
not incorporated, which is under common control with such Person within the
meaning of Section 4001 of ERISA or is part of a group which includes such
Person and which is treated as a single employer under Section 414 of the
Code.
"CONTINUATION NOTICE": a request for continuation or conversion of a
Loan as set forth in Section 2.6, substantially in the form of Exhibit C.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"COVENANT COMPLIANCE CERTIFICATE": a certificate of a senior financial
officer of the Borrower, in form, substance and detail satisfactory to the
Agent, with regard to (and setting forth the calculations for) each of the
covenants set forth in Section 6.1.
"DEBT SERVICE": for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all regularly scheduled
payments or regularly scheduled prepayments of principal of Indebtedness
(including, without limitation, the principal component of any payments in
respect of Capitalized Lease Obligations) made during such period PLUS (b)
all Interest Expense for such period.
"DEFAULT": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States.
"DRAWING LENDER": as defined in Section 2.3(c).
"DUBS ACQUISITION": as defined in the Recitals hereto.
"EARN-OUT PAYMENTS": cash payments required to be made by the Borrower
pursuant to earn-out provisions of any acquisition agreement entered into by
the Borrower prior to the date hereof for the purpose of acquiring a business.
"EBITDA": for any period, for the fiscal quarter most recently ended
and the immediately preceding three fiscal quarters, Net Income after
eliminating extraordinary gains and losses, PLUS (i) provisions for income
taxes, (ii) depreciation and amortization
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and (iii) Interest Expense.
"ENVIRONMENTAL CONTROL STATUTES": as defined in Section 3.15.
"EQUITY RIGHTS": with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any stockholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"EQUITYHOLDER AGREEMENTS": each shareholder agreement, limited
liability company agreement, partnership agreement, voting agreement,
buy-sell agreement, option, warrant, put, call, or right of first refusal,
and any other agreement or instrument with conversion rights into equity of
the Borrower or any Subsidiary either (a) between the Borrower or any
Subsidiary and any holder or prospective holder of any equity interest of the
Borrower or any Subsidiary (including interests convertible into such equity)
or (b) otherwise between any two or more such holders of equity interests.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE": as to any Person, each trade or business including
such Person, whether or not incorporated, which together with such Person
would be treated as a single employer under Section 4001(a)(14) of ERISA.
"EURODOLLAR BUSINESS DAY": any day on which banks are open for dealings
in Dollar deposits in the London Interbank Market.
"EVENT OF DEFAULT": any of the events specified in Section 7, PROVIDED
THAT any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"EXCLUDED TAXES": all taxes imposed on or by reference to the net
income of the Agent or any Lender or its Applicable Lending Office by any
Governmental Authority and all franchise taxes, taxes on doing business or
taxes measured by capital or net worth imposed on the Agent or on any Lender
or its Applicable Lending Office by any Governmental Authority and any taxes
imposed by any Governmental Authority arising as a consequence of the failure
of any Lender to provide accurate documentation required to be provided by
such Lender pursuant to Section 2.14(b).
"EXISTING AGREEMENT": as defined in the Recitals hereto.
"EXISTING REVOLVING LOAN": the revolving loan in the original principal
amount of $20,000,000 made by UBOC to the Borrower pursuant to the Existing
Agreement.
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"FAST FORWARD": Fast Forward, Inc., a Delaware corporation.
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of
the quotations for the day of such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it.
"FIXED CHARGE COVERAGE RATIO": as at the last day of any fiscal
quarter, the ratio of EBITDA LESS non-financed Capital Expenditures for the
four quarter period ending on such day to Fixed Charges for the four quarter
period ending on such day.
"FIXED CHARGES": for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (i) Debt Service for such period,
(ii) the aggregate amount of any cash dividends paid during such period in
respect of any Capital Stock of the Borrower or any of its Subsidiaries,
(iii) Cash Income Taxes for such period and (iv) Earn-out Payments for such
period.
"FUNDED DEBT": the sum of the outstanding principal balance of all
Indebtedness (including, but not limited to, Indebtedness to the Lenders and
Capitalized Lease Obligations) of Borrower and its Subsidiaries on a
consolidated basis.
"GAAP": generally accepted accounting principles in the United States
in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any federal, state
or other political subdivision thereof and any federal, state or local entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation (without duplication) of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "PRIMARY OBLIGATIONS") of any other third Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds for the purchase or payment of any such primary obligation or to
maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to
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make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lesser of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which
such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in
good faith.
"GUARANTEES": the Amended and Restated Guarantees made by each of Fast
Forward and Multi-Media and all other guarantees executed by a Guarantor in
favor of the Agent for the benefit of the Lenders, in form and substance
reasonably satisfactory to the Agent, as the same may be amended or modified
from time to time in accordance with the terms hereof.
"GUARANTOR COLLATERAL": all of the property (tangible or intangible)
purported to be subject to the lien or security interest purported to be
created by any mortgage, deed of trust, security agreement, pledge agreement,
assignment or other security document heretofore or hereafter executed by any
Guarantor as security for all or part of the Obligations or the Guarantees.
"GUARANTOR COLLATERAL DOCUMENTS": the Guarantor Security Agreements,
all notices of security interests in deposit accounts requested by the Agent
pursuant to the Guarantor Security Agreements, all Form UCC-1 Financing
Statements and amendments thereto and any other document encumbering the
Guarantor Collateral or evidencing or perfecting a security interest therein
for the benefit of the Lenders executed by any Guarantor.
"GUARANTOR SECURITY AGREEMENTS": the security agreements, in form and
substance reasonably satisfactory to the Agent, made by each Subsidiary in
favor of the Agent, for the benefit of the Lenders, as the same may be
amended from time to time in accordance with the terms hereof.
"GUARANTORS": each Subsidiary.
"HAZARDOUS MATERIAL": collectively, (a) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls ("PCB'S"), (b) any chemicals or other materials or
substances that are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted
-8-
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Control
Statute and (c) any other chemical or other material or substance, exposure
to which is now or hereafter prohibited, limited or regulated under any
Environmental Control Statute.
"INDEBTEDNESS": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than trade liabilities (other than for
borrowed money) incurred in the ordinary course of business so long as such
trade liabilities are payable within 90 days of the date the respective goods
are delivered or the respective services are rendered) or which is evidenced
by a note, bond, debenture or similar instrument, (b) all obligations of such
Person under Capitalized Lease Obligations, (c) all obligations of such
Person in respect of acceptances issued or created for the account of such
Person, (d) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (e) all obligations of such Person, whether absolute or
contingent, in respect of letters of credit opened for the account of such
Person (other than any letters of credit opened for the purpose of
facilitating the purchase of goods and services in the ordinary course of
business and having a term of not more than 360 days), (f) all obligations of
such Person under Non-Compete Agreements and (g) all Guarantee Obligations of
such Person in respect of any indebtedness, obligations or liabilities of any
other Person of the type referred to in clauses (a) through (g) of this
definition.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST EXPENSE": for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (i) all interest on Funded Debt
(including, without limitation, the interest component of any payments in
respect of Capitalized Lease Obligations) which was paid, payable and/or
accrued for such period and (ii) all commitment, letter of credit or line of
credit fees paid, payable and/or accrued for such period (without duplication
of previous amounts) to any lender in exchange for such lender's commitment
to lend.
"INTEREST PAYMENT DATE": (a) as to any Reference Rate Loan, the last
day of each month (commencing November 30, 1998) while the Loans are
outstanding, (b) as to any LIBOR Loan having an Interest Period of three
months or less, the last day of such Interest Period, (c) as to any LIBOR
Loan having an Interest Period longer than three months, each day which is at
the end of each three month-period within such Interest Period after the
first day of such Interest Period and the last day of such Interest Period
and (d) for each of (a), (b) and (c) above, on the day on which the Term
Loans and the Revolving Loans become due and payable in full and are paid or
prepaid in full.
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"INTEREST PERIOD": with respect to any LIBOR Loan:
(a) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such LIBOR Loan and ending one,
two, three, six or twelve months thereafter, as selected by the Borrower in
its notice of borrowing or Continuation Notice, as the case may be, given
with respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one, two,
three, six or twelve months thereafter, as selected by the Borrower by
irrevocable notice to the Agent not less than three Eurodollar Business Days
prior to the last day of the then current Interest Period with respect
thereto;
PROVIDED THAT, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the date
final payment is due on the Term Loans or the Revolving Loans, as
applicable, shall end on the date of such final payment; and
(iii) any Interest Period pertaining to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month.
"LANDLORD CONSENT": a waiver and consent, in form and substance
reasonably satisfactory to the Agent, of each Person who is the owner of real
property leased to the Borrower, any Guarantor or Dubs.
"LENDERS": as defined in the preamble hereto and Section 8.8 hereof.
"LETTER OF CREDIT": as defined in Section 2.1(a).
"LETTER OF CREDIT AMOUNT": the stated maximum amount available to be
drawn under a particular Letter of Credit, as such amount may be reduced or
reinstated from time to time in accordance with the terms of such Letter of
Credit.
"LETTER OF CREDIT REQUEST": a request by the Borrower for the issuance
of a Letter of Credit, on the Agent's standard form of Application for
Irrevocable Standby Letter of Credit, the current form of which is attached
hereto as Exhibit D, and containing terms
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and conditions satisfactory to the Agent in its sole discretion.
"LIBOR": with respect to each day during each Interest Period pertaining
to a LIBOR Loan, the rate of interest determined by the Agent to be the rate per
annum at which deposits in dollars would be offered to the Agent by leading
banks in the London Interbank Market at or about 9:00 a.m., Los Angeles time,
two Eurodollar Business Days prior to the beginning of such Interest Period, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its LIBOR Loan to
be outstanding during such Interest Period.
"LIBOR ADJUSTED RATE": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
-------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR LOANS": Loans the rate of interest applicable to which is based
upon LIBOR.
"LIBOR RESERVE REQUIREMENTS": for any day as applied to a LIBOR Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such Federal Reserve System.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any Capitalized Lease Obligation having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"LOAN": a Revolving Loan or a Term Loan.
"LOAN DOCUMENTS": this Agreement, the Notes, any Letter of Credit Requests
that are executed by the Borrower, the Collateral Documents, the ADR Agreement,
the Landlord Consents, the Guarantor Collateral Documents and the Guarantees and
any other agreement executed by an Obligor in connection therewith and herewith
including, but not limited to, UCC-1 Financing Statements and amendments
thereto, as such agreements and documents may be amended, supplemented and
otherwise modified from time to time in accordance with the terms hereof.
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"MAJORITY LENDERS": Lenders having at least 66-2/3% of the sum of (a) the
aggregate outstanding principal amounts of the Term Loans or, if the Term Loans
shall not have been made, the aggregate outstanding principal amount of the Term
Loan Commitments, PLUS (b) the sum of (i) the Aggregate Available Revolving Loan
Commitment at such time PLUS (ii) the aggregate outstanding principal amount of
the Revolving Loans PLUS (iii) the aggregate amount of all participations
purchased by lenders in any outstanding Letters of Credit or unreimbursed
drawings under Letters of Credit at such time.
"MAJORITY REVOLVING LOAN LENDERS": Revolving Loan Lenders having at least
66-2/3% of the aggregate amount of the Revolving Commitments or, if the
Revolving Loan Commitments shall have terminated, Lenders holding at least
66-2/3% of the sum of (a) the aggregate unpaid principal amount of the Revolving
Loans PLUS (b) the aggregate amount of all participations purchased by Lenders
in any outstanding Letters of Credit or unreimbursed drawings under Letters of
Credit at such time.
"MARGIN STOCK": as defined in Regulation U.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the business,
operations, property, financial condition, prospects, liabilities of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Obligor
to perform its respective obligations under the Loan Documents, (c) the validity
or enforceability of any of the Loan Documents or the rights or remedies of the
Agent and the Lenders hereunder or thereunder or (d) the timely payment of the
principal of or interest on the Loans or other amounts payable in connection
therewith.
"MATERIAL CONTRACTS": each contract and agreement, including, but not
limited to, site leases and licenses, material to the financial condition or
operation of the Borrower or any Subsidiary.
"MAXIMUM FUNDED DEBT RATIO": as at any date, for the Borrower and its
Subsidiaries on a consolidated basis, the ratio of Funded Debt on such date to
EBITDA as at such date.
"MULTI-MEDIA": Multi-Media Services, Inc., a California corporation.
"MULTIEMPLOYER PLAN": a plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET INCOME": net income as determined in accordance with GAAP.
"NET WORTH": net worth as determined in accordance with GAAP.
"NON-COMPETE AGREEMENTS": all agreements pursuant to which the Borrower or
any Subsidiary has agreed to make payments (whether in cash or in kind) to
another
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Person for the agreement of such Person not to compete with the Borrower
or such Subsidiary in a given area.
"NOTE": a Revolving Note or a Term Note, as the case may be, and "NOTES"
shall mean the Revolving Notes and/or the Term Notes, as the case may be.
"OBLIGATIONS": the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Term Loans and the
Revolving Loans and interest accruing on or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding and whether or not at a
default rate) the Notes, the obligation to reimburse drawings under Letters of
Credit (including the contingent obligation to reimburse any drawings under
outstanding Letters of Credit) and all other obligations and liabilities of the
Obligors to the Agent and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, the Notes, the
Letters of Credit, any other Loan Document and any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees and disbursements
of counsel (including the allocated reasonable cost of internal counsel) to the
Agent or the Lenders that are required to be paid by the Borrower pursuant to
the terms of this Agreement) or otherwise.
"OBLIGOR": the Borrower, each Guarantor and any other Person (other than a
Lender) obligated under any Loan Document.
"ORGANIC DOCUMENTS": relative to any entity, its certificate or articles
of incorporation or organization, its by-laws or operating agreement, any
Equityholder Agreements, its partnership agreement, and any other agreements or
documents relating to the control or management of any such entity (whether
existing as corporation, a partnership, a limited liability company or
otherwise).
"PARTICIPANT": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor thereto.
"PERMITTED ACQUISITION": the acquisition (whether by way of purchase of
assets or stock, by merger or consolidation or otherwise) by the Borrower, or
any Wholly Owned Subsidiary of the Borrower, of any video duplication business,
post-production business, audio sweetening business or any business engaged in
the distribution of national television spot advertising, trailers and
electronic press kits for the motion picture and television industries.
"PERSON": any individual, firm, partnership, joint venture, corporation,
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association, limited liability company, business enterprise trust,
unincorporated organization, government or department or agency thereof or other
entity, whether acting in an individual, fiduciary or other capacity.
"PLAN": as to any Person, any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of such Person or any
ERISA Affiliate of such Person (and any such plan no longer maintained by such
Person or any of such Person's ERISA Affiliates to which such Person or any of
such Person's ERISA Affiliates has made or was required to make any
contributions within any of the five preceding years).
"PROHIBITED TRANSACTION": with respect to any Plan, a prohibited
transaction (as defined in Section 406 of ERISA) with respect to such Plan.
"PROPERTIES": the collective reference to the real and personal (tangible
and intangible) property owned, leased, used, occupied or operated, under
license or permit by the Obligors.
