CREDIT AGREEMENT by and among MEDQUIST INC. as Parent, THE SUBSIDIARIES OF PARENT LISTED AS BORROWERS ON THE SIGNATURE PAGES HERETO as Borrowers, THE LENDERS THAT ARE SIGNATORIES HERETO as Lenders, and WELLS FARGO FOOTHILL, LLC as Arranger and...
Exhibit 10.2
by and among
as Parent,
THE SUBSIDIARIES OF PARENT LISTED AS
BORROWERS ON THE SIGNATURE PAGES HERETO
BORROWERS ON THE SIGNATURE PAGES HERETO
as Borrowers,
THE LENDERS THAT ARE SIGNATORIES HERETO
as Lenders,
and
XXXXX FARGO FOOTHILL, LLC
as Arranger and Administrative Agent
Dated as of August 31, 2009
THIS CREDIT AGREEMENT (this “Agreement”), is entered into as of August 31, 2009, by
and among the lenders identified on the signature pages hereof (such lenders, together with their
respective successors and permitted assigns, are referred to hereinafter each individually as a
“Lender” and collectively as the “Lenders”), XXXXX FARGO FOOTHILL, LLC, a Delaware
limited liability company, as the arranger and administrative agent for the Lenders (in such
capacity, together with its successors and assigns in such capacity, “Agent”), MEDQUIST
INC., a New Jersey corporation (“Parent”), and each of Parent’s Subsidiaries listed as a
“Borrower” on the signature pages hereto (each a “Borrower” and collectively,
“Borrowers”).
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. Capitalized terms used in this Agreement shall have the meanings
specified therefor on Schedule 1.1.
1.2 Accounting Terms. All accounting terms not specifically defined herein shall be
construed in accordance with GAAP. When used herein, the term “financial statements” shall
include the notes and schedules thereto. Whenever the term “Parent” is used in respect of a
financial covenant or a related definition, it shall be understood to mean Parent and its
Subsidiaries on a consolidated basis, unless the context clearly requires otherwise. For the
purpose of Section 7 hereof and the definitions used therein, “GAAP” shall mean generally
accepted accounting principles in effect from time to time, provided that if there occurs
after the date of this Agreement any change in GAAP (or any modification or change in the method
of accounting of the Loan Parties or their Subsidiaries permitted under Section 6.10 to
conform to GAAP) that affects in any respect the calculation of any covenant contained in
Section 7 hereof, Agent and Administrative Borrower shall negotiate in good faith
amendments to the provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of Borrowers and the Lender Group after such
change in GAAP (or method of accounting) conform as nearly as possible to their respective
positions as of the date of this Agreement and, until any such amendments have been agreed upon,
the covenants in Section 7 hereof shall be calculated as if no such change in GAAP (or
method of accounting) has occurred.
1.3 Code. Any terms used in this Agreement that are defined in the Code shall be
construed and defined as set forth in the Code unless otherwise defined herein; provided,
however, that to the extent that the Code is used to define any term herein and such term
is defined differently in different Articles of the Code, the definition of such term contained in
Article 9 of the Code shall govern.
1.4 Construction. Unless the context of this Agreement or any other Loan Document
clearly requires otherwise, references to the plural include the singular, references to the
singular include the plural, the terms “includes” and “including” are not limiting, and the term
“or” has, except where otherwise indicated, the inclusive meaning represented by the phrase
“and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this
Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or such other Loan
Document, as the case may be. Section, subsection, clause, schedule, and exhibit references
herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in
any other Loan Document to any agreement, instrument, or document shall include all alterations,
amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders,
and supplements, thereto and thereof, as applicable (subject to any restrictions on such
alterations, amendments, changes, extensions, modifications, renewals, replacements,
substitutions, joinders, and supplements set forth herein). The words “asset” and “property”
shall be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts, and contract rights. Any
reference herein or in any other Loan Document to the satisfaction or repayment in full of the
Obligations shall mean the repayment in full in cash (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization) of all Obligations other than
unasserted contingent indemnification Obligations and other than any Bank Product Obligations
that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding and
that are not required by the provisions of this Agreement to be repaid or cash collateralized.
Any reference herein to any Person shall be construed to include such Person’s successors and
assigns. Any requirement of a writing contained herein or in any other Loan Document shall be
satisfied by the transmission of a Record.
1.5 Subsidiaries.
(a) Any references herein to Subsidiaries of Parent or Subsidiaries of any Loan Party shall be
construed to exclude each Specified Subsidiary so long as such Person satisfies the criteria set
forth in clauses (i) through (vii) of Section 1.5(b). Without limiting the generality of
the foregoing, in no event shall the net earnings of any Specified Subsidiary be consolidated with
or included in the net earnings of Parent and its Subsidiaries for any purpose under this Agreement
(including, without limitation, Section 7 hereof) or any other Loan Document, and each Specified
Subsidiary shall maintain separate books and records from Parent and its Subsidiaries.
(b) The Board of Directors of Parent may designate any Subsidiary of Parent formed or acquired
in connection with a Permitted Unrestricted Acquisition to be a Specified Subsidiary so long as (i)
neither Parent nor any of its Subsidiaries is directly or indirectly liable for any Indebtedness of
such Person, (ii) no default with respect to any Indebtedness of such Person would permit (upon
notice, lapse of time or otherwise) any holder of any Indebtedness of Parent or any of its
Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity, (iii) any Investment by Parent or any of its
Subsidiaries in such Person will not violate any provision of this Agreement or any other Loan
Document, (iv) neither Parent nor any of its Subsidiaries has a contract, agreement, arrangement,
understanding or obligation of any kind (other than (A) solely in the case of Parent, in respect of
its holding Stock in such Specified Subsidiary in the amount owned by Parent on the date of
formation or acquisition thereof, as the case may be, and (B) in respect of Permitted Investments),
whether written or oral, with such Person other than those that would customarily be obtained at
the time from Persons who are not Affiliates of Parent or any of its Subsidiaries, (v) neither
Parent nor any of its Subsidiaries has any obligation to subscribe for additional shares of Stock
in such Person, or to maintain or preserve such Person’s financial condition or to cause such
Person to achieve certain levels of operating results, (vi) such Person maintains separate bank
accounts and does not commingle funds with any Loan Party or any Subsidiary of a Loan Party and
(vii) such Person’s other assets are segregated from the Collateral. Parent shall provide Agent
with written notice of such proposed designation at least 10 Business Days prior to the proposed
date of designation.
(c) The Board of Directors of Parent may designate any Specified Subsidiary as a Subsidiary so
long as (i) Parent shall have provided Agent with written notice of such proposed designation at
least 10 Business Days prior to the proposed date of designation and, not later than 5 Business
Days prior to the proposed date of designation, copies of the Governing Documents and other
Material Contracts of the Specified Subsidiary to be so designated, which Governing Documents and
other Material Contracts must be reasonably acceptable to Agent, (ii) no Default or Event of
Default shall have occurred and be continuing either before or after giving effect to such
designation or would otherwise result from such designation, (iii) the Specified Subsidiary to be
so designated shall have executed and delivered any and all documentation reasonably requested by
Agent in order to become a Guarantor, (iv) the Specified Subsidiary to be so designated shall have
executed and delivered any and all documentation reasonably requested by Agent in order to provide
Agent with a first priority perfected security interest, subject to Permitted Liens, in the assets
of such Person, (v) the owner of the Stock of the Specified Subsidiary to be so designated shall
have executed and delivered any and all documentation reasonably requested by Agent in order to
provide Agent with a first priority perfected security interest in such Stock, and (vi) Parent
shall have provided Agent with written confirmation, supported by reasonably detailed calculations,
that on a pro forma basis after giving effect to such designation, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the 12 month
period ended one year after the proposed date of such designation.
1.6 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.
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2. LOAN AND TERMS OF PAYMENT.
2.1 Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and during the term of this
Agreement, each Lender with a Revolver Commitment agrees (severally, not jointly or jointly and
severally) to make advances (“Advances”) to Borrowers in an amount at any one time
outstanding not to exceed such Lender’s Pro Rata Share of an amount equal to the lesser of (i) the
Maximum Revolver Amount less the Availability Block less the Letter of Credit Usage at such time,
and (ii) the Borrowing Base at such time less the Letter of Credit Usage at such time.
(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement.
The outstanding principal amount of the Advances, together with interest accrued thereon, shall be
due and payable on the Maturity Date or, if earlier, on the date on which they are declared due and
payable pursuant to the terms of this Agreement.
2.2 Reserves. Anything to the contrary in Section 2.1 notwithstanding, Agent
shall have the right to establish reserves against the Borrowing Base in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem necessary or appropriate,
including reserves with respect to (a) sums that Parent or its Subsidiaries are required to pay
under any Section of this Agreement or any other Loan Document (such as taxes, assessments,
insurance premiums, royalties or, in the case of leased assets, rents or other amounts payable
under such leases) and has failed to pay (after giving effect to all applicable grace periods with
respect thereto and to the extent that such payments are not the subject of a Permitted Protest)
and (b) amounts owing by Parent or its Subsidiaries to any Person to the extent secured by a Lien
on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust has
not been subordinated in writing to the Lien or trust in favor of Agent in a manner satisfactory
to Agent in its Permitted Discretion, and in the Permitted Discretion of Agent likely would have a
priority superior to the Agent’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad
valorem, excise, sales, or other taxes where given priority under applicable law) in and to such
item of the Collateral.
2.3 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Borrowing shall be made by a written request by an
Authorized Person delivered to Agent. Such written request must be received by Agent no later than
(i) in the case of Base Rate Loans, noon (New York time) on the Business Day that is the requested
Funding Date and (ii) in the case of LIBOR Rate Loans, no later than 2:00 p.m. (New York time) at
least 3 Business Days prior to the Business Day that is the requested Funding Date, in each case,
specifying (A) the amount of such Borrowing, and (B) the requested Funding Date, which shall be a
Business Day, and, in the case of a request for LIBOR Rate Loans, be accompanied by a LIBOR Notice.
At Agent’s election, in lieu of delivering the above-described written request, any Authorized
Person may give Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed in writing within
24 hours of the giving of such telephonic notice, but the failure to provide such written
confirmation shall not affect the validity of the request.
(b) Making of Swing Loans. In the case of a request for an Advance at any time that there are
2 or more Lenders, and so long as either (i) the aggregate amount of Swing Loans made since the
last Settlement Date, minus the amount of Collections or payments applied to Swing Loans since the
last Settlement Date, plus the amount of the requested Advance does not exceed $2,500,000, or (ii)
Swing Lender, in its sole discretion, shall agree to make a Swing Loan notwithstanding the
foregoing limitation, Swing Lender shall make an Advance in the amount of such Borrowing (any such
Advance made solely by Swing Lender pursuant to this Section 2.3(b) being referred to as a
“Swing Loan” and such Advances being referred to collectively as “Swing Loans”)
available to Borrowers on the Funding Date applicable thereto by transferring immediately available
funds to Borrowers’ Designated Account. Each Swing Loan shall be
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deemed to be an Advance hereunder and shall be subject to all the terms and conditions
applicable to other Advances, except that all payments on any Swing Loan shall be payable to Swing
Lender solely for its own account. Subject to the provisions of Section 2.3(d)(ii), Swing
Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual
knowledge that (i) one or more of the applicable conditions precedent set forth in Section
3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the
requested Borrowing would exceed the Availability on such Funding Date. Swing Lender shall not
otherwise be required to determine whether the applicable conditions precedent set forth in
Section 3 have been satisfied on the Funding Date applicable thereto prior to making any
Swing Loan. The Swing Loans shall be secured by the Agent’s Liens, constitute Obligations
hereunder, and bear interest at the rate applicable from time to time to Advances that are Base
Rate Loans.
(c) Making of Loans.
(i) In the event that Swing Lender is not obligated to make a Swing Loan then promptly after
receipt of a request for a Borrowing pursuant to Section 2.3(a), Agent shall notify the
Lenders, not later than 1:00 p.m. (New York time) on the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the requested Borrowing. Each
Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available
to Agent in immediately available funds, to Agent’s Account, not later than 3:00 p.m. (New York
time) on the Funding Date applicable thereto. After Agent’s receipt of the proceeds of such
Advances, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding
Date by transferring immediately available funds equal to such proceeds received by Agent to the
Designated Account; provided, however, that, subject to the provisions of
Section 2.3(d)(ii), Agent shall not request any Lender to make, and no Lender shall have
the obligation to make, any Advance if (1) one or more of the applicable conditions precedent set
forth in Section 3 will not be satisfied on the requested Funding Date for the applicable
Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender prior to 2:00 p.m. (New York time) on the date
of a Borrowing, that such Lender will not make available as and when required hereunder to Agent
for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may
assume that each Lender has made or will make such amount available to Agent in immediately
available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon
such assumption, make available to Borrowers on such date a corresponding amount. If any Lender
shall not have made its full amount available to Agent in immediately available funds and if Agent
in such circumstances has made available to Borrowers such amount, that Lender shall on the
Business Day following such Funding Date make such amount available to Agent, together with
interest at the Defaulting Lender Rate for each day during such period. A notice submitted by
Agent to any Lender with respect to amounts owing under this subsection shall be conclusive, absent
manifest error. If such amount is so made available by the Defaulting Lender, such payment to
Agent shall constitute such Lender’s Advance on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available by the Defaulting Lender to Agent on the Business
Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund
and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together
with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Advances composing such Borrowing;
provided, however, that each such payment made by Borrowers pursuant to this
sentence shall be applied, first to that portion of the Advances composing Base Rate Loans and
second, to that portion of the principal amount of the Advance composing LIBOR Rate Loans. The
failure of any Lender to make any Advance on any Funding Date shall not relieve any other Lender of
any obligation hereunder to make an Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Advance to be made by such other Lender
on any Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting Lender any payments made by
Borrowers to Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the
Defaulting Lender, Agent shall transfer any such payments to each other non-Defaulting Lender
member of the Lender Group ratably in accordance with their Commitments (but only to the extent
that such Defaulting
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Lender’s Advance was funded by the other members of the Lender Group) or, if so directed by
Administrative Borrower and if no Default or Event of Default has occurred and is continuing (and
to the extent such Defaulting Lender’s Advance was not funded by the Lender Group), retain same to
be re-advanced to Borrowers as if such Defaulting Lender had made Advances to Borrowers. Subject
to the foregoing, Agent may hold and, in its Permitted Discretion, re-lend to Borrowers for the
account of such Defaulting Lender the amount of all such payments received and retained by Agent
for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a
“Lender” and such Lender’s Commitment shall be deemed to be zero. This Section shall remain
effective with respect to such Defaulting Lender until (x) the Obligations under this Agreement
shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Administrative Borrower shall have waived such Defaulting Lender’s default in
writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays
to Agent all amounts owing by Defaulting Lender in respect thereof. The operation of this Section
shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or
excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations
hereunder, or to relieve or excuse the performance by Borrowers of their duties and obligations
hereunder to Agent or to the Lenders other than such Defaulting Lender. Any such failure to fund
by any Defaulting Lender shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Administrative Borrower at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute
Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a
substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder,
and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the
substitute Lender (and agrees that it shall be deemed to have executed and delivered such document
if it fails to do so) subject only to being repaid its share of the outstanding Obligations (other
than Bank Product Obligations, but including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever; provided,
however, that any such assumption of the Commitment of such Defaulting Lender shall not be
deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against
any such Defaulting Lender arising out of or in relation to such failure to fund.
(d) Protective Advances and Optional Overadvances.
(i) Agent hereby is authorized by Borrowers and the Lenders, from time to time in Agent’s sole
discretion, (A) after the occurrence and during the continuance of a Default or an Event of
Default, or (B) at any time that any of the other applicable conditions precedent set forth in
Section 3 are not satisfied, to make Advances to Borrowers on behalf of the Lenders that
Agent, in its Permitted Discretion deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the
Obligations (other than the Bank Product Obligations) (any of the Advances described in this
Section 2.3(d)(i) shall be referred to as “Protective Advances”).
(ii) Any contrary provision of this Agreement notwithstanding, the Lenders hereby authorize
Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is
not obligated to, knowingly and intentionally, continue to make Advances (including Swing Loans) to
Borrowers notwithstanding that an Overadvance exists or thereby would be created, so long as (A)
after giving effect to such Advances, the outstanding Revolver Usage does not exceed the Borrowing
Base by more than $4,000,000, and (B) after giving effect to such Advances, the outstanding
Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or
Lender Group Expenses) does not exceed the Maximum Revolver Amount. In the event Agent obtains
actual knowledge that the Revolver Usage exceeds the amounts permitted by the immediately foregoing
provisions, regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders
as soon as practicable (and prior to making any (or any additional) intentional Overadvances
(except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group
Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral
or its value), and the Lenders with Revolver Commitments thereupon shall, together with Agent,
jointly determine the terms of arrangements that shall be implemented with Borrowers intended to
reduce, within a reasonable time, the outstanding principal amount of the Advances to Borrowers to
an amount permitted by the preceding sentence. In such circumstances, if any Lender with a
Revolver Commitment
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objects to the proposed terms of reduction or repayment of any Overadvance, the terms of
reduction or repayment thereof shall be implemented according to the determination of the Required
Lenders. Each Lender with a Revolver Commitment shall be obligated to settle with Agent as
provided in Section 2.3(e) for the amount of such Lender’s Pro Rata Share of any
unintentional Overadvances by Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.3(d)(ii), and any Overadvances resulting from the charging
to the Loan Account of interest, fees, or Lender Group Expenses.
(iii) Each Protective Advance and each Overadvance shall be deemed to be an Advance hereunder,
except that no Protective Advance or Overadvance shall be eligible to be a LIBOR Rate Loan and,
prior to Settlement therefor, all payments on the Protective Advances shall be payable to Agent
solely for its own account. The Protective Advances and Overadvances shall be repayable on demand,
secured by the Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans. The provisions of this
Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and
are not intended to benefit Borrowers in any way.
(e) Settlement. It is agreed that each Lender’s funded portion of the Advances is intended by
the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Advances. Such
agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall
not be for the benefit of Borrowers) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among the Lenders as to the Advances, the Swing
Loans, and the Protective Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis,
or on a more frequent basis if so determined by Agent (1) on behalf of Swing Lender, with respect
to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Protective
Advances, and (3) with respect to Parent’s or its Subsidiaries’ Collections or payments received,
as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission,
of such requested Settlement, no later than 5:00 p.m. (New York time) on the Business Day
immediately prior to the date of such requested Settlement (the date of such requested Settlement
being the “Settlement Date”). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, and Protective Advances for the
period since the prior Settlement Date. Subject to the terms and conditions contained herein
(including Section 2.3(c)(iii)): (y) if a Lender’s balance of the Advances (including
Swing Loans and Protective Advances) exceeds such Lender’s Pro Rata Share of the Advances
(including Swing Loans and Protective Advances) as of a Settlement Date, then Agent shall, by no
later than 3:00 p.m. (New York time) on the Settlement Date, transfer in immediately available
funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each
such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share
of the Advances (including Swing Loans and Protective Advances), and (z) if a Lender’s balance of
the Advances (including Swing Loans and Protective Advances) is less than such Lender’s Pro Rata
Share of the Advances (including Swing Loans and Protective Advances) as of a Settlement Date, such
Lender shall no later than 3:00 p.m. (New York time) on the Settlement Date transfer in immediately
available funds to the Agent’s Account, an amount such that each such Lender shall, upon transfer
of such amount, have as of the Settlement Date, its Pro Rata Share of the Advances (including Swing
Loans and Protective Advances). Such amounts made available to Agent under clause (z) of the
immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans
or Protective Advances and, together with the portion of such Swing Loans or Protective Advances
representing Swing Lender’s Pro Rata Share thereof, shall constitute Advances of such Lenders. If
any such amount is not made available to Agent by any Lender on the Settlement Date applicable
thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its
account such amount on demand from such Lender together with interest thereon at the Defaulting
Lender Rate.
(ii) In determining whether a Lender’s balance of the Advances, Swing Loans, and Protective
Advances is less than, equal to, or greater than such Lender’s Pro Rata Share of the Advances,
Swing Loans, and Protective Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received in good funds by Agent
with respect to
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principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and
proceeds of Collateral.
(iii) Between Settlement Dates, Agent, to the extent Protective Advances or Swing Loans are
outstanding, may pay over to Agent or Swing Lender, as applicable, any Collections or payments
received by Agent, that in accordance with the terms of this Agreement would be applied to the
reduction of the Advances, for application to the Protective Advances or Swing Loans. Between
Settlement Dates, Agent, to the extent no Protective Advances or Swing Loans are outstanding, may
pay over to Swing Lender any Collections or payments received by Agent, that in accordance with the
terms of this Agreement would be applied to the reduction of the Advances, for application to Swing
Lender’s Pro Rata Share of the Advances. If, as of any Settlement Date, Collections or payments of
Parent or its Subsidiaries received since the then immediately preceding Settlement Date have been
applied to Swing Lender’s Pro Rata Share of the Advances other than to Swing Loans, as provided for
in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and
Agent shall pay to the Lenders, to be applied to the outstanding Advances of such Lenders, an
amount such that each Lender shall, upon receipt of such amount, have, as of such Settlement Date,
its Pro Rata Share of the Advances. During the period between Settlement Dates, Swing Lender with
respect to Swing Loans, Agent with respect to Protective Advances, and each Lender (subject to the
effect of agreements between Agent and individual Lenders) with respect to the Advances other than
Swing Loans and Protective Advances, shall be entitled to interest at the applicable rate or rates
payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(f) Notation. Agent, as a non-fiduciary agent for Borrowers, shall maintain a register
showing the principal amount of the Advances, owing to each Lender, including the Swing Loans owing
to Swing Lender, and Protective Advances owing to Agent, and the interests therein of each Lender,
from time to time and such records shall, absent manifest error, conclusively be presumed to be
correct and accurate.
(g) Lenders’ Failure to Perform. All Advances (other than Swing Loans and Protective
Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata
Shares. It is understood that (i) no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any failure by any
other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its
obligations hereunder shall excuse any other Lender from its obligations hereunder.
2.4 Payments; Reductions of Commitments; Prepayments.
(a) Payments by Borrowers.
(i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to
Agent’s Account for the account of the Lender Group and shall be made in immediately available
funds, no later than 2:00 p.m. (New York time) on the date specified herein. Any payment received
by Agent later than 2:00 p.m. (New York time) shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to accrue until such
following Business Day.
(ii) Unless Agent receives notice from Administrative Borrower prior to the date on which any
payment is due to the Lenders that Borrowers will not make such payment in full as and when
required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on
such date in immediately available funds and Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent Borrowers do not make such payment in full to Agent on the
date when due, each Lender severally shall repay to Agent on demand such amount distributed to such
Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date
such amount is distributed to such Lender until the date repaid.
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(b) Apportionment and Application.
(i) So long as no Application Event has occurred and is continuing and except as otherwise
provided with respect to Defaulting Lenders, all principal and interest payments shall be
apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and all payments of fees and expenses (other
than fees or expenses that are for Agent’s separate account) shall be apportioned ratably among the
Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee
or expense relates. All payments to be made hereunder by Borrowers shall be remitted to Agent and
all (subject to Section 2.4(b)(iv)) such payments, and all proceeds of Collateral received
by Agent, shall be applied, so long as no Application Event has occurred and is continuing, to
reduce the balance of the Advances outstanding and, thereafter, to Borrowers (to be wired to the
Designated Account) or such other Person entitled thereto under applicable law.
(ii) At any time that an Application Event has occurred and is continuing and except as
otherwise provided with respect to Defaulting Lenders, all payments remitted to Agent and all
proceeds of Collateral received by Agent shall be applied as follows:
(A) first, to pay any Lender Group Expenses (including cost or expense reimbursements)
or indemnities then due to Agent under the Loan Documents, until paid in full,
(B) second, to pay any fees or premiums then due to Agent under the Loan Documents
until paid in full,
(C) third, to pay interest due in respect of all Protective Advances until paid in
full,
(D) fourth, to pay the principal of all Protective Advances until paid in full,
(E) fifth, ratably to pay any Lender Group Expenses (including cost or expense
reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid
in full,
(F) sixth, ratably to pay any fees or premiums then due to any of the Lenders under
the Loan Documents until paid in full,
(G) seventh, ratably to pay interest due in respect of the Advances (other than
Protective Advances) and the Swing Loans, until paid in full,
(H) eighth, ratably (i) to pay the principal of all Swing Loans until paid in full,
(ii) to pay the principal of all Advances until paid in full, (iii) to Agent, to be held by Agent,
for the benefit of Issuing Lender and those Lenders having a share of the Risk Participation
Liability, as cash collateral in an amount up to 105% of the Letter of Credit Usage, and (iv) to
Agent, to be held by Agent, for the benefit of the Bank Product Providers, as cash collateral in an
amount up to the amount the Bank Product Providers reasonably determine to be the credit exposure
of Parent and its Subsidiaries in respect of Bank Products,
(I) ninth, to pay any other Obligations then outstanding until paid in full, and
(J) tenth, to Borrowers (to be wired to the Designated Account) or such other Person
entitled thereto under applicable law.
(iii) Agent promptly shall distribute to each Lender, pursuant to the applicable wire
instructions received from each Lender in writing, such funds as it may be entitled to receive,
subject to a Settlement delay as provided in Section 2.3(e).
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(iv) In each instance, so long as no Application Event has occurred and is continuing,
Section 2.4(b)(i) shall not apply to any payment made by Borrowers to Agent and specified
by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable)
under any provision of this Agreement or any other Loan Document.
(v) For purposes of Section 2.4(b)(ii), “paid in full” means payment in cash of all
amounts owing under the Loan Documents, including loan fees, service fees, professional fees,
interest (and specifically including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense reimbursements, whether or not any
of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency
Proceeding.
(vi) In the event of a direct conflict between the priority provisions of this Section
2.4 and any other provision contained in any other Loan Document, it is the intention of the
parties hereto that such provisions be read together and construed, to the fullest extent possible,
to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this Section 2.4 shall control and
govern.
(c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate on the
Maturity Date. Borrowers may reduce the Revolver Commitments to an amount (which may be zero) not
less than the sum of (i) the Revolver Usage as of such date, plus (ii) the principal amount of all
Advances not yet made as to which a request has been given by Administrative Borrower under
Section 2.3(a), plus (iii) the amount of all Letters of Credit not yet issued as to which a
request has been given by Administrative Borrower pursuant to Section 2.11(a). Each such
reduction shall be in an amount which is an integral multiple of $1,000,000 (unless the Revolver
Commitments in effect immediately prior to such reduction are less than $1,000,000), shall be made
by providing not less than 5 Business Days prior written notice to Agent and shall be irrevocable.
Once reduced, the Revolver Commitments may not be increased. Each such reduction of the Revolver
Commitments shall reduce the Revolver Commitments of each Lender proportionately in accordance with
its Pro Rata Share thereof.
(d) Optional Prepayments. Borrowers may prepay the principal of any Advance at any time in
whole or in part.
(e) Mandatory Prepayments.
(i) Dispositions. Within 5 Business Days of the date of receipt by Parent or any of its
Subsidiaries of the Net Cash Proceeds of any voluntary or involuntary sale or disposition by Parent
or any of its Subsidiaries of assets (including casualty losses or condemnations but excluding
sales or dispositions which qualify as Permitted Dispositions under clauses (a), (b), (c), (d),
(e), (j), (l) and (m) of the definition of Permitted Dispositions), Borrowers shall prepay the
outstanding principal amount of the Obligations in accordance with Section 2.4(f) in an
amount equal to 100% of such Net Cash Proceeds (including condemnation awards and payments in lieu
thereof) received by such Person in connection with such sales or dispositions; provided
that, so long as (A) no Default or Event of Default shall have occurred and is continuing, (B)
Administrative Borrower shall have given Agent prior written notice of Borrowers’ intention to
apply such monies to the costs of replacement of the properties or assets that are the subject of
such sale or disposition or the cost of purchase or construction of other assets useful in the
business of Parent or its Subsidiaries, (C) the monies are held in a Deposit Account in which Agent
has a perfected first-priority security interest, and (D) Parent or its Subsidiaries, as
applicable, complete such replacement, purchase, or construction within 180 days after the initial
receipt of such monies, Parent and its Subsidiaries shall have the option to apply such monies to
the costs of replacement of the assets that are the subject of such sale or disposition unless and
to the extent that such applicable period shall have expired without such replacement, purchase or
construction being made or completed, in which case, any amounts remaining in the cash collateral
account shall be paid to Agent and applied in accordance with Section 2.4(f); and
provided, further, that no prepayment shall be required pursuant to this
Section 2.4(e)(i) until the aggregate amount of Net Cash Proceeds of all dispositions
described in this Section 2.4(e)(i) exceeds $250,000 during the term of this
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Agreement. Nothing contained in this Section 2.4(e)(i) shall permit Parent or any of
its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with
Section 6.4.
(ii) Extraordinary Receipts. Within 5 Business Days of the date of receipt by Parent or any
of its Subsidiaries of any Extraordinary Receipts, Borrowers shall prepay the outstanding principal
amount of the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of
such Extraordinary Receipts, net of any reasonable expenses incurred in collecting such
Extraordinary Receipts; provided, that no prepayment shall be required pursuant to this
Section 2.4(e)(ii) until the aggregate amount of all Extraordinary Receipts described in
this Section 2.4(e)(ii) exceeds $250,000 during the term of this Agreement.
(iii) Indebtedness. Within 5 Business Days of the date of incurrence by Parent or any of its
Subsidiaries of any Indebtedness (other than Permitted Indebtedness described in clauses (a)
through (m) of the definition thereof), Borrowers shall prepay the outstanding principal amount of
the Obligations in accordance with Section 2.4(f) in an amount equal to 100% of the Net
Cash Proceeds received by such Person in connection with such incurrence. The provisions of this
Section 2.4(e)(iii) shall not be deemed to be implied consent to any such incurrence
otherwise prohibited by the terms and conditions of this Agreement.
(f) Application of Payments. Each prepayment pursuant to Section 2.4(e) above shall
(i) so long as no Application Event shall have occurred and be continuing, be applied, first, to
the outstanding principal amount of the Advances (it being understood and agreed that no such
prepayment shall result in a reduction in the Revolver Commitments and shall be available to
Borrowers to be reborrowed subject to the terms and conditions of this Agreement), until paid in
full, and second to cash collateralize the Letters of Credit in an amount equal to 105% of the then
extant Letter of Credit Usage, and (ii) if an Application Event shall have occurred and be
continuing, be applied in the manner set forth in Section 2.4(b)(ii).
(g) Waiver of Funding Losses. So long as no Default or Event of Default shall have occurred
and be continuing either before or after giving effect to any prepayment made pursuant to
Section 2.4(e) above, Agent shall waive any and all Funding Losses otherwise payable
pursuant to Section 2.12(b) as a result of any such prepayment.
2.5 Overadvances. If, at any time or for any reason, the amount of Obligations owed
by Borrowers to the Lender Group pursuant to Section 2.1 or Section 2.11 is
greater than any of the limitations set forth in Section 2.1 or Section 2.11, as
applicable (an “Overadvance”), Borrowers shall immediately pay to Agent, in cash, the
amount of such excess, which amount shall be used by Agent to reduce the Obligations in accordance
with the priorities set forth in Section 2.4(b). Borrowers promise to pay the Obligations
(including principal, interest, fees, costs, and expenses) in Dollars in full on the Maturity Date
or, if earlier, on the date on which the Obligations are declared due and payable pursuant to the
terms of this Agreement.
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations.
(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations (except for
undrawn Letters of Credit and except for Bank Product Obligations) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily Balance thereof as
follows:
(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR
Rate plus the LIBOR Rate Margin, and
(ii) otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.
(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of the Lenders
with a Revolver Commitment, subject to any agreements between Agent and individual Lenders), a
Letter of Credit fee (in addition to the charges, commissions, fees, and costs set forth in
Section 2.11(e)) which
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shall accrue at a per annum rate equal to the LIBOR Rate Margin times the Daily Balance of the
undrawn amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the continuation of an Event of Default and
at the election of the Required Lenders,
(i) all Obligations (except for undrawn Letters of Credit and except for Bank Product
Obligations) that have been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 2 percentage points above the
per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for in Section 2.6(b) shall be increased to 2
percentage points above the per annum rate otherwise applicable hereunder.