"PURCHASING LENDERS": as defined in Section 9.6(c).
"REFERENCE RATE": the rate of interest per annum publicly announced from
time to time by Union Bank of California, N.A. as its "reference rate" in effect
at its office in Los Angeles, California. Any change in the Reference Rate
shall be effective on the effective date specified in the public announcement of
such change.
"REFERENCE RATE LOANS": Loans the rate of interest applicable to which is
based upon the Reference Rate.
"REGISTER": as defined in Section 9.6(d).
"REGULATION D": Regulation D of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"REORGANIZATION": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under PBGC regulations.
"REQUIREMENT OF LAW": as to any Person, the Organic Documents of such
-14-
Person, and any law, treaty, rule or regulation, determination or policy
statement or interpretation of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"RESPONSIBLE OFFICER": with respect to the Borrower or any Subsidiary, the
chief executive officer or the president, or, with respect to financial matters,
the chief financial officer, treasurer or controller of such entity.
"RESTATEMENT DATE": the date on which the conditions precedent set forth
in Section 4.1 have been satisfied.
"RESTRICTED PAYMENTS": as defined in Section 6.6.
"REVOLVING LOAN": as defined in Section 2.1(a).
"REVOLVING LOAN COMMITMENT": with respect to each Lender having a
Revolving Loan Commitment, its commitment listed as its "Revolving Loan
Commitment" in Schedule 2.1 hereto to make Revolving Loans and participate in
Letters of Credit hereunder through its Applicable Lending Office, as the same
shall be adjusted from time to time pursuant to this Agreement.
"REVOLVING LOAN COMMITMENT EXPIRATION DATE": November 1, 1999 or such
earlier date as the Aggregate Revolving Loan Commitment shall expire (whether by
acceleration, reduction to zero or otherwise).
"REVOLVING LOAN COMMITMENT PERCENTAGE": with respect to each Revolving
Loan Lender, the percentage equivalent of the ratio which such Revolving Loan
Lender's Revolving Loan Commitment bears to the Aggregate Revolving Loan
Commitment, as such Revolving Loan Lender's Revolving Loan Commitment and the
Aggregate Revolving Loan Commitment may be adjusted from time to time pursuant
to the terms hereof.
"REVOLVING LOAN LENDER": each Lender having a Revolving Loan Commitment
and/or which shall have (i) Revolving Loans outstanding and/or
(ii) participations in Letters of Credit which are outstanding.
"REVOLVING NOTE" AND "REVOLVING NOTES": as defined in Section 2.1(c).
"SECURITY AGREEMENT": the Amended and Restated Security Agreement in form
and substance reasonably satisfactory to the Agent made by the Borrower in favor
of the Agent, for the benefit of the Lenders, in respect of the tangible and
intangible personal property of the Borrower described therein, as the same may
be amended from time to time in accordance with the terms hereof.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA,
but
-15-
which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, that:
(i) the present fair salable value of such Person's assets is in
excess of the total amount of the probable liability on such Person's
liabilities;
(ii) such Person is able to pay its debts as they become due; and
(iii) such Person does not have unreasonably small capital to carry on
such Person's business as theretofore operated and all businesses in which
such Person is about to engage.
"SUBSIDIARY": as to any Person at any time of determination, a
corporation, partnership or other entity of which shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions of such
corporation, partnership or other entity (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or
the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries or Subsidiaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"TAXES": as defined in Section 2.14.
"TERM LOAN": as defined in Section 2.2(a).
"TERM LOAN COMMITMENT": with respect to each Lender having a Term Loan
Commitment, the commitment listed as its "Term Loan Commitment" in Schedule
2.1 hereto to make a Term Loan hereunder through its Applicable Lending
Office, as the same may be adjusted pursuant to the provisions hereof.
"TERM LOAN COMMITMENT PERCENTAGE": with respect to each Term Loan
Lender, the percentage equivalent of the ratio which such Term Loan Lender's
Term Loan Commitment bears to the Aggregate Term Loan Commitment.
"TERM LOAN LENDERS": each Lender having a Term Loan Commitment and/or
which shall have Term Loans outstanding.
"TERM LOAN MATURITY DATE": October 31, 2003 or such earlier date as the
Aggregate Term Loan Commitment shall expire (whether by acceleration,
reduction to zero or otherwise).
"TERM LOAN REDUCTION DATES": the last day of each month (commencing
-16-
November 30, 1998) while the Term Loans are outstanding.
"TERM NOTE" AND "TERM NOTES": as defined in Section 2.2(c).
"TERMINATION EVENT": (i) a Reportable Event, (ii) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section
4042 of ERISA, (iii) the appointment by the PBGC of a trustee to administer
any Single Employer Plan or (iv) the existence of any other event or
condition that would reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment by the PBGC
of a trustee to administer, any Single Employer Plan.
"TRANCHE": the collective reference to LIBOR Loans the Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such LIBOR Loans shall originally have been made on the
same day).
"TRANSFEREE": as defined in Section 9.6(g).
"TYPE": as to any Term Loan or any Revolving Loan, its nature as a
Reference Rate Loan or a LIBOR Loan.
"UBOC": as defined in the Recitals hereto.
"WHOLLY OWNED SUBSIDIARY": with respect to any Person, any corporation,
partnership or other entity of which all of the equity securities or other
ownership interests (other than, in the case of a corporation, directors'
qualifying shares) are directly or indirectly owned or controlled by such
Person or one or more Wholly Owned Subsidiaries of such Person.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have such defined meanings
when used in the Notes, any other Loan Document or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein, in the Notes, in any other Loan Document, and in
any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
-17-
(e) For the purpose of determining financial covenant compliance
hereunder for any period (including with respect to Permitted Acquisitions
pursuant to Section 6.7(h)(vi)), acquisitions, divestitures, and asset sales
occurring during such period (or intended to occur during such period in the
case of a potential Permitted Acquisition) will be included in the
calculations for such period on a pro forma basis, and will be deemed to have
occurred on the first day of such period.
SECTION 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS
2.1 REVOLVING LOANS AND LETTERS OF CREDIT; REVOLVING LOAN COMMITMENT
AMOUNTS.
(a) Subject to the terms and conditions hereof, each Lender having a
Revolving Loan Commitment severally agrees to (i) make loans on a revolving
credit basis through its Applicable Lending Office to the Borrower from time
to time from and including the Restatement Date to but excluding the
Revolving Loan Commitment Expiration Date (each a "REVOLVING LOAN", and
collectively, the "REVOLVING LOANS") in accordance with the provisions of
this Agreement and (ii) participate through its Applicable Lending Office in
standby letters of credit issued for the account of the Borrower pursuant to
Section 2.3 from time to time from and including the Restatement Date to but
excluding the Revolving Loan Commitment Expiration Date (each a "LETTER OF
CREDIT", and collectively, the "LETTERS OF CREDIT"); PROVIDED, HOWEVER, that
the sum of (A) the aggregate principal amount of all Revolving Loans
outstanding, (B) the aggregate Letter of Credit Amount of all Letters of
Credit outstanding and (C) the aggregate amount of unreimbursed drawings
under all Letters of Credit shall not exceed the Aggregate Revolving Loan
Commitment at any time; and PROVIDED, FURTHER, that the sum of (x) the
aggregate Letter of Credit Amount of all Letters of Credit outstanding and
(y) the aggregate amount of unreimbursed drawings under all Letters of Credit
shall not exceed $100,000 at any time. Within the limits of each Revolving
Loan Lender's Revolving Loan Commitment, the Borrower may borrow, have
Letters of Credit issued for the Borrower's account, prepay Revolving Loans,
reborrow Revolving Loans, and have additional Letters of Credit issued for
the Borrower's account after the expiration of previously issued Letters of
Credit.
The principal amount of each Revolving Loan Lender's (A) Revolving Loan and
(B) participation in a Letter of Credit shall be in an amount equal to the
product of (i) such Revolving Loan Lender's Revolving Loan Commitment Percentage
and (ii) the total amount of the Revolving Loan or Revolving Loans, or the
Letter of Credit or Letters of Credit, requested; PROVIDED THAT in no event
shall any Revolving Loan Lender be obligated to make a Revolving Loan or
participate in a Letter of Credit if after giving effect to such Revolving Loan
or such participation the sum of such Revolving Loan Lender's (x) Revolving
Loans outstanding, (y) Revolving Loan Commitment Percentage of the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (z) Revolving
Loan Commitment Percentage of the aggregate amount of unreimbursed drawings
under all Letters of Credit would exceed its Revolving Loan Commitment or if
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the amount of such requested Revolving Loan or such Revolving Loan Lender's
Revolving Loan Commitment Percentage of such Letter of Credit is in excess of
such Revolving Loan Lender's Available Revolving Loan Commitment.
(b) Subject to Sections 2.10 and 2.12, the Revolving Loans may from
time to time be (i) LIBOR Loans, (ii) Reference Rate Loans or (iii) a
combination thereof, as determined by the Borrower and notified to the Agent
in accordance with either Section 2.1(d) or 2.6. Each Revolving Loan Lender
may make or maintain its Revolving Loans or participate in Letters of Credit
to or for the account of the Borrower by or through any Applicable Lending
Office.
(c) The Revolving Loans made by each Revolving Loan Lender to the
Borrower shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A-1 (a "REVOLVING NOTE"), with
appropriate insertions therein as to payee, date and principal amount,
payable to the order of such Revolving Loan Lender and representing the
obligations of the Borrower to pay the aggregate unpaid principal amount of
all Revolving Loans made by such Revolving Loan Lender to the Borrower
pursuant to Section 2.1(a) or 2.3(c), with interest thereon as prescribed in
Sections 2.8 and 2.9. Each Revolving Loan Lender is hereby authorized (but
not required) to record the date and amount of each payment or prepayment of
principal of its Revolving Loans made to the Borrower, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in
the case of LIBOR Loans, the length of each Interest Period with respect
thereto, in the books and records of such Revolving Loan Lender, and any such
recordation shall constitute PRIMA FACIE evidence of the accuracy of the
information so recorded. The failure of any Revolving Loan Lender to make
any such recordation or notation in the books and records of the Revolving
Loan Lender (or any error in such recordation or notation) shall not affect
the obligations of the Borrower hereunder or under the Revolving Notes. Each
Revolving Note shall (i) be dated the Restatement Date, (ii) provide for the
payment of interest in accordance with Sections 2.8 and 2.9 and (iii) be
stated to be payable in full on the Revolving Loan Commitment Expiration Date.
(d) The Borrower shall give the Agent irrevocable written notice,
substantially in the form of a Borrowing Notice (which Borrowing Notice must
be received by the Agent prior to 10:00 A.M., Los Angeles time, one Business
Day prior to each proposed borrowing date or, if all or any part of the
Revolving Loans are requested to be made as LIBOR Loans, three Eurodollar
Business Days prior to each proposed borrowing date) requesting that the
Revolving Loan Lenders make the Revolving Loans on the proposed borrowing
date and specifying (i) the aggregate amount of Revolving Loans requested to
be made, (ii) whether the Revolving Loans are to be LIBOR Loans, Reference
Rate Loans or a combination thereof and (iii) if the Revolving Loans are to
be entirely or partly LIBOR Loans, the respective amounts of each such Type
of Revolving Loan and the respective lengths of the initial Interest Periods
therefor. On receipt of such Borrowing Notice, the Agent shall promptly
notify each Revolving Loan Lender thereof. On the proposed borrowing date,
not later than 10:00 A.M., Los Angeles time, each Revolving Loan Lender shall
make available to the Agent at its
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office specified in Section 9.2 the amount of such Revolving Loan Lender's
pro rata share of the aggregate borrowing amount (as determined in accordance
with the second paragraph of Section 2.1(a)) in immediately available funds.
The Agent may, in the absence of notification from any Revolving Loan Lender
that such Revolving Loan Lender has not made its pro rata share available to
the Agent, on such date, credit the account of the Borrower on the books of
such office of the Agent with the aggregate amount of Revolving Loans.
(e) Neither the Agent nor any Revolving Loan Lender shall be
responsible for the obligation or Available Revolving Loan Commitment of any
other Revolving Loan Lender hereunder, nor will the failure of any Revolving
Loan Lender to comply with the terms of this Agreement relieve any other
Revolving Loan Lender or the Borrower of their obligations under this
Agreement and the Revolving Notes. Nothing herein shall be deemed to relieve
any Revolving Loan Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights which the Borrower may have against any
Revolving Loan Lender as a result of any default by such Revolving Loan
Lender hereunder.
(f) The Revolving Loan Commitment of each Revolving Loan Lender and the
Aggregate Revolving Loan Commitment shall terminate on the Revolving Loan
Commitment Expiration Date. All outstanding Revolving Loans shall be due and
payable on the Revolving Loan Commitment Expiration Date.
2.2 TERM LOANS; TERM LOAN COMMITMENT. (a) Subject to the terms and
conditions hereof, each Lender having a Term Loan Commitment severally agrees
to make a term loan (each, a "TERM LOAN" and, collectively, the "TERM LOANS")
to the Borrower on the Restatement Date in a principal amount equal to the
amount of the Term Loan Commitment of such Lender.
(b) Subject to Sections 2.10 and 2.12, the Term Loans may from time to
time be (i) LIBOR Loans, (ii) Reference Rate Loans or (iii) a combination
thereof, as determined by the Borrower and notified to the Agent in
accordance with either Section 2.2(e) or 2.5. Each Term Loan Lender may make
or maintain its Term Loan to the Borrower by or through any Applicable
Lending Office.
(c) The Term Loan made by each Term Loan Lender to the Borrower shall
be evidenced by a promissory note of the Borrower, substantially in the form
of Exhibit A-2 (a "TERM NOTE"), with appropriate insertions therein as to
payee, date and principal amount, payable to the order of such Term Loan
Lender and representing the obligations of the Borrower to pay the aggregate
unpaid principal amount of the Term Loan made by such Term Loan Lender to the
Borrower pursuant to Section 2.2(a), with interest thereon as prescribed in
Sections 2.8 and 2.9. Each Term Loan Lender is hereby authorized (but not
required) to record the date and amount of each payment or prepayment of
principal of its Term Loan made to the Borrower, each continuation thereof,
each conversion of all or a portion thereof to another Type and, in the case
of LIBOR Loans, the length of each Interest Period with respect thereto, in
the books and
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records of such Term Loan Lender, and any such recordation shall constitute
PRIMA FACIE evidence of the accuracy of the information so recorded. The
failure of any Term Loan Lender to make any such recordation or notation in
the books and records of the Term Loan Lender (or any error in such
recordation or notation) shall not affect the obligations of the Borrower
hereunder or under the Term Notes. Each Term Note shall (i) be dated the
Restatement Date, (ii) provide for the payment of interest in accordance with
Sections 2.8 and 2.9 and (iii) be stated to be payable in installments of
principal in accordance with, and subject to the provisions of, Section
2.2(d).