(d) Payment. Except as provided to the contrary in Section 2.10 or Section
2.12(a), interest, Letter of Credit fees, and all other fees payable hereunder shall be due and
payable, in arrears, on the first day of each month at any time that Obligations or Commitments are
outstanding. Borrowers hereby authorize Agent, from time to time without prior notice to
Borrowers, to charge all interest and fees (when due and payable), all Lender Group Expenses (as
and when incurred), all charges, commissions, fees, and costs provided for in Section
2.11(e) (as and when accrued or incurred), all fees and costs provided for in Section
2.10 (as and when accrued or incurred), and all other payments as and when due and payable
under any Loan Document (including any amounts due and payable to the Bank Product Providers in
respect of Bank Products) to the Loan Account, which amounts thereafter shall constitute Advances
hereunder and shall accrue interest at the rate then applicable to Advances that are Base Rate
Loans. Any interest not paid when due shall be compounded by being charged to the Loan Account and
shall thereafter constitute Advances hereunder and shall accrue interest at the rate then
applicable to Advances that are Base Rate Loans.
(e) Computation. All interest and fees chargeable under the Loan Documents shall be computed
on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period
during which the interest or fees accrue. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately
shall be increased or decreased by an amount equal to such change in the Base Rate.
(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or
rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the
highest rate permissible under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated
within it; provided, however, that, anything contained herein to the contrary
notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum
allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are
and shall be liable only for the payment of such maximum as allowed by law, and payment received
from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
2.7 Crediting Payments; Clearance Charge.
(a) The receipt of any payment item by Agent shall not be considered a payment on account
unless such payment item is a wire transfer of immediately available federal funds made to the
Agent’s Account or unless and until such payment item is honored when presented for payment.
Should any payment item not be honored when presented for payment, then Borrowers shall be deemed
not to have made such payment and interest shall be calculated accordingly. Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only
if it is received into the Agent’s Account on a Business Day on or before 2:00 p.m. (New York
time). If any payment item is received into the Agent’s Account on a non-Business Day or after
2:00 p.m. (New York time) on a Business Day, it shall be
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deemed to have been received by Agent as of the opening of business on the immediately
following Business Day.
(b) From and after the Closing Date, Agent shall be entitled to charge Borrowers for 1
Business Day of ‘clearance’ at the rate then applicable under Section 2.6 to Advances that
are Base Rate Loans on all Collections that are received by Parent and its Subsidiaries (regardless
of whether forwarded to Agent). This across-the-board 1 Business Day clearance charge on all
Collections of Parent and its Subsidiaries is acknowledged by the parties to constitute an integral
aspect of the pricing of the financing of Borrowers and shall apply irrespective of whether or not
there are any outstanding monetary Obligations; the effect of such clearance charge being the
equivalent of charging interest on such Collections through the completion of a period ending 1
Business Day after the receipt thereof. The parties acknowledge and agree that the economic
benefit of the foregoing provisions of this Section 2.7(b) shall be for the exclusive
benefit of Agent.
2.8 Designated Account. Agent is authorized to make the Advances and Issuing Lender
is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other
instructions received from anyone purporting to be an Authorized Person or, without instructions,
if pursuant to Section 2.6(d). Administrative Borrower agrees to establish and maintain
the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds
of the Advances requested by Borrowers and made by Agent or the Lenders hereunder. Unless
otherwise agreed by Agent and Administrative Borrower, any Advance, Protective Advance, or Swing
Loan requested by Administrative Borrower and made by Agent or the Lenders hereunder shall be made
to the Designated Account.
2.9 Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an
account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will
be charged with all Advances (including Protective Advances and Swing Loans) made by Agent, Swing
Lender, or the Lenders to Borrowers or for Borrowers’ account, the Letters of Credit issued by
Issuing Lender for Borrowers’ account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including, accrued interest, fees
and expenses, and Lender Group Expenses. In accordance with Section 2.7, the Loan Account
will be credited with all payments received by Agent from Borrowers or for Borrowers’ account.
Agent shall render statements regarding the Loan Account to Administrative Borrower, including
principal, interest, fees, and including an itemization of all charges and expenses constituting
Lender Group Expenses owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated between Borrowers and the
Lender Group unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto describing the error or
errors contained in any such statements.
2.10 Fees. Borrowers shall pay to Agent,
(a) for the account of Agent, as and when due and payable under the terms of the Fee Letter,
the fees set forth in the Fee Letter.
(b) for the ratable account of those Lenders with Revolver Commitments, on the first day of
each month from and after the Closing Date up to the first day of the month prior to the Payoff
Date and on the Payoff Date, an unused line fee in an amount equal to the percent per annum set
forth in the table below that corresponds to the average Daily Balance of the Revolver Usage during
the immediately preceding month (or portion thereof) times the result of (i) the Maximum Revolver
Amount, less (ii) the average Daily Balance of the Revolver Usage during the immediately preceding
month (or portion thereof):
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| Unused Line Fee | ||||
| Average Daily Balance of the Revolver Usage | Percent | |||
If the Average Daily Balance of the Revolver Usage is
greater than $18,750,000 |
0.50 | % | ||
If the Average Daily Balance of the Revolver Usage is
greater than $12,500,000 but less than or equal to $18,750,000 |
0.75 | % | ||
If the Average Daily Balance of the Revolver Usage is less
than or equal to $12,500,000 |
1.00 | % | ||
2.11 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, the Issuing Lender agrees to issue
letters of credit for the account of Borrowers (each, an “L/C”) or to purchase
participations or execute indemnities, guarantees, or reimbursement obligations (each such
undertaking, an “L/C Undertaking”) with respect to letters of credit issued by an
Underlying Issuer (as of the Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo)
for the account of Borrowers. Each request for the issuance of a Letter of Credit, or the
amendment, renewal, or extension of any outstanding Letter of Credit, shall be made in writing by
an Authorized Person and delivered to the Issuing Lender and Agent via hand delivery,
telefacsimile, or other electronic method of transmission reasonably in advance of the requested
date of issuance, amendment, renewal, or extension. Each such request shall be in form and
substance reasonably satisfactory to the Issuing Lender in its Permitted Discretion and shall
specify (i) the amount of such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration date of such Letter of Credit, (iv) the
name and address of the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit,
as applicable), and (v) such other information (including, in the case of an amendment, renewal, or
extension, identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit.
Anything contained herein to the contrary notwithstanding, the Issuing Lender may, but shall not be
obligated to, issue a Letter of Credit that supports the obligations of a Loan Party or its
Subsidiaries in respect of (1) a lease of real property, or (2) an employment contract. If
requested by the Issuing Lender, Borrowers also shall be applicants under the application with
respect to any Underlying Letter of Credit that is to be the subject of an L/C Undertaking. The
Issuing Lender shall have no obligation to issue a Letter of Credit if any of the following would
result after giving effect to the issuance of such requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base less the outstanding amount of
Advances, or
(ii) the Letter of Credit Usage would exceed $5,000,000, or
(iii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the sum of (A)
the Availability Block, (B) the Bank Product Reserve, and (C) the outstanding amount of Advances.
Borrowers and the Lender Group acknowledge and agree that certain Underlying Letters of Credit
may be issued to support letters of credit that already are outstanding as of the Closing Date.
Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be in form and
substance acceptable to the Issuing Lender (in the exercise of its Permitted Discretion), including
the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Lender
is obligated to advance funds under a Letter of Credit, Borrowers shall reimburse such L/C
Disbursement to Issuing Lender by paying to Agent an amount equal to such L/C Disbursement not
later than 2:00 p.m., New York time, on the date that such L/C
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Disbursement is made, if Administrative Borrower shall have received written or telephonic
notice of such L/C Disbursement prior to 1:00 p.m., New York time, on such date, or, if such notice
has not been received by Administrative Borrower prior to such time on such date, then not later
than 2:00 p.m., New York time, on the Business Day that Administrative Borrower receives such
notice, if such notice is received prior to 1:00 p.m., New York time, on the date of receipt, and,
in the absence of such reimbursement, the L/C Disbursement immediately and automatically shall be
deemed to be an Advance hereunder and, initially, shall bear interest at the rate then applicable
to Advances that are Base Rate Loans. To the extent an L/C Disbursement is deemed to be an Advance
hereunder, Borrowers’ obligation to reimburse such L/C Disbursement shall be discharged and
replaced by the resulting Advance. Promptly following receipt by Agent of any payment from
Borrowers pursuant to this paragraph, Agent shall distribute such payment to the Issuing Lender or,
to the extent that Lenders have made payments pursuant to Section 2.11(b) to reimburse the
Issuing Lender, then to such Lenders and the Issuing Lender as their interests may appear.
(b) Promptly following receipt of a notice of L/C Disbursement pursuant to Section
2.11(a), each Lender with a Revolver Commitment agrees to fund its Pro Rata Share of any
Advance deemed made pursuant to the foregoing subsection on the same terms and conditions as if
Borrowers had requested such Advance and Agent shall promptly pay to Issuing Lender the amounts so
received by it from the Lenders. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Lender or the Lenders with Revolver Commitments, the Issuing Lender shall be deemed to have
granted to each Lender with a Revolver Commitment, and each Lender with a Revolver Commitment shall
be deemed to have purchased, a participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and each such Lender
agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro Rata Share of any
payments made by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender, such Lender’s Pro
Rata Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by Borrowers on
the date due as provided in Section 2.11(a), or of any reimbursement payment required to be
refunded to Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges and
agrees that its obligation to deliver to Agent, for the account of the Issuing Lender, an amount
equal to its respective Pro Rata Share of each L/C Disbursement made by the Issuing Lender pursuant
to this Section 2.11(b) shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or Default or the
failure to satisfy any condition set forth in Section 3. If any such Lender fails to make
available to Agent the amount of such Lender’s Pro Rata Share of each L/C Disbursement made by the
Issuing Lender in respect of such Letter of Credit as provided in this Section, such Lender shall
be deemed to be a Defaulting Lender and Agent (for the account of the Issuing Lender) shall be
entitled to recover such amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group harmless
from any loss, cost, expense, or liability, and reasonable attorneys fees incurred by the Lender
Group arising out of or in connection with any Letter of Credit; provided, however,
that no Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group. Each Borrower agrees to be bound by the
Underlying Issuer’s regulations and interpretations of any Underlying Letter of Credit or by
Issuing Lender’s interpretations of any L/C issued by Issuing Lender to or for such Borrower’s
account, even though this interpretation may be different from such Borrower’s own, and each
Borrower understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following any Borrower’s instructions
or those contained in the Letter of Credit or any modifications, amendments, or supplements
thereto. Each Borrower understands that the L/C Undertakings may require Issuing Lender to
indemnify the Underlying Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless with respect to any loss, cost, expense (including reasonable attorneys
fees), or liability incurred by the Lender Group under any L/C Undertaking as
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a result of the Lender Group’s indemnification of any Underlying Issuer; provided, however, that no
Borrower shall be obligated hereunder to indemnify for any loss, cost, expense, or liability to the
extent that it is caused by the gross negligence or willful misconduct of the Issuing Lender or any
other member of the Lender Group. Each Borrower hereby acknowledges and agrees that neither the
Lender Group nor the Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.
(d) Each Borrower hereby authorizes and directs any Underlying Issuer to deliver to the
Issuing Lender all instruments, documents, and other writings and property received by such
Underlying Issuer pursuant to such Underlying Letter of Credit and to accept and rely upon the
Issuing Lender’s instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
(e) Any and all issuance charges, commissions, fees, and costs incurred by the Issuing Lender
relating to Underlying Letters of Credit shall be Lender Group Expenses for purposes of this
Agreement and shall be reimbursable immediately by Borrowers to Agent for the account of the
Issuing Lender; it being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is 0.50% per annum times the undrawn
amount of each Underlying Letter of Credit, that such issuance charge may be changed from time to
time, and that the Underlying Issuer also imposes a schedule of charges for amendments, extensions,
drawings, and renewals.
(f) If by reason of (i) any change after the Closing Date in any applicable law, treaty, rule,
or regulation or any change in the interpretation or application thereof by any Governmental
Authority, or (ii) compliance by the Underlying Issuer or the Lender Group with any direction,
request, or requirement (irrespective of whether having the force of law) of any Governmental
Authority or monetary authority including, Regulation D of the Federal Reserve Board as from time
to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect
of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the Lender Group any other condition
regarding any Underlying Letter of Credit or any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost to the Lender
Group of issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce the amount
receivable in respect thereof by the Lender Group, then, and in any such case, Agent may, at any
time within a reasonable period after the additional cost is incurred or the amount received is
reduced, notify Administrative Borrower, and Borrowers shall pay within 30 days after demand
therefor, such amounts as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder;
provided that Borrowers shall not be required to compensate a Lender pursuant to this
Section for any such amounts incurred more than 180 days prior to the date that such Lender first
demands payment from Borrowers of such amounts; provided further that if an event
or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to
above shall be extended to include the period of retroactive effect thereof. The determination by
Agent of any amount due pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error,
be final and conclusive and binding on all of the parties hereto.
2.12 LIBOR Option.
(a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate based
upon the Base Rate, Borrowers shall have the option (the “LIBOR Option”) to have interest
on all or a portion of the Advances be charged (whether at the time when made (unless otherwise
provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation
of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate.
Interest on LIBOR Rate Loans shall be
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payable on the earliest of (i) the last day of the Interest Period applicable thereto; (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof; or (iii) the date
on which this Agreement is terminated pursuant to the terms hereof. On the last day of each
applicable Interest Period, unless Administrative Borrower properly has exercised the LIBOR Option
with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall
convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At
any time that an Event of Default has occurred and is continuing, Borrowers no longer shall have
the option to request that Advances bear interest at a rate based upon the LIBOR Rate.
(b) LIBOR Election.
(i) Administrative Borrower may, at any time and from time to time, so long as no Event of
Default has occurred and is continuing, elect to exercise the LIBOR Option by notifying Agent prior
to 2:00 p.m. (New York time) at least 3 Business Days prior to the commencement of the proposed
Interest Period (the “LIBOR Deadline”). Notice of Administrative Borrower’s election of
the LIBOR Option for a permitted portion of the Advances and an Interest Period pursuant to this
Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR
Deadline, or by telephonic notice received by Agent before the LIBOR Deadline (to be confirmed by
delivery to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (New York time) on the
same day). Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof
to each of the affected Lenders.
(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection with each
LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless
against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the
payment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR
Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure
to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR
Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A
certificate of Agent or a Lender delivered to Administrative Borrower setting forth in reasonable
detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this
Section 2.12 shall be conclusive absent manifest error. Funding Losses shall, with respect
to Agent or any Lender, be deemed to equal the amount determined by Agent or such Lender to be the
excess, if any, of (1) the amount of interest that would have accrued on the principal amount of
such LIBOR Rate Loan had such event not occurred, at the LIBOR Rate that would have been applicable
thereto, for the period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert, or continue, for the period that
would have been the Interest Period therefor), minus (2) the amount of interest that would accrue
on such principal amount for such period at the interest rate which Agent or such Lender would be
offered, were it to be offered, at the commencement of such period, Dollar deposits of a comparable
amount and period in the London interbank market. Borrowers shall pay such amount to Agent or the
Lender, as applicable, within 30 days of the date of its receipt of such certificate. If a payment
of a LIBOR Rate Loan on a day other than the last day of the applicable Interest Period would
result in a Funding Loss, Agent may, in its sole discretion at the request of Administrative
Borrower, hold the amount of such payment as cash collateral in support of the Obligations until
the last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR
Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the
application of payments to any LIBOR Rate Loan and that, in the event that Agent does not defer
such application, Borrowers shall be obligated to pay any resulting Funding Losses.
(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in effect at any given time.
Borrowers only may exercise the LIBOR Option for LIBOR Rate Loans of at least $1,000,000.
(c) Conversion. Borrowers may convert LIBOR Rate Loans to Base Rate Loans at any time;
provided, however, that in the event that LIBOR Rate Loans are converted or prepaid
on any date that is not the last day of the Interest Period applicable thereto, including as a
result of any automatic prepayment through the required application by Agent of proceeds of
Parent’s and its Subsidiaries’ Collections in
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accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms
hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their
Participants harmless against any and all Funding Losses in accordance with Section 2.12
(b)(ii) above.
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis
to take into account any additional or increased costs to such Lender of maintaining or obtaining
any eurodollar deposits or increased costs, in each case, due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period, including changes
in tax laws (except changes of general applicability in corporate income tax laws) and changes in
the reserve requirements imposed by the Board of Governors of the Federal Reserve System (or any
successor), excluding the Reserve Percentage, which additional or increased costs would increase
the cost of funding or maintaining loans bearing interest at the LIBOR Rate. In any such event,
the affected Lender shall give Administrative Borrower and Agent written notice of such a
determination and adjustment and Agent promptly shall transmit the notice to each other Lender and,
upon its receipt of the notice from the affected Lender, Administrative Borrower may, by notice to
such affected Lender (y) require such Lender to furnish to Administrative Borrower a statement
setting forth in reasonable detail the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans with respect to which
such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).
(ii) In the event that any change in market conditions or any law, regulation, treaty, or
directive, or any change therein or in the interpretation or application thereof, shall at any time
after the date hereof, in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or maintaining, or to
determine or charge interest rates at the LIBOR Rate, such Lender shall give notice of such changed
circumstances to Agent and Administrative Borrower and Agent promptly shall transmit the notice to
each other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are outstanding,
the date specified in such Lender’s notice shall be deemed to be the last day of the Interest
Period of such LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such Lender thereafter
shall accrue interest at the rate then applicable to Base Rate Loans, and (z) Borrowers shall not
be entitled to elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.
(e) No Requirement of Matched Funding. Anything to the contrary contained herein
notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually
to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest
accrues at the LIBOR Rate.
2.13 Capital Requirements.
(a) If, after the date hereof, any Lender determines that (i) the adoption of or change in any
law, rule, regulation or guideline regarding capital requirements for banks or bank holding
companies, or any change in the interpretation or application thereof by any Governmental Authority
charged with the administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect of reducing the return on such
Lender’s or such holding company’s capital as a consequence of such Lender’s Commitments hereunder
to a level below that which such Lender or such holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender’s or such holding company’s
then existing policies with respect to capital adequacy and assuming the full utilization of such
entity’s capital) by any amount deemed by such Lender to be material, then such Lender may notify
Administrative Borrower and Agent thereof. Following receipt of such notice, Borrowers agree to
pay such Lender on demand the amount of such reduction of return of capital as and when such
reduction is determined, payable within 30 days after presentation by such Lender of a statement in
the amount and setting forth in reasonable detail such Lender’s calculation thereof and the
assumptions upon which such
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calculation was based (which statement shall be deemed true and correct
absent manifest error). In determining such amount, such Lender may use any reasonable averaging and attribution methods.
Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation; provided that
Borrowers shall not be required to compensate a Lender pursuant to this Section for any reductions
in return incurred more than 180 days prior to the date that such Lender notifies Administrative
Borrower of such law, rule, regulation or guideline giving rise to such reductions and of such
Lender’s intention to claim compensation therefor; provided further that if such
claim arises by reason of the adoption of or change in any law, rule, regulation or guideline that
is retroactive, then the 180-day period referred to above shall be extended to include the period
of retroactive effect thereof.
(b) If any Lender requests additional or increased costs referred to in Section
2.12(d)(i) or amounts under Section 2.13(a) (any such Lender, an “Affected
Lender”), then such Affected Lender shall use reasonable efforts to promptly designate a
different one of its lending offices or to assign its rights and obligations hereunder to another
of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such
designation or assignment would eliminate or reduce amounts payable pursuant to Section
2.12(d)(i) or Section 2.13(a), as applicable, and (ii) in the reasonable judgment of
such Affected Lender, such designation or assignment would not subject it to any material
unreimbursed cost or expense and would not otherwise be materially disadvantageous to it.
Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected
Lender in connection with any such designation or assignment. If, after such reasonable efforts,
such Affected Lender does not so designate a different one of its lending offices or assign its
rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any
future amounts to such Affected Lender pursuant to Section 2.12(d)(i) or Section
2.13(a), as applicable, then Borrowers (without prejudice to any amounts then due to such
Affected Lender under Section 2.12(d)(i) or Section 2.13(a), as applicable) may,
unless prior to the effective date of any such assignment the Affected Lender withdraws its request
for such additional amounts under Section 2.12(d)(i) or Section 2.13(a), as
applicable, designate another Lender reasonably acceptable to Agent to purchase the Obligations
owed to such Affected Lender and such Affected Lender’s Commitments hereunder (a “Replacement
Lender”), such Affected Lender shall assign to the Replacement Lender its Obligations and
Commitments, pursuant to an Assignment and Acceptance Agreement, and upon such purchase by the
Replacement Lender, such Replacement Lender shall be deemed to be a “Lender” for purposes of this
Agreement and such Affected Lender shall cease to be a “Lender” for purposes of this Agreement.
2.14 Joint and Several Liability of Borrowers.
(a) Each Borrower is accepting joint and several liability hereunder and under the other Loan
Documents in consideration of the financial accommodations to be provided by the Lender Group under
this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in
consideration of the undertakings of the other Borrowers to accept joint and several liability for
the Obligations.
(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers,
with respect to the payment and performance of all of the Obligations (including any Obligations
arising under this Section 2.14), it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of each Borrower without preferences or
distinction among them.
(c) If and to the extent that any Borrower shall fail to make any payment with respect to any
of the Obligations as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event the other Borrowers will make such payment with respect to,
or perform, such Obligation.
(d) The Obligations of each Borrower under the provisions of this Section 2.14
constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable
against each Borrower to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other circumstances whatsoever.
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(e) Except as otherwise expressly provided in this Agreement, each Borrower hereby waives
notice of acceptance of its joint and several liability, notice of any Advances or Letters of
Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event
of Default, or of any demand for any payment under this Agreement, notice of any action at any time
taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any requirement
of diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Borrower hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations, the acceptance of
any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any
default by any Borrower in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in
respect of any of the Obligations, and the taking, addition, substitution or release, in whole or
in part, at any time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting the generality of
the foregoing, each Borrower assents to any other action or delay in acting or failure to act on
the part of Agent or any Lender with respect to the failure by any Borrower to comply with any of
its respective Obligations, including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 2.14 afford grounds for
terminating, discharging or relieving any Borrower, in whole or in part, from any of its
Obligations under this Section 2.14, it being the intention of each Borrower that, so long
as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this
Section 2.14 shall not be discharged except by performance and then only to the extent of
such performance. The Obligations of each Borrower under this Section 2.14 shall not be
diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or Agent or any Lender.
(f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently
informed of the financial condition of Borrowers and of all other circumstances which a diligent
inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower
further represents and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower
will continue to keep informed of Borrowers’ financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment or
nonperformance of the Obligations.
(g) Each Borrower waives all rights and defenses that such Borrower may have because the
Obligations are at any time secured by Real Property. This means, among other things:
(i) Agent and Lenders may collect from such Borrower without first foreclosing on any
Collateral pledged by such Borrower, and
(ii) if Agent or any Lender forecloses on any Real Property Collateral pledged by Borrowers:
(A) the amount of the Obligations may be reduced only by the price for which that Real
Property Collateral is sold at the foreclosure sale, even if that Real Property Collateral is worth
more than the sale price, and
(B) Agent and Lenders may collect from such Borrower even if Agent or any Lender, by
foreclosing on the Real Property Collateral, has destroyed any right such Borrower may have to
collect from the other Borrowers.
This is an unconditional and irrevocable waiver of any rights and defenses such Borrower may have
because the Obligations are secured by Real Property.
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(h) The provisions of this Section 2.14 are made for the benefit of Agent, Lenders and
their respective successors and assigns, and may be enforced by it or them from time to time
against any or all Borrowers as often as occasion therefor may arise and without requirement on the
part of Agent or such Lenders, successors or assigns first to marshal any of its or their claims or
to exercise any of its or their rights against any Borrower or to exhaust any remedies available to
it or them against any Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The provisions of this Section
2.14 shall remain in effect until all of the Obligations shall have been paid in full or
otherwise fully satisfied and all of the Commitments have been terminated. If at any time, any
payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by Agent or any Lender upon the insolvency, bankruptcy or
reorganization of Parent or any of its Subsidiaries, or otherwise, the provisions of this
Section 2.14 will forthwith be reinstated in effect, as though such payment had not been
made.
(i) Until the Obligations have been paid in full and all of the Commitments terminated, each
Borrower hereby agrees that it will not enforce any of its rights of contribution or subrogation
against any other Borrower with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to Agent or Lenders with respect to any of the
Obligations or any collateral security therefor until such time as all of the Obligations have been
paid in full in cash and all of the Commitments have been terminated. Any claim which any Borrower
may have against any other Borrower with respect to any payments to Agent or any Lender hereunder
or under any other Loan Documents are hereby expressly made subordinate and junior in right of
payment, without limitation as to any increases in the Obligations arising hereunder or thereunder,
to the prior payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of
any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or
involuntary, all such Obligations shall be paid in full in cash before any payment or distribution
of any character, whether in cash, securities or other property, shall be made to any other
Borrower therefor.
(j) Each Borrower hereby agrees that, after the occurrence and during the continuance of any
Default or Event of Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior payment in full in cash
of the Obligations. Each Borrower hereby agrees that after the occurrence and during the
continuance of any Default or Event of Default, such Borrower will not demand, xxx for or otherwise
attempt to collect any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the foregoing sentence, such
Borrower shall collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the Obligations in accordance
with Section 2.4(b).
2.15 Increase in Commitments.
(a) Request for Increase. At any time prior to the date that is six months prior to the
Maturity Date and so long as no Default or Event of Default has occurred and is continuing or would
otherwise arise as a result thereof, upon notice to Agent (which shall promptly notify Lenders),
Administrative Borrower may request an increase in the Total Commitment in an amount of up to
$15,000,000 (such increase, the “Commitment Increase”). At the time of sending such
notice, Administrative Borrower (in consultation with Agent) shall specify the time period within
which each Lender is requested to respond (which shall in no event be more than 10 Business Days or
less than 5 Business Days from the date of delivery of such notice to Lenders). Administrative
Borrower may only make one request for a Commitment Increase during the term of this Agreement.
(b) Lender Elections to Increase. Each Lender shall notify Agent within such time period
whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to,
greater than, or less than its Pro Rata Share of the Commitment Increase. Any Lender not
responding within such time period shall be deemed to have declined to increase its Commitment.
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(c) Notification by Agent; Additional Commitment Lenders. Agent shall notify Administrative
Borrower and each Lender of Lenders’ responses to the request for the Commitment Increase. If the
existing Lenders decline to increase their Commitments, or decline to increase their Commitments to
the full amount of the Commitment Increase, then, Agent may, at its option, (i) invite one or more
other new lenders to become a Lender hereunder and to issue Commitments in an amount equal to the
amount of the Commitment Increase not accepted by the existing Lenders, or (ii) request WFF, in its
capacity as a Lender, to increase (and, if requested, or if no lender commits to provide a
Commitment at Agent’s invitation under clause (i) above, WFF hereby irrevocably agrees to increase)
its Commitment in an amount equal to the amount of the Commitment Increase not accepted by the
existing Lenders or issued by any new lenders (each Lender increasing or issuing a Commitment under
this Section 2.15, an “Additional Commitment Lender”).
(d) Effective Date and Allocations. If the Total Commitment is increased in accordance with
this Section 2.15, Agent shall determine the effective date (the “Increase Effective
Date”) and the final allocation of the Commitment Increase. Agent shall promptly notify
Administrative Borrower and Lenders of the final allocation of the Commitment Increase and the
Increase Effective Date (which shall be no later than 5 Business Days after the later of (x) the
date on which Agent has completed the allocation of the Commitment Increase pursuant to Section
2.15(c) and (y) the date on which all conditions to effectiveness of the Commitment Increase set
forth in Section 2.15(e) have been satisfied) and, on the Increase Effective Date, (i) the Total
Commitment under, and for all purposes of, this Agreement shall be increased by the aggregate
amount of the Commitment Increase, and (ii) Schedule C-1 shall be deemed modified, without
further action, to reflect the revised Total Commitment and each Lender’s Commitment.
(e) Conditions to Effectiveness of Commitment Increase. As a condition precedent to the
Commitment Increase: (i) Administrative Borrower shall have delivered to Agent a certificate of
each Loan Party dated as of the Increase Effective Date (with sufficient copies for each Lender)
signed by a responsible officer of such Loan Party (A) certifying and attaching the resolutions
adopted by such Loan Party approving or consenting to the Commitment Increase, and (B) in the case
of Parent and Borrowers, certifying that, before and after giving effect to the Commitment
Increase, the representations and warranties contained in Section 4 and the other Loan
Documents are true and correct in all material respects (except that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof) on and as of the Increase Effective Date, except to
the extent that such representations and warranties specifically refer to an earlier date, in which
case such representations and warranties are true and correct in all material respects (except that
such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) as of such earlier date; (ii)
Loan Parties, Agent, and any Additional Commitment Lender that is not an existing Lender shall have
executed and delivered a joinder to the Loan Documents in such form as Agent shall reasonably
request; (iii) Borrowers shall have paid to Agent the fees set forth in the Fee Letter with respect
to the Commitment Increase; (iv) Loan Parties shall have delivered to Agent and Lenders an opinion
or opinions reasonably satisfactory to Agent from counsel to Loan Parties reasonably satisfactory
to Agent and dated the Increase Effective Date; (v) Loan Parties and Additional Commitment Lenders
shall have delivered such other instruments, documents and agreements as Agent shall reasonably
request; and (vi) no Default or Event of Default shall have occurred and be continuing either
before or after giving effect to the Commitment Increase. Borrowers shall prepay any Advances
outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to
Section 2.12) to the extent necessary to keep the outstanding Advances ratable with the
revised Pro Rata Shares of the Total Commitment that arise from any nonratable increase in the
Commitments under this Section 2.15; provided that Borrowers may use the proceeds
of Advances from Additional Commitment Lenders to make such payments, which payments shall be
applied, first, to that portion of the principal amount of the Advances composing Base Rate Loans,
and second, to that portion of the principal amount of the Advances composing LIBOR Rate Loans.
(f) Conflicting Provisions. This Section 2.15 shall supersede any provisions in
Section 14.1 to the contrary.
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3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Extension of Credit. The obligation of each
Lender to make its initial extension of credit provided for hereunder, is subject to the
fulfillment, to the satisfaction of Agent and each Lender of each of the conditions precedent set
forth on Schedule 3.1 (the making of such initial extension of credit by a Lender being
conclusively deemed to be its satisfaction or waiver of the conditions precedent ).
3.2 Conditions Precedent to all Extensions of Credit. The obligation of the Lender
Group (or any member thereof) to make any Advances hereunder (or to extend any other credit
hereunder) at any time shall be subject to the following conditions precedent:
(a) the representations and warranties of Parent or its Subsidiaries contained in this
Agreement or in the other Loan Documents shall be true and correct in all material respects (except
that such materiality qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on and as of the date of such
extension of credit, as though made on and as of such date (except to the extent that such
representations and warranties relate solely to an earlier date in which case such representations
and warranties shall only be required to be true and correct in all material respects (except that
such materiality qualifier shall not be applicable to any representations and warranties that are
already qualified or modified by materiality in the text thereof) on such earlier date); and
(b) no Default or Event of Default shall have occurred and be continuing on the date of such
extension of credit, nor shall either result from the making thereof.
The submission by Administrative Borrower to Agent of a request for each Advance (or other
extension of credit) hereunder, and Borrowers’ acceptance of the proceeds of such Advance (or other
extension of credit), shall each be deemed to be a representation and warranty by each Borrower on
the date of such Advance (or other extension of credit) that each of the foregoing conditions
precedent has been satisfied on the date of such Advance (or other extension of credit).
3.3 Conditions Subsequent to Effectiveness. As an accommodation to Parent and
Borrowers, the Lender Group has agreed to execute this Agreement and to make extensions of credit
hereunder notwithstanding the failure by Parent and Borrowers to satisfy the conditions set forth
on Schedule 3.3 on or before the Closing Date. In consideration of such accommodation,
Parent and Borrowers agree that, in addition to all other terms, conditions and provisions set
forth in this Agreement and the other Loan Documents, including those conditions set forth in
Section 3.1, Parent and Borrowers shall satisfy each of the conditions subsequent set forth
on Schedule 3.3 on or before the date applicable thereto (it being understood that (a) the
failure by Parent or Borrowers to perform or cause to be performed any such unsatisfied condition
subsequent on or before the date applicable thereto shall constitute an Event of Default and (b) to
the extent that the existence of any such condition subsequent would otherwise cause any
representation, warranty or covenant in this Agreement or any other Loan Document to be breached,
the Required Lenders hereby waive such breach for the period from the Closing Date until the date
on which such condition subsequent is required to be fulfilled pursuant to this Section
3.3).
3.4 Term. This Agreement shall continue in full force and effect for a term ending
on August 31, 2014 (the “Maturity Date”). The foregoing notwithstanding, the Lender
Group, upon the election of the Required Lenders, shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the occurrence and during the
continuation of an Event of Default.
3.5 Effect of Termination. On the date of termination of this Agreement, all
Obligations (including contingent reimbursement obligations of Borrowers with respect to
outstanding Letters of Credit and including all Bank Product Obligations) immediately shall become
due and payable without notice or demand (including the requirement that Borrowers provide (a)
Letter of Credit Collateralization, and (b) Bank Product Collateralization). No termination of
this Agreement, however, shall relieve or discharge Parent or its Subsidiaries of their duties,
Obligations, or covenants hereunder or under any other Loan
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Document and the Agent’s Liens in the Collateral shall remain in effect until all Obligations
have been paid in full and the Lender Group’s obligations to provide additional credit hereunder
have been terminated. When this Agreement has been terminated and all of the Obligations have
been paid in full and the Lender Group’s obligations to provide additional credit under the Loan
Documents have been terminated irrevocably, Agent will, at Borrowers’ sole expense, execute and
deliver any termination statements, lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other similar discharge or release documents
(and, if applicable, in recordable form) as are reasonably necessary to release, whether or not,
as of record, the Agent’s Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.
3.6 Early Termination by Borrowers. Borrowers have the option, at any time upon 10
Business Days prior written notice to Agent, to terminate this Agreement and terminate the
Commitments hereunder by paying to Agent the Obligations (including (a) providing Letter of Credit
Collateralization with respect to the then existing Letter of Credit Usage, and (b) providing Bank
Product Collateralization with respect to the then existing Bank Products), in full.
4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each of Parent and Borrowers
makes the following representations and warranties to the Lender Group which shall be true,
correct, and complete, in all material respects (except that such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof), as of the date hereof, and shall be true, correct, and complete,
in all material respects (except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by materiality in the text
thereof), as of the Closing Date and at and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of such Advance (or
other extension of credit) (except to the extent that such representations and warranties relate
solely to an earlier date) and such representations and warranties shall survive the execution and
delivery of this Agreement:
4.1 Due Organization and Qualification; Subsidiaries.
(a) Each Loan Party (i) is duly organized and existing and in good standing under the laws of
the jurisdiction of its organization, (ii) is qualified to do business in any state where the
failure to be so qualified reasonably could be expected to result in a Material Adverse Change, and
(iii) has all requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated thereby.
(b) Set forth on Schedule 4.1(b) is a complete and accurate description of the
authorized capital Stock of Parent, by class, and, as of the Closing Date, a description of the
number of shares of each such class that are issued and outstanding. Other than as described on
Schedule 4.1(b), there are no subscriptions, options, warrants, or calls relating to any
shares of Parent’s capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. Parent is not subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its capital Stock or any
security convertible into or exchangeable for any of its capital Stock.
(c) Set forth on Schedule 4.1(c) (as such Schedule may be updated from time to time to
reflect changes permitted to be made under Section 5.11), is a complete and accurate list
of Parent’s direct and indirect Subsidiaries, showing: (i) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries, and (ii) the number and the
percentage of the outstanding shares of each such class owned directly or indirectly by Parent.
All of the outstanding capital Stock of each such Subsidiary has been validly issued and is fully
paid and non-assessable.
(d) Except as set forth on Schedule 4.1(c), there are no subscriptions, options,
warrants, or calls relating to any shares of Parent’s Subsidiaries’ capital Stock, including any
right of conversion or
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exchange under any outstanding security or other instrument. Neither Parent nor any of its
Subsidiaries is subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of Parent’s Subsidiaries’ capital Stock or any security convertible
into or exchangeable for any such capital Stock.
4.2 Due Authorization; No Conflict.
(a) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the
Loan Documents to which it is a party have been duly authorized by all necessary action on the part
of such Loan Party.
(b) As to each Loan Party, the execution, delivery, and performance by such Loan Party of the
Loan Documents to which it is a party do not and will not (i) violate any material provision of
federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the
Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any
court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or both) a default
under any Material Contract of any Loan Party or its Subsidiaries except to the extent that any
such conflict, breach or default could not individually or in the aggregate reasonably be expected
to have a Material Adverse Change, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or
(iv) require any approval of any Loan Party’s holders of Stock or any approval or consent of any
Person under any Material Contract of any Loan Party, other than consents or approvals that have
been obtained and that are still in force and effect and except, in the case of Material Contracts,
for consents or approvals, the failure to obtain could not individually or in the aggregate
reasonably be expected to cause a Material Adverse Change.
4.3 Governmental Consents. The execution, delivery, and performance by each Loan
Party of the Loan Documents to which such Loan Party is a party and the consummation of the
transactions contemplated by the Loan Documents do not and will not require any registration with,
consent, or approval of, or notice to, or other action with or by, any Governmental Authority,
other than consents or approvals that have been obtained and that are still in force and effect
and except for filings and recordings with respect to the Collateral to be made, or otherwise
delivered to Agent for filing or recordation, as of the Closing Date.
4.4 Binding Obligations; Perfected Liens.
(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party
thereto and is the legally valid and binding obligation of such Loan Party, enforceable against
such Loan Party in accordance with its respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors’ rights generally.
(b) The Agent’s Liens are validly created, perfected (other than (i) in respect of motor
vehicles and (ii) any Deposit Accounts and Securities Accounts not subject to a Control Agreement
as permitted by Section 6.11, and subject only to the filing of financing statements and
the recordation of any Mortgages) and first priority Liens, subject only to Permitted Liens.
4.5 Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries
has (i) good and legal title to (in the case of fee interests in Real Property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal property), and
(iii) good and marketable title to (in the case of all other personal property), all of their
respective assets reflected in their most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such financial
statements to the extent permitted hereby. All of such assets are free and clear of Liens except
for Permitted Liens.
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4.6 Jurisdiction of Organization; Location of Chief Executive Office; Organizational
Identification Number; Commercial Tort Claims.
(a) The name of (within the meaning of Section 9-503 of the Code) and jurisdiction of
organization of each Loan Party and each of its Subsidiaries is set forth on Schedule
4.6(a) (as such Schedule may be updated from time to time to reflect changes permitted to be
made under Section 6.5).
(b) The chief executive office of each Loan Party and each of its Subsidiaries is located at
the address indicated on Schedule 4.6(b) (as such Schedule may be updated from time to time
to reflect changes permitted to be made under Section 5.15).
(c) Each Loan Party’s and each of its Subsidiaries’ tax identification numbers and
organizational identification numbers, if any, are identified on Schedule 4.6(c) (as such
Schedule may be updated from time to time to reflect changes permitted to be made under Section
6.5).
(d) As of the Closing Date, no Loan Party and no Subsidiary of a Loan Party holds any
commercial tort claims that exceed $250,000 in amount, except as set forth on Schedule
4.6(d).
4.7 Litigation.
(a) All disclosures regarding actions, suits, or proceedings pending or, to the best knowledge
of Parent and Borrowers, threatened against a Loan Party or any of its Subsidiaries, which have
been disclosed as part of public filings made by Parent as required in compliance with the
requirements of the SEC are accurate and complete in all material respects.
(b) There are no actions, suits, or proceedings pending or, to the best knowledge of Parent
and Borrowers, threatened against a Loan Party or any of its Subsidiaries that either individually
or in the aggregate could reasonably be expected to result in a Material Adverse Change.
4.8 Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in
violation of any applicable laws, rules, regulations, executive orders, or codes (including
Environmental Laws and HIPAA Laws and Regulations) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Change, or (b) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or
any federal, state, municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Change.
4.9 No Material Adverse Change. All financial statements relating to the Loan
Parties and their Subsidiaries that have been delivered by any Loan Party or any of its
Subsidiaries to Agent have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes, being subject to year-end audit adjustments and
the exclusion of Specified Subsidiaries) and present fairly in all material respects, the Loan
Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and
results of operations for the period then ended. Since March 31, 2009, no event, circumstance, or
change has occurred that has or could reasonably be expected to result in a Material Adverse
Change with respect to the Loan Parties and their Subsidiaries.
4.10 Fraudulent Transfer.
(a) Each Loan Party is Solvent.
(b) No transfer of property is being made by any Loan Party and no obligation is being
incurred by any Loan Party in connection with the transactions contemplated by this Agreement or
the other Loan Documents with the intent to hinder, delay, or defraud either present or future
creditors of such Loan Party.
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4.11 Employee Benefits. No Loan Party, none of their Subsidiaries, nor any of their
ERISA Affiliates maintains or contributes to any Benefit Plan.
4.12 Environmental Condition. Except as set forth on Schedule 4.12, (a) to
Parent’s and Borrowers’ knowledge, no Loan Party’s or its Subsidiaries’ properties or assets has
ever been used by a Loan Party, its Subsidiaries, or by previous owners or operators in the
disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials,
where such disposal, production, storage, handling, treatment, release or transport was in
violation, in any material respect, of any applicable Environmental Law, (b) to Parent’s and
Borrowers’ knowledge, no Loan Party’s or its Subsidiaries’ properties or assets has ever been
designated or identified in any manner pursuant to any environmental protection statute as a
Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received
notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real
Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of
its Subsidiaries nor any of their respective operations is, nor to Parent’s and Borrowers’
knowledge, is any facility used by any Loan Party or any Subsidiary thereof, subject to any
outstanding written order, consent decree, or settlement agreement with any Person relating to any
Environmental Law or Environmental Liability that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Change.
4.13 Intellectual Property.
(a) Each Loan Party and each of its Subsidiaries owns, or holds licenses in, all trademarks,
trade names, copyrights, patents, and licenses that are necessary to the conduct of its business as
currently conducted, and attached hereto as Schedule 4.13 (as updated from time to time) is
a true, correct, and complete listing of all material trademarks, trade names, copyrights, patents,
and licenses as to which Parent or one of its Subsidiaries is the owner or is an exclusive
licensee; provided, however, that Borrowers may amend Schedule 4.13 to add
additional intellectual property from time to time upon written notice to Agent not more than 5
Business Days after the date on which the applicable Loan Party or its Subsidiary acquires any such
property after the Closing Date.
(b) Parent and each of its Subsidiaries has taken reasonable measures to protect the secrecy,
confidentiality and value of all of its material trade secrets (including, without limitation,
entering into appropriate confidentiality agreements with all officers, directors, employees, and
other Persons with access to such trade secrets). To the knowledge of Parent and each Borrower,
neither Parent’s nor any of its Subsidiaries’ material trade secrets have been disclosed to any
Person other than to Persons who had a need to know and use such trade secrets in the ordinary
course of business and who executed appropriate confidentiality agreements prohibiting unauthorized
disclosure of such trade secrets.
4.14 Leases. Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to their business and to which they are parties or under
which they are operating, and, subject to Permitted Protests, all of such material leases are
valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries
exists under any of them.
4.15 Deposit Accounts and Securities Accounts. Set forth on Schedule 4.15
(as updated pursuant to the provisions of the Security Agreement from time to time) is a listing
of all of the Loan Parties’ and their Subsidiaries’ Deposit Accounts and Securities Accounts,
including, with respect to each bank or securities intermediary (a) the name and address of such
Person, and (b) the account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.
4.16 Complete Disclosure. All factual information (taken as a whole) furnished by or
on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all
information contained in the Schedules hereto or in the other Loan Documents) for purposes of or
in connection with this Agreement, the other Loan Documents, or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to make
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such information (taken as a whole) not misleading in any material respect at such time in
light of the circumstances under which such information was provided. On the Closing Date, the
Closing Date Projections represent, and as of the date on which any other Projections are
delivered to Agent, such additional Projections represent Parent’s and Borrowers’ good faith
estimate of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered
thereby based upon assumptions believed by Parent and Borrowers to be reasonable at the time of
the delivery thereof to Agent (it being understood that such projections and forecasts are subject
to uncertainties and contingencies, many of which are beyond the control of the Loan Parties and
their Subsidiaries and no assurances can be given that such projections or forecasts will be
realized).
4.17 Material Contracts. Set forth on Schedule 4.17 (as updated from time to
time) is a reasonably detailed description of the Material Contracts of each Loan Party and its
Subsidiaries; provided, however, that Borrowers may amend Schedule 4.17 to
add additional Material Contracts so long as such amendment occurs by written notice to Agent at
the time that Parent provides its quarterly financial statements pursuant to Section 5.1.
Except for matters which, either individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Change, each Material Contract (other than those that
have expired at the end of their normal terms) (a) is in full force and effect and is binding upon
and enforceable against the applicable Loan Party or its Subsidiary and, to the best of Parent’s
and Borrowers’ knowledge, each other Person that is a party thereto in accordance with its terms,
(b) has not been otherwise amended or modified (other than amendments or modifications permitted
by Section 6.7(d)), and (c) is not in default due to the action or inaction of the
applicable Loan Party or its Subsidiary.
4.18 Patriot Act. To the extent applicable, each Loan Party is in compliance, in all
material respects, with the (a) Trading with the Enemy Act, as amended, and each of the foreign
assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter
V, as amended) and any other enabling legislation or executive order relating thereto, and (b)
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA Patriot Act of 2001) (the “Patriot Act”). No part of the proceeds
of the loans made hereunder will be used, directly or indirectly, for any payments to any
governmental official or employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.
4.19 Indebtedness. Set forth on Schedule 4.19 is a true and complete list of
all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to
the Closing Date that is to remain outstanding after the Closing Date and such Schedule accurately
sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.
4.20 Payment of Taxes. Except as otherwise permitted under Section 5.5, all
tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of
them have been timely filed, and all taxes shown on such tax returns to be due and payable and all
assessments, fees and other governmental charges upon a Loan Party and its Subsidiaries and upon
their respective assets, income, businesses and franchises that are due and payable have been paid
when due and payable. Each Loan Party and each of its Subsidiaries have made adequate provision
in accordance with GAAP for all taxes not yet due and payable. Neither Parent nor any Borrower
knows of any proposed tax assessment against a Loan Party or any of its Subsidiaries that is not
being actively contested by such Loan Party or such Subsidiary diligently, in good faith, and by
appropriate proceedings; provided such reserves or other appropriate provisions, if any,
as shall be required in conformity with GAAP shall have been made or provided therefor. No Loan
Party nor any of its Subsidiaries has ever been a party to any understanding or arrangement
constituting a “tax shelter” within the meaning of Section 6662(d)(2)(C)(iii) of the IRC or within
the meaning of Section 6111(c) or Section 6111(d) of the IRC as in effect immediately prior to the
enactment of the American Jobs Creation Act of 2004, or has ever “participated” in a “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4, except as would not be
reasonably expected to, individually or in the aggregate, result in a Material Adverse Change.
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4.21 Margin Stock. No Loan Party nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrowers
will be used to purchase or carry any such Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock or for any purpose that violates, or is
inconsistent with, the provisions of Regulation T, U or X of said Board of Governors.
4.22 Governmental Regulation. No Loan Party nor any of its Subsidiaries is subject
to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur Indebtedness or which
may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any
of its Subsidiaries is a “registered investment company” or a company “controlled” by a
“registered investment company” or a “principal underwriter” of a “registered investment company”
as such terms are defined in the Investment Company Act of 1940.
4.23 OFAC. No Loan Party nor any of its Subsidiaries is in violation of any of the
country or list based economic and trade sanctions administered and enforced by OFAC. No Loan
Party nor any of its Subsidiaries (a) is a Sanctioned Person or a Sanctioned Entity, (b) has a
more than 10% of its assets located in Sanctioned Entities, or (c) derives more than 10% of its
revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The
proceeds of any Advance will not be used to fund any operations in, finance any investments or
activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.
4.24 Holding Company; Inactive Subsidiary.
(a) Parent is a holding company and does not have any material liabilities (other than
liabilities arising under the Loan Documents), own any material assets (other than the Stock of it
Subsidiaries) or engage in any operations or business (other than the ownership of the Stock of its
Subsidiaries).
(b) The Inactive Subsidiaries do not have any material liabilities, own any material assets or
engage in any operations or business.
4.25 Eligible Accounts. As to each Account that is identified by Administrative
Borrower as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account
is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the
sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary
course of such Borrower’s business, (b) owed to such Borrower without any known defenses,
disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as
ineligible by virtue of one or more of the excluding criteria set forth in the definition of
Eligible Accounts.
4.26 Location of Inventory and Equipment. The Inventory and Equipment (other than
vehicles or Equipment out for repair, and servers and computers of the Loan Parties that are
located at customer and other offsite locations in the ordinary course of the Loan Parties’
business operations) of the Loan Parties and their Subsidiaries are not stored with a bailee,
warehouseman, or similar party and are located only at, or in-transit between, the locations
identified on Schedule 4.26 (as such Schedule may be updated pursuant to Section
5.15).
4.27 Inventory Records. Each Loan Party keeps correct and accurate records itemizing
and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book
value thereof.
4.28 Customers and Suppliers. There exists no actual or threatened termination,
cancellation or limitation of, or modification to or change in, the business relationship between
any Loan Party, on the one hand, and any customer or supplier or any group thereof, on the other
hand, that either individually or in the aggregate could reasonably be expected to result in a
Material Adverse Change; and there exists no
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present state of facts or circumstances that could give rise to or result in any such
termination, cancellation, limitation, modification or change.
4.29 HIPAA.
(a) Each Loan Party and each of its Subsidiaries has implemented appropriate measures required
for it to comply in all material respects with its obligations as a “Business Associate” and as an
“agent” or “subcontractor” of a Business Associate, as those terms are used in the Health Insurance
Portability and Accountability Act of 1996 (as amended, “HIPAA”) and/or the privacy
regulations promulgated thereunder (45 C.F.R. 160 and 164). As of the date of this Agreement,
neither the Loan Parties nor any of their Subsidiaries is a Covered Entity as defined by HIPAA
and/or the regulations, including, without limitation, the privacy standards and security
standards, promulgated thereunder (collectively, the “HIPAA Laws and Regulations”). With
respect to any HIPAA-related contractual privacy and security commitments for “Protected Health
Information” (as that term is defined in the HIPAA Laws and Regulations), for which compliance by
any Loan Party or any of its Subsidiaries is required (collectively, the “HIPAA
Commitments”),
(i) the Loan Parties and their Subsidiaries are in material compliance with the HIPAA
Commitments;
(ii) the transactions contemplated by this Agreement will not violate any of the HIPAA
Commitments;
(iii) the Loan Parties and their Subsidiaries have not received written inquiries from the
U.S. Department of Health and Human Services or any other Governmental Authority regarding their
compliance with the HIPAA Commitments;
(iv) the HIPAA Commitments have not been rejected by any applicable certification organization
which has reviewed such HIPAA Commitments or to which any such HIPAA Commitment has been submitted;
and
(v) the HIPAA Commitments do not violate HIPAA laws and regulations in any material respect.
(b) Each Loan Party and each of its Subsidiaries has either entered into valid and written
business associate agreements or similar privacy agreements, to the extent required in the HIPAA
Commitments, with appropriate parties having access to “Protected Health Information” including,
without limitation, all individuals involved in creating, editing or handling medical
transcriptions at the request of, for or on behalf of, any Loan Party or any of its Subsidiaries.
(c) Neither any Loan Party nor any of its Subsidiaries is aware of any material violation of
HIPAA Laws and Regulations or of any of the HIPAA Commitments either by it or any of its
subcontractors or agents.
(d) The Loan Parties and their Subsidiaries are taking appropriate steps to comply with and,
where applicable, will be and remain in material compliance with, the Health Information Technology
for Economic and Clinical Health Act (the “HITECH Act”).
4.30 Health Laws and Regulations.
(a) Except as otherwise set forth in Schedule 4.30, the Loan Parties and their
Subsidiaries are conducting and have conducted their business and operations in compliance in all
material respects with, and neither any Loan Party nor any of its Subsidiaries has engaged in any
activities that would constitute a violation, in any material respect, of applicable civil or
criminal statutes, laws, ordinances, rules and regulations of any federal, state, local or foreign
Governmental Authority with respect to regulatory matters relating to the provision,
administration, and/or payment for healthcare products or services
- 29 -
(collectively, “Healthcare Laws”), including, without limitation, to the extent
applicable: (i) rules and regulations governing the operation and administration of Medicare,
Medicaid, or other federal health care programs; (ii) 42 U.S.C. Section 1320a-7(b), commonly
referred to as the “Federal Anti-Kickback Statute,” (iii) 42 U.S.C. Section 1395nn, commonly
referred to as the “Xxxxx Law,” (iv) 31 U.S.C. Sections 3729-33, commonly referred to as the “False
Claims Act” and (v) rules and regulations of the U.S. Food and Drug Administration.
(b) Except as otherwise set forth in Schedule 4.30, (i) neither any Loan Party nor any
of its Subsidiaries has received any written notice or communication from any Governmental
Authority alleging noncompliance with any Healthcare Laws; (ii) there is no civil, criminal or
administrative action, suit, demand, claim, complaint, hearing, investigation, notice, demand
letter, warning letter, proceeding or request for information related to noncompliance with, or
otherwise involving, any Healthcare Laws pending against any Loan Party or any of its Subsidiaries;
(iii) the Loan Parties and their Subsidiaries have no material liability (whether actual or
contingent) for failure to comply with any Healthcare Laws; (iv) there has not been any material
violation of any Healthcare Laws by any Loan Party or any of its Subsidiaries in its submissions or
reports to any Governmental Authority that could reasonably be expected to require investigation,
corrective action or enforcement action; (v) neither any Loan Party nor any of its Subsidiaries has
been debarred or excluded from participation in Medicare, Medicaid, or any other federal or state
healthcare program; and (vi) each Loan Party and each of its Subsidiaries has maintained, in all
material respects, all records required to be kept by it under any Healthcare Laws.
5. AFFIRMATIVE COVENANTS.
Parent and each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties shall and shall cause each of
their Subsidiaries to comply with each of the following:
5.1 Financial Statements, Reports, Certificates. Deliver to Agent, with copies to
each Lender, each of the financial statements, reports, and other items set forth on Schedule
5.1 at the times specified therein. In addition, Parent and each Borrower agrees that no
Subsidiary of a Loan Party will have a fiscal year different from that of Parent. In addition,
Parent and each Borrower agrees to maintain a system of accounting that enables Parent and each
Borrower to produce financial statements in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes, being subject to year-end audit adjustments and
the exclusion of Specified Subsidiaries). Each Loan Party shall also (a) keep a reporting system
that shows all additions, sales, claims, and allowances with respect to its and its Subsidiaries’
sales, and (b) maintain its billing systems/practices as approved by Agent prior to the Closing
Date and shall only make material modifications thereto with notice to, and with the consent of,
Agent.
5.2 Collateral Reporting. Provide Agent (and if so requested by Agent, with copies
for each Lender) with each of the reports set forth on Schedule 5.2 at the times specified
therein. In addition, Parent and each Borrower agrees to use the system of electronic collateral
reporting as approved by Agent prior to the Closing Date in order to provide electronic reporting
of each of the items set forth above and shall only make material modifications to such system
with notice to, and with the consent of, Agent.
5.3 Existence. Except as otherwise permitted under Section 6.3, each Loan
Party to, and cause each of its Subsidiaries to, at all times preserve and keep in full force and
effect its existence (including being in good standing in its jurisdiction of organization) and
all rights and franchises, licenses and permits material to its business.
5.4 Maintenance of Properties. Maintain and preserve all of its assets that are
necessary or useful in the proper conduct of its business in good working order and condition,
ordinary wear, tear, and casualty excepted and Permitted Dispositions excepted, and comply with
the material provisions of all material leases to which it is a party as lessee, so as to prevent
the loss or forfeiture thereof, unless such provisions are the subject of a Permitted Protest.
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5.5 Taxes. Cause all assessments and taxes imposed, levied, or assessed against any
Loan Party or its Subsidiaries, or any of their respective assets or in respect of any of its
income, businesses, or franchises to be paid in full, before delinquency or before the expiration
of any extension period, except to the extent that the validity of such assessment or tax shall be
the subject of a Permitted Protest and so long as, in the case of an assessment or tax that has or
may become a Lien against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such assessment or tax. Parent will and
will cause each of its Subsidiaries to make timely payment or deposit of all tax payments and
withholding taxes required of it and them by applicable laws, including those laws concerning
F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon
request, furnish Agent with proof reasonably satisfactory to Agent indicating that Parent and its
Subsidiaries have made such payments or deposits.
5.6 Insurance. At Borrowers’ expense, maintain insurance respecting each of the Loan
Parties’ and their Subsidiaries’ assets wherever located, covering loss or damage by fire, flood,
theft, explosion, and all other hazards and risks as ordinarily are insured against by other
Persons engaged in the same or similar businesses. Parent and each Borrower also shall maintain
(with respect to each of the Loan Parties and their Subsidiaries) business interruption, public
liability, and product liability insurance, as well as insurance against larceny, embezzlement,
and criminal misappropriation. All such policies of insurance shall be with responsible and
reputable insurance companies and in such amounts as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and located and in any
event in amount, adequacy and scope reasonably satisfactory to Agent. All property insurance
policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the
Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable
endorsement with a standard non contributory “lender” or “secured party” clause and are to contain
such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in
the Collateral and to any payments to be made under such policies. All certificates of insurance
are to be delivered to Agent, with the loss payable and additional insured endorsement in favor of
Agent and shall provide for not less than 30 days (10 days in the case of non-payment) prior
written notice to Agent of the exercise of any right of cancellation. If Parent or any Borrower
fails to maintain such insurance, Agent may arrange for such insurance, but at Borrowers’ expense
and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of claims. Administrative
Borrower shall give Agent prompt notice of any loss exceeding $750,000 covered by its casualty or
business interruption insurance. Upon the occurrence and during the continuance of an Event of
Default, Agent shall have the sole right to file claims under any insurance policies, to receive,
receipt and give acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other documents that may
be necessary to effect the collection, compromise or settlement of any claims under any such
insurance policies.
5.7 Inspection. Permit Agent and each of its duly authorized representatives or
agents to visit any of its properties and inspect any of its assets or books and records, to
examine and make copies of its books and records, and to discuss its affairs, finances, and
accounts with, and to be advised as to the same by, its officers and employees at such reasonable
times and intervals as Agent may designate and, so long as no Default or Event of Default exists,
with reasonable prior notice to Administrative Borrower.
5.8 Compliance with Laws. Comply with the requirements of all applicable laws,
rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations,
and orders the non-compliance with which, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Change.
5.9 Environmental.
(a) Keep any property either owned or operated by Parent or its Subsidiaries free of any
Environmental Liens or post bonds or other financial assurances sufficient to satisfy the
obligations or liability evidenced by such Environmental Liens,
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(b) comply, in all material respects, with Environmental Laws and provide to Agent
documentation of such compliance which Agent reasonably requests,
(c) promptly notify Agent of any release of a Hazardous Material in any reportable quantity
from or onto property owned or operated by Parent or its Subsidiaries and take any Remedial Actions
required to xxxxx said release or otherwise to come into compliance with applicable Environmental
Law, and
(d) promptly, but in any event within 5 Business Days of its receipt thereof, provide Agent
with written notice of any of the following: (i) notice that an Environmental Lien has been filed
against any of the real or personal property of Parent or its Subsidiaries, (ii) commencement of
any Environmental Action or notice that an Environmental Action will be filed against Parent or its
Subsidiaries, and (iii) notice of a violation, citation, or other administrative order which could
reasonably be expected to result in a Material Adverse Change.
5.10 Disclosure Updates. Promptly and in no event later than 5 Business Days after
obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished
to the Lender Group contained, at the time it was furnished, any untrue statement of a material
fact or omitted to state any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made. The foregoing to the contrary
notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the
effect of the prior untrue statement of a material fact or omission of any material fact nor shall
any such notification have the effect of amending or modifying this Agreement or any of the
Schedules hereto.
5.11 Formation of Subsidiaries. At the time that any Loan Party forms any direct or
indirect Subsidiary, acquires any direct or indirect Subsidiary after the Closing Date, or
designates an Inactive Subsidiary as a non-Inactive Subsidiary, such Loan Party shall (a) within
10 days of such formation, acquisition or designation cause such Subsidiary to provide to Agent a
joinder to the Guaranty and the Security Agreement, together with such other security documents
(including mortgages with respect to any Real Property owned in fee of such Subsidiary with a fair
market value of at least $250,000), as well as appropriate financing statements (and with respect
to all property subject to a mortgage, fixture filings), all in form and substance reasonably
satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed, acquired or designated Subsidiary);
provided that the Guaranty, the Security Agreement, and such other security documents
shall not be required to be provided to Agent with respect to any Subsidiary of Parent that is a
CFC if providing such documents would result in adverse tax consequences or the costs to the Loan
Parties of providing such Guaranty, executing any security documents or perfecting the security
interests created thereby are unreasonably excessive (as determined by Agent in consultation with
Administrative Borrower) in relation to the benefits of Agent and the Lenders of the security or
guarantee afforded thereby, (b) within 10 days of such formation, acquisition or designation (or
such later date as permitted by Agent in its sole discretion) provide to Agent a pledge agreement
and appropriate certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such Subsidiary reasonably satisfactory to Agent;
provided that only 662/3% of the total outstanding voting Stock of any first
tier Subsidiary of Parent that is a CFC and none of the total outstanding voting Stock of any
other Subsidiary of such CFC shall be required to be pledged if hypothecating a greater amount
would result in adverse tax consequences or the costs to the Loan Parties of providing such pledge
or perfecting the security interests created thereby are unreasonably excessive (as determined by
Agent in consultation with Administrative Borrower) in relation to the benefits of Agent and the
Lenders of the security or guarantee afforded thereby (which pledge shall be governed by the laws
of the jurisdiction of such Subsidiary), and (c) within 10 days of such formation, acquisition or
designation (or such later date as permitted by Agent in its sole discretion) provide to Agent all
other documentation, including one or more opinions of counsel reasonably satisfactory to Agent,
which in its opinion is appropriate with respect to the execution and delivery of the applicable
documentation referred to above (including policies of title insurance or other documentation with
respect to all Real Property owned in fee and subject to a mortgage). Any document, agreement, or
instrument executed or issued pursuant to this Section 5.11 shall be a Loan Document.
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5.12 Further Assurances. At any time upon the reasonable request of Agent, execute
or deliver to Agent any and all financing statements, fixture filings, security agreements,
pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions
of counsel, and all other documents (collectively, the “Additional Documents”) that Agent
may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect,
and continue perfected or to better perfect the Agent’s Liens in all of the assets of Parent and
its Subsidiaries (whether now owned or hereafter arising or acquired, tangible or intangible, real
or personal), to create and perfect Liens in favor of Agent in any Real Property acquired by
Parent or its Subsidiaries after the Closing Date with a fair market value in excess of $250,000,
and in order to fully consummate all of the transactions contemplated hereby and under the other
Loan Documents); provided that the foregoing shall not apply to any Subsidiary of Parent
that is a CFC if providing such documents would result in adverse tax consequences or the costs to
the Loan Parties of providing such documents are unreasonably excessive (as determined by Agent in
consultation with Administrative Borrower) in relating to the benefits of Agent and the Lenders of
the benefits afforded thereby. To the maximum extent permitted by applicable law, Parent and each
Borrower authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s
or its Subsidiary’s name, as applicable, and authorizes Agent to file such executed Additional
Documents in any appropriate filing office. In furtherance and not in limitation of the
foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to
time to ensure that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of Parent and its Subsidiaries and all of the outstanding Capital
Stock of Borrower and Borrower’s Subsidiaries (subject to limitations contained in the Credit
Documents with respect to Foreign Subsidiaries).