(d) On each Term Loan Reduction Date, the Borrower shall repay the
principal of the Term Notes in an aggregate amount equal to $483,333.33;
PROVIDED, that the final installment paid shall be in an amount equal to all
amounts owed by the Borrower on the Term Notes.
All outstanding Term Loans shall be due and payable, to the extent not
previously paid in accordance with the terms hereof, on the Term Loan
Maturity Date. The aggregate amount payable to any Term Loan Lender on any
Term Loan Reduction Date shall be determined in accordance with the
provisions of Section 2.11.
(e) The Borrower shall give the Agent irrevocable written notice,
substantially in the form of a Borrowing Notice (which Borrowing Notice must
be received by the Agent prior to 10:00 A.M., Los Angeles time, one Business
Day prior to the Restatement Date) requesting that the Term Loan Lenders make
the Term Loans on the Restatement Date. Upon receipt of such Borrowing
Notice the Agent shall promptly notify each Term Loan Lender thereof. Not
later than 10:00 A.M., Los Angeles time, on the Restatement Date each Term
Loan Lender shall make available to the Agent at its office specified in
Section 9.2 the amount of such Term Loan Lender's Term Loan Commitment in
immediately available funds. The Agent may, in the absence of notification
from any Term Loan Lender that such Term Loan Lender has not made its pro
rata share available to the Agent, on such date, credit the account of the
Borrower on the books of such office of the Agent with the aggregate Term
Loans.
(f) Neither the Agent nor any Term Loan Lender shall be responsible for
the obligations or Term Loan Commitment of any other Term Loan Lender
hereunder, nor will the failure of any Term Loan Lender to comply with the
terms of this Agreement relieve any other Term Loan Lender or the Borrower of
their obligations under this Agreement and the Term Notes. Nothing herein
shall be deemed to relieve any Term Loan Lender from its obligation to
fulfill its Commitment hereunder or to prejudice any rights which the
Borrower may have against any Term Loan Lender as a result of any default by
such Term Loan Lender hereunder.
2.3 ISSUANCE OF LETTERS OF CREDIT. (a) The Borrower shall be entitled to
request the issuance of Letters of Credit from time to time from and including
the Restatement Date to but excluding the date which is two Business Days prior
to the Revolving Loan Commitment Expiration Date, by giving the Agent a Letter
of Credit Request at least three Business Days before the requested date of
issuance of such Letter of Credit
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(which shall be a Business Day). Any Letter of Credit Request received by
the Agent later than 10:00 a.m., Los Angeles time, shall be deemed to have
been received on the next Business Day. Each Letter of Credit Request shall
be made in writing, shall be signed by a Responsible Officer, shall be
irrevocable and shall be effective upon receipt by the Agent. Provided that a
valid Letter of Credit Request has been received by the Agent and upon
fulfillment of the other applicable conditions set forth in Section 4.2, the
Agent will issue the requested Letter of Credit from its office specified in
Section 9.2. No Letter of Credit shall have an expiration date later than
two Business Days prior to the Revolving Loan Commitment Expiration Date.
(b) Immediately upon the issuance of each Letter of Credit, the Agent
shall be deemed to have sold and transferred to each Revolving Loan Lender,
and each Revolving Loan Lender shall be deemed to have purchased and received
from the Agent, in each case irrevocably and without any further action by
any party, an undivided interest and participation in such Letter of Credit,
each drawing thereunder and the obligations of the Borrower under this
Agreement in respect thereof in an amount equal to the product of (i) such
Revolving Loan Lender's Revolving Loan Commitment Percentage and (ii) the
maximum amount available to be drawn under such Letter of Credit (assuming
compliance with all conditions to drawing). The Agent shall promptly advise
each Revolving Loan Lender of the issuance of each Letter of Credit, the
Letter of Credit Amount of such Letter of Credit, any change in the face
amount or expiration date of such Letter of Credit, the cancellation or other
termination of such Letter of Credit and any drawing under such Letter of
Credit.
(c) The payment by the Agent of a draft drawn under any Letter of Credit
shall first be made from any Cash Collateral Deposit held by the Agent with
respect to such Letter of Credit. After any such Cash Collateral Deposit has
been applied, the payment by the Agent of a draft drawn under any Letter of
Credit shall constitute for all purposes of this Agreement the making by the
Agent in its individual capacity as a Lender hereunder (in such capacity, the
"DRAWING LENDER") of a Reference Rate Loan in the amount of such payment (but
without any requirement of compliance with the conditions set forth in Section
4.2). In the event that any such Loan by the Drawing Lender resulting from a
drawing under any Letter of Credit is not repaid by the Borrower by 12:00 noon,
Los Angeles time, on the day of payment of such drawing, the Agent shall
promptly notify each other Revolving Loan Lender. Each Revolving Loan Lender
shall, on the day of such notification (or if such notification is not given by
3:00 p.m., Los Angeles time, on such day, then on the next succeeding Business
Day), make a Reference Rate Loan, which shall be used to repay the applicable
portion of the Reference Rate Loan of the Drawing Lender with respect to such
Letter of Credit drawing, in an amount equal to the amount of such Revolving
Loan Lender's participation in such drawing for application to repay the Drawing
Lender (but without any requirement of compliance with the applicable conditions
set forth in Section 4.2) and shall deliver to the Agent for the account of the
Drawing Lender, on the day of such notification (or if such notification is not
given by 3:00 p.m., Los Angeles time, on such day, then on the next succeeding
Business Day) and in immediately available funds, the amount of such Reference
Rate Loan. In the event that any Revolving Loan Lender
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fails to make available to the Agent for the account of the Drawing Lender
the amount of such Reference Rate Loan, the Drawing Lender shall be entitled
to recover such amount on demand from such Revolving Loan Lender together
with interest thereon at the Federal Funds Effective Rate for each day such
amount remains outstanding.
(d) The obligations of the Borrower with respect to any Letter of
Credit, any Letter of Credit Request and any other agreement or instrument
relating to any Letter of Credit and any Reference Rate Loan made under
Section 2.3(c) shall be absolute, unconditional and irrevocable and shall be
paid strictly in accordance with the terms of the aforementioned documents
under all circumstances, including the following:
(i) any lack of validity or enforceability of any Letter of
Credit, this Agreement or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right
that the Borrower may have at any time against any beneficiary or transferee
of any Letter of Credit (or any Person for whom any such beneficiary or
transferee may be acting), the Agent, any Lender (other than the defense of
payment to a Lender in accordance with the terms of this Agreement) or any
other Person, whether in connection with this Agreement, any other Loan
Document, the transactions contemplated hereby or thereby or any unrelated
transaction;
(iii) any statement or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect, or any statement therein being untrue or inaccurate in any respect
whatsoever; PROVIDED THAT payment by the Agent under the applicable Letter of
Credit shall not have constituted gross negligence or willful misconduct of
the Agent under the circumstances in question, as determined by a final
determination of a referee in accordance with the terms of the ADR Agreement;
and
(iv) any exchange, release or nonperfection of any Collateral or
other collateral, or any release, amendment or waiver of or consent to
departure from any Guarantee, other Loan Document or other guaranty, for any
of the Obligations of the Borrower in respect of the Letters of Credit.
(e) The Borrower shall pay to the Agent for the account of the
Revolving Loan Lenders with respect to each Letter of Credit issued
hereunder, for the period from and including the day such Letter of Credit is
issued to but excluding the day such Letter of Credit expires, a letter of
credit fee equal to the product of (i) 1.50% PER ANNUM and (ii) the Letter of
Credit Amount of such Letter of Credit from time to time, such letter of
credit fee to be payable quarterly in arrears on the last day of each March,
June, September and December and on the expiration date of such Letter of
Credit.
(f) The Borrower shall pay to the Agent for its own account, with respect
to each Letter of Credit issued hereunder, (i) for the period from and including
the day such Letter of Credit is issued to but excluding the day such Letter of
Credit expires, a
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fronting fee in respect of each Letter of Credit in an amount equal to 1/4 of
1% per annum of the Letter of Credit Amount of such Letter of Credit from
time to time, such fronting fee to be payable quarterly in arrears on the
last day of each March, June, September and December and on the expiration
date of such Letter of Credit and (ii) from time to time such additional fees
and charges (including cable charges) as are generally associated with
letters of credit, in accordance with the Agent's standard internal charge
guidelines and the related Letter of Credit Request.
(g) The Borrower agrees to the provisions in the Letter of Credit
Request form; PROVIDED, HOWEVER, that the terms of the Loan Documents shall
take precedence if there is any inconsistency between the terms of the Loan
Documents and the terms of said form.
(h) The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Agent nor any Lender nor any of their
respective officers or directors shall be liable or responsible for (i) the
use that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; or (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement thereof, even
if such documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; PROVIDED THAT, with respect to clause
(ii) of this Section 2.3(h), the Borrower shall retain any and all rights it
may have against the Agent for any liability arising out of the gross
negligence or willful misconduct of the Agent, as determined by a final
determination of a referee in accordance with the terms of the ADR Agreement.
In furtherance and not in limitation of the foregoing, the Agent may accept
any document that appears on its face to be in order, without responsibility
for further investigation, regardless of any notice or information to the
contrary.
(i) The Borrower hereby indemnifies and holds harmless each Revolving
Loan Lender and the Agent from and against any and all claims and damages,
losses, liabilities, costs or expenses that such Lender or the Agent may
incur (or that may be claimed against such Lender or the Agent by any Person
whatsoever) by reason of or in connection with the execution and delivery or
transfer of or payment or refusal to pay by the Agent, as issuer of any
Letter of Credit; PROVIDED THAT the Borrower shall not be required to
indemnify any Lender or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused
by (x) the willful misconduct or gross negligence of the Agent, as issuer of
such Letter of Credit, in determining whether a request presented under any
Letter of Credit complied with the terms of such Letter of Credit or (y) in
the case of the Agent, as issuer of such Letter of Credit, the Agent's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this Section 2.3 is intended to limit the other
obligations of the Borrower, any Lender, or the Agent under this Agreement.
2.4 OPTIONAL PREPAYMENTS. The Borrower may at any time and from time to
time, prepay the Loans, in whole or in part, without premium or penalty, upon at
least
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three Business Days' irrevocable written notice, in the case of LIBOR Loans,
and upon at least one Business Day's irrevocable written notice, in the case
of Reference Rate Loans, from the Borrower to the Agent, specifying the date
and amount of prepayment and whether the prepayment is of LIBOR Loans,
Reference Rate Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each and whether the prepayment is of Term
Loans or Revolving Loans, or a combination thereof, and, if a combination
thereof, the amount allocable to each. Upon receipt of any such notice from
the Borrower, the Agent shall promptly notify each Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable by the Borrower on the date specified therein, together with accrued
interest to such date on the amount prepaid and any amounts payable pursuant
to Section 2.15. Partial prepayments of Term Loans shall be applied to the
installments of principal thereof in inverse order of maturity. Amounts
prepaid on account of the Term Loans may not be reborrowed. Partial
prepayments of the Term Loans shall be in an aggregate principal amount of
$1,000,000 and integral multiples of $250,000 in excess thereof. Partial
prepayments of the Revolving Loans shall be in an aggregate principal amount
of $250,000 and integral multiples of $100,000 in excess thereof.
2.5 MANDATORY PREPAYMENTS. If at any time the aggregate principal
amount of all Loans outstanding exceeds the Aggregate Commitment, the
Borrower shall immediately, without notice or request by the Agent, prepay
the Loans (together with accrued interest to the date of prepayment on the
principal amount prepaid) in an aggregate amount equal to such excess.
2.6 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert LIBOR Loans to Reference Rate Loans, by the
Borrower giving the Agent at least two Business Days' prior irrevocable
written notice of such election pursuant to a Continuation Notice. The
Borrower may elect from time to time to convert Reference Rate Loans to LIBOR
Loans by the Borrower giving the Agent at least three Eurodollar Business
Days' prior irrevocable written notice of such election pursuant to a
Continuation Notice. Any such notice of conversion to LIBOR Loans shall
specify the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall promptly notify
each Lender thereof. All or any part of outstanding LIBOR Loans and
Reference Rate Loans may be converted as provided herein, PROVIDED THAT (i)
any such conversion may only be made if, after giving effect thereto, Section
2.7 shall not have been contravened, (ii) no Term Loan may be converted into
a LIBOR Loan after the date that is one month prior to the due date of the
final installment of principal of the Term Loans, (iii) no Revolving Loan may
be converted into a LIBOR Loan after the date that is one month prior to the
Revolving Loan Commitment Expiration Date and (iv) the Borrower shall not
have the right to elect to continue at the end of the applicable Interest
Period, or to convert to, a LIBOR Loan if a Default shall have occurred and
be continuing.
(b) Any LIBOR Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving
notice to the Agent, in accordance with the applicable provisions of the term
"Interest Period" set
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forth in Section 1.1, of the length of the next Interest Period to be
applicable to such LIBOR Loan, PROVIDED THAT no LIBOR Loan may be continued
as such (i) if, after giving effect thereto, Section 2.7 would be
contravened, (ii) with respect to the Term Loans, after the date that is one
month prior to the due date of the final installment of principal of the Term
Loans, (iii) with respect to the Revolving Loans, after the date that is one
month prior to the Revolving Loan Commitment Expiration Date or (iv) if a
Default shall have occurred and be continuing and PROVIDED, FURTHER, that if
the Borrower shall fail to give any required notice as described above in
this Section or if such continuation is not permitted pursuant to the
preceding proviso, such Loans shall be automatically converted to Reference
Rate Loans on the last day of such then-expiring Interest Period.
2.7 MINIMUM AMOUNTS OF TRANCHES. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the
Loans comprising each Tranche (except Loans made pursuant to Section 2.3(c))
shall be equal to $1,000,000 or a whole multiple of $100,000 in excess
thereof and, in any case, there shall not be more than 8 Tranches.
2.8 INTEREST RATES AND PAYMENT DATES. (a) Each LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the LIBOR Adjusted Rate plus (i) for LIBOR Loans
which are Revolving Loans, the Applicable Revolving Loan Margin and (ii) for
LIBOR Loans which are Term Loans, the Applicable Term Loan Margin.
(b) Each Reference Rate Loan shall bear interest at a rate per annum
equal to the Reference Rate.
(c) If any Default shall have occurred and be continuing, all amounts
outstanding shall bear interest at a rate per annum which is the rate
described in paragraph (b) of this Section plus 2% from the date of the
occurrence of such Default until such Default is no longer continuing (after
as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable on demand.
2.9 COMPUTATION OF INTEREST AND FEES. (a) Interest on Reference Rate
Loans shall be calculated on the basis of a 365- (or 366-, as the case may
be), day year for the actual days elapsed and interest on LIBOR Loans and all
other Obligations of the Borrower shall be calculated on the basis of a
360-day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
LIBOR Adjusted Rate. Any change in the interest rate on a Loan resulting
from a change in the Reference Rate or the LIBOR Reserve Requirements shall
become effective as of the opening of business on the day on which such change
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in the Reference Rate is announced or such change in the LIBOR Reserve
Requirements becomes effective, as the case may be. The Agent shall as soon
as practicable notify the Borrower and the Lenders of the effective date and
the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.