5.13 Lender Meetings. At the reasonable request of Agent or of the Required Lenders
and upon reasonable prior notice, hold a meeting or conference call (at a mutually agreeable
location and time) with all Lenders who choose to attend such meeting or conference call to review
the financial results of the previous fiscal year and the financial condition of Parent and its
Subsidiaries and the projections presented for the current fiscal year of Parent. Such meeting or
conference call, if so requested pursuant to this Section 5.13, shall occur within 90 days
after the close of each of Parent’s fiscal years during the term of this Agreement.
5.14 Material Contracts. Contemporaneously with the delivery of each Compliance
Certificate pursuant hereto, provide Agent with copies of (a) each Material Contract entered into
since the delivery of the previous Compliance Certificate, and (b) each material amendment or
modification of any Material Contract entered into since the delivery of the previous Compliance
Certificate.
5.15 Location of Inventory and Equipment. Keep each Loan Parties’ and its
Subsidiaries’ Inventory and Equipment (other than vehicles and Equipment out for repair, and
servers and computers of the Loan Parties that are located at customer and other offsite locations
in the ordinary course of the Loan Parties’ business operations) only at the locations identified
on Schedule 4.26 and their chief executive offices only at the locations identified on
Schedule 4.6(b); provided, however, that Borrowers may amend Schedule
4.26 or Schedule 4.6(b) so long as such amendment occurs by written notice to Agent
not less than 10 days prior to the date on which such Inventory or Equipment is moved to such new
location or such chief executive office is relocated and so long as such new location is within
the continental United States, and so long as, at the time of such written notification, Borrowers
provide Agent a Collateral Access Agreement with respect thereto.
5.16 HIPAA; HITECH Act; Healthcare Laws.
(a) Comply in all material respects with and implement all such measures required to comply in
all material respects with their obligations as a “Business Associate” and as an “agent” or
“subcontractor” of a Business Associate, as those terms are used in HIPAA and/or the privacy
regulations promulgated thereunder (45 C.F.R. 160 and 164).
(b) Enter into valid and written business associate agreements or similar privacy agreements,
to the extent required in the HIPAA Commitments, with appropriate parties having access to
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“Protected Health Information” (as that term is defined in the HIPAA Laws and Regulations),
including, without limitation, all individuals involved in creating, editing or handling medical
transcriptions at the request of, for or on behalf of, any Loan Party or any of its Subsidiaries.
(c) Take appropriate steps to comply in all material respects with and, where applicable,
remain in compliance in all material respects with the HITECH Act.
5.17 Health Laws and Regulations. Conduct their business and operations in
compliance in all material respects with applicable Healthcare Laws, including, without
limitation, to the extent applicable: (a) rules and regulations governing the operation and
administration of Medicare, Medicaid, or other federal health care programs; (b) 42 U.S.C. Section
1320a-7(b), commonly referred to as the “Federal Anti-Kickback Statute,” (c) 42 U.S.C. Section
1395nn, commonly referred to as the “Xxxxx Law,” (d) 31 U.S.C. Sections 3729-33, commonly referred
to as the “False Claims Act” and (e) rules and regulations of the U.S. Food and Drug
Administration.
6. NEGATIVE COVENANTS.
Parent and each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, the Loan Parties will not and will not permit
any of their Subsidiaries to do any of the following:
6.1 Indebtedness. Create, incur, assume, suffer to exist, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any Indebtedness, except for
Permitted Indebtedness.
6.2 Liens. Create, incur, assume, or suffer to exist, directly or indirectly, any
Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted Liens.
6.3 Restrictions on Fundamental Changes.
(a) Enter into any merger, consolidation, reorganization, or recapitalization, or reclassify
its Stock, except for (i) any merger or consolidation between Loan Parties, provided that a
Borrower must be the surviving entity of any such merger or consolidation to which it is a party
and no merger or consolidation may occur between Parent and any other Loan Party, (ii) any merger
or consolidation between Loan Parties and Subsidiaries of Parent that are not Loan Parties so long
as such Loan Party is the surviving entity of any such merger or consolidation and (iii) any merger
or consolidation between Subsidiaries of Parent that are not Loan Parties.
(b) Liquidate, wind up, or dissolve itself (or suffer any liquidation or dissolution), except
for (i) the liquidation or dissolution of any Inactive Subsidiary and other non-operating
Subsidiaries of Parent (other than Loan Parties) with nominal assets and nominal liabilities, (ii)
the liquidation or dissolution of a Loan Party (other than Parent or a Borrower) or any of its
wholly-owned Subsidiaries so long as all of the assets (including any interest in any Stock) of
such liquidating or dissolving Loan Party or Subsidiary are transferred to a Loan Party that is not
liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Parent that
is not a Loan Party (other than any such Subsidiary the Stock of which (or any portion thereof) is
subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving
Subsidiary are transferred to a Subsidiary of Parent that is not liquidating or dissolving; or
(c) Suspend or go out of a substantial portion of its or their business, except as permitted
pursuant to clauses (a) or (b) above or in connection with the transactions permitted pursuant to
Section 6.4.
6.4 Disposal of Assets. Other than Permitted Dispositions, Permitted Investments, or
transactions expressly permitted by Sections 6.3 and 6.11, convey, sell, lease,
license, assign, transfer, or otherwise dispose of (or enter into an agreement to convey, sell,
lease, license, assign, transfer, or otherwise dispose of) any of Parent’s or its Subsidiaries
assets.
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6.5 Change Name. Change Parent’s or any of its Subsidiaries’ name, organizational
identification number, jurisdiction of organization or organizational identity; provided,
however, that Parent or any of its Subsidiaries may change their names upon at least 10
days prior written notice to Agent of such change.
6.6 Nature of Business. Make any change in the nature of its or their business as
described in Schedule 6.6 or acquire any properties or assets that are not reasonably
related to the conduct of such business activities; provided that Parent and its
Subsidiaries may engage in any business that is reasonably related or ancillary to its or their
business.
6.7 Prepayments and Amendments.
(a) Except in connection with Refinancing Indebtedness permitted by Section 6.1,
(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of
Parent or its Subsidiaries, other than (i) the Obligations in accordance with this Agreement, and
(ii) Permitted Intercompany Advances (other than the Permitted Intercompany Advances made by Speech
Machines Ltd. and MedQuist Canada Company to MedQuist Transcriptions, Ltd. identified on
Schedule 4.19),
(ii) make any payment on account of Indebtedness that has been contractually subordinated in
right of payment if such payment is not permitted at such time under the subordination terms and
conditions, or
(iii) make any payment on account of the Permitted Intercompany Advances made by Speech
Machines Ltd. and MedQuist Canada Company to MedQuist Transcriptions, Ltd. identified on
Schedule 4.19 prior to the date that is 90 days after the Maturity Date, or
(b) Directly or indirectly, amend, modify, or change any of the terms or provisions of
(i) any agreement, instrument, document, indenture, or other writing evidencing or concerning
Indebtedness permitted under Section 6.1 other than (A) the Obligations in accordance with
this Agreement, (B) Permitted Intercompany Advances, and (C) Indebtedness permitted under
clauses (c), (f), (h) and (i) of the definition of Permitted Indebtedness,
(ii) any Material Contract except to the extent that such amendment, modification, alteration,
increase, or change could not, individually or in the aggregate, reasonably be expected to be
materially adverse to the interests of the Lenders, or
(iii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect
thereof, either individually or in the aggregate, could reasonably be expected to be materially
adverse to the interests of the Lenders.
6.8 Change of Control. Cause, permit, or suffer, directly or indirectly, any Change
of Control.
6.9 Distributions. Make any distribution or declare or pay any dividends (in cash or
other property, other than common Stock) on, or purchase, acquire, redeem, or retire any of
Parent’s or any of its Subsidiaries’ Stock, of any class, whether now or hereafter outstanding;
provided, however, that, so long as it is permitted by applicable law,
(a) Subsidiaries of Parent may, or may make distributions so that Parent may, pay the
consideration necessary to consummate any Permitted Acquisition in accordance with the agreements
evidencing such Permitted Acquisition,
(b) Parent’s Subsidiaries may make distributions to Parent for the sole purpose of allowing
Parent to, and Parent shall use the proceeds thereof solely to, pay federal and state income taxes
and franchise taxes solely arising out of the consolidated operations of Parent and its
Subsidiaries, after taking into
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account all available credits and deductions (provided that neither any Loan Party nor any of
its Subsidiaries shall make any distribution to Parent in any amount greater than the share of such
taxes arising out of Parent’s consolidated net income), and
(c) Parent may make any other distributions or declare or pay dividends on, or purchase,
acquire, redeem, or retire any of Parent’s or any of it its Subsidiaries’ Stock. so long as (i) if
during the 1 day period immediately prior to such payment and immediately after giving effect to
such payment, the Revolver Usage is zero, (A) no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (B) during the 1 day period immediately prior to such
distribution, Borrowers have, and immediately after giving affect to such distribution, Borrowers
are projected to have, Excess Availability of at least $20,000,000 (notwithstanding the foregoing
and for purposes of clarity of this Section 6.9(c)(i)(B) only, the “Availability” component
of Excess Availability shall be determined pursuant to the most recent Borrowing Base Certificate
delivered pursuant to Section 5.2 (but after giving effect to all Obligations (other than
Bank Product Obligations) then outstanding during the 1 day period immediately prior to such
distribution and immediately after giving affect to such distribution)), (C) no portion of the
Advances are used to make such distribution, and (D) Parent has provided Agent with written notice
containing (1) notice of its intent to make such distribution pursuant to this Section
6.9(c)(i), (2) the amount of such proposed distribution, (3) a certification that each of the
conditions contained in clauses (A) through (C) above will be satisfied both before and after
giving effect to such proposed distribution and (4) a confirmation, supported by reasonably
detailed calculations, that on a pro forma basis, Parent and its Subsidiaries are projected to be
in compliance with the financial covenants in Section 7 for the 12 month period ended one
year after the proposed date of consummation of such proposed distribution and (ii) if during the 1
day period immediately prior to such payment or immediately after giving effect to such payment,
the Revolver Usage is greater than zero, (A) no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (B) during the 1 day period immediately prior to such
distribution, Borrowers have, and immediately after giving affect to such distribution, the
Borrowers are projected to have, Excess Availability of at least $15,000,000, (C) Parent has
provided Agent with written notice containing (1) notice of its intent to make such distribution
pursuant to this Section 6.9(c)(ii), (2) the amount of such proposed distribution, (3) a
certification that each of the conditions contained in clauses (A) and (B) above will be satisfied
both before and after giving effect to such proposed distribution and (4) a confirmation, supported
by reasonably detailed calculations, that on a pro forma basis, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the 12 month
period ended one year after the proposed date of consummation of such proposed distribution and (D)
the aggregate amount of all such distribution made pursuant to this clause (c)(ii),
together with the aggregate amount of all Investments made pursuant to clause (n)(ii) of the
definition of “Permitted Investments,” shall not exceed $4,500,000 in any 12 consecutive month
period.
6.10 Accounting Methods. Modify or change its fiscal year or its method of
accounting (other than as may be required to conform to GAAP).
6.11 Investments. Except for Permitted Investments, directly or indirectly, make or
acquire any Investment or incur any liabilities (including contingent obligations) for or in
connection with any Investment; provided, however, that (other than (a) an
aggregate amount of not more than $250,000 at any one time, in the case of Parent and its
Subsidiaries (other than those that are CFCs), (b) amounts deposited into Deposit Accounts
specially and exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for Parent’s or its Subsidiaries’ employees, and (c) an aggregate amount of not
more than $250,000 (calculated at current exchange rates) at any one time, in the case of
Subsidiaries of Parent that are CFCs) Parent and its Subsidiaries shall not have Permitted
Investments consisting of cash, Cash Equivalents, or amounts credited to Deposit Accounts or
Securities Accounts unless Parent or its Subsidiary, as applicable, and the applicable securities
intermediary or bank have entered into Control Agreements with Agent governing such Permitted
Investments in order to perfect (and further establish) the Agent’s Liens in such Permitted
Investments. Subject to the foregoing proviso, Parent shall not and shall not permit its
Subsidiaries to establish or maintain any Deposit Account or Securities Account unless Agent shall
have received a Control Agreement in respect of such Deposit Account or Securities Account.
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6.12 Transactions with Affiliates. Directly or indirectly enter into or permit to
exist any transaction with any Affiliate of Parent or any of its Subsidiaries except for:
(a) transactions (other than the payment of management, consulting, monitoring, or advisory
fees) between Parent or its Subsidiaries, on the one hand, and any Affiliate of Parent or its
Subsidiaries, on the other hand, so long as such transactions (i) are upon fair and reasonable
terms, (ii) are fully disclosed to Agent prior to the consummation thereof, if they involve one or
more payments by Parent or its Subsidiaries in excess of $500,000 for any single transaction or
series of related transactions, and (iii) are no less favorable, taken as a whole, to Parent or its
Subsidiaries, as applicable, than would be obtained in an arm’s length transaction with a
non-Affiliate,
(b) so long as it has been approved by Parent’s Board of Directors in accordance with
applicable law, any indemnity provided for the benefit of directors of Parent,
(c) so long as it has been approved by Parent’s Board of Directors, the payment of reasonable
fees, compensation, or employee benefit arrangements to employees, officers, and outside directors
of Parent in the ordinary course of business and consistent with industry practice,
(d) the payment of:
(i) management, consulting, monitoring, and advisory fees to Equity Sponsor or its Affiliates,
so long as (A) if during the 1 day period immediately prior to such payment and immediately after
giving effect to such payment, the Revolver Usage is zero, (1) no Default or Event of Default shall
have occurred and be continuing either before or after giving effect to such payment, (2) Borrowers
shall have Excess Availability of at least $20,000,000 both before and after giving effect to such
payment and (3) Parent has provided Agent with written notice containing (w) notice of its intent
to make such payment pursuant to this Section 6.12(d)(i)(A), (x) the amount of such
proposed payment, (y) a certification that each of the conditions contained in clauses (1) through
(3) above will be satisfied both before and after giving effect to such proposed payment and (z) a
confirmation, supported by reasonably detailed calculations, that on a pro forma basis, Parent and
its Subsidiaries are projected to be in compliance with the financial covenants in Section
7 for the 12 month period ended one year after the date of such payment and (B) if during the 1
day period immediately prior to such payment or immediately after giving effect to such payment,
the Revolver Usage is greater than zero, (1) no Default or Event of Default shall have occurred and
be continuing either before or after giving effect to such payment, (2) Borrowers shall have Excess
Availability of at least $5,000,000 both before and after giving effect to such payment, (3) Parent
has provided Agent with written notice containing (w) notice of its intent to make such payment
pursuant to this Section 6.12(d)(i)(B), (x) the amount of such proposed payment, (y) a
certification that each of the conditions contained in clauses (1) and (2) above will be satisfied
both before and after giving effect to such proposed payment and (z) confirmation, supported by
reasonably detailed calculations, that on a pro forma basis, Parent and its Subsidiaries are
projected to be in compliance with the financial covenants in Section 7 for the 12 month
period ended one year after the date of such payment, and (4) the aggregate amount of all such
payments made pursuant to this clause (d)(i)(B) shall not exceed $1,400,000 in any calendar year;
and
(ii) reasonable and documented out-of-pocket expenses and the indemnities payable pursuant to
the Equity Sponsor in an amount not to exceed $100,000 in any fiscal year of Parent;
(e) transactions permitted by Section 6.3 or Section 6.9, or any Permitted
Intercompany Advance, and
(f) the transactions set forth on Schedule 6.12.
6.13 Use of Proceeds. Use the proceeds of the Advances for any purpose other than
(a) on the Closing Date, to pay transactional fees, costs, and expenses incurred in connection
with this Agreement, the other Loan Documents, and the transactions contemplated hereby and
thereby, and (b) thereafter, consistent with the terms and conditions hereof, for its lawful and
permitted purposes.
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6.14 Holding Company; Inactive Subsidiary.
(a) Permit Parent to incur any liabilities (other than liabilities arising under the Loan
Documents), own or acquire any assets (other than the Stock of its Subsidiaries) or engage itself
in any operations or business, except in connection with its ownership of its Subsidiaries and its
rights and obligations under the Loan Documents.
(b) Permit any Inactive Subsidiary to incur any liabilities, own or acquire any assets or
engage itself in any operations or business.
6.15 Consignments. Consign any of its or their Inventory or sell any of its or their
Inventory on xxxx and hold, sale or return, sale on approval, or other conditional terms of sale.
6.16 Inventory and Equipment with Bailees. Store the Inventory or Equipment (other
than vehicles and Equipment out for repair, and servers and computers of the Loan Parties that are
located at customer and other offsite locations in the ordinary course of the Loan Parties’
business operations) of Parent or its Subsidiaries at any time now or hereafter with a bailee,
warehouseman, or similar party, unless such bailee, warehouseman or similar party has executed and
delivered to Agent a Collateral Access Agreement.
7. FINANCIAL COVENANTS.
Parent and each Borrower covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Parent and each Borrower will comply with each
of the following financial covenants:
(a) Minimum EBITDA. Achieve EBITDA, measured on a month-end basis, of at least the required
amount set forth in the following table for the applicable period set forth opposite thereto:
| Applicable Amount | Applicable Period | |
$17,500,000.00
|
For the 6 month period ending June 30, 2009 | |
$20,416,666.67
|
For the 7 month period ending July 31, 2009 | |
$23,333,333.33
|
For the 8 month period ending August 31, 2009 | |
$26,250,000.00
|
For the 9 month period ending September 20, 2009 | |
$29,166,666.67
|
For the 10 month period ending October 31, 2009 | |
$32,083,333.33
|
For the 11 month period ending November 30, 2009 | |
$35,000,000.00
|
For the 12 month period ending December 31, 2009 | |
$35,000,000.00
|
For the 12 month period ending on the last day of each month thereafter |
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(b) Fixed Charge Coverage Ratio. Have a Fixed Charge Coverage Ratio, measured on a month-end
basis, of at least the required amount set forth in the following table for the applicable period
set forth opposite thereto:
| Applicable Ratio | Applicable Period | |
1.0:1.0
|
For the 6 month period ending June 30, 2009 | |
1.0:1.0
|
For the 7 month period ending July 31, 2009 | |
1.0:1.0
|
For the 8 month period ending August 31, 2009 | |
1.0:1.0
|
For the 9 month period ending September 20, 2009 | |
1.0:1.0
|
For the 10 month period ending October 31, 2009 | |
1.0:1.0
|
For the 11 month period ending November 30, 2009 | |
1.0:1.0
|
For the 12 month period ending December 31, 2009 | |
1.0:1.0
|
For the 12 month period ending January 31, 2010 | |
1.0:1.0
|
For the 12 month period ending February 28, 2010 | |
1.0:1.0
|
For the 12 month period ending March 31, 2010 | |
1.0:1.0
|
For the 12 month period ending April 30, 2010 | |
1.0:1.0
|
For the 12 month period ending May 31, 2010 | |
1.25:1.0
|
For the 12 month period ending on the last day of each month thereafter |
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of default (each, an
“Event of Default”) under this Agreement:
8.1 If any Loan Party fails to pay when due and payable, or when declared due and payable, (a)
all or any portion of the Obligations consisting of interest, fees, or charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof
constituting principal) constituting Obligations (including any portion thereof that accrues after
the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period
of 3 Business Days, or (b) all or any portion of the principal of the Obligations;
8.2 If any Loan Party or any of its Subsidiaries:
(a) fails to perform or observe any covenant or other agreement contained in any of
(i) Sections 3.3, 5.1 (except as otherwise provided in Section 8.2(b)),
5.2, 5.3 (solely if any Loan Party or any of its Subsidiaries is not in good
standing in its jurisdiction of organization), 5.6, 5.7 (solely if any Loan Party
or any of its Subsidiaries refuses to allow Agent or its representatives or agents to visit such
Loan Party’s or
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such Subsidiary’s properties, inspect its assets or books or records, examine and make copies of
its books and records, or discuss such Loan Party’s or such Subsidiary’s affairs, finances, and
accounts with officers and employees of such Loan Party or such Subsidiary), 5.10,
5.11, 5.14, 5.16 or 5.17 of this Agreement, (ii) Sections
6.1 through 6.16 of this Agreement, (iii) Section 7 of this Agreement, or (iv)
Section 6 of the Security Agreement;
(b) fails to perform or observe any covenant or other agreement contained in any of
Sections 5.1 (it being understand and agreed that the grace period set forth in this
clause (b) with respect to Section 5.1 shall be applicable only twice during any
12-month period), 5.3 (other than if any Loan Party or any of its Subsidiaries is not in
good standing in its jurisdiction of organization), 5.4, 5.5, 5.8,
5.12, 5.13 and 5.15 of this Agreement and such failure continues for a
period of 10 days after the earlier of (i) the date on which such failure shall first become known
to any officer of any Loan Party or any of its Subsidiaries or (ii) the date on which written
notice thereof is given to Administrative Borrower by Agent; or
(c) fails to perform or observe any covenant or other agreement contained in this Agreement,
or in any of the other Loan Documents, in each case, other than any such covenant or agreement that
is the subject of another provision of this Section 8 (in which event such other provision
of this Section 8 shall govern), and such failure continues for a period of 30 days after
the earlier of (i) the date on which such failure shall first become known to any officer of any
Loan Party or any of its Subsidiaries or (ii) the date on which written notice thereof is given to
Administrative Borrower by Agent;
8.3 If one or more judgments, orders, or awards for the payment of money involving an
aggregate amount of $1,000,000, or more (except to the extent fully covered by insurance pursuant
to which the insurer has accepted liability therefor in writing) is entered or filed against a Loan
Party or any of its Subsidiaries, or with respect to any of their respective assets, and remains
unsatisfied and either (a) there is a period of 30 consecutive days at any time after the entry of
any such judgment, order, or award during which a stay of enforcement thereof is not in effect, or
(b) enforcement proceedings are commenced upon such judgment, order, or award;
8.4 If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;
8.5 If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries
and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the
institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties or assets of, or
to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or
(e) an order for relief shall have been issued or entered therein;
8.6 If a Loan Party or any of its Subsidiaries is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of its business
affairs;
8.7 If there is a default in one or more agreements to which a Loan Party or any of its
Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its
Subsidiaries’ Indebtedness involving an aggregate amount of $1,000,000 or more, and such default
(i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such
third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or
its Subsidiary’s obligations thereunder;
8.8 If any warranty, representation, statement, or Record made herein or in any other Loan
Document or delivered in writing to Agent or any Lender in connection with this Agreement or any
other Loan Document proves to be untrue in any material respect (except that such materiality
qualifier shall not be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof) as of the date of issuance or making or deemed
making thereof;
- 40 -
8.9 If the obligation of any Guarantor under the Guaranty is limited or terminated by
operation of law or by such Guarantor;
8.10 If the Security Agreement or any other Loan Document that purports to create a Lien,
shall, for any reason, fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien on the Collateral covered thereby,
except as a result of a disposition of the applicable Collateral in a transaction permitted under
this Agreement;
8.11 Any provision of any Loan Document shall at any time for any reason be declared to be
null and void, or the validity or enforceability thereof shall be contested by a Loan Party or its
Subsidiaries, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any
Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to
establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall
deny that such Loan Party or its Subsidiaries has any liability or obligation purported to be
created under any Loan Document; or
8.12 If there is any actual termination, cancellation, limitation of, or modification to or
change in, the business relationship between any Loan Party, on the one hand, and any customer or
supplier or any group thereof, on the other hand, where such termination, cancellation, limitation
of, or modification to or change in, such business relationship could reasonably be expected to
result in a Material Adverse Change.
8.13 If (a) Parent designates any Subsidiary as a Specified Subsidiary, or any Specified
Subsidiary as a Subsidiary, in each case, other than in accordance with Section 1.5, or (b)
any Specified Subsidiary shall fail to satisfy any of the criteria set forth in clauses (i) through
(vii) of Section 1.5(b).
9. RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence and during the continuation of an Event
of Default, Agent may, and, at the instruction of the Required Lenders, shall, in each case by
written notice to Administrative Borrower and in addition to any other rights or remedies provided
for hereunder or under any other Loan Document or by applicable law, do any one or more of the
following on behalf of the Lender Group:
(a) declare the Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable, whereupon the same shall become and be
immediately due and payable, without presentment, demand, protest, or further notice or other
requirements of any kind, all of which are hereby expressly waived by Parent and Borrowers; and
(b) declare the Revolver Commitments terminated, whereupon the Revolver Commitments shall
immediately be terminated together with any obligation of any Lender hereunder to make Advances and
the obligation of the Issuing Lender to issue Letters of Credit.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default
described in Section 8.4 or Section 8.5, in addition to the remedies set forth
above, without any notice to any Loan Party or any other Person or any act by the Lender Group, the
Commitments shall automatically terminate and the Obligations then outstanding, together with all
accrued and unpaid interest thereon and all fees and all other amounts due under this Agreement and
the other Loan Documents, shall automatically and immediately become due and payable, without
presentment, demand, protest, or notice of any kind, all of which are expressly waived by Parent
and Borrowers.
9.2 Remedies Cumulative. The rights and remedies of the Lender Group under this
Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender
Group shall have all other rights and remedies not inconsistent herewith as provided under the
Code by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed
an election, and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or
acquiescence by it.
- 41 -
10. WAIVERS; INDEMNIFICATION.
10.1 Demand; Protest; etc. Parent and each of its Subsidiaries waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents,
instruments, chattel paper, and guarantees at any time held by the Lender Group on which any Loan
Party may in any way be liable.
10.2 The Lender Group’s Liability for Collateral. Parent and each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under the Code or other
applicable law, the Lender Group shall not in any way or manner be liable or responsible for: (i)
the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any
manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk
of loss, damage, or destruction of the Collateral shall be borne by Borrowers.
10.3 Indemnification. Each Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons, and each Participant (each, an “Indemnified
Person”) harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs,
penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or
consultants and all other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred
by any of them (a) in connection with or as a result of or related to the execution and delivery
(provided that Borrowers shall not be liable for costs and expenses (including attorneys fees) of
any Lender (other than WFF) incurred in advising, structuring, drafting, reviewing, administering
or syndicating the Loan Documents), enforcement, performance, or administration (including any
restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents,
or the transactions contemplated hereby or thereby (other than disputes solely between the
Lenders) or the monitoring of Parent’s and its Subsidiaries’ compliance with the terms of the Loan
Documents (provided that Borrowers shall not be liable for costs and expenses (including attorneys
fees) of any Lender (other than WFF) incurred in connection with such monitoring), (b) with
respect to any investigation, litigation, or proceeding related to this Agreement, any other Loan
Document, or the use of the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto (other than disputes solely between the Lenders), and (c) in connection with or
arising out of any presence or release of Hazardous Materials at, on, under, to or from any assets
or properties owned, leased or operated by Parent or any of its Subsidiaries or any Environmental
Actions, Environmental Liabilities and Costs or Remedial Actions related in any way to any such
assets or properties of Parent or any of its Subsidiaries (each and all of the foregoing, the
“Indemnified Liabilities”). The foregoing to the contrary notwithstanding, Borrowers
shall have no obligation to any Indemnified Person under this Section 10.3 with respect to
any Indemnified Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified Person or its
officers, directors, employees, attorneys, or agents. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any Indemnified Person
makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to
which Borrowers were required to indemnify the Indemnified Person receiving such payment, the
Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED
PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE
OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement
or any other Loan Document shall be in writing and (except for financial statements and other
- 42 -
informational documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by registered or certified mail (postage prepaid, return receipt
requested), overnight courier, electronic mail (at such email addresses as a party may designate in
accordance herewith), or telefacsimile. In the case of notices or demands to Administrative
Borrower or Agent, as the case may be, they shall be sent to the respective address set forth
below:
If to Administrative Borrower:
|
MEDQUIST TRANSCRIPTIONS, LTD. | |
| 0000 Xxxxxxx Xxxx Xxxx. Xx. Xxxxxx, Xxx Xxxxxx 00000-0000 Attn: Xxxx Xxxxxxxx Fax No. (000) 000-0000 |
||
with copies to:
|
Xxxxxxxx & Xxxx LLP 000 Xxxxxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxxxx 00000 Attn: Xxxxxxx X. Xxxxxxxx, Esq. Fax No.: (000) 000-0000 |
|
If to Agent:
|
XXXXX FARGO FOOTHILL, LLC Xxx Xxxxxx Xxxxx, Xxxxx 0000 Xxxxxx, Xxxxxxxxxxxxx 00000 Attn: Business Finance Manager Fax No.: (000) 000-0000 |
|
with copies to:
|
XXXXXXX XXXX & XXXXX LLP 000 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxxxx X. Xxxxxxxxxx Fax No.: (000) 000-0000 |
Any party hereto may change the address at which they are to receive notices hereunder, by
notice in writing in the foregoing manner given to the other party. All notices or demands sent in
accordance with this Section 11, shall be deemed received on the earlier of the date of
actual receipt or 3 Business Days after the deposit thereof in the mail; provided, that (a)
notices sent by overnight courier service shall be deemed to have been given when received, (b)
notices by facsimile shall be deemed to have been given when sent (except that, if not given during
normal business hours for the recipient, shall be deemed to have been given at the opening on
business on the next Business Day for the recipient) and (c) notices by electronic mail shall be
deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as
by the “return receipt requested” function, as available, return email or other written
acknowledgment).
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO
THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND
THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
- 43 -
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL
OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. PARENT AND
EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
12(b).
(c) PARENT AND EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. PARENT AND EACH BORROWER AND
EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.1 Assignments and Participations.
(a) With the prior written consent of Agent, which consent of Agent shall not be unreasonably
withheld, delayed or conditioned, and shall not be required in connection with an assignment to a
Person that is a Lender or an Affiliate (other than individuals) of a Lender, any Lender may assign
and delegate to one or more Eligible Transferees (each an “Assignee”; provided that
no Loan Party, Affiliate of a Loan Party, Equity Sponsor, or Affiliate of Equity Sponsor shall be
permitted to become an Assignee) all or any portion of the Obligations, the Commitments and the
other rights and obligations of such Lender hereunder and under the other Loan Documents, in a
minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply
to (x) an assignment or delegation by any Lender to any other Lender or an Affiliate of any Lender
or (y) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of
such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is
at least $5,000,000); provided, however, that Borrowers and Agent may continue to
deal solely and directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given to Administrative
Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its Assignee have
delivered to Administrative Borrower and Agent an Assignment and Acceptance and Agent has notified
the assigning Lender of its receipt thereof in accordance with Section 13.1(b), and (iii)
unless waived by Agent, the assigning Lender or Assignee has paid to Agent for Agent’s separate
account a processing fee in the amount of $3,500.
(b) From and after the date that Agent notifies the assigning Lender (with a copy to
Administrative Borrower) that it has received an executed Assignment and Acceptance and, if
applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to
- 44 -
Section 10.3 hereof) and be released from any future obligations under this Agreement
(and in the case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such
Lender shall cease to be a party hereto and thereto), and such assignment shall effect a novation
among Borrowers, the assigning Lender, and the Assignee; provided, however, that
nothing contained herein shall release any assigning Lender from obligations that survive the
termination of this Agreement, including such assigning Lender’s obligations under Section
15 and Section 17.9(a) of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder
and the Assignee thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial condition of Borrowers or
the performance or observance by Borrowers of any of their obligations under this Agreement or any
other Loan Document furnished pursuant hereto, (iii) such Assignee confirms that it has received a
copy of this Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such Assignment and
Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning
Lender 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 decisions in taking or not taking action
under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to
exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent,
by the terms hereof and thereof, together with such powers as are reasonably incidental thereto,
and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) Immediately upon Agent’s receipt of the required processing fee, if applicable, and
delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement
shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro
tanto.
(e) Any Lender may at any time sell to one or more commercial banks, financial institutions,
or other Persons (a “Participant”) participating interests in all or any portion of its
Obligations, its Commitment, and the other rights and interests of that Lender (the
“Originating Lender”) hereunder and under the other Loan Documents; provided,
however, that (i) the Originating Lender shall remain a “Lender” for all purposes of this
Agreement and the other Loan Documents and the Participant receiving the participating interest in
the Obligations, the Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the
Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating
Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender’s rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the
Participant has the right to approve any amendment to, or any consent or waiver with respect to,
this Agreement or any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A) extend the final
maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce
the interest rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or substantially all of the Collateral or guaranties (except to the
extent expressly provided herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the
amount of, the interest or fees payable to such Participant through such Lender, or (E) change the
amount or due dates of scheduled principal repayments or prepayments or premiums, and (v) all
amounts payable by Borrowers hereunder shall be determined as if such
- 45 -
Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and
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 set off in respect of its
participating interest in amounts owing under this Agreement to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under this Agreement. The rights
of any Participant only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this Agreement or the other
Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collections of
Parent or its Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or participation or proposed assignment or
participation or any grant of a security interest in, or pledge of, its rights under and interest
in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all
documents and information which it now or hereafter may have relating to Parent and its
Subsidiaries and their respective businesses.
(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a
security interest in, or pledge, all or any portion of its rights under and interest in this
Agreement in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause to be
maintained, a register (the “Register”) on which it enters the name and address of each
Lender as the registered owner of the Obligations (and the principal amount thereof and stated
interest thereon) held by such Lender (each, a “Registered Loan”). Other than in
connection with an assignment by a Lender of all or any portion of its portion of the Advances or
Commitments to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan
(and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each registered note shall
expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and
the registered note, if any, evidencing the same) may be effected only by registration of such
assignment or sale on the Register, together with the surrender of the registered note, if any,
evidencing the same duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration
of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same),
Borrowers shall treat the Person in whose name such Registered Loan (and the registered note, if
any, evidencing the same) is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case
of any assignment by a Lender of all or any portion of the Advances or Commitments to an Affiliate
of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the
Register, the assigning Lender, on behalf of Borrowers, shall maintain a register comparable to the
Register.
(i) In the event that a Lender sells participations in the Registered Loan, such Lender, as a
non-fiduciary agent on behalf of Borrowers, shall maintain a register on which it enters the name
of all participants in the Registered Loans held by it (the “Participant Register”). A
Registered Loan (and the Registered Note, if any, evidencing the same) may be participated in whole
or in part only by registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by the registration of such
participation on the Participant Register.
(j) Agent shall make a copy of the Register (and each Lender shall make a copy of its
Participant Register in the extent it has one) available for review by Administrative Borrower from
time to time as Administrative Borrower may reasonably request.
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13.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however, that
neither Parent nor any Borrower may assign this Agreement or any rights or duties hereunder
without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void
ab initio. No consent to assignment by the Lenders shall release Parent or any Borrower from its
Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and
duties hereunder and thereunder pursuant to Section 13.1 hereof and, except as expressly
required pursuant to Section 13.1 hereof, no consent or approval by Parent or any Borrower
is required in connection with any such assignment.
14. AMENDMENTS; WAIVERS.
14.1 Amendments and Waivers.
(a) No amendment, waiver or other modification of any provision of this Agreement or any other
Loan Document (other than Bank Product Agreements or the Fee Letter), and no consent with respect
to any departure by Parent or any Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Required Lenders (or by Agent at the written request of the Required
Lenders), Parent and Administrative Borrower (on behalf of all Borrowers) and then any such waiver
or consent shall be effective, but only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent shall,
unless in writing and signed by all of the Lenders directly affected thereby and Parent and
Administrative Borrower (on behalf of all Borrowers), do any of the following:
(i) increase the amount of or extend the expiration date of any Commitment of any Lender,
(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees, or other amounts due hereunder or under any other Loan
Document,
(iii) reduce the principal of, or the rate of interest on, any loan or other extension of
credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan
Document (except (y) in connection with the waiver of applicability of Section 2.6(c)
(which waiver shall be effective with the written consent of the Required Lenders), and (z) that
any amendment or modification of defined terms used in the financial covenants in this Agreement
shall not constitute a reduction in the rate of interest or a reduction of fees for purposes of
this clause (iii)),
(iv) amend or modify this Section or any provision of this Agreement providing for consent or
other action by all Lenders,
(v) other than as permitted by Section 15.11, release Agent’s Lien in and to any of
the Collateral,
(vi) change the definition of “Required Lenders” or “Pro Rata Share”,
(vii) contractually subordinate any of the Agent’s Liens,
(viii) other than in connection with a merger, liquidation, dissolution or sale of such Person
expressly permitted by the terms hereof or the other Loan Documents, release any Borrower or any
Guarantor from any obligation for the payment of money or consent to the assignment or transfer by
any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan
Documents,
(ix) amend any of the provisions of Section 2.4(b)(i) or Section 2.4(e) or
(f),
(x) amend Section 13.1(a) to permit a Loan Party, an Affiliate of a Loan Party, Equity
Sponsor, or an Affiliate of Equity Sponsor to be permitted to become an Assignee, or
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(xi) change the definition of Borrowing Base or any of the defined terms (including the
definition of Availability Block and Eligible Accounts) that are used in such definition to the
extent that any such change results in more credit being made available to Borrowers based upon the
Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount, or change
Section 2.2.
(b) No amendment, waiver, modification, or consent shall amend, modify, or waive (i) the
definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of
Agent and Administrative Borrower (and shall not require the written consent of any of the
Lenders), and (ii) any provision of Section 15 pertaining to Agent, or any other rights or duties
of Agent under this Agreement or the other Loan Documents, without the written consent of Agent,
Administrative Borrower, and the Required Lenders.
(c) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision
of this Agreement or the other Loan Documents pertaining to Issuing Lender, or any other rights or
duties of Issuing Lender under this Agreement or the other Loan Documents, without the written
consent of Issuing Lender, Agent, Administrative Borrower, and the Required Lenders.
(d) No amendment, waiver, modification, or consent shall amend, modify, or waive any provision
of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or
duties of Swing Lender under this Agreement or the other Loan Documents, without the written
consent of Swing Lender, Agent, Administrative Borrower, and the Required Lenders.
(e) Anything in this Section 14.1 to the contrary notwithstanding, any amendment,
modification, waiver, consent, termination, or release of, or with respect to, any provision of
this Agreement or any other Loan Document that relates only to the relationship of the Lender Group
among themselves, and that does not affect the rights or obligations of Parent or any Borrower,
shall not require consent by or the agreement of Parent or any Borrower.
14.2 Replacement of Holdout Lender.
(a) If any action to be taken by the Lender Group or Agent hereunder requires the unanimous
consent, authorization, or agreement of all Lenders and if such action has received the consent,
authorization, or agreement of the Required Lenders but not all of the Lenders, then Agent, upon at
least 5 Business Days prior irrevocable notice, may permanently replace any Lender (a “Holdout
Lender”) that failed to give its consent, authorization, or agreement with one or more
Replacement Lenders, and the Holdout Lender shall have no right to refuse to be replaced hereunder.
Such notice to replace the Holdout Lender shall specify an effective date for such replacement,
which date shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout Lender and each Replacement
Lender shall execute and deliver an Assignment and Acceptance, subject only to the Holdout Lender
being repaid its share of the outstanding Obligations (including an assumption of its Pro Rata
Share of the Risk Participation Liability) without any premium or penalty of any kind whatsoever.
If the Holdout Lender shall refuse or fail to execute and deliver any such Assignment and
Acceptance prior to the effective date of such replacement, the Holdout Lender shall be deemed to
have executed and delivered such Assignment and Acceptance. The replacement of any Holdout Lender
shall be made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other
rights and obligations of the Holdout Lender hereunder and under the other Loan Documents, the
Holdout Lender shall remain obligated to make the Holdout Lender’s Pro Rata Share of Advances and
to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of
the Risk Participation Liability of such Letter of Credit.
14.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise
any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or
any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any
Lender will be
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effective unless it is in writing, and then only to the extent specifically stated. No
waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s
rights thereafter to require strict performance by Parent and each Borrower of any provision of
this Agreement. Agent’s and each Lender’s rights under this Agreement and the other Loan
Documents will be cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
15. AGENT; THE LENDER GROUP.
15.1 Appointment and Authorization of Agent. Each Lender hereby designates and
appoints WFF as its representative under this Agreement and the other Loan Documents and each
Lender hereby irrevocably authorizes Agent to execute and deliver each of the other Loan Documents
on its behalf and to take such other action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties as are expressly
delegated to Agent by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Agent agrees to act as such on the express
conditions contained in this Section 15. The provisions of this Section 15 are
solely for the benefit of Agent and the Lenders, and Parent and its Subsidiaries shall have no
rights as a third party beneficiary of any of the provisions contained herein. Any provision to
the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding,
Agent shall not have any duties or responsibilities, except those expressly set forth herein and
in the other Loan Documents, nor shall Agent have or be deemed to have 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 Agent; it being expressly understood and agreed that the use of the word “Agent” is for
convenience only, that WFF is merely the representative of the Lenders, and only has the
contractual duties set forth herein and in the other Loan Documents. Except as expressly
otherwise provided in this Agreement, Agent shall have and may use its sole discretion with
respect to exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the
foregoing, or of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as
this Agreement remains in effect: (a) maintain, in accordance with its customary business
practices, ledgers and records reflecting the status of the Obligations, the Collateral, the
Collections of Parent and its Subsidiaries, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect to the Loan
Documents, (c) make Advances, for itself or on behalf of Lenders, as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of Parent and its
Subsidiaries as provided in the Loan Documents, (e) open and maintain such bank accounts and cash
management arrangements as Agent deems necessary and appropriate in accordance with the Loan
Documents for the foregoing purposes with respect to the Collateral and the Collections of Parent
and its Subsidiaries, (f) perform, exercise, and enforce any and all other rights and remedies of
the Lender Group with respect to Parent or its Subsidiaries, the Obligations, the Collateral, the
Collections of Parent and its Subsidiaries, or otherwise related to any of same as provided in the
Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or
appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan
Documents.
15.2 Delegation of Duties. Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys in fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not
be responsible for the negligence or misconduct of any agent or attorney in fact that it selects
as long as such selection was made without gross negligence or willful misconduct.
15.3 Liability of Agent. None of the Agent-Related Persons shall (a) be liable for
any action taken or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders for
any recital, statement, representation or warranty made by Parent or any of its Subsidiaries or
Affiliates, or any officer or director
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thereof, contained in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received by Agent under or
in connection with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for
any failure of Parent or its Subsidiaries or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall 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 books
and records or properties of Parent or its Subsidiaries.
15.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone
message, statement 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 counsel to any Loan Party or counsel to any Lender), independent
accountants and other experts selected by Agent. Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document unless Agent shall
first receive such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If
Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request and any action taken or failure to
act pursuant thereto shall be binding upon all of the Lenders.
15.5 Notice of Default or Event of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except with respect to
defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent
for the account of the Lenders and, except with respect to Events of Default of which Agent has
actual knowledge, unless Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of Default, and stating
that such notice is a “notice of default.” Agent promptly will notify the Lenders of its receipt
of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender
obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving
any notices to its Participants, if any. Subject to Section 15.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by the Required
Lenders in accordance with Section 8; provided, however, that unless and
until Agent has received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
15.6 Credit Decision. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken,
including any review of the affairs of Parent and its Subsidiaries or Affiliates, shall be deemed
to constitute any representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of any Borrower or any other Person party to a Loan Document,
and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents that it will, independently and without reliance upon any Agent-Related Person 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 investigations as it deems necessary to
inform itself as to the business, prospects, operations, property, financial and other condition
and creditworthiness of any Borrower or any other Person party to a Loan Document. Except for
notices, reports, and other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty
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or responsibility to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or creditworthiness of
any Borrower or any other Person party to a Loan Document that may come into the possession of any
of the Agent-Related Persons.
15.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender Group
Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and
fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including
court costs, attorneys fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral,
whether or not any Borrower is obligated to reimburse Agent or Lenders for such expenses pursuant
to this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Parent and its Subsidiaries received by Agent to reimburse Agent
for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders. In
the event Agent is not reimbursed for such costs and expenses by Parent or its Subsidiaries, each
Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s Pro Rata
Share thereof. Whether or not the transactions contemplated hereby are consummated, the Lenders
shall indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrowers and without limiting the obligation of Borrowers to do so), according to their
Pro Rata Shares, from and against any and all Indemnified Liabilities; provided,
however, that no Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or
willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without limitation of the
foregoing, each Lender shall reimburse Agent upon demand for such Lender’s Pro Rata Share of any
costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees
and expenses) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the
extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The
undertaking in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
15.8 Agent in Individual Capacity. WFF and its Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity interests in, and
generally engage in any kind of banking, trust, financial advisory, underwriting, or other
business with Parent and its Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though WFF were not Agent hereunder, and, in each case, without notice to or consent
of the other members of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, WFF or its Affiliates may receive information regarding Parent or its
Affiliates or any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Parent or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver Agent will use its
reasonable best efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms “Lender” and “Lenders” include WFF in its individual capacity.
15.9 Successor Agent. Agent may resign as Agent upon 30 days’ prior written notice
to the Lenders (unless such notice is waived by the Required Lenders) and Administrative Borrower
(unless such notice is waived by Administrative Borrower). If Agent resigns under this Agreement,
the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is
continuing) the consent of Administrative Borrower (such consent not to be unreasonably withheld,
delayed, or conditioned), appoint a successor Agent for the Lenders. If, at the time that Agent’s
resignation is effective, it is acting as the Issuing Lender or the Swing Lender, such resignation
shall also operate to effectuate its resignation as the Issuing Lender or the Swing Lender, as
applicable, and it shall automatically be relieved of any further obligation to issue Letters of
Credit or make Swing Loans. If no successor Agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with the Lenders and
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Administrative Borrower, a successor Agent. If Agent has materially breached or failed to
perform any material provision of this Agreement or of applicable law, the Required Lenders may
agree in writing to remove and replace Agent with a successor Agent from among the Lenders. In
any such event, upon the acceptance of its appointment as successor Agent hereunder, such
successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the
term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and
duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Section 15 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has
accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of
resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the
Lenders appoint a successor Agent as provided for above.
15.10 Lender in Individual Capacity. Any Lender and its respective Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial advisory, underwriting,
or other business with Parent and its Subsidiaries and Affiliates and any other Person party to
any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent
of the other members of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, such Lender and its respective Affiliates may receive information
regarding Parent or its Affiliates or any other Person party to any Loan Documents that is subject
to confidentiality obligations in favor of Parent or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver
such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any
obligation to provide such information to them.
15.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Agent, at its option and in its sole discretion,
to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations, (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if Administrative
Borrower certifies to Agent that the sale or disposition is permitted under Section 6.4 of
this Agreement or the other Loan Documents (and Agent may rely conclusively on any such
certificate, without further inquiry), (iii) constituting property in which Parent or its
Subsidiaries owned no interest at the time the Agent’s Lien was granted nor at any time thereafter,
or (iv) constituting property leased to Parent or its Subsidiaries under a lease that has expired
or is terminated in a transaction permitted under this Agreement. Except as provided above, Agent
will not execute and deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or Administrative Borrower
at any time, the Lenders will confirm in writing Agent’s authority to release any such Liens on
particular types or items of Collateral pursuant to this Section 15.11; provided,
however, that (1) Agent shall not be required to execute any document necessary to evidence
such release on terms that, in Agent’s opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner discharge, affect, or
impair the Obligations or any Liens (other than those expressly being released) upon (or
obligations of Borrowers in respect of) all interests retained by Borrowers, including, the
proceeds of any sale, all of which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders to assure that the
Collateral exists or is owned by Parent or its Subsidiaries or is cared for, protected, or insured
or has been encumbered, or that the Agent’s Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or
to continue exercising, any of the rights, authorities and powers granted or available to Agent
pursuant to any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, subject to the terms and
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conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole
discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and
that Agent shall have no other duty or liability whatsoever to any Lender as to any of the
foregoing, except as otherwise provided herein.
15.12 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the express written consent of
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request
of Agent, set off against the Obligations, any amounts owing by such Lender to Parent or its
Subsidiaries or any deposit accounts of Parent or its Subsidiaries now or hereafter maintained with
such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested
to do so in writing by Agent, take or cause to be taken any action, including, the commencement of
any legal or equitable proceedings to enforce any Loan Document against any Borrower or any
Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the
Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or
otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for
any such proceeds or payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and
with such endorsements as may be required to negotiate the same to Agent, or in immediately
available funds, as applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase,
without recourse or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably as among the
Lenders in accordance with their Pro Rata Shares; provided, however, that to the
extent that such excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such purchasing party,
but without interest except to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
15.13 Agency for Perfection. Agent hereby appoints each other Lender as its agent
(and each Lender hereby accepts such appointment) for the purpose of perfecting the Agent’s Liens
in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be
perfected by possession or control. Should any Lender obtain possession or control of any such
Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor
shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s
instructions.
15.14 Payments by Agent to the Lenders. All payments to be made by Agent to the
Lenders shall be made by bank wire transfer of immediately available funds pursuant to such wire
transfer instructions as each party may designate for itself by written notice to Agent.
Concurrently with each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, fees, or interest of the Obligations.
15.15 Concerning the Collateral and Related Loan Documents. Each member of the
Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan
Documents. Each member of the Lender Group agrees that any action taken by Agent in accordance
with the terms of this Agreement or the other Loan Documents relating to the Collateral and the
exercise by Agent of its powers set forth therein or herein, together with such other powers that
are reasonably incidental thereto, shall be binding upon all of the Lenders.
15.16 Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information. By becoming a party to this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes
available, a copy of each field audit or examination report respecting Parent or its Subsidiaries
(each
- 53 -
a “Report” and collectively, “Reports”) prepared by or at the request of
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make any representation or
warranty as to the accuracy of any Report, and (ii) shall not be liable for any information
contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or
examinations, that Agent or other party performing any audit or examination will inspect only
specific information regarding Parent and its Subsidiaries and will rely significantly upon
Parent’s and its Subsidiaries’ books and records, as well as on representations of Parent’s and its
Subsidiaries’ personnel,
(d) agrees to keep all Reports and other material, non-public information regarding Parent and
its Subsidiaries and their operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 17.9, and
(e) without limiting the generality of any other indemnification provision contained in this
Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any
action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender
may reach or draw from any Report in connection with any loans or other credit accommodations that
the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s
participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii)
to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and
other amounts (including, attorneys fees and costs) incurred by Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of Agent in writing
that Agent provide to such Lender a copy of any report or document provided by Parent or its
Subsidiaries to Agent that has not been contemporaneously provided by Parent or such Subsidiary to
such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such
Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to
request additional reports or information from Parent or its Subsidiaries, any Lender may, from
time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice
to Agent, whereupon Agent promptly shall request of Borrowers the additional reports or information
reasonably specified by such Lender, and, upon receipt thereof from Parent or such Subsidiary,
Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to
Administrative Borrower a statement regarding the Loan Account, Agent shall send a copy of such
statement to each Lender.
15.17 Several Obligations; No Liability. Notwithstanding that certain of the Loan
Documents now or hereafter may have been or will be executed only by or in favor of Agent in its
capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of
Agent (if any) to make any credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time
outstanding, the amount of their respective Commitments. Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the
business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be
solely responsible for notifying its Participants of any matters relating to the Loan Documents to
the extent any such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section 15.7, no
member of the Lender Group shall have any liability for the acts of any other member of the Lender
Group. No Lender shall be responsible to any Borrower or any other Person for any failure by any
other Lender to fulfill its obligations to make credit available hereunder, nor to advance for it
or on its behalf in connection with its Commitment, nor to take any other action on its behalf
hereunder or in connection with the financing contemplated herein.
- 54 -
16. WITHHOLDING TAXES.
(a) All payments made by any Borrower hereunder or under any note or other Loan Document will
be made without setoff, counterclaim, or other defense. In addition, all such payments will be
made free and clear of, and without deduction or withholding for, any present or future Taxes, and
in the event any deduction or withholding of Taxes is required, each Borrower shall comply with the
next sentence of this Section 16(a). If any Taxes are so levied or imposed, each Borrower
agrees to pay the full amount of such Taxes and such additional amounts as may be necessary so that
every payment of all amounts due under this Agreement, any note, or Loan Document, including any
amount paid pursuant to this Section 16(a) after withholding or deduction for or on account
of any Taxes, will not be less than the amount provided for herein; provided, however, that
Borrowers shall not be required to increase any such amounts if the increase in such amount payable
results from Agent’s or such Lender’s own willful misconduct or gross negligence (as finally
determined by a court of competent jurisdiction). Each Borrower will furnish to Agent as promptly
as possible after the date the payment of any Tax is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by Borrowers.
(b) Each Borrower agrees to pay any present or future stamp, value added or documentary taxes
or any other excise or property taxes, charges, or similar levies that arise from any payment made
hereunder or from the execution, delivery, performance, recordation, or filing of, or otherwise
with respect to this Agreement or any other Loan Document.
(c) If a Lender or Participant is entitled to claim an exemption or reduction from United
States withholding tax, such Lender or Participant agrees with and in favor of Agent, to deliver to
Agent (or, in the case of a Participant, to the Lender granting the participation only) one of the
following before receiving its first payment under this Agreement:
(i) if such Lender or Participant is entitled to claim an exemption from United States
withholding tax pursuant to its portfolio interest exception, (A) a statement of the Lender or
Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section
881(c)(3)(A) of the IRC, (II) a 10% shareholder of any Borrower (within the meaning of Section
871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to any Borrower within
the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form
W-8BEN or Form W-8IMY (with proper attachments);
(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of,
withholding tax under a United States tax treaty, a properly completed and executed copy of IRS
Form W-8BEN;
(iii) if such Lender or Participant is entitled to claim that interest paid under this
Agreement is exempt from United States withholding tax because it is effectively connected with a
United States trade or business of such Lender, a properly completed and executed copy of IRS Form
W-8ECI;
(iv) if such Lender or Participant is entitled to claim that interest paid under this
Agreement is exempt from United States withholding tax because such Lender or Participant serves as
an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper
attachments); or
(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9,
as may be required under the IRC or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding or backup withholding tax.
Each Lender or Participant shall provide new forms (or successor forms) upon the expiration or
obsolescence of any previously delivered forms and to promptly notify Agent (or, in the case of a
Participant, to the Lender granting the participation only) of any change in circumstances which
would modify or render invalid any claimed exemption or reduction.
- 55 -
(d) If a Lender or Participant claims an exemption from withholding tax in a jurisdiction
other than the United States, such Lender or such Participant agrees with and in favor of Agent, to
deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only)
any such form or forms, as may be required under the laws of such jurisdiction as a condition to
exemption from, or reduction of, foreign withholding or backup withholding tax before receiving its
first payment under this Agreement, but only if such Lender or such Participant is legally able to
deliver such forms, provided, however, that nothing in this Section 16(d) shall
require a Lender or Participant to disclose any information that it deems to be confidential
(including without limitation, its tax returns). Each Lender and each Participant shall provide
new forms (or successor forms) upon the expiration or obsolescence of any previously delivered
forms and to promptly notify Agent (or, in the case of a Participant, to the Lender granting the
participation only) of any change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(e) If a Lender or Participant claims exemption from, or reduction of, withholding tax and
such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant
agrees to notify Agent (or, in the case of a sale of a participation interest, to the Lender
granting the participation only) of the percentage amount in which it is no longer the beneficial
owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage
amount, Agent will treat such Lender’s or such Participant’s documentation provided pursuant to
Section 16(c) or 16(d) as no longer valid. With respect to such percentage amount, such
Participant or Assignee may provide new documentation, pursuant to Section 16(c) or 16(d), if
applicable. Borrowers agree that each Participant shall be entitled to the benefits of this
Section 16 with respect to its participation in any portion of the Commitments and the Obligations
so long as such Participant complies with the obligations set forth in this Section 16 with
respect thereto.
(f) If a Lender or a Participant is entitled to a reduction in the applicable withholding tax,
Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold
from any interest payment to such Lender or such Participant an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation
required by subsection (c) or (d) of this Section 16 are not delivered to
Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or,
in the case of a Participant, to the Lender granting the participation) may withhold from any
interest payment to such Lender or such Participant not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(g) If the IRS or any other Governmental Authority of the United States or other jurisdiction
asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the
participation) did not properly withhold tax from amounts paid to or for the account of any Lender
or any Participant due to a failure on the part of the Lender or any Participant (because the
appropriate form was not delivered, was not properly executed, or because such Lender failed to
notify Agent (or such Participant failed to notify the Lender granting the participation) of a
change in circumstances which rendered the exemption from, or reduction of, withholding tax
ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in
the case of a Participant, such Participant shall indemnify and hold the Lender granting the
participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of
a Participant, to the Lender granting the participation), as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts payable to Agent
(or, in the case of a Participant, to the Lender granting the participation only) under this
Section 16, together with all costs and expenses (including attorneys fees and expenses).
The obligation of the Lenders and the Participants under this subsection shall survive the payment
of all Obligations and the resignation or replacement of Agent.
(h) If Agent or a Lender determines, in its sole discretion, that it has received a refund of
any Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has
paid additional amounts pursuant to this Section 16, so long as no Default or Event of
Default has occurred and is continuing, it shall pay over such refund to such Borrower (but only to
the extent of payments made, or additional amounts paid, by such Borrower under this Section
16 with respect to Taxes giving rise to such a refund), net of all out-of-pocket expenses of
Agent or such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such a refund); provided, that such Borrower,
- 56 -
upon the request of Agent or such Lender, agrees to repay the amount paid over to such
Borrower (plus any penalties, interest or other charges, imposed by the relevant Governmental
Authority, other than such penalties, interest or other charges imposed as a result of the willful
misconduct or gross negligence of Agent hereunder) to Agent or such Lender in the event Agent or
such Lender is required to repay such refund to such Governmental Authority. Notwithstanding
anything in this Credit Agreement to the contrary, this Section 16 shall not be construed
to require Agent or any Lender to make available its tax returns (or any other information which it
deems confidential) to any Borrower or any other Person.
(i) Each Borrower shall indemnify and hold harmless each Lender (including for purposes of
this section any Participant) and Agent (and, in the case of any Lender or Agent that is a
partnership or other “flow-through” entity for tax purposes, each beneficial owner thereof (each, a
“Beneficial Owner”)) for the full amount of Taxes that arise from any payment made
hereunder or under any of the Loan Documents and Other Taxes imposed on or paid by such Person and
any liability (including penalties, interest and expenses) arising from or with respect to such
taxes, whether or not they were correctly or legally asserted. In addition, each Borrower shall
indemnify Lenders and Agent (and their Beneficial Owners) for any taxes based on or measured by the
overall net income of Lenders or Agent (or their Beneficial Owners) (“Net Income Taxes”)
imposed by any jurisdiction on or with respect to any increased amount payable by any Borrower
under this Section 16. Payment under this indemnification shall be made within 30 days
from the date Agent or the relevant Lender makes written demand for it. A certificate containing
reasonable detail as to the amount of such Taxes, Other Taxes or Net Income Taxes submitted to
Administrative Borrower by Agent or the relevant Lender shall be conclusive evidence, absent
manifest error, of the amount due from Borrowers to Agent or such Lender (or their Beneficial
Owners).
(j) The provisions of this Section 16 shall survive the termination of this Agreement
and the repayment of all Obligations.
17. GENERAL PROVISIONS.
17.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Parent, each Borrower, Agent, and each Lender whose signature is provided for on the
signature pages hereof.
17.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies equally to this entire Agreement.
17.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed against the Lender Group or Parent or any Borrower, whether under any rule of
construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
17.5 Bank Product Providers. Each Bank Product Provider shall be deemed a third
party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any
reference in a Loan Document to the parties for whom Agent is acting; it being understood and
agreed that the rights and benefits of such Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider’s right to share in payments and collections out of the
Collateral as more fully set forth herein. In connection with any such distribution of payments
and collections, Agent shall be entitled to assume no amounts are due to any Bank Product Provider
unless such Bank Product Provider has notified Agent in writing of the amount of any such
liability owed to it prior to such distribution.
- 57 -
17.6 Debtor-Creditor Relationship. The relationship between the Lenders and Agent,
on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor.
No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty
to any Loan Party arising out of or in connection with the Loan Documents or the transactions
contemplated thereby, and there is no agency or joint venture relationship between the members of
the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan
Document or any transaction contemplated therein.
17.7 Counterparts; Electronic Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed and delivered, shall be deemed to be an original, and all of which, when taken together,
shall constitute but one and the same Agreement. Delivery of an executed counterpart of this
Agreement by telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any party delivering
an executed counterpart of this Agreement by telefacsimile or other electronic method of
transmission also shall deliver an original executed counterpart of this Agreement but the failure
to deliver an original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.8 Revival and Reinstatement of Obligations. If the incurrence or payment of the
Obligations by any Borrower or any Guarantor or the transfer to the Lender Group of any property
should for any reason subsequently be asserted, or declared, to be void or voidable under any
state or federal law relating to creditors’ rights, including provisions of the Bankruptcy Code
relating to fraudulent conveyances, preferences, or other voidable or recoverable payments of
money or transfers of property (each, a “Voidable Transfer”), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer, or elects to do so
upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, or the amount
thereof that the Lender Group is required or elects to repay or restore, and as to all reasonable
costs, expenses, and attorneys fees of the Lender Group related thereto, the liability of
Borrowers or Guarantors automatically shall be revived, reinstated, and restored and shall exist
as though such Voidable Transfer had never been made.
17.9 Confidentiality.
(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that
material, non-public information regarding Parent and its Subsidiaries, their operations, assets,
and existing and contemplated business plans shall be treated by Agent and the Lenders in a
confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not
parties to this Agreement, except: (i) to attorneys for and other advisors, accountants, auditors,
and consultants to any member of the Lender Group, (ii) to Subsidiaries and Affiliates of any
member of the Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the
terms of this Section 17.9, (iii) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (iv) as may be agreed to in advance by Administrative
Borrower or as requested or required by any Governmental Authority pursuant to any subpoena or
other legal process, (v) as to any such information that is or becomes generally available to the
public (other than as a result of prohibited disclosure by Agent or the Lenders), (vi) in
connection with any assignment, participation or pledge of any Lender’s interest under this
Agreement, provided that any such assignee, participant, or pledgee shall have agreed in writing to
receive such information hereunder subject to the terms of this Section, and (vii) in connection
with any litigation or other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such parties under this
Agreement or the other Loan Documents.
(b) Anything in this Agreement to the contrary notwithstanding, Agent may provide information
concerning the terms and conditions of this Agreement and the other Loan Documents to loan
syndication and pricing reporting services.
- 58 -
17.10 Lender Group Expenses. Borrowers agree to pay any and all Lender Group
Expenses promptly after demand therefor by Agent and agrees that their obligations contained in
this Section 17.10 shall survive payment or satisfaction in full of all other Obligations.
17.11 USA PATRIOT Act. Each Lender that is subject to the requirements of the Patriot
Act hereby notifies Parent and each Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies Parent and each of its
Subsidiaries, which information includes the name and address of Parent and each of its
Subsidiaries and other information that will allow such Lender to identify Parent and each of its
Subsidiaries in accordance with the Patriot Act.
17.12 Integration. This Agreement, together with the other Loan Documents, reflects
the entire understanding of the parties with respect to the transactions contemplated hereby and
shall not be contradicted or qualified by any other agreement, oral or written, before the date
hereof.
17.13 MedQuist Transcriptions, Ltd. as Agent for Borrowers. Each Borrower hereby
irrevocably appoints MedQuist Transcriptions, Ltd. as the borrowing agent and attorney-in-fact for
all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force
and effect unless and until Agent shall have received prior written notice signed by each Borrower
that such appointment has been revoked and that another Borrower has been appointed Administrative
Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower
(a) to provide Agent with all notices with respect to Advances and Letters of Credit obtained for
the benefit of any Borrower and all other notices and instructions under this Agreement and (b) to
take such action as the Administrative Borrower deems appropriate on its behalf to obtain Advances
and Letters of Credit and to exercise such other powers as are reasonably incidental thereto to
carry out the purposes of this Agreement. It is understood that the handling of the Loan Account
and Collateral of Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers
in the most efficient and economical manner and at their request, and that the Lender Group shall
not incur liability to any Borrower or any other Person as a result hereof. Each Borrower expects
to derive benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower is dependent on
the continued successful performance of the integrated group. To induce the Lender Group to do
so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify
each member of the Lender Group and hold each member of the Lender Group harmless against any and
all liability, expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of (i) the handling
of the Loan Account and Collateral of Borrowers as herein provided, (ii) the Lender Group’s
relying on any instructions of the Administrative Borrower, or (iii) any other action taken by the
Lender Group hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under this Section
17.13 with respect to any liability that has been finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be.
[Signature pages to follow.]