2.10 INABILITY TO DETERMINE INTEREST RATE. In the event that prior to
the first day of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower absent manifest error) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Adjusted Rate for
such Interest Period, or
(b) the Agent shall have received notice from the Majority Lenders acting
in good faith that the LIBOR Adjusted Rate determined or to be determined for
such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period, the Agent shall give telecopy
or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (x) any LIBOR Loans requested
to be made on the first day of such Interest Period shall accrue interest at the
Reference Rate, (y) Loans that were to have been converted on the first day of
such Interest Period to LIBOR Loans shall be continued as Reference Rate Loans
and (z) any outstanding LIBOR Loans shall be converted, on the first day of such
Interest Period, to Reference Rate Loans. Until such notice has been withdrawn
by the Agent, no further LIBOR Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Reference Rate Loans to LIBOR
Loans.
2.11 PRO RATA TREATMENT AND PAYMENTS. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Loans shall be made pro rata according to the respective outstanding
principal and interest amounts of such Loans then held by the Lenders. All
payments (including prepayments) to be made by the Borrower hereunder and
under the Notes, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made
prior to 12:00 Noon, Los Angeles time, on the due date thereof to the Agent,
for the account of the applicable Lenders, at the Agent's office specified in
Section 9.2, in Dollars and in immediately available funds. The Agent shall
distribute such payments to the applicable Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on the
LIBOR Loans) becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with
respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment on a LIBOR Loan
becomes due and payable on a day other
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than a Eurodollar Business Day, the maturity thereof shall be extended to the
next succeeding Eurodollar Business Day (and interest shall continue to
accrue thereon at the applicable rate) unless the result of such extension
would be to extend such payment into another calendar month, in which event
such payment shall be made on the immediately preceding Eurodollar Business
Day.
2.12 ILLEGALITY. Notwithstanding any other provision herein, if any
change after the Restatement Date in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender
or Applicable Lending Office to make or maintain LIBOR Loans as contemplated
by this Agreement, (a) the commitment of such Lender hereunder to make LIBOR
Loans, continue LIBOR Loans as such and convert Reference Rate Loans to LIBOR
Loans shall forthwith be suspended during such period of illegality and (b)
the Loans of such Lender or Applicable Lending Office then outstanding as
LIBOR Loans, if any, shall be converted automatically to Reference Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a LIBOR Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section
2.15. To the extent that a Lender's LIBOR Loans have been converted to
Reference Rate Loans pursuant to this Section 2.12, all payments and
prepayments of principal that otherwise would be applied to such Lender's
LIBOR Loans shall be applied instead to its Reference Rate Loans.
2.13 INCREASED COSTS. (a) In the event that any change after the
Restatement Date in any Requirement of Law or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law but, if not having the force of law,
generally applicable to and complied with by banks and financial institutions
of the same general type as such Lender in the relevant jurisdiction) from
any central bank or other Governmental Authority made subsequent to the date
hereof:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirements against assets held by,
letters of credit or guarantees issued by, deposits or other liabilities in
or for the account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, any office of such Lender or Applicable
Lending Office which is not otherwise included in the determination of the
LIBOR Adjusted Rate hereunder; or
(ii) shall impose on such Lender or Applicable Lending Office any
other condition;
and the result of any of the foregoing is to increase the cost to the Agent
of issuing or maintaining any Letter of Credit by an amount which the Agent
deems to be material, or to such Lender or Applicable Lending Office, by an
amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans, or
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purchasing or maintaining any participation in a Letter of Credit, or to
reduce any amount receivable hereunder in respect thereof then, in any such
case, the Borrower shall immediately pay to the Agent, for its own account or
on behalf of such Lender or Applicable Lending Office, as applicable, upon
the demand of the Agent for itself or at the request of such Lender, as
applicable, any additional amounts necessary to compensate such Lender or the
Agent, as applicable, for such increased cost or reduced amount receivable.
If the Agent, any Lender or any Applicable Lending Office becomes entitled to
claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower, through the Agent, of the event by reason of which it
has become so entitled. A certificate as to any additional amounts payable
pursuant to this Section submitted by the Agent or such Lender or Applicable
Lending Office, through the Agent, to the Borrower shall be conclusive
evidence of the accuracy of the information so recorded, absent manifest
error. This covenant shall survive the termination of this Agreement,
expiration of the Letters of Credit and the payment of the Notes and all
other amounts payable hereunder.
(b) If, after the date of this Agreement, the introduction of or any
change in any applicable law, rule, regulation or guideline regarding capital
adequacy, or any change in the interpretation or administration thereof by
any Governmental Authority, central bank or the National Association of
Insurance Commissioners or comparable agency charged with the interpretation
or administration thereof, affects the amount of capital required or expected
to be maintained by any Lender or any corporation controlling any Lender, and
such Lender (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) determines that the amount of
capital maintained by such Lender or such corporation which is attributable
to or based upon the Loans, the Letters of Credit, the Commitments or this
Agreement must be increased as a consequence of such introduction or change
by an amount deemed by such Lender to be material, then, upon demand of the
Agent at the request of such Lender, the Borrower shall immediately pay to
the Agent on behalf of such Lender, additional amounts sufficient to
compensate such Lender or such corporation for the increased costs to such
Lender or corporation of such increased capital. Any such demand shall be
accompanied by a certificate of such Lender setting forth in reasonable
detail the computation of any such increased costs, which certificate shall
be conclusive, absent manifest error. This covenant shall survive the
termination of this Agreement, expiration of the Letters of Credit and the
payment of the Notes and all other amounts payable hereunder.
2.14 TAXES. (a) All payments made by the Borrower in respect of the
Obligations shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority or any political subdivision or taxing authority thereof
or therein, other than Excluded Taxes (all such non-Excluded Taxes being
hereinafter called "TAXES"). If any Taxes are required to be withheld from any
amounts payable to the Agent or any Lender in respect of the Obligations, the
amounts so payable to the Agent or such Lender shall be increased to the extent
necessary to
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yield to the Agent or such Lender (after payment of all Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes. The Agent or a Lender, as the
case may be, shall deliver to the Borrower a certificate in good faith
setting forth the amount of such Taxes, the calculation of such Taxes and an
explanation of the requirement therefor, all in reasonable detail and such
certificate shall be conclusive, absent manifest error. Whenever any Taxes
are payable by the Borrower, as promptly as possible thereafter, the Borrower
shall send to the Agent, for its own account or for the account of such
Lender, as the case may be, a copy of an original official receipt received
by the Borrower showing payment thereof or such other evidence of payment
reasonably satisfactory to the Agent. If the Borrower fails to pay any Taxes
when due to the appropriate taxing authority or fails to remit to the Agent
the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the Lenders for any incremental taxes, interest
or penalties (and related reasonable fees and expenses of counsel) that may
become payable by the Agent or any Lender as a result of any such failure.
The agreements in this Section shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder.
(b) Each Lender that is not organized under the laws of the United
States of America or a state thereof agrees that it will deliver to the
Borrower and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as
the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form. Each such Lender also agrees to deliver to the
Borrower and the Agent two further copies of the said Form 1001 or 4224 and
Form W-8 or W-9, or successor applicable forms or other manner or
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower and
the Agent, and such extensions or renewals thereof as may reasonably be
requested by the Borrower or the Agent, unless in any such case an event
beyond the control of such Lender (including, without limitation, any change
in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advised the
Borrower and the Agent. Each such Lender shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled
to an exemption from United States backup withholding tax.
2.15 INDEMNITY. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from and to pay each Lender within 5 Business Days of such
Lender's demand the amount of any liability, loss or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained (including reasonable fees and
expenses of counsel) which such Lender may sustain or incur as a consequence of
(a) default by the Borrower in
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payment when due of the principal amount of or interest on any LIBOR Loan,
(b) default by the Borrower in making a borrowing of, conversion into or
continuation of LIBOR Loans after the Borrower has given a notice requesting
the same in accordance with the provisions of this Agreement, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice
thereof in accordance with the provisions of this Agreement or (d) the making
by the Borrower of a prepayment or conversion of LIBOR Loans on a day which
is not the last day of an Interest Period with respect thereto. A Lender's
certificate as to such liability, loss or expense shall be deemed conclusive,
absent manifest error. This covenant shall survive the termination of this
Agreement, expiration of the Letters of Credit and the payment of the Notes
and all other amounts payable hereunder.
2.16 MITIGATION OF COSTS. If any Lender, by changing its Applicable
Lending Office or taking any other reasonable action, so long as making such
change or taking such other action is not disadvantageous to it in any
financial, regulatory or other respect, can mitigate any adverse effect on
the Borrower under Section 2.10, 2.12, 2.13, or 2.14, such Lender shall take
such action.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the Loans
and participate in the Letters of Credit, and to induce the Agent to issue
the Letters of Credit, the Borrower hereby represents and warrants to the
Agent and each Lender that:
3.1 ORGANIZATION AND GOOD STANDING. The Borrower and each Subsidiary (a)
is duly incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation as indicated on SCHEDULE 3.1, (b) has all
requisite corporate power and authority to own its properties and to conduct its
business as now conducted and as currently proposed to be conducted and (c) is
duly qualified to conduct business as a foreign corporation and is currently in
good standing in each state and jurisdiction in which it conducts business
except, in each case referred to in clause (c), to the extent that the failure
to do so could not reasonably be expected to have a Material Adverse Effect.
Each state and jurisdiction in which the Borrower or any Subsidiary is or should
be qualified to conduct business is listed on SCHEDULE 3.1 hereto.
3.2 POWER AND AUTHORITY. The Borrower and each Subsidiary has all
requisite power and authority under applicable law and under its Organic
Documents to (i) in the case of the Borrower, borrow hereunder and consummate
the Dubs Acquisition in accordance with the terms of the Acquisition Agreement
and (ii) execute, deliver and perform its respective obligations under the Loan
Documents to which it is a party. All actions, waivers and consents (corporate,
regulatory and otherwise) necessary or appropriate for the Borrower to
consummate the Dubs Acquisition in accordance with the terms of the Acquisition
Agreement, and for the Borrower and each Subsidiary to execute, deliver and
perform the Loan Documents to which it is a party have been
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taken and/or received.
3.3 VALIDITY AND LEGAL EFFECT. This Agreement constitutes, and the
other Loan Documents to which the Borrower or any Subsidiary is a party
constitute (or will constitute when executed and delivered), the legal, valid
and binding obligations of the Borrower or such Subsidiary, as applicable,
enforceable against it in accordance with the terms thereof, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement
of creditors' rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.4 NO VIOLATION OF LAWS OR AGREEMENTS. The execution, delivery and
performance of the Loan Documents and the consummation of the Dubs
Acquisition in accordance with the terms of the Acquisition Agreement (a)
will not violate or contravene any Requirement of Law, (b) will not result in
any material breach or violation of, or constitute a material default under,
any agreement or instrument by which the Borrower or any Subsidiary, or any
of its property, may be bound, and (c) will not result in or require the
creation of any Lien (other than those permitted by Section 6.3) upon or with
respect to any property of the Borrower or any Subsidiary, whether such
property is now owned or hereafter acquired.
3.5 TITLE TO ASSETS; EXISTING ENCUMBRANCES; LEGAL NAMES. The Borrower
and each Subsidiary has good and marketable title to all of its real and
personal properties and assets, free and clear of any Liens (other than those
permitted by Section 6.3). Neither the Borrower nor any Subsidiary has used
(or permitted the filing of any financing statement under) any legal or
operating name at any time during the twelve consecutive calendar months
immediately preceding the execution of this Agreement, except as identified
on SCHEDULE 3.5 hereto.
3.6 CAPITAL STRUCTURE; EQUITY OWNERSHIP. The authorized capital stock
of the Borrower consists of an aggregate of 50,000,000 shares of common
stock, without par value, 9,770,837 shares of which are issued and
outstanding, and 5,000,000 shares of preferred stock, without par value, no
shares of which are issued and outstanding. All of the issued and
outstanding shares of common stock of the Borrower are duly and validly
issued and outstanding, and each of such shares is fully paid and
nonassessable. Except as set forth on SCHEDULE 3.6 hereto, there are no
outstanding Equity Rights with respect to the Borrower or any Subsidiary and
there are no outstanding obligations of the Borrower or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of
capital stock of the Borrower, nor are there any outstanding obligations of
the Borrower or any of its Subsidiaries to make payments to any Person, such
as "phantom stock" payments, where the amount thereof is calculated with
reference to the fair market value or equity value of Borrower or any of its
Subsidiaries.
3.7 SUBSIDIARIES AND AFFILIATES. SCHEDULE 3.7 hereto accurately and
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completely discloses (i) each Subsidiary and Affiliate of the Borrower (other
than its officers and directors), (ii) each Person holding ownership
interests in such Subsidiary and (iii) the nature of the ownership interests
held by each such Person and the percentage of ownership of such Subsidiary
represented by such ownership interests.
3.8 MATERIAL CONTRACTS. Neither the Borrower nor any Subsidiary has
committed any unwaived breach or default under any Material Contract, and the
Borrower has no knowledge or reason to believe that any other party to any
Material Contract has committed any unwaived breach or default thereof. Each
of the Material Contracts is a legal, valid and binding obligation of the
Borrower or the Subsidiaries party thereto, enforceable in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability. The
Borrower has made available to the Lenders and the Agent a complete and
correct copy of each Material Contract (including in each case all exhibits,
schedules and disclosure letters referred to therein or delivered pursuant
thereto, if any) and all amendments thereto and other side letters or
agreements affecting the terms thereof. Except for the Acquisition
Agreement, neither the Borrower nor any of its Subsidiaries is party to any
current agreements or letters of intent providing for the acquisition or
disposition of any assets with a fair market value of $1,000,000 or more.
3.9 TAXES AND ASSESSMENTS. The Borrower and each Subsidiary has timely
filed all required tax returns and reports (federal, state and local) or has
properly filed for extensions of the time for the filing thereof. The
Borrower has no knowledge of any deficiency, penalty or additional assessment
due or appropriate in connection with any such taxes. All taxes (federal,
state and local) imposed upon the Borrower or any Subsidiary or any of its
properties, operations or income have been paid and discharged prior to the
date when any interest or penalty would accrue for the nonpayment thereof,
except for those taxes being contested in good faith by appropriate
proceedings diligently prosecuted and with adequate reserves reflected on the
financial statements in accordance with GAAP. There are no taxes imposed on
the Borrower or its Subsidiaries by any political subdivision or taxing
authority due or payable either on or by virtue of the execution and delivery
by the Borrower, the Subsidiaries, the Agent, or the Lenders of this
Agreement or any other Loan Document to which the Borrower or the
Subsidiaries are party, or on any payment to be made by the Borrower pursuant
hereto or thereto.