- 59 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered
as of the date first above written.
| MEDQUIST INC., a New Jersey corporation, as Parent |
||||
| By: | ||||
| Title: | ||||
| MEDQUIST CM LLC, a Delaware limited liability company, as a Borrower |
||||
| By: | ||||
| Title: | ||||
| MEDQUIST IP LLC, a Delaware limited liability company, as a Borrower |
||||
| By: | ||||
| Title: | ||||
| MEDQUIST TRANSCRIPTIONS, LTD., a New Jersey corporation, as a Borrower |
||||
| By: | ||||
| Title: | ||||
| XXXXX FARGO FOOTHILL, LLC, a Delaware limited liability company, as Agent and as a Lender |
||||
| By: | ||||
| Title: | ||||
TABLE OF CONTENTS
| Page | ||||||
| 1. | DEFINITIONS
AND CONSTRUCTION |
1 | ||||
1.1 Definitions |
1 | |||||
1.2 Accounting Terms |
1 | |||||
1.3 Code |
1 | |||||
1.4 Construction |
1 | |||||
1.5 Subsidiaries |
2 | |||||
1.6 Schedules and Exhibits |
2 | |||||
| 2. | LOAN AND
TERMS OF PAYMENT |
3 | ||||
2.1 Revolver Advances |
3 | |||||
2.2 Reserves |
3 | |||||
2.3 Borrowing Procedures and Settlements |
3 | |||||
2.4 Payments; Reductions of Commitments; Prepayments |
7 | |||||
2.5 Overadvances |
10 | |||||
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations |
10 | |||||
2.7 Crediting Payments; Clearance Charge |
11 | |||||
2.8 Designated Account |
12 | |||||
2.9 Maintenance of Loan Account; Statements of Obligations |
12 | |||||
2.10 Fees |
12 | |||||
2.11 Letters of Credit |
13 | |||||
2.12 LIBOR Option |
15 | |||||
2.13 Capital Requirements |
17 | |||||
2.14 Joint and Several Liability of Borrowers |
18 | |||||
2.15 Increase in Commitments |
20 | |||||
| 3. | CONDITIONS; TERM OF AGREEMENT |
22 | ||||
3.1 Conditions Precedent to the Initial Extension of Credit |
22 | |||||
3.2 Conditions Precedent to all Extensions of Credit |
22 | |||||
3.3 Conditions Subsequent to Effectiveness |
22 | |||||
3.4 Term |
22 | |||||
3.5 Effect of Termination |
22 | |||||
3.6 Early Termination by Borrowers |
23 | |||||
| 4. | REPRESENTATIONS AND WARRANTIES. |
23 | ||||
4.1 Due Organization and Qualification; Subsidiaries |
23 | |||||
4.2 Due Authorization; No Conflict |
24 | |||||
4.3 Governmental Consents |
24 | |||||
4.4 Binding Obligations; Perfected Liens |
24 | |||||
- i -
Table of Contents
(continued)
(continued)
| Page | ||||||
4.5 Title to Assets; No Encumbrances |
24 | |||||
4.6 Jurisdiction of Organization; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort
Claims |
25 | |||||
4.7 Litigation |
25 | |||||
4.8 Compliance with Laws |
25 | |||||
4.9 No Material Adverse Change |
25 | |||||
4.10 Fraudulent Transfer |
25 | |||||
4.11 Employee Benefits |
26 | |||||
4.12 Environmental Condition |
26 | |||||
4.13 Intellectual Property |
26 | |||||
4.14 Leases |
26 | |||||
4.15 Deposit Accounts and Securities Accounts |
26 | |||||
4.16 Complete Disclosure |
26 | |||||
4.17 Material Contracts |
27 | |||||
4.18 Patriot Act |
27 | |||||
4.19 Indebtedness |
27 | |||||
4.20 Payment of Taxes |
27 | |||||
4.21 Margin Stock |
28 | |||||
4.22 Governmental Regulation |
28 | |||||
4.23 OFAC |
28 | |||||
4.24 Holding Company; Inactive Subsidiary |
28 | |||||
4.25 Eligible Accounts |
28 | |||||
4.26 Location of Inventory and Equipment |
28 | |||||
4.27 Inventory Records |
28 | |||||
4.28 Customers and Suppliers |
28 | |||||
4.29 HIPAA |
29 | |||||
4.30 Health Laws and Regulations |
29 | |||||
| 5. | AFFIRMATIVE COVENANTS |
30 | ||||
5.1 Financial Statements, Reports, Certificates |
30 | |||||
5.2 Collateral Reporting |
30 | |||||
5.3 Existence |
30 | |||||
5.4 Maintenance of Properties |
30 | |||||
5.5 Taxes |
31 | |||||
5.6 Insurance |
31 | |||||
5.7 Inspection |
31 | |||||
- ii -
Table of Contents
(continued)
(continued)
| Page | ||||||
5.8 Compliance with Laws |
31 | |||||
5.9 Environmental |
31 | |||||
5.10 Disclosure Updates |
32 | |||||
5.11 Formation of Subsidiaries |
32 | |||||
5.12 Further Assurances |
33 | |||||
5.13 Lender Meetings |
33 | |||||
5.14 Material Contracts |
33 | |||||
5.15 Location of Inventory and Equipment |
33 | |||||
5.16 HIPAA; HITECH Act; Healthcare Laws |
33 | |||||
5.17 Health Laws and Regulations |
34 | |||||
| 6. | NEGATIVE COVENANTS |
34 | ||||
6.1 Indebtedness |
34 | |||||
6.2 Liens |
34 | |||||
6.3 Restrictions on Fundamental Changes |
34 | |||||
6.4 Disposal of Assets |
34 | |||||
6.5 Change Name |
35 | |||||
6.6 Nature of Business |
35 | |||||
6.7 Prepayments and Amendments |
35 | |||||
6.8 Change of Control |
35 | |||||
6.9 Distributions |
35 | |||||
6.10 Accounting Methods |
36 | |||||
6.11 Investments |
36 | |||||
6.12 Transactions with Affiliates |
37 | |||||
6.13 Use of Proceeds |
37 | |||||
6.14 Holding Company; Inactive Subsidiary |
38 | |||||
6.15 Consignments |
38 | |||||
6.16 Inventory and Equipment with Bailees |
38 | |||||
| 7. | FINANCIAL COVENANTS |
38 | ||||
| 8. | EVENTS OF DEFAULT |
39 | ||||
| 9. | RIGHTS AND REMEDIES |
41 | ||||
9.1 Rights and Remedies |
41 | |||||
9.2 Remedies Cumulative |
41 | |||||
| 10. | WAIVERS; INDEMNIFICATION |
42 | ||||
- iii -
Table of Contents
(continued)
(continued)
| Page | ||||||
10.1 Demand; Protest; etc |
42 | |||||
10.2 The Lender Group’s Liability for Xxxxxxxxxx |
00 | |||||
00.0 Xxxxxxxxxxxxxxx |
00 | |||||
| 00. | NOTICES |
42 | ||||
| 12. | CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER |
43 | ||||
| 13. | ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS |
44 | ||||
13.1 Assignments and Participations |
44 | |||||
13.2 Successors |
47 | |||||
| 14. | AMENDMENTS; WAIVERS |
47 | ||||
14.1 Amendments and Waivers |
47 | |||||
14.2 Replacement of Holdout Lender |
48 | |||||
14.3 No Waivers; Cumulative Remedies |
48 | |||||
| 15. | AGENT; THE LENDER GROUP |
49 | ||||
15.1 Appointment and Authorization of Agent |
49 | |||||
15.2 Delegation of Duties |
49 | |||||
15.3 Liability of Agent |
49 | |||||
15.4 Reliance by Agent |
50 | |||||
15.5 Notice of Default or Event of Default |
50 | |||||
15.6 Credit Decision |
50 | |||||
15.7 Costs and Expenses; Indemnification |
51 | |||||
15.8 Agent in Individual Capacity |
51 | |||||
15.9 Successor Agent |
51 | |||||
15.10 Lender in Individual Capacity |
52 | |||||
15.11 Collateral Matters |
52 | |||||
15.12 Restrictions on Actions by Lenders; Sharing of Payments |
53 | |||||
15.13 Agency for Perfection |
53 | |||||
15.14 Payments by Agent to the Lenders |
53 | |||||
15.15 Concerning the Collateral and Related Loan Documents |
53 | |||||
15.16 Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information |
53 | |||||
15.17 Several Obligations; No Liability |
54 | |||||
| 16. | WITHHOLDING TAXES |
55 | ||||
| 17. | GENERAL PROVISIONS |
57 | ||||
- iv -
Table of Contents
(continued)
(continued)
| Page | ||||||
17.1 Effectiveness |
57 | |||||
17.2 Section Headings |
57 | |||||
17.3 Interpretation |
57 | |||||
17.4 Severability of Provisions |
57 | |||||
17.5 Bank Product Providers |
57 | |||||
17.6 Debtor-Creditor Relationship |
58 | |||||
17.7 Counterparts; Electronic Execution |
58 | |||||
17.8 Revival and Reinstatement of Obligations |
58 | |||||
17.9 Confidentiality |
58 | |||||
17.10 Lender Group Expenses |
59 | |||||
17.11 USA PATRIOT Act |
59 | |||||
17.12 Integration |
59 | |||||
17.13 MedQuist Transcriptions, Ltd. as Agent for Borrowers |
59 | |||||
- v -
EXHIBITS AND SCHEDULES
Exhibit A-1
|
Form of Assignment and Acceptance | |
Exhibit B-1
|
Form of Borrowing Base Certificate | |
Exhibit C-1
|
Form of Compliance Certificate | |
Exhibit L-1
|
Form of LIBOR Notice | |
Schedule A-1
|
Agent’s Account | |
Schedule A-2
|
Authorized Persons | |
Schedule C-1
|
Commitments | |
Schedule D-1
|
Designated Account | |
Schedule G-1
|
Guarantors | |
Schedule P-1
|
Permitted Intercompany Advances | |
Schedule P-2
|
Permitted Investments | |
Schedule P-3
|
Permitted Liens | |
Schedule 1.1
|
Definitions | |
Schedule 3.1
|
Conditions Precedent | |
Schedule 3.3
|
Conditions Subsequent | |
Schedule 4.1(b)
|
Capitalization of Parent | |
Schedule 4.1(c)
|
Capitalization of Parent’s Subsidiaries | |
Schedule 4.6(a)
|
States of Organization | |
Schedule 4.6(b)
|
Chief Executive Offices | |
Schedule 4.6(c)
|
Organizational Identification Numbers | |
Schedule 4.6(d)
|
Commercial Tort Claims | |
Schedule 4.12
|
Environmental Matters | |
Schedule 4.13
|
Intellectual Property | |
Schedule 4.15
|
Deposit Accounts and Securities Accounts | |
Schedule 4.17
|
Material Contracts | |
Schedule 4.19
|
Permitted Indebtedness | |
Schedule 4.26
|
Locations of Inventory and Equipment | |
Schedule 4.30
|
Health Laws and Regulations | |
Schedule 5.1
|
Financial Statements, Reports, Certificates | |
Schedule 5.2
|
Collateral Reporting | |
Schedule 6.6
|
Nature of Business | |
Schedule 6.12
|
Transactions with Affiliates |
Schedule A-1
Agent’s Account
An account at a bank designated by Agent from time to time as the account into which Borrower
shall make all payments to Agent for the benefit of the Lender Group and into which the Lender
Group shall make all payments to Agent under the Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the contrary, Agent’s Account
shall be that certain deposit account bearing account number 4121624308 and maintained by Agent
with Xxxxx Fargo Bank, N.A., San Francisco, CA, ABA #XXXXXXXXXXX.
Schedule C-1
Commitments
| Lender | Revolver Commitment | Total Commitment | ||||||
Xxxxx Fargo Foothill, LLC |
$ | 25,000,000 | $ | 25,000,000 | ||||
All Lenders |
$ | 25,000,000 | $ | 25,000,000 | ||||
Schedule G-1
Guarantors
MedQuist of Delaware, Inc.
Schedule 1.1
As used in the Agreement, the following terms shall have the following definitions:
“Account” means an account (as that term is defined in the Code).
“Account Debtor” means any Person who is obligated on an Account, chattel paper, or a
general intangible.
“ACH Transactions” means any cash management or related services (including the
Automated Clearing House processing of electronic fund transfers through the direct Federal Reserve
Fedline system) provided by a Bank Product Provider for the account of Parent or its Subsidiaries.
“Accommodation Charge” means any reduction of the selling price of any Loan Parties’
services pursuant to the Accommodation Program.
“Accommodation Program” means a program established by the Loan Parties in response to
customers’ concerns regarding historical billing practices, pursuant to which such Loan Parties
offer financial accommodations to certain customers on an individualized basis in an effort to
reach a settlement with such customers.
“Acquired Indebtedness” means Indebtedness of a Person whose assets or Stock is
acquired by Parent or any of its Subsidiaries in a Permitted Acquisition, provided that such
Indebtedness (a) is either Purchase Money Indebtedness or a Capital Lease with respect to Equipment
or mortgage financing with respect to Real Property, and (b) was not incurred in connection with,
or in contemplation of, such Permitted Acquisition.
“Acquisition” means (a) a Stock Acquisition, or (b) an Asset Acquisition, as the
context requires.
“Additional Commitment Lender” has the meaning specified therefor in Section
2.15 of the Agreement.
“Additional Documents” has the meaning specified therefor in Section 5.12 of
the Agreement.
“Administrative Borrower” has the meaning specified therefor in Section 17.13
of the Agreement.
“Advances” has the meaning specified therefor in Section 2.1(a) of the
Agreement.
“Affected Lender” has the meaning specified therefor in Section 2.13(b) of the
Agreement.
“Affiliate” means, as applied to any Person, any other Person who controls, is
controlled by, or is under common control with, such Person. For purposes of this definition,
“control” means the possession, directly or indirectly through one or more intermediaries, of the
power to direct the management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of the definition of
Eligible Accounts and Section 6.12 of the Agreement: (a) any Person which owns directly or
indirectly 10% or more of the Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the partnership or other
ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an
Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner
shall be deemed an Affiliate of such Person.
Schedule 1.1-1
“Agent” has the meaning specified therefor in the preamble to the Agreement.
“Agent-Related Persons” means Agent, together with its Affiliates, officers,
directors, employees, attorneys, and agents.
“Agent’s Account” means the Deposit Account of Agent identified on Schedule
A-1.
“Agent’s Liens” means the Liens granted by Parent or its Subsidiaries to Agent under
the Loan Documents.
“Agreement” means the Credit Agreement to which this Schedule 1.1 is attached.
“Application Event” means the occurrence of (a) a failure by Borrowers to repay all of
the Obligations on the Maturity Date, or (b) an Event of Default and the election by Agent or the
Required Lenders to require that payments and proceeds of Collateral be applied pursuant to
Section 2.4(b)(ii) of the Agreement.
“Asset Acquisition” means the purchase or other acquisition by a Person or its
Subsidiaries of all or substantially all of the assets of (or any division or business line of) any
other Person.
“Assignee” has the meaning specified therefor in Section 13.1(a) of the
Agreement.
“Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially
in the form of Exhibit A-1.
“Authorized Person” means any one of the individuals identified on Schedule
A-2.
“Availability” means, as of any date of determination, the amount that Borrowers are
entitled to borrow as Advances under Section 2.1 of the Agreement (after giving effect to
all then outstanding Obligations (other than Bank Product Obligations)).
“Availability Block” means (a) during the period from the Closing Date to the Increase
Effective Date, $4,000,000 and (b) from and after the Increase Effective Date, $6,000,000;
provided that the amount of the Availability Block specified in this clause (b) shall be
reduced to $4,500,000 on any date after the one year anniversary of the Closing Date so long as (i)
no Default or Event of Default shall have occurred and be continuing either before or after giving
effect to such reduction and (2) Borrowers shall have Excess Availability plus Qualified Cash in an
aggregate amount of not less than $20,000,000 both before and after giving effect to such
reduction.
“Average Excess Availability” means, as of any date of determination, the sum of (a)
the average of the Excess Availability for the 30 day period prior to the date of determination
plus (b) the average of the aggregate amount of Qualified Cash of the Loan Parties for the 30-day
period prior to the date of determination.
“Bank Product” means any financial accommodation extended to Parent or its
Subsidiaries by a Bank Product Provider (other than pursuant to the Agreement) including: (a)
credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) ACH
Transactions, (f) cash management, including controlled disbursement, accounts or services, or (g)
transactions under Hedge Agreements.
“Bank Product Agreements” means those agreements entered into from time to time by
Parent or its Subsidiaries with a Bank Product Provider in connection with the obtaining of any of
the Bank Products.
Schedule 1.1-2
“Bank Product Collateralization” means providing cash collateral (pursuant to
documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank
Product Providers in an amount determined by Agent as sufficient to satisfy the reasonably
estimated credit exposure with respect to the then existing Bank Products.
“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement
obligations, fees, or expenses owing by Parent or its Subsidiaries to any Bank Product Provider
pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and (b) all amounts that Parent or its Subsidiaries are obligated to reimburse
to Agent or any member of the Lender Group as a result of Agent or such member of the Lender Group
purchasing participations from, or executing guarantees or indemnities or reimbursement obligations
to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product
Provider to Parent or its Subsidiaries.
“Bank Product Provider” means Xxxxx Fargo or any of its Affiliates.
“Bank Product Reserve” means, as of any date of determination, the amount of reserves
that Agent has established (based upon the Bank Product Providers’ reasonable determination of the
credit exposure of Parent and its Subsidiaries in respect of Bank Products) in respect of Bank
Products then provided or outstanding.
“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to
time.
“Base LIBOR Rate” means the greater of (a) 2.50 percent per annum, and (b) the rate
per annum, determined by Agent in accordance with its customary procedures, and utilizing such
electronic or other quotation sources as it considers appropriate, to be the rate at which Dollar
deposits (for delivery on the first day of the requested Interest Period) are offered to major
banks in the London interbank market 2 Business Days prior to the commencement of the requested
Interest Period, for a term and in an amount comparable to the Interest Period and the amount of
the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan or as a continuation of a
LIBOR Rate Loan or as a conversion of a Base Rate Loan to a LIBOR Rate Loan) by Borrower in
accordance with the Agreement, which determination shall be conclusive in the absence of manifest
error.
“Base Rate” means the greatest of (a) 3.00 percent per annum, (b) the Federal Funds
Rate plus 1/2%, (c) the LIBOR Rate (which rate shall be calculated based upon an Interest Period of 3
months and shall be determined on a daily basis) plus 1.00% and (d) the rate of interest announced,
from time to time, within Xxxxx Fargo at its principal office in San Francisco as its “prime rate”,
with the understanding that the “prime rate” is one of Xxxxx Fargo’s base rates (not necessarily
the lowest of such rates) and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto and is evidenced by the recording thereof after
its announcement in such internal publications as Xxxxx Fargo may designate.
“Base Rate Loan” means the portion of the Advances that bears interest at a rate
determined by reference to the Base Rate.
“Base Rate Margin” means, as of any date of determination (with respect to any portion
of the outstanding Advances on such date that is a Base Rate Loan), the applicable margin set forth
in the following table that corresponds to the most recent Average Excess Availability calculation
performed by Agent (the “Average Excess Availability Calculation”); provided,
however, that (a) for the period from the Closing Date through the date Agent performs the
Average Excess Availability Calculation in respect of the testing period ending September 30, 2009,
the Base Rate Margin shall be at the margin in the row styled “Level II”, and (b) at any time that
a Default or an Event of Default shall have occurred and be continuing, the Base Rate Margin shall
be at the margin in the row styled “Level I”:
Schedule 1.1-3
| Average Excess Availability | ||||
| Level | Calculation | Base Rate Margin | ||
I
|
If the Average Excess Availability is less than or equal to $20,000,000 | 4.00 percentage points | ||
II
|
If the Average Excess Availability is greater than $20,000,000 | 3.75 percentage points |
Except as set forth in the foregoing proviso, the Base Rate Margin shall be based upon the
most recent determination by Agent of the Average Excess Availability Calculation, which will be
calculated as of the end of each fiscal quarter. Except as set forth in the foregoing proviso, the
Base Rate Margin shall be re-determined quarterly on the first day of the month following the date
of delivery by Parent and its Subsidiaries to Agent of the report described in clause (i)
of Schedule 5.2 of the Agreement; provided, however, that if Parent and its
Subsidiaries fail to provide such report when such report is due, the Base Rate Margin shall be set
at the margin in the row styled “Level I” as of the first day of the month following the date on
which such report was required to be delivered until the date on which such report is delivered (on
which date (but not retroactively), without constituting a waiver of any Default or Event of
Default occasioned by the failure to timely deliver such report, the Base Rate Margin shall be set
at the margin based upon the Average Excess Availability Calculation determined by Agent based upon
the information contained in such report. In the event that the information used by Agent to
perform the Average Excess Availability Calculation contained in any such report is shown to be
inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Base
Rate Margin for any period (a “Base Rate Period”) than the Base Rate Margin actually
applied for such Base Rate Period, then (i) Administrative Borrower shall immediately deliver to
Agent a correct report for such Base Rate Period, (ii) the Base Rate Margin shall be determined as
if the correct Base Rate Margin (as set forth in the table above) were applicable for such Base
Rate Period, and (iii) Administrative Borrower shall immediately deliver to Agent full payment in
respect of the accrued additional interest as a result of such increased Base Rate Margin for such
Base Rate Period, which payment shall be promptly applied by Agent to the affected Obligations.
“Benefit Plan” means a “defined benefit plan” (as defined in Section 3(35) of ERISA)
for which Parent or any of its Subsidiaries or ERISA Affiliates has been an “employer” (as defined
in Section 3(5) of ERISA) within the past six years.
“Board of Directors” means the board of directors (or comparable managers) of Parent
or any committee thereof duly authorized to act on behalf of the board of directors (or comparable
managers).
“Borrower” and “Borrowers” have the meaning specified therefor in the preamble
to the Agreement.
“Borrowing” means a borrowing hereunder consisting of Advances made on the same day by
the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by
Agent in the case of a Protective Advance.
“Borrowing Base” means, as of any date of determination, the result of:
| (a) | 85% of the amount of Eligible Accounts, less the amount, if any, of the Dilution Reserve, minus | ||
| (b) | the Availability Block, minus |
Schedule 1.1-4
| (c) the sum of (i) the Bank Product Reserve, and (ii) the aggregate amount of reserves, if any, established by Agent under Section 2.2 of the Agreement. | ||||
“Borrowing Base Certificate” means a certificate in the form of Exhibit
B-1.
“Business Day” means any day that is not a Saturday, Sunday, or other day on which
banks are authorized or required to close in the state of New York, except that, if a determination
of a Business Day shall relate to a LIBOR Rate Loan, the term “Business Day” also shall exclude any
day on which banks are closed for dealings in Dollar deposits in the London interbank market.
“Capital Expenditures” means, with respect to any Person for any period, the aggregate
of all expenditures by such Person and its Subsidiaries during such period that are capital
expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or
financed, which expenditures are, as of the Closing Date, reflected on the statements of cash flows
of Parent and its Subsidiaries required to be delivered to Agent and Lenders pursuant to Section
5.1 under the line items “Purchases of property and equipment, net” and “Capitalized software.”
“Capitalized Lease Obligation” means that portion of the obligations under a Capital
Lease that is required to be capitalized in accordance with GAAP.
“Capital Lease” means a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
“Cash Equivalents” means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the
full faith and credit of the United States, in each case maturing within 1 year from the date of
acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of
the United States or any political subdivision of any such state or any public instrumentality
thereof maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating
Group (“S&P”) or Xxxxx’x Investors Service, Inc. (“Moody’s”), (c) commercial paper maturing no more
than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of
at least A-1 from S&P or at least P-1 from Moody’s, (d) certificates of deposit, time deposits,
overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition
thereof issued by any bank organized under the laws of the United States or any state thereof or
the District of Columbia or any United States branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit
Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or
(ii) any other bank organized under the laws of the United States or any state thereof so long as
the full amount maintained with any such other bank is insured by the Federal Deposit Insurance
Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of
clause (d) of this definition or recognized securities dealer having combined capital and surplus
of not less than $250,000,000, having a term of not more than seven days, with respect to
securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities
of six months or less from the date of acquisition backed by standby letters of credit issued by
any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in
money market funds substantially all of whose assets are invested in the types of assets described
in clauses (a) through (g) above.
“CFC” means a controlled foreign corporation (as that term is defined in the IRC).
“Change of Control” means that (a) any “person” or “group” (within the meaning of
Sections 13(d) and 14(d) of the Exchange Act) other than the Equity Sponsor or its Affiliates
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 20%, or more, of the Stock of Parent having the right to vote for the election of
members of the Board of Directors, (b) a majority of the
Schedule 1.1-5
members of the Board of Directors do not constitute Continuing Directors, or (c) Parent fails
to own and control, directly or indirectly, 100% of the Stock of each of its Subsidiaries.
“Closing Date” means the date of the making of the initial Advance (or other extension
of credit) hereunder.
“Code” means the New York Uniform Commercial Code, as in effect from time to time.
“Collateral” means all assets and interests in assets and proceeds thereof now owned
or hereafter acquired by Parent or its Subsidiaries in or upon which a Lien is granted by such
Person in favor of Agent or the Lenders under any of the Loan Documents.
“Collateral Access Agreement” means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in
possession of, having a Lien upon, or having rights or interests in Parent’s or its Subsidiaries’
books and records, Equipment or Inventory, in each case, in form and substance reasonably
satisfactory to Agent.
“Collections” means all cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, cash proceeds of asset sales, rental proceeds, and tax refunds).
“Commitment” means, with respect to each Lender, its Revolver Commitment or its Total
Commitment, as the context requires, and, with respect to all Lenders, their Revolver Commitments
or their Total Commitments, as the context requires, in each case as such Dollar amounts are set
forth beside such Lender’s name under the applicable heading on Schedule C-1 or in the
Assignment and Acceptance pursuant to which such Lender became a Lender hereunder, as such amounts
may be reduced or increased from time to time pursuant to assignments made in accordance with the
provisions of Section 13.1 of the Agreement.
“Commitment Increase” has the meaning specified therefor in Section 2.15 of
the Agreement.
“Compliance Certificate” means a certificate substantially in the form of Exhibit
C-1 delivered by the chief financial officer of Parent to Agent.
“Continuing Director” means (a) any member of the Board of Directors who was a
director (or comparable manager) of Parent on the Closing Date, and (b) any individual who becomes
a member of the Board of Directors after the Closing Date if such individual was approved,
appointed or nominated for election to the Board of Directors by a majority of the Continuing
Directors, but excluding any such individual originally proposed for election in opposition to the
Board of Directors in office at the Closing Date in an actual or threatened election contest
relating to the election of the directors (or comparable managers) of Parent and whose initial
assumption of office resulted from such contest or the settlement thereof.
“Contribution Agreement” means a contribution agreement executed and delivered by each
Loan Party, the form and substance of which is satisfactory to Agent.
“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Parent or one of its Subsidiaries, Agent, and the
applicable securities intermediary (with respect to a Securities Account) or bank (with respect to
a Deposit Account).
“Controlled Account Agreement” has the meaning specified therefor in the Security
Agreement.
“Copyright Security Agreement” has the meaning specified therefor in the Security
Agreement.
Schedule 1.1-6
“Daily Balance” means, as of any date of determination and with respect to any
Obligation, the amount of such Obligation owed at the end of such day.
“Default” means an event, condition, or default that, with the giving of notice, the
passage of time, or both, would be an Event of Default.
“Defaulting Lender” means any Lender that fails to make any Advance (or other
extension of credit) that it is required to make hereunder on the date that it is required to do so
hereunder.
“Defaulting Lender Rate” means (a) for the first 3 days from and after the date the
relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to
Advances that are Base Rate Loans (inclusive of the Base Rate Margin applicable thereto).
“Deposit Account” means any deposit account (as that term is defined in the Code).
“Designated Account” means the Deposit Account of Administrative Borrower identified
on Schedule D-1.
“Designated Account Bank” has the meaning specified therefor in Schedule D-1.
“Dilution” means, as of any date of determination, a percentage, based upon the
experience of the immediately prior 90 consecutive days, that is the result of dividing the Dollar
amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive
items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ xxxxxxxx with
respect to Accounts during such period.
“Dilution Reserve” means, as of any date of determination, an amount sufficient to
reduce the advance rate against Eligible Accounts by 1 percentage point for each percentage point
by which Dilution is in excess of 5%.
“Dollars” or “$” means United States dollars.
“EBITDA” means, with respect to any fiscal period, the result of (a) Parent’s
consolidated net earnings (or loss) for such period determined on a consolidated basis in
accordance with GAAP, but excluding the earnings (or loss) of any Specified Subsidiary and A-Life
Medical, Inc., plus (b) the sum of the following amounts for such period and to the extent deducted
in determining net earnings (or loss) for such period: (i) interest expense, (ii) income tax
expense, (iii) depreciation expense, (iv) amortization expense, (v) non-cash extraordinary losses,
(vi) Excess Legacy Legal Fees, (vii) Legacy Litigation Settlements, (viii) fees and expenses
incurred in connection with Permitted Acquisitions in an aggregate amount not to exceed $1,000,000
during the term of the Agreement, (ix) any non-cash restructuring charges (including but not
limited to non-cash severance costs), (x) non-cash amortization and impairment charges, (xi)
non-cash compensation charges and deferred compensation charges (including but not limited to stock
based compensation and compensation in respect of any long term incentive plan), (xii) non-cash
translation losses with respect to foreign currency fluctuations or with respect to any hedging
activity, minus (c) the sum of the following amounts for such period: (i) any
extraordinary gains and (ii) non-cash translation gains with respect to foreign currency
fluctuations or with respect to any hedging activity.
“Eligible Accounts” means those Accounts created by a Borrower in the ordinary course
of its business, that arise out of such Borrower’s sale of goods or rendition of services, that
comply with each of the representations and warranties respecting Eligible Accounts made in the
Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, however, that such criteria may be revised from
time to time by Agent in Agent’s Permitted Discretion to address the results of any audit performed
by Agent from time to time after the Closing Date. In determining the amount
Schedule 1.1-7
to be included, Eligible Accounts shall be calculated net of customer deposits and unapplied
cash. Eligible Accounts shall not include the following:
(a) Accounts (i) that the Account Debtor has failed to pay within 90 days of original invoice
date, (ii) with selling terms of more than 60 days or (iii) that are more than 60 days past due
(other than (A) Accounts of Xxxxxx Xxxxxx (ABLEH) and University of Miami Medical Group in an
aggregate amount not to exceed $250,000, to the extent that (1) such Account Debtor has failed to
pay such Accounts more than 90 days (but not more than 120 days) of original invoice date or (2)
such Accounts have selling terms of more than 60 days (but not more than 90 days), provided that in
each case of clauses (1) and (2), such Accounts are not more than 60 days past due),
(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts
owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an Affiliate of a Borrower or an
employee or agent of a Borrower or any Affiliate of a Borrower,
(d) Accounts arising in a transaction wherein goods are placed on consignment or are sold
pursuant to a guaranteed sale, a sale or return, a sale on approval, a xxxx and hold, or any other
terms by reason of which the payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief
executive office in the United States or Canada, or (ii) is not organized under the laws of the
United States, any state thereof, Canada or any province thereof, or (iii) is the government of any
foreign country or sovereign state, or of any state, province, municipality, or other political
subdivision thereof, or of any department, agency, public corporation, or other instrumentality
thereof, unless (y) the Account is supported by an irrevocable letter of credit reasonably
satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been
delivered to Agent and is directly drawable by Agent, or (z) the Account is covered by credit
insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,
(g) Accounts with respect to which the Account Debtor is either (i) the United States or any
department, agency, or instrumentality of the United States (exclusive, however, of Accounts with
respect to which the applicable Borrower has complied, to the reasonable satisfaction of Agent,
with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States,
(h) Accounts (i) that are subject to customer debit memos, chargebacks or volume rebates to
the extent of such customer debit memo, chargeback or volume rebate or (ii) with respect to which
the Account Debtor is a creditor of a Borrower, has or has asserted a right of setoff or
Accommodation Charge, or has disputed its obligation to pay all or any portion of the Account, to
the extent of such claim, right of setoff, Accommodation Charge or dispute,
(i) Accounts with respect to an Account Debtor whose total obligations owing to Borrowers
exceed 10% (such percentage, as applied to a particular Account Debtor, being subject to reduction
by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates)
of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess
of such percentage; provided, however, that, in each case, the amount of Eligible
Accounts that are excluded because they exceed the foregoing percentage shall be determined by
Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations
based upon the foregoing concentration limit,
Schedule 1.1-8
(j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding,
is not Solvent, has gone out of business, or as to which a Borrower has received notice of an
imminent Insolvency Proceeding or a material impairment of the financial condition of such Account
Debtor,
(k) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be
doubtful by reason of the Account Debtor’s financial condition,
(l) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,
(m) Accounts with respect to which (i) the goods giving rise to such Account have not been
shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not
been performed and billed to the Account Debtor,
(n) Accounts with respect to which the Account Debtor is a Sanctioned Person or Sanctioned
Entity,
(o) Accounts that represent deferred revenue, the right to receive progress payments or other
advance xxxxxxxx that are due prior to the completion of performance by the applicable Borrower of
the subject contract for goods or services; or
(p) Accounts created by a Specified Subsidiary that was designated as a Subsidiary in
accordance with Section 1.5(c) until such time as Agent has completed due diligence and any
other appraisals and examinations with respect to such Person and its Accounts that it deems
reasonably necessary, and the results of which are reasonably satisfactory to Agent .