3.10 LITIGATION AND LEGAL PROCEEDINGS. Except as disclosed on SCHEDULE
3.10 hereto, there is no litigation, claim, investigation, administrative
proceeding, labor controversy or similar action that is pending or, to the
knowledge of the Borrower, threatened (i) with respect to any Loan Document
or the transactions contemplated thereby, (ii) with respect to the Dubs
Acquisition or the transactions contemplated by the Acquisition Agreement or
(iii) against the Borrower, any Subsidiary or any Property which, if
determined adversely to the Borrower or any Subsidiary, would reasonably be
expected to have a Material Adverse Effect.
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3.11 ACCURACY OF FINANCIAL INFORMATION. (a) All information previously
furnished to the Agent and the Lenders that was prepared by or on behalf of
the Borrower concerning the financial condition and operations of the
Borrower or any Subsidiary, including (i) the audited consolidated financial
statements of the Borrower and its Subsidiaries for the fiscal year ended
December 31, 1997 (including, separately stated, consolidating statements of
income, retained earnings and cash flows of the Borrower and its
Subsidiaries), (ii) the unaudited consolidated financial statements for the
Borrower and its Subsidiaries for the fiscal quarter ended June 30, 1998 and
(iii) the unaudited pro forma consolidated balance sheet for the Borrower and
its Subsidiaries, as at December 31, 1998 and the unaudited pro forma
consolidated opening balance sheet for the Borrower and its Subsidiaries, as
at November 1, 1998, in each case prepared under the assumption that the Dubs
Acquisition occurred on November 1, 1998, (A) have been prepared in
accordance with GAAP consistently applied, (B) are true, accurate and
complete in all material respects, (C) fairly present the financial condition
of the organizations covered thereby as of the dates and for the periods
covered thereby and (D) disclose all material liabilities (contingent and
otherwise) of the Borrower and the Subsidiaries.
(b) Since December 31, 1997 there has been no event or condition
resulting in a Material Adverse Effect.
3.12 ACCURACY OF OTHER INFORMATION. All information contained in any
application, schedule, report, certificate, or any other document given to
the Agent or any Lender by the Borrower or any agent of the Borrower in
connection with the Loan Documents is in all material respects true, accurate
and complete, and no such Person has omitted to state therein (or failed to
include in any such document) any material fact or any fact necessary to make
such information not misleading. All projections given to the Agent, or any
Lender by the Borrower or any other Person have been prepared with a
reasonable basis and in good faith making use of such information as was
available at the date such projection was made. The projections and pro
forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by the Borrower to be reasonable at
the time made and as of the Restatement Date, it being recognized that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may
differ from the projected results.
3.13 COMPLIANCE WITH LAWS GENERALLY. The Borrower and each Subsidiary
is in compliance in all material respects with all Requirements of Law
applicable to it, its operations and its properties.
3.14 ERISA COMPLIANCE.
(a) The Borrower and each Subsidiary is in compliance in all
material respects with all applicable provisions of ERISA, and all rules,
regulations and orders implementing ERISA.
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(b) Neither the Borrower nor any Subsidiary, or any ERISA
Affiliate thereof, maintains or contributes to (or has maintained or
contributed to) any Multiemployer Plan under which the Borrower, any
Subsidiary or any ERISA Affiliate thereof could have any withdrawal liability.
(c) Neither the Borrower nor any Subsidiary, or any ERISA
Affiliate thereof, sponsors or maintains any defined benefit pension plan
under which there is an accumulated funding deficiency within the meaning of
Section 412 of the Code, whether or not waived.
(d) The liability for accrued benefits under each defined benefit
pension plan that will be sponsored or maintained by the Borrower, any
Subsidiary or any ERISA Affiliate thereof (determined on the basis of the
actuarial assumptions utilized by the PBGC) does not exceed the aggregate
fair market value of the assets under each such defined benefit pension plan.
(e) The aggregate liability of the Borrower, each Subsidiary and
each ERISA Affiliate thereof arising out of or relating to a failure of any
employee benefit plan within the meaning of Section 3(2) of ERISA to comply
with provisions of ERISA or the Code will not have a Material Adverse Effect.
(f) There does not exist any unfunded liability (determined on the
basis of actuarial assumptions utilized by the actuary for the plan in
preparing the most recent annual report) of the Borrower, any Subsidiary or
any ERISA Affiliate thereof under any plan, program or arrangement providing
post-retirement, life or health benefits.
(g) No Reportable Event and no Prohibited Transaction (as defined
in ERISA) has occurred or is occurring with respect to any plan with which
the Borrower or any Subsidiary is associated.
3.15 ENVIRONMENTAL COMPLIANCE. (a) The Borrower and each Subsidiary has
received all permits and filed all notifications necessary under and is
otherwise in compliance in all material respects with all federal, state and
local laws, rules and regulations governing the control, removal, storage,
transportation, spill, release or discharge of Hazardous Materials,
including, without limitation, as provided in the provisions of and the
regulations under (i) the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act of 1986, (ii) the Solid Waste Disposal Act, (iii) the
Clean Water Act and the Clean Air Act, (iv) the Hazardous Materials
Transportation Act, (v) the Resource Conservation and Recovery Act of 1976
and (vi) the Federal Water Pollution Control Act Amendments of 1972 (all of
the foregoing enumerated and nonenumerated statutes, including without
limitation any applicable state or local statutes, all as amended,
collectively, the "ENVIRONMENTAL CONTROL STATUTES").
(b) Neither the Borrower nor any Subsidiary has given any written
or
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oral notice to the Environmental Protection Agency ("EPA") or any state or
local agency with regard to any actual or imminently threatened removal,
storage, transportation, spill, release or discharge of Hazardous Wastes
either (i) on properties owned or leased by the Borrower or such Subsidiary
or (ii) otherwise in connection with the conduct of its business and
operations.
(c) Neither the Borrower nor any Subsidiary has received notice
that it is potentially responsible for costs of clean-up of any actual or
imminently threatened spill, release or discharge of Hazardous Wastes
pursuant to any Environmental Control Statute.
(d) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under
any Environmental Control Statute to which the Borrower or any of its
Subsidiaries is named as a party with respect to the Properties or the
business conducted at the Properties, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Control Statute with respect to the Properties or such business.
3.16 FEDERAL REGULATIONS. No Letter of Credit and no part of the
proceeds of any Loans are intended to be or will be used, directly or
indirectly for any purpose which violates the provisions of the Regulations
of the Board of Governors of the Federal Reserve System. If requested by any
Lender or the Agent, and in any event upon consummation of any acquisition
involving the purchase of stock by the Borrower or any Subsidiary, the
Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of Form U-1 referred to
in Regulation U.
3.17 FEES AND COMMISSIONS. Except as disclosed on SCHEDULE 3.17 hereto
or the letter referred to in Section 4.1(d), neither the Borrower nor any
Subsidiary owes or will owe any fees or commissions of any kind in connection
with the Dubs Acquisition, this Agreement or the transactions contemplated
hereby or thereby, and the Borrower does not know of any claim (or any basis
for any claim) for any fees or commissions in connection with the Dubs
Acquisition, the Acquisition Agreement, this Agreement or the transactions
contemplated hereby or thereby.
3.18 REPRESENTATIONS AND WARRANTIES IN ACQUISITION AGREEMENT. The Agent
has received a complete and correct copy of the Acquisition Agreement
(including all exhibits, schedules and disclosure letters referred to therein
or delivered or to be delivered pursuant thereto, if any) and all amendments
thereto, waivers relating thereto and other side letters or agreements
affecting the terms thereof. The Acquisition Agreement has been duly
executed and delivered by the parties thereto and is in full force and effect
with no default thereunder. Each representation and warranty made by the
Borrower in the Acquisition Agreement shall be deemed to be made by the
Borrower for the Lenders' benefit as if set forth herein at length.
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3.19 SOLVENCY. Immediately prior to and upon the execution of this
Agreement, the consummation of the Dubs Acquisition, the funding of the Loans
and the issuance of any Letters of Credit to be funded or issued on the
Restatement Date, the Borrower and each Guarantor was, is and will be Solvent.
3.20 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. (a)
Neither the Borrower nor any Subsidiary is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
(b) Neither the Borrower nor any Subsidiary is a "holding company," or
an "affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of
1935, as amended.
3.21 NATURE OF BUSINESS. Neither the Borrower nor any of its
Subsidiaries is engaged in any material business other than as described in
Section 6.11.
3.22 RANKING OF LOANS. This Agreement and the other Loan Documents to
which the Borrower is party, when executed, and the Loans, when borrowed, are
and will be the direct and general obligations of the Borrower. The
Borrower's obligations hereunder and thereunder rank and will rank at least
PARI PASSU in priority of payment to all other Indebtedness.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO RESTATEMENT DATE. The agreement of each Lender to
make the Loans requested to be made by it on the Restatement Date and
participate in any Letters of Credit issued on the Restatement Date and the
agreement of the Agent to issue any Letters of Credit requested to be issued
on the Restatement Date are subject to the satisfaction, immediately prior to
or concurrently with the making of such Loans and/or the issuance of and
participation in such Letters of Credit on the Restatement Date, of the
following conditions precedent:
(a) CREDIT AGREEMENT. The Agent shall have received this Agreement,
executed and delivered by an officer of the Borrower as of the Restatement
Date.
(b) OTHER LOAN DOCUMENTS. The Agent shall have received the Term
Notes, the Revolving Notes, the Guarantees, the Guarantor Collateral
Documents, the Collateral Documents, the ADR Agreement, all UCC-1 Financing
Statements and amendments thereto and all other agreements or instruments
required to create or perfect a security interest in the Collateral and the
Guarantor Collateral executed in connection herewith, in each case executed
and delivered by an officer of the relevant Obligor.
(c) CORPORATE DOCUMENTS. Certified copies of the charter and by-laws
of each
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Obligor (other than Fast Forward) and of all corporate authority for each
Obligor (including, without limitation, board of director resolutions and
evidence of the incumbency, including specimen signatures, of officers) with
respect to the execution, delivery and performance of such of the Loan
Documents to which such Obligor is intended to be a party and each other
document to be delivered by such Obligor from time to time in connection
herewith and the extensions of credit hereunder.
(d) FEES AND COSTS. The Agent shall have received payment of (i) the
fees set forth in the fee side letter executed by the Borrower and the Agent
in connection herewith and (ii) such other fees, costs and expenses,
including reasonable legal fees, as are requested by the Agent to be paid on
the Restatement Date by the Borrower in connection with this Agreement.
(e) ACQUISITION AGREEMENT. The Agent shall have received a copy of the
Acquisition Agreement, and each agreement and instrument delivered in
connection therewith, all of the foregoing in form and substance satisfactory
to the Agent and all as certified as true and correct by a Responsible
Officer of the Borrower.
(f) LIEN SEARCHES. The Agent shall have received such lien searches as
it shall request from all relevant jurisdictions, listing all effective
financing statements which name the Borrower, any Guarantor or Dubs (or any
predecessor thereto), as debtor, none of which, except for Liens permitted by
Section 6.3, shall cover any of the Collateral.
(g) REPAYMENT OF CERTAIN INDEBTEDNESS; RELEASE OF LIENS. The Agent
shall have received evidence satisfactory to it that (i) all Indebtedness
listed on SCHEDULE 4.1(g) has been repaid in full and (ii) except as set
forth on SCHEDULE 4.1(g), all UCC financing statements which name Dubs as
debtor have been terminated and all Liens on the assets of Dubs (except any
permitted by Section 6.3), have been released.
(h) GOOD STANDING CERTIFICATES. With respect to each Obligor which is
a legal entity, the Agent shall have received a certificate, dated a recent
date, of the Secretary of State of the state of formation of such Obligor and
each other jurisdiction where such Obligor is required to be qualified to do
business under such jurisdiction's law (other than the State of Texas with
respect to the Borrower and the State of Illinois with respect to
Multi-Media), certifying as to the existence and good standing of, and the
payment of taxes by, each such Obligor in such state.
(i) OFFICER'S CERTIFICATE. A certificate of a senior officer of the
Borrower, dated the Restatement Date, to the effect set forth in the first
sentence of Section 4.2 hereof.
(j) INSURANCE POLICIES. The Agent shall have received evidence in form
and substance reasonably satisfactory to the Agent that the insurance
required by Section 5.6 is in full force and effect.
(k) ACQUISITION. The Acquisition Agreement shall have been executed and
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delivered by each party thereto, and the Agent shall have received a
certificate of a Responsible Officer of the Borrower to the effect that all
material transactions contemplated by the Acquisition Agreement to be
consummated on or prior to the Restatement Date have been consummated without
amendment, waiver or modification of the material terms thereof.
(l) ACQUISITION PRICE. The aggregate consideration paid in connection
with the Dubs Acquisition shall not exceed $14,300,000, and the Agent shall
have received a certificate of a Responsible Officer of the Borrower to such
effect.
(m) NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. The Borrower shall have obtained all governmental
authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Dubs Acquisition and the other
transactions contemplated by the Loan Documents and each of the foregoing
shall be in full force and effect, in each case other than those the failure
to obtain or maintain which, either individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Dubs Acquisition or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
(n) ADDITIONAL PROCEEDINGS. The Agent shall have received such other
approvals, opinions and documents as the Agent may reasonably request and all
legal matters incident to the making of such Loans and issuance of such
Letters of Credit shall be reasonably satisfactory to the Agent.
4.2 CONDITIONS TO EACH LOAN OR LETTER OF CREDIT. The agreement of each
Lender to make each Loan and to participate in each Letter of Credit, and the
agreement of the Agent to issue each Letter of Credit, requested to be made,
issued or participated in by it is subject to the satisfaction, immediately
prior to or concurrently with the making of such Loan or the issuance or
participation in such Letter of Credit, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The following
statements shall be true and the Borrower's acceptance of the proceeds of
such Loan or its delivery of an executed Letter of Credit Request shall be
deemed to be a representation and warranty of the Borrower on the date of
such Loan or as of the date of issuance of such Letter of Credit, as
applicable, that:
(i) The representations and warranties contained in this Agreement
and in each other Loan Document and certificate or other writing delivered
to the Lenders prior to, on or after the Restatement Date pursuant hereto
and on or prior to the date for such Loan or the issuance of such Letter of
Credit are
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correct on and as of such date in all material respects as though made on
and as of such date except to the extent that such representations and
warranties expressly relate to an earlier date; and
(ii) No Default has occurred and is continuing or would result from
the making of the Loan to be made on such date or the issuance of such
Letter of Credit as of such date.
(b) LEGALITY. The making of such Loan or the issuance of such Letter of
Credit, as applicable, shall not contravene any law, rule or regulation
applicable to any Lender or any Obligor.
(c) BORROWING NOTICE/LETTER OF CREDIT REQUEST. The Agent shall have
received a borrowing notice or Letter of Credit Request, as applicable,
pursuant to the provisions of this Agreement from the Borrower.
4.3 CONDITIONS SUBSEQUENT. Not later than 30 days after the
Restatement Date, in the case of the items listed in Section 4.3(a), not
later than 60 days after the Restatement Date, in the case of the items
listed in Sections 4.3(b) and (c), and not later than 14 days after the
Restatement Date, in the case of the items listed in Sections 4.3(d), (e) and
(f), the Agent shall have received the following:
(a) LEGAL OPINIONS. The Agent shall have received, with a counterpart
for each Lender, the following executed legal opinions:
(i) the executed legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to
the Borrower and the Guarantors, in form and substance satisfactory to the
Agent; and
(ii) such other legal opinions as the Agent may reasonably request.
(b) CERTIFIED UCC SEARCHES. The Agent shall have received certified
copies of requests for information from all relevant jurisdictions, listing
all effective financing statements which name the Borrower or any Guarantor
(or any predecessor thereto), as debtor, together with copies of such
financing statements, none of which, except for Liens permitted by Section
6.3, shall cover any of the Collateral or the Guarantor Collateral.
(c) LANDLORD CONSENTS. The Agent shall have received a Landlord
Consent with respect to all real property leased to the Borrower or any
Guarantor and listed on SCHEDULE 4.3(c) hereto, including, without
limitation, with respect to each real property lease assigned to the Borrower
pursuant to the Acquisition Agreement, and all such Landlord Consents shall
have been submitted for recording in the relevant recording offices in each
relevant jurisdiction.
(d) CORPORATE DOCUMENTS. The Agent shall have received certified copies
of
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the charter and by-laws of Fast Forward.
(e) GOOD STANDING CERTIFICATES. The Agent shall have received (i) a
certificate, dated a recent date, of the Secretary of State of the State of
Texas certifying as to the existence and good standing of, and the payment of
taxes by, the Borrower in such state, and (ii) a certificate, dated a recent
date, of the Secretary of State of the State of Illinois certifying as to the
existence and good standing of, and the payment of taxes by, Multi-Media in
such state.
(f) INSURANCE POLICIES. With respect to the insurance required by
Section 5.6, the Agent shall have received appropriate evidence showing the
Agent as an additional named insured or loss payee, as appropriate, in form
and substance reasonably satisfactory to the Agent.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Restatement Date, so
long as any Commitment remains in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender or the Agent hereunder, or
any Letter of Credit remains outstanding:
5.1 FINANCIAL STATEMENTS. (a) As soon as available and in any event
within 45 days after the end of each quarterly fiscal period of each fiscal
year of the Borrower, the Borrower shall deliver to the Agent, with
sufficient copies for each Lender, consolidated statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for
such period, and the related consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such period, setting forth in each case in
comparative form the corresponding consolidated figures for the corresponding
periods in the preceding fiscal year (except that, in the case of the balance
sheets, such comparison shall be to the last day of the prior fiscal year),
accompanied by a certificate of a senior financial officer of the Borrower,
which certificate shall state that said consolidated financial statements
fairly present the consolidated financial condition and results of operations
of the Borrower, the Borrower and its Subsidiaries, in each case in
accordance with GAAP consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments); and
(b) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, the Borrower shall deliver to the Agent,
with sufficient copies for each Lender, consolidated statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for
such fiscal year and the related consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal year, setting forth in
comparative form the corresponding consolidated figures for the preceding
fiscal year, and accompanied by an opinion thereon of the Accountants, which
opinion shall state that said consolidated financial statements fairly
present the consolidated financial condition and results of operations of the
Borrower and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with GAAP, and a
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statement of the Accountants to the effect that, in making the examination
necessary for their opinion, nothing came to their attention that caused them
to believe that the Borrower was not in compliance with Section 6.1, insofar
as such Section relates to accounting matters.
5.2 CERTIFICATES; OTHER INFORMATION. The Borrower shall deliver to
each Lender:
(a) within 45 days after the end of each quarterly fiscal period of
each fiscal year of the Borrower, a Covenant Compliance Certificate as of the
end of such quarter;
(b) within five Business Days after the same are filed, copies of all
financial statements and reports which the Borrower or any Subsidiary may
make to, or file with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(c) promptly but, in any event, within five Business Days after receipt
thereof, copies of all financial reports (including, without limitation,
management letters), if any, submitted to the Borrower or any Subsidiary by
the Accountants in connection with any annual or interim audit of the books
thereof;
(d) as soon as available and in any event within 30 days after
December 31 of each fiscal year, a budget for the next following fiscal year
setting forth anticipated income, expense and capital expenditure items for
each quarter during such fiscal year;
(e) as soon as possible and in any event within five Business Days
after the occurrence of a Default or, in the good faith determination of a
Responsible Officer of the Borrower, a Material Adverse Effect, the written
statement by a Responsible Officer of the Borrower, setting forth the details
of such Default or Material Adverse Effect and the action which the Borrower
proposes to take with respect thereto;
(f) (A) as soon as possible and in any event within 30 days after the
Borrower knows or has reason to know that any Termination Event with respect
to any Plan has occurred, a statement of a Responsible Officer of the
Borrower describing such Termination Event and the action, if any, which the
Borrower proposes to take with respect thereto, (B) promptly and in any event
within ten days after receipt thereof by the Borrower or any ERISA Affiliate
of the Borrower from the PBGC, copies of each notice received by the Borrower
or such ERISA Affiliate of the PBGC's intention to terminate any Plan or to
have a trustee appointed to administer any Plan, (C) promptly and in any
event within 30 days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Single Employer Plan
maintained for or covering employees of the Borrower or any Subsidiary if the
present value of the accrued benefits under the Plan exceeds its assets by an
amount in excess of $500,000 and (D) promptly and in any event within ten
days after receipt thereof by the Borrower or any ERISA Affiliate of the
Borrower from a sponsor of a Multiemployer Plan or from the PBGC, a copy of
each notice received by the Borrower or such ERISA Affiliates
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concerning the imposition or amount of withdrawal liability under Section 4202
of ERISA or indicating that such Multiemployer Plan may enter reorganization
status under Section 4241 of ERISA;
(g) promptly after the commencement thereof, but in any event not later
than five Business Days after service of process with respect thereto on, or
the obtaining of knowledge by, the Borrower or any Subsidiary, notice of each
material action, suit or proceeding before any Governmental Authority;
(h) within five days following receipt by the Borrower or any
Subsidiary, copies of all notices received by the Borrower or such Subsidiary
from the Internal Revenue Service or other taxing authority relating to any
material dispute regarding deductions, audits or any other material matter;
and
(i) promptly, such additional financial and other information as any
Lender, through the Agent, may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each
of its Subsidiaries to, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the failure to so satisfy such
obligations would not have a Material Adverse Effect or except where the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or its Subsidiaries,
as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The Borrower
shall, and shall cause each of its Subsidiaries to, (i) continue to engage in
the video duplication business, the post-production business, the audio
sweetening business, the business of distributing national television spot
advertising, trailers and electronic press kits for the motion picture and
television industries, or engage in the business of owning (and renting)
limited amounts of niche programming and media buying, (ii) preserve, renew
and keep in full force and effect its corporate existence, (iii) take all
reasonable action to maintain all rights, registrations, licenses, privileges
and franchises necessary or desirable in the normal conduct of its business,
and (iv) comply with all Contractual Obligations and Requirements of Law
except to the extent, in the case of this clause (iv), that failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY. The Borrower shall, and shall cause each
of its Subsidiaries to, keep all property useful or necessary in its business
in good working order and condition (ordinary wear and tear excepted).
5.6 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations
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engaged in the same or similar business similarly situated, against loss,
damage and liability of the kinds and in the amounts customarily maintained
by such corporations. The Borrower shall designate the Agent as loss payee
or additional insured, as appropriate with respect to such insurance and
cause such insurance to provide for 30 days' prior written notice to Agent of
any modification or cancellation of such insurance.
5.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower shall, and shall cause each of its Subsidiaries to, keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all
material dealings and transactions in relation to its business and
activities; and upon reasonable notice and at such reasonable times during
usual business hours, permit representatives of any Lender to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time and as often as may reasonably be
desired and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its Accountants.
5.8 ENVIRONMENTAL LAWS. The Borrower shall, and shall cause each of
its Subsidiaries to:
(a) Comply in all material respects with, and ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Control
Statutes and obtain and comply in all material respects with any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Control Statutes;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Control Statutes and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities
regarding Environmental Control Statutes except to the extent that the same
are being contested in good faith by appropriate proceedings; and
(c) Defend, indemnify and hold harmless the Agent and the Lenders, and
their respective employees, agents, officers and directors, from and against
any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Control
Statutes applicable to the operations of the Borrower or any of its
Subsidiaries, or the Borrower's or any of such Subsidiaries' interest in
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, attorneys' and
consultants' fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party seeking
indemnification therefor. This indemnity shall continue in full force and
effect regardless of the termination of this Agreement.
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5.9 USE OF PROCEEDS. The Borrower will use the proceeds of the Loans,
and any Letters of Credit issued hereunder, as follows:
(i) the Term Loans shall be used in full on the Restatement Date
(A) to repay all unpaid principal of and interest on the Existing Revolving
Loan and (B) to pay a portion of the purchase price with regard to the Dubs
Acquisition and expenses associated therewith;
(ii) the Revolving Loans shall be used (A) for capital
expenditures, working capital and general corporate purposes and (B) to fund
Permitted Acquisitions; and
(iii) any Letters of Credit shall be used for general corporate
purposes.
Notwithstanding anything herein to the contrary, no Loan or Letter of Credit
will be used for the purchasing or carrying of any Margin Stock.
5.10 COMPLIANCE WITH LAWS, ETC. The Borrower shall comply, and shall
cause each of its Subsidiaries to comply, in all material respects with all
applicable Requirements of Law, such compliance to include, without
limitation (i) paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any of its Properties and (ii) paying all lawful
claims which if unpaid might become a Lien upon any of its Properties;
PROVIDED, HOWEVER, that neither the Borrower nor any of its Subsidiaries
shall be required to pay and discharge or to cause to be paid and discharged
any such tax, assessment, charge, levy or claim so long as (A) the validity
or applicability thereof is being contested in good faith by appropriate
proceedings and (B) the Borrower or such Subsidiary shall, to the extent
required by GAAP, have set aside on its books adequate reserves with respect
thereto.
5.11 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES; PROHIBITIONS ON
CERTAIN AGREEMENTS. (a) The Borrower will cause each of its Subsidiaries
hereafter formed or acquired to execute and deliver to the Agent promptly
upon the formation or acquisition thereof (i) a Guarantee in form and
substance satisfactory to the Agent, guaranteeing the Obligations,(ii) a
Guarantor Security Agreement, in form and substance satisfactory to the
Agent, granting to the Agent, for the benefit of the Lenders, a security
interest in the tangible and intangible personal property of such Subsidiary,
together with appropriate Lien searches requested by the Agent indicating the
Lenders' first priority Lien on such personal property and (iii) UCC-1
Financing Statements, duly executed by such Subsidiary, in form and substance
satisfactory to the Agent.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, without the prior written consent of the Majority Lenders, enter into any
indenture, agreement, instrument or other arrangement that, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the incurrence or
payment of indebtedness, the granting of Liens, the declaration or
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payment of dividends, the making of loans, advances or investments or the
sale, assignment, transfer or other disposition of Property, or which imposes
any financial covenants on the Borrower or any of its Subsidiaries.
5.12 YEAR 2000. The Borrower has implemented, and has caused its
Subsidiaries to implement, a plan to address Year 2000 problems that might occur
in the Borrower's or its Subsidiaries' computer hardware, software, operating
systems, telecommunications, building systems and data exchange with their
respective critical vendors and customers. The Borrower has allocated, and has
caused its Subsidiaries to allocate, adequate staff and financial resources, and
the Borrower and its Subsidiaries will be Year 2000 Complaint with all their
respective mission-critical systems by the earlier of such date as the Borrower
and its Subsidiaries have appointed in their Year 2000 remediation plans, or
midnight, Pacific Coast Time, December 31, 1999. "Year 2000 Complaint" means
the state and point in time when the Borrower's and its Subsidiaries'
information processing, financial and business operations, systems and
technologies (collectively, "Technologies") will accurately process date/time
data (including without limitation calculating, comparing and sequencing) from,
into and between the years 1999 and 2000, for their own accounts and when used
in combination with the Technologies of third parties. Upon request, the
Borrower will provide to the Agent evidence of the Borrower's and its
Subsidiaries' compliance with the terms of this paragraph.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Restatement Date, so
long as any Commitments remain in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender or the Agent hereunder, or any
Letter of Credit remains outstanding:
6.1 FINANCIAL CONDITION COVENANTS. The Borrower shall not:
(a) MAXIMUM FUNDED DEBT TO EBITDA. As of the last day of any fiscal
quarter, commencing with the fiscal quarter ending December 31, 1998, permit the
ratio of Funded Debt to EBITDA, calculated on a cumulative four quarter rolling
basis for such fiscal quarter and the three immediately preceding fiscal
quarters, to exceed 2.50:1.
(b) FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage Ratio
as of the last day of any fiscal quarter, commencing with the fiscal quarter
ending December 31, 1998, calculated on a cumulative four quarter rolling basis
for the present fiscal quarter and the three immediately preceding fiscal
quarters, to be less than 1.30:1.
(c) MINIMUM NET WORTH. Permit Net Worth at any time to be less than
$23,900,000.
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6.2 LIMITATION ON INDEBTEDNESS. The Borrower shall not create, incur,
assume or suffer to exist any Indebtedness, and shall not permit any of its
Subsidiaries to create, incur, assume or suffer to exist any Indebtedness,
except for:
(a) Indebtedness created hereunder and under the Notes and the other Loan
Documents;
(b) Indebtedness of the Borrower or any of its Subsidiaries outstanding on
the Restatement Date and listed on SCHEDULE 6.2 (and not referred to in any
other clause of this Section 6.2);
(c) Indebtedness (i) evidenced by performance bonds issued in the ordinary
course of business or reimbursement obligations in respect thereof, (ii)
evidenced by a letter of credit facility related to insurance associated with
claims for work-related injuries or (iii) for bank overdrafts incurred in the
ordinary course of business that are promptly repaid, in an aggregate amount
(under clauses (i), (ii) and (iii)) not to exceed $100,000 at any one time
outstanding;
(d) Indebtedness secured by Liens permitted by Section 6.3(g);
(e) Indebtedness incurred in connection with Capitalized Lease Obligations
permitted pursuant to Section 6.3(g);
(f) Indebtedness of Wholly Owned Subsidiaries of the Borrower to the
Borrower or to other Wholly Owned Subsidiaries of the Borrower;
(g) Guarantee Obligations of the Borrower incurred in the ordinary course
of business in respect of obligations of any Subsidiary; and
(h) other unsecured Indebtedness incurred in the ordinary course of
business in an aggregate amount not to exceed at any time $2,000,000.