“Eligible Transferee” means (a) a commercial bank organized under the laws of the
United States, or any state thereof, and having total assets in excess of $250,000,000, (b) a
commercial bank organized under the laws of any other country which is a member of the Organization
for Economic Cooperation and Development or a political subdivision of any such country and which
has total assets in excess of $250,000,000, provided that such bank is acting through a branch or
agency located in the United States, (c) a finance company, insurance company, or other financial
institution or fund that is engaged in making, purchasing, or otherwise investing in commercial
loans in the ordinary course of its business and having (together with its Affiliates) total assets
in excess of $250,000,000, (d) any Person that is a Lender or an Affiliate (other than individuals)
of a Lender, (e) so long as no Default or Event of Default has occurred and is continuing, any
other Person approved by Agent and Administrative Borrower (such approval by Administrative
Borrower not to be unreasonably withheld, conditioned or delayed), and (f) during the continuation
of a Default or an Event of Default, any other Person approved by Agent.
“Environmental Action” means any written complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative proceeding,
judgment, letter, or other written communication from any Governmental Authority, or any third
party involving violations of Environmental Laws or releases of Hazardous Materials from (a) any
assets, properties, or businesses of any Borrower, any Subsidiary of a Borrower, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of a
Borrower, or any of their predecessors in interest.
“Environmental Law” means any applicable federal, state, provincial, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and
enforceable written policy, or rule of common law now or hereafter in effect and in each case as
amended, or any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent binding on Parent or
its Subsidiaries, relating to the environment, the effect of the environment on employee health, or
Hazardous Materials, in each case as amended from time to time.
Schedule 1.1-9
“Environmental Liabilities” means all liabilities, monetary obligations, losses,
damages, punitive damages, consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental Authority or any
third party, and which relate to any Environmental Action.
“Environmental Lien” means any Lien in favor of any Governmental Authority for
Environmental Liabilities.
“Equipment” means equipment (as that term is defined in the Code).
“Equity Sponsor” means S.A.C. PEI CB Investment L.P.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any
successor statute thereto.
“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as
employed by the same employer as the employees of Parent or its Subsidiaries under IRC Section
414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the
same employer as the employees of Parent or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA
that is a member of an affiliated service group of which Parent or any of its Subsidiaries is a
member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412
of the IRC, any Person subject to ERISA that is a party to an arrangement with Parent or any of its
Subsidiaries and whose employees are aggregated with the employees of Parent or its Subsidiaries
under IRC Section 414(o).
“Event of Default” has the meaning specified therefor in Section 8 of the
Agreement.
“Excess Legacy Legal Fees” means legal fees and expenses relating to any litigation as
disclosed in Parent’s Form-10K as of December 31, 2008 or Form 10Q as of March 31, 2009 and paid on
or prior to June 30, 2009, in an aggregate amount not to exceed $6,000,000.
“Excess Availability” means, as of any date of determination, the amount equal to
Availability minus the aggregate amount, if any, of all trade payables of Parent and its
Subsidiaries aged in excess of historical levels with respect thereto and all book overdrafts of
Parent and its Subsidiaries in excess of historical practices with respect thereto, in each case as
determined by Agent in its Permitted Discretion.
“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to
time.
“Extraordinary Receipts” means any cash received by Parent or any of its Subsidiaries
not in the ordinary course of business (and not consisting of proceeds described in Section
2.4(e)(i) of the Agreement) consisting of (a) proceeds of judgments, proceeds of settlements or
other consideration of any kind in connection with any cause of action, (b) indemnity payments
(other than to the extent such indemnity payments are (i) immediately payable to a Person that is
not an Affiliate of Parent or any of its Subsidiaries, or (ii) received by Parent or any of its
Subsidiaries as reimbursement for any payment previously made to such Person), and (c) any purchase
price adjustment (other than a working capital adjustment) received in connection with any purchase
agreement.
“Fee Letter” means that certain fee letter by and among Borrowers and Agent, in form
and substance reasonably satisfactory to Agent.
Schedule 1.1-10
“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal to, for each day during such period, 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
such day on such transactions received by Agent from three Federal funds brokers of recognized
standing selected by it.
“Fixed Charges” means, with respect to any fiscal period and with respect to Parent
determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a)
Net Interest Expense accrued during such period, (b) principal payments in respect of Indebtedness
that are required to be paid during such period and (c) all federal, state, and local income taxes
paid in cash during such period.
“Fixed Charge Coverage Ratio” means, with respect to Parent for any period, the ratio
of (i) EBITDA for such period minus Capital Expenditures made (to the extent not already incurred
in a prior period) or incurred during such period, to (ii) Fixed Charges for such period.
“Foreign Lender” means any Lender or Participant that is not a United States person
within the meaning of IRC section 7701(a)(30).
“Funding Date” means the date on which a Borrowing occurs.
“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of
the Agreement.
“GAAP” means generally accepted accounting principles as in effect from time to time
in the United States, consistently applied.
“Governing Documents” means, with respect to any Person, the certificate or articles
of incorporation, by-laws, or other organizational documents of such Person.
“Governmental Authority” means any federal, state, local, or other governmental or
administrative body, instrumentality, board, department, or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar dispute-resolving
panel or body.
“Guarantors” means (a) Parent, (b) each Subsidiary of Parent identified on
Schedule G-1, and (c) each other Person that becomes a guarantor after the Closing Date
pursuant to Section 5.11 of the Agreement or otherwise, and “Guarantor” means any
one of them.
“Guaranty” means that certain general continuing guaranty executed and delivered by
each Guarantor in favor of Agent, for the benefit of the Lender Group and the Bank Product
Providers, in form and substance reasonably satisfactory to Agent.
“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise
classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous
materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define,
list, or classify substances by reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or
petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids,
produced waters, and other wastes associated with the exploration, development, or production of
crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any
radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil
or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per
million.
“Healthcare Laws” has the meaning specified therefor in Section 4.30 of the
Agreement.
Schedule 1.1-11
“Hedge Agreement” means any and all agreements or documents now existing or hereafter
entered into by Parent or any of its Subsidiaries that provide for an interest rate, credit,
commodity or equity swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with respect to, these
or similar transactions, for the purpose of hedging Parent’s or any of its Subsidiaries’ exposure
to fluctuations in interest or exchange rates, loan, credit exchange, security, or currency
valuations or commodity prices.
“HIPAA” has the meaning specified therefor in Section 4.29 of the Agreement.
“HIPAA Commitments” has the meaning specified therefor in Section 4.29 of the
Agreement.
“HIPAA Laws and Regulations” has the meaning specified therefor in Section
4.29 of the Agreement.
“HITECH Act” has the meaning specified therefor in Section 4.30 of the
Agreement.
“Holdout Lender” has the meaning specified therefor in Section 14.2(a) of the
Agreement.
“Inactive Subsidiary” means each of LHC Canada, Inc., a Delaware corporation, and LHC
Australia, Inc., a Delaware corporation; provided, that Parent may designate an Inactive
Subsidiary as a non-Inactive Subsidiary for purposes of the Agreement by giving Agent written
notice of such designation if (a) such designation would not cause a Default or an Event of Default
to occur and be continuing immediately after such designation and (b) Parent and its Subsidiaries
comply with the provisions of Section 5.11 with respect the Inactive Subsidiary so
designated.
“Increase Effective Date” has the meaning specified therefor in Section 2.15
of the Agreement.
“Indebtedness” means (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other
obligations in respect of letters of credit, bankers acceptances, or other financial products, (c)
all obligations as a lessee under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of a Person or its Subsidiaries, irrespective of whether such
obligation or liability is assumed, (e) all obligations to pay the deferred purchase price of
assets (other than trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under Hedge Agreements (which
amount shall be calculated based on the amount that would be payable by such Person if the Hedge
Agreement were terminated on the date of determination), (g) any Prohibited Preferred Stock and (h)
any obligation guaranteeing or intended to guarantee (whether directly or indirectly guaranteed,
endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this
definition, (i) the amount of any Indebtedness represented by a guaranty or other similar
instrument shall be the lesser of the principal amount of the obligations guaranteed and still
outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness
described in clause (d) above shall be the lower of the amount of the obligation and the fair
market value of the assets securing such obligation.
“Indemnified Liabilities” has the meaning specified therefor in Section 10.3
of the Agreement.
“Indemnified Person” has the meaning specified therefor in Section 10.3 of the
Agreement.
“Insolvency Proceeding” means any proceeding commenced by or against any Person under
any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency
law,
Schedule 1.1-12
assignments for the benefit of creditors, formal or informal moratoria, compositions,
extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other
similar relief.
“Intercompany Subordination Agreement” means a subordination agreement executed and
delivered by Parent, each of its Subsidiaries, and Agent, the form and substance of which is
reasonably satisfactory to Agent.
“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on
the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the
conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter;
provided, however, that (a) interest shall accrue at the applicable rate based upon
the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day
on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a
Business Day shall be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on the next preceding
Business Day, (c) with respect to an Interest Period 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), the Interest Period shall end on the last Business Day
of the calendar month that is 1, 2, or 3 months after the date on which the Interest Period began,
as applicable, and (d) Borrowers may not elect an Interest Period which will end after the Maturity
Date.
“Inventory” means inventory (as that term is defined in the Code).
“Investment” means, with respect to any Person, any investment by such Person in any
other Person (including Affiliates) in the form of loans, guarantees, advances, capital
contributions (excluding (a) commission, travel, and similar advances to officers and employees of
such Person made in the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practice), or acquisitions of Indebtedness, Stock,
or all or substantially all of the assets of such other Person (or of any division or business line
of such other Person), and any other items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP.
“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.
“Issuing Lender” means WFF or any other Lender that, at the request of Administrative
Borrower and with the consent of Agent, agrees, in such Lender’s sole discretion, to become an
Issuing Lender for the purpose of issuing L/Cs or L/C Undertakings pursuant to Section 2.11
of the Agreement.
“L/C” has the meaning specified therefor in Section 2.11(a) of the Agreement.
“L/C Disbursement” means a payment made by the Issuing Lender pursuant to a Letter of
Credit.
“L/C Undertaking” has the meaning specified therefor in Section 2.11(a) of the
Agreement.
“Legacy Litigation Settlements” means any settlements paid by Parent relating to the
Anthurium patent litigation in an aggregate amount not to exceed $5,800,000 during the term of the
Agreement.
“Lender” and “Lenders” have the respective meanings set forth in the preamble
to the Agreement, and shall include any other Person made a party to the Agreement in accordance
with the provisions of Section 13.1 of the Agreement.
“Lender Group” means, individually and collectively, each of the Lenders (including
the Issuing Lender) and Agent.
Schedule 1.1-13
“Lender Group Expenses” means all (a) costs or expenses (including taxes, and
insurance premiums) required to be paid by Parent or its Subsidiaries under any of the Loan
Documents that are paid, advanced, or incurred by the Lender Group, (b) reasonable out-of-pocket
fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with
Parent or its Subsidiaries under any of the Loan Documents, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC searches and including searches with the patent and
trademark office, the copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic collateral appraisals or business valuations to the
extent of the fees and charges (and up to the amount of any limitation) contained in the Agreement
or the Fee Letter), real estate surveys (only to the extent such real estate is or will become
Collateral of the Lender Group), real estate title policies and endorsements (only to the extent
such real estate is or will become Collateral of the Lender Group), and environmental audits (only
to the extent such real estate is or will become Collateral of the Lender Group), (c) reasonable
out-of-pocket costs and expenses incurred by Agent in the disbursement of funds to Borrowers or
other members of the Lender Group (by wire transfer or otherwise), (d) out-of-pocket charges paid
or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (e)
reasonable out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any
default or enforce any provision of the Loan Documents, or during the continuance of an Event of
Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling,
preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) reasonable out-of-pocket audit fees and expenses (including
travel, meals, and lodging) of Agent related to any inspections or audits to the extent of the fees
and charges (and up to the amount of any limitation) contained in the Agreement or the Fee Letter,
(g) reasonable out-of-pocket costs and expenses of third party claims or any other suit paid or
incurred by the Lender Group in enforcing or defending the Loan Documents or in connection with the
transactions contemplated by the Loan Documents or the Lender Group’s relationship with Parent or
any of its Subsidiaries (excluding any claims or suits solely among Agent and the Lenders), (h)
Agent’s reasonable costs and expenses (including reasonable attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering (including travel, meals, and lodging) or amending
the Loan Documents, and (i) Agent’s and each Lender’s reasonable costs and expenses (including
reasonable attorneys, accountants, consultants, and other advisors fees and expenses) incurred in
terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and
expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Parent or any of its Subsidiaries or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is brought, or in taking
any Remedial Action concerning the Collateral.
“Lender-Related Person” means, with respect to any Lender, such Lender, together with
such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.
“Letter of Credit” means an L/C or an L/C Undertaking, as the context requires.
“Letter of Credit Collateralization” means either (a) providing cash collateral
(pursuant to documentation reasonably satisfactory to Agent, including provisions that specify that
the Letter of Credit fee and all usage charges set forth in the Agreement will continue to accrue
while the Letters of Credit are outstanding) to be held by Agent for the benefit of those Lenders
with a Revolver Commitment in an amount equal to 105% of the then existing Letter of Credit Usage,
(b) causing the Letters of Credit to be returned to the Issuing Lender, or (c) providing Agent with
a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a
commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 105% of the then
existing Letter of Credit Usage (it being understood that the Letter of Credit fee and all usage
charges set forth in the Agreement will continue to accrue while the Letters of Credit are
outstanding and that any such fees that accrue must be an amount that can be drawn under any such
standby letter of credit).
“Letter of Credit Usage” means, as of any date of determination, the aggregate undrawn
amount of all outstanding Letters of Credit.
Schedule 1.1-14
“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of
the Agreement.
“LIBOR Notice” means a written notice in the form of Exhibit L-1.
“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of the
Agreement.
“LIBOR Rate” means, for each Interest Period for each LIBOR Rate Loan, the rate per
annum determined by Agent by dividing (a) the Base LIBOR Rate for such Interest Period, by (b) 100%
minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of
any change in the Reserve Percentage.
“LIBOR Rate Loan” means each portion of an Advance that bears interest at a rate
determined by reference to the LIBOR Rate.
“LIBOR Rate Margin” means, as of any date of determination (with respect to any
portion of the outstanding Advances on such date that is a LIBOR Rate Loan), the applicable margin
set forth in the following table that corresponds to the most recent Average Excess Availability
calculation performed by Agent (the “Average Excess Availability Calculation”);
provided, however, that (a) for the period from the Closing Date through the date
Agent performs the Average Excess Availability Calculation in respect of the testing period ending
September 30, 2009, the LIBOR Rate Margin shall be at the margin in the row styled “Level II”, and
(b) at any time that a Default or an Event of Default shall have occurred and be continuing, the
LIBOR Rate Margin shall be at the margin in the row styled “Level I”:
| Average Excess Availability | ||||
| Level | Calculation | LIBOR Rate Margin | ||
I
|
If the Average Excess Availability is less than or equal to $20,000,000 | 4.00 percentage points | ||
II
|
If the Average Excess Availability is greater than $20,000,000 | 3.75 percentage points |
Except as set forth in the foregoing proviso, the LIBOR Rate Margin shall be based upon the
most recent determination by Agent of the Average Excess Availability Calculation, which will be
calculated as of the end of each fiscal quarter. Except as set forth in the foregoing proviso, the
LIBOR Rate Margin shall be re-determined quarterly on the first day of the month following the date
of delivery by Parent and its Subsidiaries to Agent of the report described in clause (i)
of Schedule 5.2 of the Agreement; provided, however, that if Parent and its
Subsidiaries fail to provide such report when such report is due, the LIBOR Rate Margin shall be
set at the margin in the row styled “Level I” as of the first day of the month following the date
on which such report was required to be delivered until the date on which such report is delivered
(on which date (but not retroactively), without constituting a waiver of any Default or Event of
Default occasioned by the failure to timely deliver such report, the LIBOR Rate Margin shall be set
at the margin based upon the Average Excess Availability Calculation determined by Agent based upon
the information contained in such report. In the event that the information used by Agent to
perform the Average Excess Availability Calculation contained in any such report is shown to be
inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher LIBOR
Rate Margin for any period (a “LIBOR Rate Period”) than the LIBOR Rate Margin actually
applied for such LIBOR Rate Period, then (i) Administrative Borrower shall immediately deliver to
Agent a correct report for such LIBOR Rate Period, (ii) the LIBOR Rate Margin shall be determined
as if the correct LIBOR Rate Margin (as set forth in the table above) were applicable for such
LIBOR Rate Period, and (iii) Administrative Borrower shall immediately deliver to Agent full
payment in
Schedule 1.1-15
respect of the accrued additional interest and letter of credit fees as a result of such
increased LIBOR Rate Margin for such LIBOR Rate Period, which payment shall be promptly applied by
Agent to the affected Obligations.
“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge,
deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other
security arrangement and any other preference, priority, or preferential arrangement of any kind or
nature whatsoever, including any conditional sale contract or other title retention agreement, the
interest of a lessor under a Capital Lease and any synthetic or other financing lease having
substantially the same economic effect as any of the foregoing.
“Loan Account” has the meaning specified therefor in Section 2.9 of the
Agreement.
“Loan Documents” means the Agreement, the Bank Product Agreements, any Borrowing Base
Certificate, the Contribution Agreement, the Control Agreements, the Controlled Account Agreements,
the Copyright Security Agreements, the Fee Letter, the Guaranties, the Intercompany Subordination
Agreement, the Letters of Credit, any Mortgages, the Patent Security Agreements, the Security
Agreement, the Trademark Security Agreements, any note or notes executed by Borrower in connection
with the Agreement and payable to any member of the Lender Group, any letter of credit application
entered into by a Borrower in connection with the Agreement, and any other agreement entered into,
now or in the future, by Parent or any of its Subsidiaries and any member of the Lender Group in
connection with the Agreement.
“Loan Party” means any Borrower or any Guarantor.
“Margin Stock” as defined in Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
“Material Adverse Change” means (a) a material adverse change in the business,
prospects, operations, results of operations, assets, liabilities or condition (financial or
otherwise) of Borrowers, taken as a whole, or Parent and its Subsidiaries, taken as a whole, (b) a
material impairment of Parent’s or any of its Subsidiaries’ ability to perform its obligations
under the Loan Documents to which it is a party or of the Lender Group’s ability to enforce the
Obligations or realize upon any of the Collateral, or (c) a material impairment of the
enforceability or priority of the Agent’s Liens with respect to any of the Collateral as a result
of an action or failure to act on the part of Parent or any of its Subsidiaries.
“Material Contract” means, with respect to any Person, (a) each contract or agreement
to which such Person or any of its Subsidiaries is a party involving aggregate consideration
payable to or by such Person or such Subsidiary of $1,000,000 or more in any fiscal year (other
than purchase orders and sales contracts in the ordinary course of the business of such Person or
such Subsidiary and other than contracts that by their terms may be terminated by such Person or
Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or
premium) and (b) all other contracts or agreements material to the business, operations, condition
(financial or otherwise), performance, prospects or properties of such Person or such Subsidiary,
including, without limitation, contracts or agreements with the Equity Sponsor or its Affiliates
(including, without limitation, the Transcription Services Agreement).
“Maturity Date” has the meaning specified therefor in Section 3.3 of the
Agreement.
“Maximum Revolver Amount” means (a) prior to the Increase Effective Date, $25,000,000,
and (b) thereafter, $25,000,000 plus the Commitment Increase, in the case of each of clauses (a)
and (b), decreased by the amount of reductions in the Revolver Commitments made in accordance with
Section 2.4(c) of the Agreement.
“Xxxxx’x” has the meaning specified therefor in the definition of Cash Equivalents.
Schedule 1.1-16
“Mortgage Policy” has the meaning specified therefor in Schedule 3.1(v).
“Mortgages” means, individually and collectively, one or more mortgages, deeds of
trust, or deeds to secure debt, executed and delivered by Parent or its Subsidiaries in favor of
Agent, in form and substance reasonably satisfactory to Agent, that encumber any Real Property
Collateral.
“Net Cash Proceeds” means:
(a) with respect to any sale or disposition by Parent or any of its Subsidiaries of assets,
the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial
consideration or through the payment of deferred consideration) by or on behalf of Parent or its
Subsidiaries, in connection therewith after deducting therefrom only (i) the amount of any
Indebtedness secured by any Permitted Lien on any asset (other than (A) Indebtedness owing to Agent
or any Lender under the Agreement or the other Loan Documents and (B) Indebtedness assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection with such sale or
disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be
paid by Parent or such Subsidiary in connection with such sale or disposition and (iii) taxes paid
or payable to any taxing authorities by Parent or such Subsidiary in connection with such sale or
disposition, in each case to the extent, but only to the extent, that the amounts so deducted are,
at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate
of Parent or any of its Subsidiaries, and are properly attributable to such transaction; and
(b) with respect to the issuance or incurrence of any Indebtedness by Parent or any of its
Subsidiaries, or the issuance by Parent or any of its Subsidiaries of any shares of its Stock, the
aggregate amount of cash received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration) by or on behalf of
Parent or such Subsidiary in connection with such issuance or incurrence, after deducting therefrom
only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by
Parent or such Subsidiary in connection with such issuance or incurrence, (ii) taxes paid or
payable to any taxing authorities by Parent or such Subsidiary in connection with such issuance or
incurrence, in each case to the extent, but only to the extent, that the amounts so deducted are,
at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate
of Parent or any of its Subsidiaries, and are properly attributable to such transaction.
“Net Interest Expense” means, for any period, the result of (a) the aggregate of the
interest expense of Parent and its Subsidiaries for such period minus (b) the aggregate of the
interest income of Parent and its Subsidiaries for such period, in each case, determined on a
consolidated basis in accordance with GAAP.
“Obligations” means (a) all loans, Advances, debts, principal, interest (including any
interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether
allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), contingent
reimbursement or indemnification obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to the Loan Account pursuant to the
Agreement), obligations (including indemnification obligations), fees (including the fees provided
for in the Fee Letter), Lender Group Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in
part as a claim in any such Insolvency Proceeding), guaranties, covenants, and duties of any kind
and description owing by Borrowers to the Lender Group pursuant to or evidenced by the Loan
Documents and irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising, and including all
interest not paid when due and all other expenses or other amounts that Borrowers are required to
pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan
Documents, and (b) all Bank Product Obligations. Any reference in the Agreement or in the Loan
Documents to the Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency
Proceeding.
Schedule 1.1-17
“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.
“Originating Lender” has the meaning specified therefor in Section 13.1(e) of
the Agreement.
“Other Taxes” shall mean any and all present or future stamp, value added or
documentary taxes or any other excise or property taxes, charges or similar levies (including
interest, fines, penalties and additions to tax) arising from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement, recordation or filing of, or
otherwise with respect to, any Loan Document.
“Overadvance” has the meaning specified therefor in Section 2.5 of the
Agreement.
“Parent” has the meaning specified therefor in the preamble to the Agreement.
“Participant” has the meaning specified therefor in Section 13.1(e) of the
Agreement.
“Participant Register” has the meaning set forth in Section 13.1(i) of the
Agreement.
“Patent Security Agreement” has the meaning specified therefor in the Security
Agreement.
“Patriot Act” has the meaning specified therefor in Section 4.18 of the
Agreement.
“Payoff Date” means the first date on which all of the Obligations are paid in full
and the Commitments of the Lenders are terminated.
“Permitted Acquisition” means any Acquisition as to which each of the following is
applicable:
(a) no Default or Event of Default shall have occurred and be continuing or would result from
the consummation of the proposed Acquisition and the proposed Acquisition is consensual,
(b) no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its
Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clause (l) of
the definition of Permitted Indebtedness and no Liens will be incurred, assumed, or would exist
with respect to the assets of Parent or its Subsidiaries as a result or such Acquisition other than
Liens permitted under clause (r) of the definition of Permitted Liens,
(c) Parent has provided Agent with forecasted balance sheets, profit and loss statements, and
cash flow statements of the Person to be acquired (or related to the assets to be acquired), all
prepared on a basis consistent with such Person’s historical financial statements (or the
historical financial statements related to such assets), together with appropriate supporting
details and a statement of underlying assumptions for the 3 year period following the date of the
proposed Acquisition (on a year by year basis, and for the 1 year period following the date of the
proposed Acquisition, on a month by month basis), in each case, reasonably satisfactory to Agent,
(d) Parent has provided Agent with written confirmation, supported by reasonably detailed
calculations, that on a pro forma basis, created by adding the historical combined financial
statements of Parent (including the combined financial statements of any other Person or assets
that were the subject of a prior Permitted Acquisition during the relevant period) to the
historical consolidated financial statements of the Person to be acquired (or the historical
financial statements related to the assets to be acquired) pursuant to the proposed Acquisition
(adjusted to eliminate expense items that would not have been incurred and to include income items
that would have been recognized, in each case, if the combination had been accomplished at the
beginning of the relevant period; such eliminations and inclusions to be mutually and reasonably
agreed upon by Parent and Agent), Parent and its Subsidiaries, are projected to be in compliance
with the financial
Schedule 1.1-18
covenants in Section 7 for the 12 month period ended one year after the proposed date
of consummation of such proposed Acquisition, together with copies of all such historical financial
statements of the Person or assets being acquired for the 12 month period ended immediately prior
to the proposed date of consummation of such proposed Acquisition,
(e) Parent has provided Agent with written notice of the proposed Acquisition at least 14 days
prior to the anticipated closing date of the proposed Acquisition and, not later than 3 Business
Days prior to the anticipated closing date of the proposed Acquisition, copies of the acquisition
agreement and other material documents relative to the proposed Acquisition, which agreement and
documents must be reasonably acceptable to Agent,
(f) the assets being acquired (other than a de minimis amount of assets in relation to Parent
and its Subsidiaries’ total assets), or the Person whose Stock is being acquired, are useful in or
engaged in, as applicable, the business of Parent and its Subsidiaries or a business reasonably
related thereto,
(g) the subject assets or Stock, as applicable, are being acquired directly by a Loan Party,
and (i) in the case of an Asset Acquisition, such Loan Party shall have executed and delivered or
authorized, as applicable, any and all documentation reasonably requested by Agent in order to
provide Agent with a first priority perfected security interest, subject to Permitted Liens, in the
acquired assets, and (ii) in the case of a Stock Acquisition, (A) the Person whose Stock is being
acquired shall have executed and delivered any and all documentation reasonably requested by Agent
in order to become a Guarantor, (B) the Person whose Stock is being acquired shall have executed
and delivered any and all documentation reasonably requested by Agent in order to provide Agent
with a first priority perfected security interest, subject to Permitted Liens, in the assets of
such Person, and (C) the owner of the Stock subject to such Stock Acquisition shall have executed
and delivered any and all documentation reasonably requested by Agent in order to provide Agent
with a first priority perfected security interest in such Stock,
(h) Borrowers shall have Excess Availability of not less than $10,000,000 plus Qualified Cash
of not less than $10,000,000, in each case, both for the 1 day period before, and, on a pro forma
basis, for the 1 day period after giving effect to, the consummation of the proposed Acquisition,
(i) the assets being acquired (other than a de minimis amount of assets in relation to the
assets being acquired) are located within the United States or any other jurisdiction approved by
Agent, or the Person whose Stock is being acquired is organized in a jurisdiction located within
the United States or any other jurisdiction approved by Agent, and
(j) the purchase consideration payable in respect of all Permitted Acquisitions in the
aggregate (including the proposed Acquisition and including deferred payment obligations) shall not
exceed $30,000,000.
“Permitted Discretion” means a determination made in the exercise of reasonable (from
the perspective of a secured lender) business judgment.
“Permitted Dispositions” means:
(a) sales, abandonment, or other dispositions of Equipment that is substantially worn,
damaged, or obsolete in the ordinary course of business,
(b) sales of Inventory to buyers in the ordinary course of business,
(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the
terms of the Agreement or the other Loan Documents,
Schedule 1.1-19
(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,
(e) the granting of Permitted Liens,
(f) the sale or discount, in each case without recourse, of Accounts arising in the ordinary
course of business, but only in connection with the compromise or collection thereof,
(g) any involuntary loss, damage or destruction of property,
(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, or confiscation or requisition of use of property,
(i) the leasing or subleasing of assets of Parent or its Subsidiaries in the ordinary course
of business,
(j) the sale or issuance of Stock (other than Prohibited Preferred Stock) of Parent,
(k) [Reserved],
(l) the lapse of registered patents, trademarks and other intellectual property of Parent and
its Subsidiaries to the extent not economically desirable in the conduct of their business and so
long as such lapse is not materially adverse to the interests of the Lenders,
(m) dispositions of assets (other than Accounts, intellectual property, licenses, Stock of
Subsidiaries of Parent, or Material Contracts) not otherwise permitted in clauses (a)
through (l) above so long as made at fair market value and the aggregate fair market value
of all assets disposed of in all such dispositions in any calendar year (including the proposed
disposition) would not exceed $250,000, and
(n) dispositions of assets (other than Accounts, intellectual property, licenses, Stock of
Subsidiaries of Parent, or Material Contracts) not otherwise permitted in clauses (a)
through (m) above so long as (i) no Default or Event of Default shall have occurred and be
continuing or would otherwise result from the consummation of the proposed disposition, (ii)
Borrowers shall have Excess Availability of at least $20,000,000, in each case, both for the 1 day
period before, and, on a pro forma basis, for the 1 day period after giving effect to, the
consummation of the proposed disposition, (iii) the proposed disposition is made at fair market
value, and (iv) the aggregate fair market value of all assets disposed of in all such dispositions
(including the proposed disposition) would not exceed $2,500,000 during the term of the Agreement.
“Permitted Indebtedness” means:
(a) Indebtedness evidenced by the Agreement and the other Loan Documents, together with
Indebtedness owed to Underlying Issuers with respect to Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 4.19 and any Refinancing Indebtedness in
respect of such Indebtedness,
(c) Permitted Purchase Money Indebtedness and any Refinancing Indebtedness in respect of such
Indebtedness,
(d) endorsement of instruments or other payment items for deposit,
(e) Indebtedness consisting of (i) unsecured guarantees incurred in the ordinary course of
business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds,
completion
Schedule 1.1-20
guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary
indemnification obligations to purchasers in connection with Permitted Dispositions; and (iii)
unsecured guarantees with respect to Indebtedness of Parent or one of its Subsidiaries, to the
extent that the Person that is obligated under such guaranty could have incurred such underlying
Indebtedness,
(f) Indebtedness incurred in the ordinary course of business under performance, surety,
statutory, and appeal bonds,
(g) Indebtedness owed to any Person providing property, casualty, liability, or other
insurance to Parent or any of its Subsidiaries, so long as the amount of such Indebtedness is not
in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of,
such insurance for the year in which such Indebtedness is incurred and such Indebtedness is
outstanding only during such year,
(h) the incurrence by Parent or its Subsidiaries of Indebtedness under Hedge Agreements that
are incurred for the bona fide purpose of hedging the interest rate or foreign currency risk
associated with Parent’s and its Subsidiaries’ operations and not for speculative purposes,
(i) unsecured Indebtedness incurred in respect of netting services, overdraft protection, and
other like services, in each case, incurred in the ordinary course of business,
(j) unsecured Indebtedness of Parent owing to former employees, officers, or directors (or any
spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase
by Parent of the Stock of Parent that has been issued to such Persons, so long as (i) no Default or
Event of Default has occurred and is continuing or would result from the incurrence of such
Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does
not exceed $500,000, and (iii) such Indebtedness is subordinated to the Obligations on terms and
conditions reasonably acceptable to Agent,
(k) Indebtedness composing Permitted Investments,
(l) Acquired Indebtedness in an aggregate amount for all Permitted Acquisitions not to exceed
$7,500,000,
(m) contingent liabilities in respect of any indemnification obligation, adjustment of
purchase price, non-compete, or similar obligation of Parent or the applicable Loan Party incurred
in connection with the consummation of one or more Permitted Acquisitions, and
(n) Subordinated Indebtedness.