6.3 LIMITATION ON LIENS. The Borrower shall not, and shall not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens created hereunder or under any of the other Loan Documents;
(b) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, PROVIDED THAT adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
(c) Liens created by operation of law not securing the payment of
Indebtedness for money borrowed or guaranteed, including carriers',
warehousemen's,
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mechanics', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period of more than
30 days or which are being contested in good faith by appropriate proceedings;
(d) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, would not
cause a Material Adverse Effect;
(g) Liens securing Capitalized Lease Obligations and purchase money
security interests on any property or equipment acquired or held by the Borrower
or its Subsidiaries in the ordinary course of business, securing Indebtedness
incurred or assumed for the purpose of financing all or any part of the cost of
acquiring such property or equipment; PROVIDED THAT (i) any such Lien attaches
to such property or equipment concurrently with or within 20 days after the
acquisition thereof, (ii) such Lien attaches solely to the property or equipment
so acquired in such transaction, (iii) the principal amount of the Indebtedness
secured thereby does not exceed 100% of the cost of such property or equipment
including transportation, installation and sales or use taxes; and
(h) Liens existing on the date hereof and referred to in SCHEDULE 6.3 (and
not referred to in any other clause of this Section 6.3).
6.4 LIMITATION ON FUNDAMENTAL CHANGES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, (i) enter into any merger, consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or (ii) convey, sell, lease, assign, transfer or
otherwise dispose of all or substantially all of its property, business or
assets, or (iii) acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person EXCEPT THAT, so long as no Default
has occurred and is continuing or would result therefrom:
(a) The Borrower may consummate the Dubs Acquisition on or after the
Restatement Date in accordance with the terms of the Acquisition Agreement;
(b) the Borrower may consummate Permitted Acquisitions in accordance with
the terms of Section 6.7(h);
(c) 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 Subsidiary; PROVIDED THAT if any such transaction
shall be between a
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Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned Subsidiary shall
be the continuing or surviving corporation; and
(d) any Subsidiary may sell, lease, transfer or otherwise dispose of any
or all of its Property (upon voluntary liquidation or otherwise) to the Borrower
or a Wholly Owned Subsidiary of the Borrower.
6.5 LIMITATION ON SALE OF ASSETS. The Borrower will not, nor will it
permit any of its Subsidiaries to, make any Asset Disposition except Asset
Dispositions of obsolete or worn-out Property, tools or equipment no longer used
or useful in its business so long as the aggregate amount thereof sold in any
single fiscal year by the Borrower and its Subsidiaries shall not have a fair
market value in excess of $250,000; PROVIDED THAT in each case, no Default has
occurred and is continuing or would result from such Asset Disposition.
6.6 LIMITATION ON DIVIDENDS. The Borrower shall not, and shall not permit
any of its Subsidiaries to if a corporation, declare or pay any dividend (other
than dividends payable solely in common stock of the Borrower or its
Subsidiaries) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or its Subsidiaries or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary (such declarations,
payments, setting apart, purchases, redemptions, defeasance, retirements,
acquisitions and distributions being herein called "RESTRICTED PAYMENTS"),
EXCEPT THAT any Subsidiary may make Restricted Payments to the Borrower or to
any other Wholly Owned Subsidiary of the Borrower; PROVIDED THAT in each case no
Default has occurred and is continuing or would result from the making of such
Restricted Payment.
6.7 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The Borrower will not,
and will not permit any of its Subsidiaries to, make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in (any of the foregoing, an
"INVESTMENT"), any Person, except for:
(a) investments permitted by Section 6.4(a) and (b);
(b) investments in marketable securities, liquid investments and other
financial instruments that are acquired for investment purposes and may be
readily sold or otherwise liquidated, that have a value which may be readily
established and which are investment grade;
(c) investments outstanding on the date hereof and identified in
SCHEDULE 6.7;
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(d) operating deposit accounts with banks;
(e) investments by the Borrower and its Subsidiaries in the Borrower and
its Subsidiaries;
(f) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(g) extensions of credit to employees evidenced by promissory notes in an
aggregate amount not to exceed $500,000; and
(h) Permitted Acquisitions, so long as:
(i) unless the Majority Lenders shall otherwise consent in writing,
the aggregate purchase price of all Permitted Acquisitions shall not exceed
$4,000,000;
(ii) such acquisition (if by purchase of assets, merger or
consolidation) shall be effected in such manner so that the acquired entity
and the related assets thereof, are owned either by the Borrower or a
Wholly Owned Subsidiary of the Borrower, and, if effected by merger or
consolidation involving the Borrower, the Borrower shall be the continuing
or surviving entity;
(iii) such acquisition (if by purchase of stock) shall be effected in
such manner so that the acquired entity becomes a Wholly Owned Subsidiary
of the Borrower;
(iv) the Agent shall have received, at least 10 Business Days prior to
such acquisition, each of the following, in each case in form and substance
reasonably acceptable to the Agent, (A) all documents as it shall
reasonably request evidencing such acquisition (including the acquisition
agreement therefor), (B) pro forma financial statements combining the
historical results of the Borrower and the business to be acquired, (C)
updated projections of the Borrower reflecting such acquisition, (D) such
security documents, mortgages, pledge agreements, UCC-1 Financing
Statements and related documents as the Agent shall request to create or
confirm a first-priority security interest in favor of the Agent in the
assets to be acquired, (E) a pro forma Covenant Compliance Certificate and
(F) such other documents or evidence as the Agent or any Lender shall
reasonably request;
(v) concurrently with the consummation of such acquisition, all
actions (1) required under Section 5.11 and (2) required by the Agent to
perfect a security interest in all personal property assets acquired shall
have been taken); and
(vi) at the time of such acquisition and after giving effect thereto,
no Default
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shall have occurred and shall be continuing.
6.8 TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property, employee
compensation arrangements, or the rendering of any service, with any Affiliate
or any Subsidiary not a Wholly Owned Subsidiary UNLESS such transaction is in
the ordinary course of the Borrower's or such Subsidiary's business and is upon
terms no less favorable to the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person not
an Affiliate; PROVIDED THAT, if any such transaction has a value in excess of
$500,000 the Majority Lenders shall have consented thereto.
6.9 FISCAL YEAR. Borrower shall not permit its fiscal year or the fiscal
year of any of its Subsidiaries to end on a day other than December 31.
6.10 SALE-LEASEBACK TRANSACTIONS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, assign or otherwise transfer any of its
Properties, rights or assets (whether now owned or hereafter acquired) to any
Person and thereafter directly or indirectly lease back the same or similar
property.
6.11 LINES OF BUSINESS. The Borrower will not, nor will it permit any of
its Subsidiaries to, engage to any substantial extent in any line or lines of
business activity other than the business of video duplication, post-production,
audio sweetening, the distribution of national television spot advertising,
trailers and electronic press kits for the motion picture and television
industries, and the ownership and rental of limited amounts of niche programming
and media buying.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall default in the payment when due (whether at stated
maturity or upon mandatory or optional prepayment) of any principal of or
interest on any Loan, any fee or any other amount payable by it hereunder or
under any other Loan Document; or
(b) Any representation or warranty made or deemed made by any Obligor
herein or in any other Loan Document or which is contained in any certificate,
document or financial or other statement furnished at any time under or in
connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Section 4.3(a), 4.3(b), 5.4(ii), 5.9 or 5.11 or any
provision of Section 6; or
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(d) Any Obligor shall default in the observance or performance of any
other agreement or obligation contained in this Agreement or the other Loan
Documents (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30 days
after notice thereof from the Agent to the Borrower; or
(e) Any Guarantee shall cease, for any reason, to be in full force and
effect; or
(f) The Borrower or any other Obligor shall default in the payment when
due of principal of or interest on any Indebtedness (other than the Notes)
issued under the same indenture or other agreement, if the original principal
amount of Indebtedness covered by such indenture or agreement is $100,000 or
more; or any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness shall occur if the effect of
such event is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity; or
(g) (i) The Borrower or any other Obligor shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
other Obligor shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Borrower or any other Obligor any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged, unstayed or unbonded
for a period of 60 days; or (iii) there shall be commenced against the Borrower
or any other Obligor any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any other Obligor shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any other Obligor shall
generally not, or shall be unable to, or shall admit in writing its inability
to, pay its debts as they become due or there shall be a general assignment for
the benefit of creditors; or
(h) (i) The Borrower or any Commonly Controlled Entity shall engage in
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any non-exempt "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived, shall
exist with respect to any Plan, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee would reasonably be expected to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA (other than a standard termination) or (v) the
Borrower or any Commonly Controlled Entity would reasonably be expected to incur
any liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan; and in each case regarding clauses (i)
through (v) above, such event or condition, together with all other such events
or conditions, if any, would reasonably be expected to result in a Material
Adverse Effect; or
(i) One or more judgments or decrees shall be entered against the Borrower
or any Subsidiary involving in the aggregate a liability (not paid or fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) of $500,000 or more, or involving in the aggregate a liability
(regardless of insurance coverage) of $1,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof or in any event five days before
the date of any sale pursuant to such judgment or decree; or
(j) The Liens created by the Collateral Documents and/or the Guarantor
Collateral Documents shall at any time not constitute valid and perfected Liens
on the collateral intended to be covered thereby in favor of the Agent, free and
clear of all other Liens (other than Liens permitted under Section 6.3), or,
except for expiration in accordance with its terms, any of the Collateral
Documents and/or the Guarantor Collateral Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by any Obligor; or
(k) (i) R. ▇▇▇▇ ▇▇▇▇▇▇▇▇, or another officer of the Borrower as of the
Restatement Date, shall cease to be the Chief Executive Officer of the Borrower,
(ii) R. ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall cease to beneficially own Capital Stock representing
at least 20% of the votes that may be cast in an election of directors of the
Borrower, or (iii) individuals who constituted the Borrower's Board of Directors
as of the Restatement Date shall cease for any reason to constitute a majority
of the directors then in office;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above, automatically the Commitments to the Borrower and the
commitment to issue Letters of Credit shall immediately terminate and the Loans
made to the Borrower hereunder (with accrued interest thereon) and all other
Obligations shall immediately become due and payable, and (B) if such event is
any other Event of Default, with the consent of the Majority Lenders, the Agent
may, or upon the request of
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the Majority Lenders, the Agent shall, take any or all of the following
actions: (i) by notice to the Borrower declare the Commitments to the
Borrower and the commitment to issue Letters of Credit to be terminated
forthwith, whereupon such Commitments and the commitment to issue Letters of
Credit shall immediately terminate; and (ii) by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
Obligations under this Agreement and the Notes to be due and payable
forthwith, whereupon (x) the same shall immediately become due and payable
and (y) to the extent any Letters of Credit are then outstanding, the
Borrower shall make a Cash Collateral Deposit in an amount equal to the
aggregate Letter of Credit Amount. In all cases, with the consent of the
Majority Lenders, the Agent may enforce any or all of the Liens and security
interests and other rights and remedies created pursuant to any Loan Document
or available at law or in equity. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
SECTION 8. THE AGENT
8.1 APPOINTMENT. Each Lender hereby irrevocably designates and appoints
Union Bank of California, N.A., as Agent for such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes Union
Bank of California, N.A., as the Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall have no duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Agent, nor any of the Agent's
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower, any Subsidiary
or any other Obligor or any officer thereof contained in this Agreement or any
other Loan Document or in any certificate, report, statement or other
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document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of the
Borrower, any Subsidiary or any other Obligor to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of the
Borrower, any Subsidiary or any other Obligor.
8.4 RELIANCE BY THE AGENT. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), the Accountants and independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Lenders, the
Majority Revolving Loan Lenders or all Lenders, as it deems appropriate, or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense (except those incurred solely as a result of the
Agent's gross negligence or willful misconduct) which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the Notes and the other Loan Documents in accordance with a
request of the Majority Lenders, the Majority Revolving Loan Lenders or all
Lenders, as may be required, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default hereunder unless the Agent has received
notice from a Lender or the Borrower referring to this Agreement, describing
such Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give notice thereof
to the Lenders. The Agent shall take such action with respect to such Default
as shall be reasonably directed by the Majority Lenders, the Majority Revolving
Loan Lenders, or all Lenders as appropriate; PROVIDED THAT unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Lenders
or as the Agent shall believe necessary to protect the Lenders' interests in the
Collateral or the Guarantor Collateral.
8.6 NON-RELIANCE ON THE AGENT AND OTHER LENDERS. Each Lender expressly
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acknowledges that neither the Agent, nor any of the Agent's officers,
directors, partners, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the Borrower, any
Subsidiary or any other Obligor, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender
represents to the Agent that it has, independently and without reliance upon
the Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower, any Subsidiary and the other Obligors and
made its own decision to make its Loans, and participate in Letters of
Credit, hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Loan Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower, its Subsidiaries and the
other Obligors. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent
shall have no duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower, any
Subsidiary or any other Obligor which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower, its
Subsidiaries or the other Obligors and without limiting the obligation of
such Persons to do so), ratably according to the respective amounts of their
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs (including, without
limitation, the allocated cost of internal counsel), expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent, in its capacity as
Agent, but not as a Lender hereunder, in any way relating to or arising out
of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; PROVIDED THAT no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent they arise from the gross negligence
or willful misconduct of the party to be indemnified. The agreements in this
Section shall survive the payment of the Notes and all other amounts payable
hereunder and the expiration of the Letters of Credit.
8.8 THE AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the
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Borrower, any Subsidiary and the other Obligors as though the Agent were not
the Agent hereunder and under the other Loan Documents. The Loans made or
renewed and the Letters of Credit issued or participated in by the Agent, and
any Note issued to the Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and the Agent may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 30 days' notice
to the Lenders. If the Agent shall resign as Agent under this Agreement and
the other Loan Documents, then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (so long
as no Default has occurred and is continuing) shall be approved by the
Borrower (which consent shall not be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent
and the term "Agent" shall mean such successor agent, effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement or any holders of the
Notes. After any retiring Agent's resignation as Agent, the provisions of
this Section shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan
Documents. Further, if the Agent no longer has any Loans, Letter of Credit
participations or Commitments hereunder, the Agent shall immediately resign
and shall be replaced, and have the benefits, as set forth in this Section
8.9. In addition, after the replacement of an Agent hereunder, the retiring
Agent shall remain a party hereto and shall continue to have all the rights
and obligations of an Agent under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
8.10 COLLATERAL DOCUMENTS. Anything contained in any of the Loan
Documents to the contrary notwithstanding, the Borrower, the Agent and each
Lender hereby agree that (a) no Lender shall have any right individually to
realize upon any of the Collateral or Guarantor Collateral under any Loan
Document or to enforce any Guarantee, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and Guarantor
Collateral Documents and the Guarantees may be exercised solely by the Agent
for the benefit of the Lenders in accordance with the terms thereof, and (b)
in the event of a foreclosure by the Agent on any of the Collateral or
Guarantor Collateral pursuant to a public or private sale, the Agent or any
Lender may be the purchaser of any or all of such Collateral or Guarantor
Collateral at any such sale and the Agent, as agent for and representative of
the Lenders (but not any Lender or Lenders in its or their respective
individual capacities unless the Majority Lenders shall otherwise agree in
writing) shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral or
Guarantor Collateral sold at any such public sale, to use and apply any of
the Obligations as a credit on account of the purchase price for any such
collateral payable by the Agent at such sale.
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SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Except as otherwise expressly provided in
this Agreement, any provision of the Loan Documents may be modified or
supplemented only by an instrument in writing signed by the Borrower, the
Agent and the Majority Lenders, or by the Borrower and the Agent acting with
the consent of the Majority Lenders, and any provision of any Loan Document
may be waived by the Majority Lenders or by the Agent acting with the consent
of the Majority Lenders; PROVIDED, HOWEVER, that no such waiver and no such
amendment, supplement or modification shall (i) (a) reduce the amount or
extend the maturity of any Note or any installment due thereon, or reduce the
rate or extend the time of payment of interest thereon, or reduce the amount
or extend the time of payment of any fee, indemnity or reimbursement payable
to any Lender hereunder, or change the amount of any Lender's Commitment, or
amend, modify or waive any provision of Section 2.4, without the written
consent of the Lender affected thereby; or (b) amend, modify or waive any
provision of this Section 9.1 or reduce the percentage specified in or
otherwise modify the definition of Majority Lenders or Majority Revolving
Loan Lenders, or consent to the assignment or transfer by any Obligor of any
of its rights and obligations under this Agreement and the other Loan
Documents (except as permitted under Section 6.4); or (c) release any Obligor
from any liability under its respective Loan Documents; or (d) release any
material portion of the Collateral or any material portion of the Guarantor
Collateral, except for any Asset Disposition or release of Lien permitted by
this Agreement or any other Loan Document; or (e) amend, modify or waive,
directly or indirectly, any of the provisions of Section 2.1(e), 2.2(f) or
2.11; or (f) amend, modify or waive any provision of this Agreement requiring
the consent or approval of all Lenders; or (g) increase the Aggregate
Commitment, in each case set forth in clauses (i)(b) through (i)(g) above
without the written consent of all the Lenders; or (ii) amend, modify or
waive any provision of Section 4.2 with respect to the making of a Revolving
Loan, or reduce the percentage specified in, or otherwise modify the
definition of, Majority Revolving Loan Lenders, without the written consent
of the Majority Revolving Loan Lenders; or (iii) amend, modify or waive any
provision of Section 8 without the written consent of the Agent, or any
provision affecting the rights and duties of the Agent as the issuer of
Letters of Credit without the consent of the then Agent. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Borrower, the other Obligors, the
Lenders, the Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the other Obligors, the Lenders, and the Agent shall be
restored to their former position and rights hereunder and under the
outstanding Notes and any other Loan Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to
any subsequent or other Default, or impair any right consequent thereon.
9.2 NOTICES. All notices, requests and demands or other communications to
or upon the respective parties hereto to be effective shall be in writing
(including by
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telecopy), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand, or 3 days after being
deposited in the United States mail, certified and postage prepaid and return
receipt requested, or, in the case of telecopy notice, when received, in each
case addressed as follows in the case of the Borrower and the Agent, and as
set forth on the signature pages hereto, or in the Assignment and Acceptance
pursuant to which a Person becomes a party hereto, in the case of the
Lenders, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Borrower: VDI Media
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Union Bank of California, N.A
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED THAT any notice, request or demand to or upon the Agent or the
Lenders pursuant to Section 2.1, 2.2, 2.3, 2.4 or 2.6 shall not be effective
until received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the Notes.
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Agent for all its reasonable costs and out-of-pocket expenses
(including travel and other expenses incurred by it or its agents in connection
with performing due diligence with regard hereto) incurred in connection with
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, syndication efforts (whether completed before or after the
Restatement Date) in connection with this
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Agreement and the reasonable fees and disbursements of counsel to the Agent,
(b) after the occurrence and during the continuance of a Default, to pay or
reimburse the Agent and each Lender for all its reasonable costs and
out-of-pocket expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Notes, the other Loan
Documents and any such other documents or in connection with any refinancing
or restructuring of the credit arrangements provided under this Agreement in
the nature of a "work-out" or of any insolvency or bankruptcy proceeding,
including, without limitation, reasonable legal fees and disbursements of
counsel to the Agent and each Lender (including the allocated costs of
internal counsel to the Agent and the Lenders which costs are not in
duplication of any costs of outside counsel to the Agent and each Lender),
(c) to pay, and indemnify and hold harmless each Lender and the Agent from
any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any
of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the Notes, the other Loan Documents and any such other documents
and (d) to pay, and indemnify and hold harmless each Lender and the Agent and
the officers, partners, directors, employees, agents and affiliates of the
Agent or any Lender (collectively "INDEMNITEES") from and against, any and
all Indemnified Liabilities, PROVIDED THAT the Borrower shall have no
obligation hereunder to the Agent or any Lender with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of the
Agent or any Lender. As used herein, "Indemnified Liabilities" means,
collectively, any and all liabilities, obligations, losses, damages
(including natural resource damages), penalties, actions, judgments, suits,
claims (including environmental claims), costs (including the costs of any
investigation, study, sampling, testing, abatement, cleanup, removal,
remediation or other response action necessary to remove, remediate, clean up
or ▇▇▇▇▇ any activities relating to Hazardous Materials), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened
by any Person, whether or not any such Indemnitee shall be designated as a
party or a potential party thereto, and any fees or expenses incurred by
Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and environmental laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents or the Acquisition
Agreement or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the Loans hereunder or the use or intended use of
the proceeds thereof or the issuance of Letters of Credit hereunder or the
use or intended use of any thereof, or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon
any of the Collateral or the Guarantor Collateral or the enforcement of the
Guarantees)). (To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this Section 9.5 may be unenforceable in whole
or in part because they are violative of any law or public policy, the
Borrower shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by Indemnitees or any of them.) The
agreements in this Section shall
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survive repayment of the Notes and all other amounts payable hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS. (a)
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking or
finance business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("PARTICIPANTS") participating interests
in any Loan owing to such Lender, any Letter of Credit participated in by
such Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender hereunder and under the other Loan
Documents; PROVIDED THAT the holder of any such participation, other than an
Affiliate of such Lender, shall not be entitled to require such Lender to
take or omit to take any action hereunder except action directly affecting
the extension of the maturity of any portion of the principal amount of a
Loan or Commitment, the expiration of a Letter of Credit or any portion of
interest or fees related thereto allocated to such participation or a
reduction of the principal amount or principal payment amount of or the rate
of interest payable on the Loans or any fees related thereto or reduction of
the amount to be reimbursed under any Letter of Credit, or a release of any
Obligor or any substantial portion of the Collateral or the Guarantor
Collateral or any increase in participation amounts. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note and
the participant in any such Letter of Credit for all purposes under this
Agreement and the other Loan Documents, and the Borrower and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. The Borrower agrees that if amounts outstanding under this
Agreement and the Notes are due or unpaid, or shall have been declared or
shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement and any Note
to the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note, PROVIDED THAT
such Participant shall only be entitled to such right of setoff if it shall
have agreed in the agreement pursuant to which it shall have acquired its
participating interest to share with the Lenders the proceeds thereof as
provided in Section 9.7. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 with
respect to its participation in the Commitments and the Loans and the Letters
of Credit outstanding from time to time; PROVIDED THAT no Participant shall
be entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking
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business and in accordance with applicable law, at any time sell to any of
its Affiliates or to any Lender, any Affiliate thereof or to one or more
additional lenders or financial institutions, which additional lenders shall
be subject to the consent of the Borrower, such consent not to be
unreasonably withheld and not to be required if a Default has occurred and is
continuing, and the Agent ("PURCHASING LENDERS") all or any part of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents pursuant to an Assignment and Acceptance executed by such
Purchasing Lender and such transferor Lender and delivered to the Agent for
its acceptance and recording in the Register (as defined in (d) below),
PROVIDED THAT (i) any such sale must result in the Purchasing Lender having
at least $5,000,000 in aggregate amount of obligations under this Agreement,
the Notes and the other Loan Documents and (ii) each such assignment by a
Lender of its Revolving Loans, Revolving Note, Revolving Commitment or its
participation in Letters of Credit shall be in such manner so that the same
portion of its Revolving Loans, Revolving Note, Revolving Commitment and its
participation in Letters of Credit is assigned to the respective assignee.
Upon such execution, delivery, acceptance and recording, from and after the
transfer effective date determined pursuant to such Assignment and
Acceptance, (x) the Purchasing Lender thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the transferor Lender thereunder shall, to the extent of such assigned
portion and as provided in such Assignment and Acceptance, be released from
its obligations under this Agreement and the other Loan Documents (and, in
the case of an Assignment and Acceptance covering all or the remaining
portion of a transferor Lender's rights and obligations under this Agreement,
such transferor Lender shall cease to be a party hereto). Such Assignment
and Acceptance shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of Commitment Percentages arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement, the Notes and the
other Loan Documents. On or prior to the transfer effective date determined
pursuant to such Assignment and Acceptance, the Borrower, at its own expense,
shall execute and deliver to the Agent in exchange for the surrendered Note
or Notes a new Note or Notes to the order of such Purchasing Lender in an
amount equal to the Commitments assumed by it pursuant to such Assignment and
Acceptance, and if the transferor Lender has retained a Commitment hereunder,
new Notes to the order of the transferor Lender in an amount equal to the
Commitments retained by it hereunder. Such new Notes shall be dated the
Restatement Date and shall otherwise be in the form of the Notes replaced
thereby. The Notes surrendered by the transferor Lender shall be returned by
the Agent to the Borrower marked "canceled."
(d) The Agent shall maintain at its address referred to in Section 9.2 a
copy of each Assignment and Acceptance delivered to it and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans owing to, and, if
applicable, the Letters of Credit participated in by, each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the
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Lenders may treat each Person whose name is recorded in the Register as the
owner of the Loans and the participant in the Letters of Credit, if
applicable, recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed in
accordance with the terms hereof, together with payment to the Agent by the
Purchasing Lender of a registration and processing fee of $2,500, the Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "TRANSFEREE") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Borrower, its Subsidiaries, and their Affiliates which has been delivered to
such Lender by or on behalf of the Borrower pursuant to this Agreement or any
other Loan Document or which has been delivered to such Lender by or on
behalf of the Borrower in connection with such Lender's credit evaluation of
the Borrower, its Subsidiaries, and their Affiliates prior to becoming a
party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or assigning
any of its rights under its Notes, or, if applicable, its participation in
any Letter of Credit, to any Federal Reserve Bank in accordance with
applicable law.
9.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans, its
participations in Letters of Credit, or interest thereon, or fees, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 7(g), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender's Loans, its participations in Letters of Credit, or interest thereon,
or fees, such benefitted Lender shall purchase for cash from the other
Lenders such portion of each such other Lender's Loans, participations in
Letters of Credit, or fees, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower agrees that each
Lender so purchasing a portion of another Lender's Loan or its participations
in Letters of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if
such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by law,
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with the prior consent of the Majority Lenders, each Lender shall have the
right, exercisable upon the occurrence and during the continuance of an Event
of Default and acceleration of the Obligations pursuant to Section 7, without
prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, to set-off and
appropriate and apply against any such Obligations any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender or any branch or agency thereof or bank
controlling such Lender to or for the credit or the account of the Borrower.
Each Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, PROVIDED THAT the failure to give such
notice shall not affect the validity of such set-off and application.
9.8 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery by telecopier of an executed counterpart of a
signature page to this Agreement shall be effective as delivery of an
originally executed counterpart of this Agreement.
9.9 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 INTEGRATION. This Agreement represents the entire agreement of the
Borrower, the Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or
warranties by the Agent or any Lender relative to the subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
9.12 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that: (a) it
has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the Notes and the other Loan Documents;(b) neither the
Agent nor any Lender has any fiduciary relationship to the Borrower solely by
virtue of any of the Loan Documents, and the relationship pursuant to the
Loan Documents between the Agent and the Lenders, on one hand, and the
Borrower on the other hand, is solely that of creditor and debtor; and (c)
no joint venture exists among the Lenders or among the Borrower, on one hand
and the Lenders, on the other hand.
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9.13 HEADINGS. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any
other purpose.
9.14 COPIES OF CERTIFICATES, ETC. Whenever the Borrower is required to
deliver notices, certificates, opinions, statements or other information
hereunder to the Agent for delivery to any Lender, it shall do so in such
number of copies as the Agent shall reasonably specify.
9.15 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY.
(a) The Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrower or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender, or by one or more Subsidiaries or
affiliates of such Lender and the Borrower hereby authorizes each Lender to
share any information delivered to such Lender by the Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision
of such Lender to enter into this Agreement, to any such Subsidiary or
affiliate, it being understood that any such Subsidiary or affiliate
receiving such information shall be bound by the provisions of clause (b)
below as if it were a Lender hereunder. Such authorization shall survive the
repayment of the Loans, the expiration of the Letters of Credit and the
termination of the Commitments.
(b) Each Lender and the Agent agrees (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives) to use
reasonable precautions to keep confidential, in accordance with their
customary procedures for handling confidential information of the same nature
and in accordance with safe and sound banking practices, any non-public
information supplied to it by the Borrower pursuant to this Agreement that is
identified by the Borrower as being confidential at the time the same is
delivered to the Lenders or the Agent, PROVIDED THAT nothing herein shall
limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel for any of the
Lenders or the Agent, (iii) to bank examiners or other regulatory
authorities, auditors or accountants, (iv) to the Agent or any other Lender,
(v) in connection with any litigation to which any one or more of the Lenders
or the Agent is a party, (vi) to a subsidiary or affiliate of such Lender as
provided in clause (a) above or (vii) to any assignee or participant (or
prospective assignee or participant), and PROVIDED FURTHER that in no event
shall any Lender or the Agent be obligated or required to return any
materials furnished by the Borrower.
9.16 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH AND FOR ANY COUNTERCLAIM
THEREIN.
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9.17 EFFECT OF AMENDMENT AND RESTATEMENT. This Agreement is intended to
completely amend, restate and replace the Existing Agreement, without
novation. The Borrower hereby acknowledges, certifies and agrees that if,
pursuant to the Existing Agreement the Lender party thereto has made advances
on a revolving basis to the Borrower that are outstanding as of the date as
of this Agreement, or the Agent has issued letters of credit that are
outstanding as of the date of this Agreement, the Borrower's respective
obligations to repay those advances to the Lender and to reimburse the Agent
in respect of drawings under such letters of credit are not subject to any
defense, counterclaim, set-off, right of recoupment, abatement or other claim
or determination.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER
VDI MEDIA
By: /s/ R. ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: R. ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: Chief Executive Officer
--------------------------
AGENT
UNION BANK OF CALIFORNIA, N.A.,
as Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title:
--------------------------
LENDERS
UNION BANK OF CALIFORNIA, N.A.,
as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title:
--------------------------
ADDRESS FOR NOTICES
Commercial Portfolio Administration
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
APPROVED LENDING OFFICES
Applicable Lending Office for Reference
Rate Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Applicable Lending Office for LIBOR
Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Applicable Lending Office for
Participations in Letters of Credit:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
SCHEDULE 2.1
COMMITMENTS
Term Loan Revolving Loan
Lender Commitment Commitment
------ ---------- ----------
Union Bank of
California, N.A. $29,000,000 $6,000,000