“Permitted Intercompany Advances” means (a) loans made by (i) a Loan Party to another
Loan Party other than Parent, (ii) a non-Loan Party to another non-Loan Party (other than a
Specified Subsidiary), (iii) a non-Loan Party to a Loan Party, so long as the parties thereto are
party to the Intercompany Subordination Agreement, and (iv) a Loan Party to a non-Loan Party so
long as (A) the amount of such loans does not exceed $1,000,000 outstanding at any one time, (B) no
Default or Event of Default has occurred and is continuing or would result therefrom, and (C)
Borrowers have Excess Availability of not less than $10,000,000 both for the 1 day period before
and the 1 day period after giving effect to each such loan, and (b) those recurring ordinary course
transactions of Borrowers as further described on Schedule P-1.
“Permitted Investments” means:
(a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments deposited or to be deposited for collection in the
ordinary course of business,
Schedule 1.1-21
(c) advances made in connection with purchases of goods or services in the ordinary course of
business,
(d) Investments received in settlement of amounts due to any Loan Party or any of its
Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its
Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the
foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,
(e) Investments owned by any Loan Party or any of its Subsidiaries on the Closing Date and set
forth on Schedule P-2,
(f) guarantees permitted under the definition of Permitted Indebtedness,
(g) Permitted Intercompany Advances,
(h) Stock or other securities acquired in connection with the satisfaction or enforcement of
Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers
or suppliers or otherwise outside the ordinary course of business) or as security for any such
Indebtedness or claims,
(i) deposits of cash made in the ordinary course of business to secure performance of
operating leases,
(j) non-cash loans to employees, officers, and directors of Parent or any of its Subsidiaries
for the purpose of purchasing Stock in Parent so long as the proceeds of such loans are used in
their entirety to purchase such stock in Parent,
(k) Permitted Acquisitions,
(l) Permitted Unrestricted Acquisitions,
(m) [Reserved], and
(n) any other Investment not otherwise permitted by the foregoing clauses (a) through (m) so
long as (i) if during the 1 day period immediately prior to such Investment and immediately after
giving effect to such Investment, the Revolver Usage is zero, (A) no Default or Event of Default
shall have occurred and be continuing or would result therefrom, (B) during the 1 day period
immediately prior to the making of such Investment, Borrowers have, and immediately after the
making of such Investment, the Borrowers are projected to have, Excess Availability of at least
$20,000,000, (C) no portion of the Advances are used to make such Investment, and (D) Parent has
provided Agent with written notice containing (1) notice of its intent to make such Investment
pursuant to this clause (n)(i), (2) the amount of such proposed Investment, (3) certification that
each of the conditions contained in clauses (A) through (C) above will be satisfied both before and
after giving effect to such proposed Investment and (4) a confirmation, supported by reasonably
detailed calculations, that on a pro forma basis, Parent and its Subsidiaries are projected to be
in compliance with the financial covenants in Section 7 for the 12 month period ended one
year after the proposed date of such Investment and (ii) if during the 1 day period immediately
prior to such Investment or immediately after giving effect to such Investment, the Revolver Usage
is greater than zero, (A) no Default or Event of Default shall have occurred and be continuing or
would result therefrom, (B) during the 1 day period immediately prior to the making of such
Investment, the Borrowers have, and immediately after the making of such Investment, Borrowers are
projected to have, Excess Availability of at least $15,000,000, (C) Parent has provided Agent with
written notice containing (1) notice of its intent to make such Investment pursuant to this clause
(n)(ii), (2) the amount of such proposed Investment, (3) certification that each of the conditions
contained in clauses (A) and (B) above will be satisfied both before and after giving effect to
such proposed Investment and (4) a
Schedule 1.1-22
confirmation, supported by reasonably detailed calculations, that on a pro forma basis, Parent
and its Subsidiaries are projected to be in compliance with the financial covenants in Section
7 for the 12 month period ended one year after the proposed date of such Investment and (D) the
aggregate amount of all such Investments made pursuant to this clause (n)(ii), together with the
aggregate amount of all distributions made pursuant to Section 6.9(c)(ii), shall not exceed
$4,500,000 in any 12 consecutive month period.
“Permitted Liens” means
(a) Liens held by Agent to secure the Obligations,
(b) Liens for unpaid taxes, assessments, or other governmental charges or levies that either
(i) are not yet delinquent, or (ii) do not have priority over Agent’s Liens and the underlying
taxes, assessments, or charges or levies are the subject of Permitted Protests,
(c) judgment Liens arising solely as a result of the existence of judgments, orders, or awards
that do not constitute an Event of Default under Section 8.3 of the Agreement,
(d) Liens set forth on Schedule P-3, provided that any such Lien only secures the
Indebtedness that it secures on the Closing Date and any Refinancing Indebtedness in respect
thereof,
(e) the interests of lessors under operating leases and non-exclusive licensors under license
agreements,
(f) purchase money Liens or the interests of lessors under Capital Leases to the extent that
such Liens or interests secure Permitted Purchase Money Indebtedness and so long as (i) such Lien
attaches only to the asset purchased or acquired and the proceeds thereof, and (ii) such Lien only
secures the Indebtedness that was incurred to acquire the asset purchased or acquired or any
Refinancing Indebtedness in respect thereof,
(g) Liens arising by operation of law in favor of warehousemen, landlords, carriers,
mechanics, materialmen, laborers, or suppliers, incurred in the ordinary course of business and not
in connection with the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests,
(h) Liens on amounts deposited in connection with obtaining worker’s compensation or other
unemployment insurance,
(i) Liens on amounts deposited in connection with the making or entering into of bids,
tenders, or leases in the ordinary course of business and not in connection with the borrowing of
money,
(j) Liens on amounts deposited as security for surety or appeal bonds in connection with
obtaining such bonds in the ordinary course of business,
(k) with respect to any Real Property, easements, rights of way, and zoning restrictions that
do not materially interfere with or impair the use or operation thereof,
(l) non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property
rights in the ordinary course of business,
(m) Liens that are replacements of Permitted Liens to the extent that the original
Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement
Liens only encumber those assets that secured the original Indebtedness,
Schedule 1.1-23
(n) rights of setoff or bankers’ liens upon deposits of cash in favor of banks or other
depository institutions, solely to the extent incurred in connection with the maintenance of such
deposit accounts in the ordinary course of business,
(o) Liens granted in the ordinary course of business on the unearned portion of insurance
premiums securing the financing of insurance premiums to the extent the financing is permitted
under the definition of Permitted Indebtedness,
(p) Liens in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods,
(q) Liens solely on any xxxx xxxxxxx money deposits made by Parent or any of its Subsidiaries
in connection with any letter of intent or purchase agreement with respect to a Permitted
Acquisition, and
(r) Liens assumed by Parent or any of its Subsidiaries in connection with a Permitted
Acquisition that secure Acquired Indebtedness.
“Permitted Preferred Stock” means and refers to any Preferred Stock issued by Parent
(and not by one or more of its Subsidiaries) that is not Prohibited Preferred Stock.
“Permitted Protest” means the right of Parent or any of its Subsidiaries to protest
any Lien (other than any Lien that secures the Obligations), taxes (other than payroll taxes or
taxes that are the subject of a United States federal tax lien), or rental payment, provided that
(a) a reserve with respect to such obligation is established on Parent’s or its Subsidiaries’ books
and records in such amount as is required under GAAP, (b) any such protest is instituted promptly
and prosecuted diligently by Parent or its Subsidiary, as applicable, in good faith, and (c) Agent
is satisfied that, while any such protest is pending, there will be no impairment of the
enforceability, validity, or priority of any of the Agent’s Liens.
“Permitted Purchase Money Indebtedness” means, as of any date of determination,
Purchase Money Indebtedness incurred after the Closing Date in an aggregate principal amount
outstanding at any one time not in excess of $1,000,000.
“Permitted Unrestricted Acquisition” means any Stock Acquisition as to which each of
the following is applicable:
(a) no Default or Event of Default shall have occurred and be continuing or would result from
the consummation of the proposed Stock Acquisition and the proposed Stock Acquisition is
consensual,
(b) no Indebtedness will be incurred, assumed, or would exist with respect to Parent or its
Subsidiaries as a result of such Stock Acquisition, and no Liens will be incurred, assumed, or
would exist with respect to the assets of Parent or its Subsidiaries as a result or such Stock
Acquisition,
(c) Parent has provided Agent with forecasted balance sheets, profit and loss statements, and
cash flow statements of the Person to be acquired, all prepared on a basis consistent with such
Person’s historical financial statements, together with appropriate supporting details and a
statement of underlying assumptions for the 3 year period following the date of the proposed Stock
Acquisition (on a year by year basis, and for the 1 year period following the date of the proposed
Stock Acquisition, on a month by month basis), in each case, reasonably satisfactory to Agent,
(d) Parent has provided Agent with written notice of the proposed Stock Acquisition at least
14 days prior to the anticipated closing date of the proposed Stock Acquisition and, not later than
3 Business Days prior to the anticipated closing date of the proposed Acquisition, copies of the
acquisition
Schedule 1.1-24
agreement and other material documents relative to the proposed Stock Acquisition, which
agreement and documents must be reasonably acceptable to Agent,
(e) the Person whose Stock is being acquired is engaged in the business of Parent and its
Subsidiaries or a business reasonably related thereto,
(f) the consideration payable by Parent or its Subsidiaries in respect of the proposed Stock
Acquisition shall be composed solely of common Stock or Permitted Preferred Stock of Parent and/or
proceeds of contributions to capital or the purchase of common Stock or Permitted Preferred Stock
of Parent contemporaneously made by the holders of such common Stock or Permitted Preferred Stock,
(g) Borrowers shall have Excess Availability of not less than $20,000,000 both for the 1 day
period before, and, on a pro forma basis, after giving effect to the consummation of the proposed
Stock Acquisition,
(h) during the 1 day period immediately prior to such proposed Stock Acquisition and
immediately after giving affect to such proposed Stock Acquisition, the Revolver Usage is zero,
(i) no portion of the Advances are used to make such Stock Acquisition,
(j) (i) the Person whose Stock is being acquired shall not be owned by any Loan Party (or
Subsidiary of a Loan Party) other than Parent, and (ii) Parent shall have designated such Person as
a Specified Subsidiary in accordance with Section 1.5(b) of the Agreement,
(k) for the 12 consecutive month period immediately prior to the proposed Stock Acquisition,
such Person has not had revenues in excess of $125,000,000,
(l) for the 12 consecutive month period immediately prior to the proposed Stock Acquisition,
such Person has, and during the 6 consecutive month period immediately after the proposed Stock
Acquisition, such Person is projected to have, Permitted Unrestricted Acquisition EBITDA in excess
of $1.00, and
(m) the purchase consideration payable in respect of all Permitted Unrestricted Acquisitions
(including the proposed Permitted Unrestricted Acquisition and including deferred payment
obligations) shall not exceed $100,000,000, except to the extent that the Person whose Stock is
being acquired shall otherwise be acceptable to Agent, as evidenced by a duly executed written
agreement between Agent and Borrowers.
“Permitted Unrestricted Acquisition EBITDA” means, with respect to any fiscal period,
such Person’s consolidated net earnings (or loss), minus extraordinary gains, interest income, plus
non-cash extraordinary losses, interest expense, income taxes, and depreciation and amortization
for such period, in each case, determined on a consolidated basis in accordance with GAAP (except
for the exclusion of the net earnings (or less) of Specified Subsidiaries).
“Person” means natural persons, corporations, limited liability companies, limited
partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land
trusts, business trusts, or other organizations, irrespective of whether they are legal entities,
and governments and agencies and political subdivisions thereof.
“Preferred Stock” means, as applied to the Stock of any Person, the Stock of any class
or classes (however designated) that is preferred with respect to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Stock of any other class of such Person.
Schedule 1.1-25
“Prohibited Preferred Stock” means any Preferred Stock that by its terms is
mandatorily redeemable or subject to any other payment obligation (including any obligation to pay
dividends, other than dividends of shares of Preferred Stock of the same class and series payable
in kind or dividends of shares of common stock) on or before a date that is less than 1 year after
the Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is
redeemable at the option of the holder thereof for cash or assets or securities (other than
distributions in kind of shares of Preferred Stock of the same class and series or of shares of
common stock).
“Projections” means Parent’s forecasted (a) balance sheets, (b) profit and loss
statements, and (c) cash flow statements, all prepared on a basis consistent with Parent’s
historical financial statements, together with appropriate supporting details and a statement of
underlying assumptions.
“Pro Rata Share” means, as of any date of determination:
(a) with respect to a Lender’s obligation to make Advances and right to receive payments of
principal, interest, fees, costs, and expenses with respect thereto, (i) prior to the Revolver
Commitments being terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or reduced to zero, the
percentage obtained by dividing (y) the outstanding principal amount of such Lender’s Advances by
(z) the outstanding principal amount of all Advances,
(b) with respect to a Lender’s obligation to participate in Letters of Credit, to reimburse
the Issuing Lender, and right to receive payments of fees with respect thereto, (i) prior to the
Revolver Commitments being terminated or reduced to zero, the percentage obtained by dividing (y)
such Lender’s Revolver Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and
(ii) from and after the time that the Revolver Commitments have been terminated or reduced to zero,
the percentage obtained by dividing (y) the outstanding principal amount of such Lender’s Advances
by (z) the outstanding principal amount of all Advances; provided, however, that if
all of the Advances have been repaid in full and Letters of Credit remain outstanding, Pro Rata
Share under this clause shall be determined based upon subclause (i) of this clause as if the
Revolver Commitments had not been terminated or reduced to zero and based upon the Revolver
Commitments as they existed immediately prior to their termination or reduction to zero, and
(c) with respect to all other matters as to a particular Lender (including the indemnification
obligations arising under Section 15.7 of the Agreement), the percentage obtained by
dividing (i) such Lender’s Revolver Commitment, by (ii) the aggregate amount of Revolver
Commitments of all Lenders; provided, however, that in the event the Revolver
Commitments have been terminated or reduced to zero, Pro Rata Share under this clause shall be the
percentage obtained by dividing (A) the outstanding principal amount of such Lender’s Advances plus
such Lender’s ratable portion of the Risk Participation Liability with respect to outstanding
Letters of Credit by (B) the outstanding principal amount of all Advances plus the aggregate amount
of the Risk Participation Liability with respect to outstanding Letters of Credit.
“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i)
of the Agreement.
“Purchase Money Indebtedness” means Indebtedness (other than the Obligations, but
including Capitalized Lease Obligations), incurred at the time of, or within 20 days after, the
acquisition of any fixed assets for the purpose of financing all or any part of the acquisition
cost thereof.
“Qualified Cash” means, as of any date of determination, the amount of unrestricted
cash and Cash Equivalents of Parent and its Subsidiaries that is in Deposit Accounts or in
Securities Accounts, or any combination thereof, and which such Deposit Account or Securities
Account is the subject of a Control
Schedule 1.1-26
Agreement and is maintained by a branch office of the bank or securities intermediary located
within the United States.
“Real Property” means any estates or interests in real property now owned or hereafter
acquired by Parent or its Subsidiaries and the improvements thereto.
“Real Property Collateral” means any Real Property hereafter acquired by Parent or its
Subsidiaries.
“Record” means information that is inscribed on a tangible medium or that is stored in
an electronic or other medium and is retrievable in perceivable form.
“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness
so long as:
(a) the terms and conditions of such refinancings, renewals, or extensions do not, in Agent’s
reasonable judgment, materially impair the prospects of repayment of the Obligations by Parent and
its Subsidiaries or materially impair Parent’s and its Subsidiaries’ creditworthiness,
(b) such refinancings, renewals, or extensions do not result in an increase in the principal
amount of the Indebtedness so refinanced, renewed, or extended,
(c) such refinancings, renewals, or extensions do not result in an increase in the interest
rate with respect to the Indebtedness so refinanced, renewed, or extended,
(d) such refinancings, renewals, or extensions do not result in a shortening of the average
weighted maturity (measured as of the refinancing, renewal or extension) of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are,
materially more burdensome or restrictive to Parent and its Subsidiaries,
(e) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of
payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension
must include subordination terms and conditions that are at least as favorable to the Lender Group
as those that were applicable to the refinanced, renewed, or extended Indebtedness, and
(f) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person
that is liable on account of the Obligations other than those Persons which were obligated with
respect to the Indebtedness that was refinanced, renewed, or extended.
“Related Fund” means, with respect to any Lender that is an investment fund, any other
investment fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.
“Register” has the meaning set forth in Section 13.1(h) of the Agreement.
“Registered Loan” has the meaning set forth in Section 13.1(h) of the
Agreement.
“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain,
treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or
outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor
or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform
any pre-remedial studies, investigations, or post-remedial
Schedule 1.1-27
operation and maintenance activities, or (e) conduct any other actions with respect to
Hazardous Materials authorized by Environmental Laws.
“Replacement Lender” has the meaning specified therefor in Section 2.13(b) of
the Agreement.
“Report” has the meaning specified therefor in Section 15.16 of the Agreement.
“Required Availability” means that the sum of (a) Excess Availability, plus (b)
Qualified Cash exceeds $50,000,000.
“Required Lenders” means, at any time, Lenders whose aggregate Pro Rata Shares
(calculated under clause (c) of the definition of Pro Rata Shares) exceed 50%; provided,
however, that at any time there are 2 or more Lenders, “Required Lenders” must include at
least 2 Lenders.
“Reserve Percentage” means, on any day, for any Lender, the maximum percentage
prescribed by the Board of Governors of the Federal Reserve System (or any successor Governmental
Authority) for determining the reserve requirements (including any basic, supplemental, marginal,
or emergency reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as “eurocurrency liabilities”) of that Lender, but so long as such Lender is
not required or directed under applicable regulations to maintain such reserves, the Reserve
Percentage shall be zero.
“Revolver Commitment” means, with respect to each Lender, its Revolver Commitment,
and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts
are set forth beside such Lender’s name under the applicable heading on Schedule C-1 or in
the Assignment and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments made in accordance
with the provisions of Section 13.1 of the Agreement.
“Revolver Usage” means, as of any date of determination, the sum of (a) the amount of
outstanding Advances, plus (b) the amount of the Letter of Credit Usage.
“Risk Participation Liability” means, as to each Letter of Credit, all obligations of
Borrowers to the Issuing Lender with respect to such Letter of Credit, including (a) the contingent
reimbursement obligations of Borrowers with respect to the amounts available to be drawn or which
may become available to be drawn thereunder, (b) the reimbursement obligations of Borrowers with
respect to amounts that have been paid by the Issuing Lender to the Underlying Issuer, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
“Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of
the government of a country, (c) an organization directly or indirectly controlled by a country or
its government, (d) a Person resident in or determined to be resident in a country, in each case,
that is subject to a country sanctions program administered and enforced by OFAC.
“Sanctioned Person” means a person named on the list of Specially Designated Nationals
maintained by OFAC.
“SEC” means the United States Securities and Exchange Commission and any successor
thereto.
“Securities Account” means a securities account (as that term is defined in the Code).
Schedule 1.1-28
“Securities Act” means the Securities Act of 1933, as amended from time to time, and
any successor statute.
“Security Agreement” means a security agreement, in form and substance reasonably
satisfactory to Agent, executed and delivered by Borrowers and Guarantors to Agent.
“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of the
Agreement.
“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of
the Agreement.
“Solvent” means, with respect to any Person on a particular date, that the sum of such
Person’s assets, at fair valuations, is greater than all of such Person’s debts.
“Specified Subsidiary” means any Subsidiary formed or acquired by Parent in connection
with a Permitted Unrestricted Acquisition that is designated by the Board of Directors of Parent as
a Specified Subsidiary in accordance with Section 1.5(b) of the Agreement.
“S&P” has the meaning specified therefor in the definition of Cash Equivalents.
“Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such term is defined in
Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).
“Stock Acquisition” means the purchase or other acquisition (whether by means of a
merger, consolidation, or otherwise) by a Person or its Subsidiaries of all or substantially all of
the Stock of any other Person.
“Subordinated Indebtedness” means unsecured Indebtedness of Parent or any of its
Subsidiaries the terms of which are satisfactory to Agent and which has been expressly subordinated
in right of payment to all Indebtedness of Parent and its Subsidiaries under the Loan Documents (a)
by the execution and delivery of a subordination agreement, in form and substance satisfactory to
Agent, or (b) otherwise on terms and conditions (including, without limitation, subordination
provisions, payment terms, interest rates, covenants, remedies, defaults and other material terms)
satisfactory to Agent.
“Subsidiary” of a Person means a corporation, partnership, limited liability company,
or other entity in which that Person directly or indirectly owns or controls the shares of Stock
having ordinary voting power to elect a majority of the board of directors (or appoint other
comparable managers) of such corporation, partnership, limited liability company, or other entity;
provided, however, that with respect to Parent or any Loan Party, any reference to “Subsidiary”
shall be construed to exclude each Specified Subsidiary so long as such Person satisfies the
criteria set forth in clauses (i) through (vii) of Section 1.5(b).
“Swing Lender” means WFF or any other Lender that, at the request of Administrative
Borrower and with the consent of Agent agrees, in such Lender’s sole discretion, to become the
Swing Lender under Section 2.3(b) of the Agreement.
“Swing Loan” has the meaning specified therefor in Section 2.3(b) of the
Agreement.
“Taxes” shall mean, any taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments and all interest,
penalties or similar liabilities with respect thereto; provided that Taxes shall exclude
(i) any tax imposed on the net income or net profits of any Lender or any Participant (including
any branch profits taxes), in each case imposed by the jurisdiction (or by
Schedule 1.1-29
any political subdivision or taxing authority thereof) in which such Lender or such
Participant is organized or the jurisdiction (or by any political subdivision or taxing authority
thereof) in which such Lender’s or such Participant’s principal office is located in each case as a
result of a present or former connection between such Lender or such Participant and the
jurisdiction or taxing authority imposing the tax (other than any such connection arising solely
from such Lender or such Participant having executed, delivered or performed its obligations or
received payment under, or enforced its rights or remedies under the Agreement or any other Loan
Document); (ii) taxes resulting from a Lender’s or a Participant’s failure to comply with the
requirements of Section 16(c) or (d) of the Agreement, and (iii) any United States
federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon
the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the
Agreement (or designates a new lending office), except that Taxes shall include (A) any
amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive
pursuant to Section 16(a) of the Agreement, if any, with respect to such withholding tax at
the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office),
and (B) additional United States federal withholding taxes that may be imposed after the time such
Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result
of a change in law, rule, regulation, order or other decision with respect to any of the foregoing
by any Governmental Authority.
“Total Commitment” means, with respect to each Lender, its Total Commitment, and, with
respect to all Lenders, their Total Commitments, in each case as such Dollar amounts are set forth
beside such Lender’s name under the applicable heading on Schedule C-1 attached hereto or
on the signature page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder, as such amounts may be reduced or increased from time to time pursuant to
assignments made in accordance with the provisions of Section 13.1 of the Agreement.
“Trademark Security Agreement” has the meaning specified therefor in the Security
Agreement.
“Transcription Services Agreement” means that certain Transcription Services
Agreement, dated April 3, 2009, by and between MedQuist Transcriptions, Ltd. and CBay Systems &
Services, Inc.
“Underlying Issuer” means a third Person which is the beneficiary of an L/C
Undertaking and which has issued a letter of credit at the request of the Issuing Lender for the
benefit of Borrowers.
“Underlying Letter of Credit” means a letter of credit that has been issued by an
Underlying Issuer.
“United States” means the United States of America.
“Voidable Transfer” has the meaning specified therefor in Section 17.8 of the
Agreement.
“Xxxxx Fargo” means Xxxxx Fargo Bank, National Association, a national banking
association.
“WFF” means Xxxxx Fargo Foothill, LLC, a Delaware limited liability company.
Schedule 1.1-30
Schedule 3.1
The obligation of each Lender to make its initial extension of credit provided for in the
Agreement is subject to the fulfillment, to the satisfaction of each Lender (the making of such
initial extension of credit by any Lender being conclusively deemed to be its satisfaction or
waiver of the following), of each of the following conditions precedent:
(a) the Closing Date shall occur on or before September 2, 2009;
(b) Agent shall have received a letter duly executed by each Borrower and each Guarantor
authorizing Agent to file appropriate financing statements in such office or offices as may be
necessary or, in the opinion of Agent, desirable to perfect the security interests to be created by
the Loan Documents;
(c) Agent shall have received evidence that appropriate financing statements have been duly
filed in such office or offices as may be necessary or, in the opinion of Agent, desirable to
perfect the Agent’s Liens in and to the Collateral, and Agent shall have received searches
reflecting the filing of all such financing statements, and evidencing the absence of any Liens on
the Collateral, other than Liens acceptable to Agent;
(d) Agent shall have received each of the following documents, in form and substance
satisfactory to Agent, duly executed, and each such document shall be in full force and effect:
(i) the Contribution Agreement,
(ii) the Control Agreements,
(iii) the Controlled Account Agreements (other than as set forth on Schedule 3.3),
(iv) the Copyright Security Agreement,
(v) a disbursement letter executed and delivered by each Borrower to Agent regarding the
extensions of credit to be made on the Closing Date, the form and substance of which is
satisfactory to Agent,
(vi) the Fee Letter,
(vii) the Guaranty,
(viii) the Intercompany Subordination Agreement,
(ix) the Patent Security Agreement,
(x) the Security Agreement, together with all certificates representing the shares of Stock
pledged thereunder, as well as stock powers with respect thereto endorsed in bank,
(xi) the Trademark Security Agreement;
Schedule 3.1-1
(e) Agent shall have received a certificate from the Secretary of each Loan Party (i)
attesting to the resolutions of such Loan Party’s Board of Directors authorizing its execution,
delivery, and performance of the Agreement (in the case of Parent and Borrowers) and the other Loan
Documents to which such Loan Party is a party, (ii) authorizing specific officers of such Loan
Party to execute the same, and (iii) attesting to the incumbency and signatures of such specific
officers of such Loan Party;
(f) Agent shall have received copies of each Loan Party’s Governing Documents, as amended,
modified, or supplemented to the Closing Date, certified by the Secretary of such Loan Party;
(g) Other than as set forth on Schedule 3.3, Agent shall have received a certificate
of status with respect to each Loan Party, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of organization of such
Loan Party, which certificate shall indicate that such Loan Party is in good standing in such
jurisdiction;
(h) Agent shall have received certificates of status with respect to each Loan Party, each
dated within 30 days of the Closing Date, such certificates to be issued by the appropriate officer
of the jurisdictions (other than the jurisdiction of organization of such Loan Party) in which its
failure to be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Loan Party is in good standing in such jurisdictions;
(i) Agent shall have received a certificate of insurance, together with the endorsements
thereto, as are required by Section 5.6, the form and substance of which shall be
satisfactory to Agent;
(j) Agent shall have received Collateral Access Agreements with respect to the following
locations:
(i) 0000 Xxxxxxx Xxxx Xxxxxxxxx, Xx. Xxxxxx, Xxx Xxxxxx 00000; and
(ii) 0000 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000;
(k) Agent shall have received an opinion of each of the following counsel in form and
substance satisfactory to Agent:
(i) Xxxxxxxx & Xxxx LLP; and
(ii) Xxxxxxx & Xxxxxxx, LLP;
(l) Agent shall have received a certificate from the Chief Financial Officer or other
responsible officer of each Loan Party certifying as to (i) the truth and accuracy of the
representations and warranties of the Loan Parties contained in Section 4 of the Agreement, (ii)
the absence of any Defaults or Events of Default, (iii) Borrowers having the Required Availability
after giving effect to the initial extensions of credit under the Agreement and the payment of all
fees and expenses required to be paid by Parent and its Subsidiaries on the Closing Date under the
Agreement or the other Loan Documents and (iv) the solvency of each Loan Party after giving effect
to the incurrence of Indebtedness under the Agreement;
(m) the Loan Parties shall have implemented a system of electronic collateral reporting in
order to provide electronic reporting of each of the items required by Section 5.2 of the
Agreement;
(n) Agent shall have completed to its reasonable satisfaction its business, legal, and
collateral due diligence, including (i) a collateral audit and review of Parent’s and its
Subsidiaries’ books and records and verification of Parent’s and its Subsidiaries’ representations
and warranties to Lender Group, the results of which shall be satisfactory to Agent, (ii) an
inspection of each of the locations where Parent’s and its Subsidiaries Inventory and Equipment is
located, the results of which shall be satisfactory to Agent, (iii) a
Schedule 3.1-2
review of Parent’s and its Subsidiaries Material Contracts, the results of which shall be
reasonably satisfactory to Agent, and (iv) a review of Parent’s business plan, the results of which
shall be reasonably satisfactory to Agent;
(o) Agent shall have received (i) completed reference checks with respect to Parent’s and its
Subsidiaries’ senior management and (ii) completed Patriot Act and OFAC searches, in each case, the
results of which are satisfactory to Agent in its sole discretion;
(p) Agent shall have received a set of Projections of Parent for the 3-year period following
the Closing Date (on a year by year basis, and for the 1-year period following the Closing Date, on
a month by month basis), in form and substance (including as to scope and underlying assumptions)
reasonably satisfactory to Agent;
(q) Borrowers shall have paid all Lender Group Expenses incurred in connection with the
transactions evidenced by the Agreement;
(r) Agent shall have received copies of each Material Contract, together with a certificate of
the Secretary of Administrative Borrower certifying each such document as being a true, correct,
and complete copy thereof;
(s) Parent and each of its Subsidiaries shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in connection with the execution
and delivery by Parent or its Subsidiaries of the Loan Documents or with the consummation of the
transactions contemplated thereby;
(t) Agent shall have performed a full field audit of Parent and its Subsidiaries, the results
of which shall be satisfactory to Agent; and
(u) all other documents and legal matters in connection with the transactions contemplated by
the Agreement shall have been delivered, executed, or recorded and shall be in form and substance
reasonably satisfactory to Agent.
Schedule 3.1-3
Schedule 3.3
Conditions Subsequent
Parent and Borrowers agree that, in addition to all other terms, conditions and provisions set
forth in the Agreement and the other Loan Documents, including those conditions set forth in
Sections 3.1 and 3.2, Parent and Borrowers shall satisfy each of the following
conditions subsequent on or before the date applicable thereto:
(a) Within three days after the Closing Date, Agent shall have received evidence satisfactory
to Agent that Loan Parties have closed Investment Account number 00000000 maintained at JPMorgan
Chase Bank, N.A.
(b) On or prior to September 9, 2009, Agent shall have received a Controlled Account Agreement
with respect to the Loan Parties’ account number XXXXXX maintained at JPMorgan Chase Bank.
(c) Within 15 days after the Closing Date, Agent shall have received a Collateral Access
Agreement with respect to the following leased location: 0000 X. Xxxxxxxx Xxxxxxx, Xxxxxxxx 000,
Xxxxx 000/000, Xxxxxxxx, Xxxxxxx 00000;
provided, however, that the Collateral Access Agreement with respect to the leased
location described above shall not be required if Agent is satisfied, in its Permitted Discretion,
that such Collateral Access Agreement will not be obtained after the Loan Parties have used
commercially reasonable efforts to do so (it being understood and agreed that in the event the Loan
Parties are unable to obtain such Collateral Access Agreement, Agent may, in its Permitted
Discretion, establish such reserves as it deems necessary with respect to such leased location).
(d) Within 120 days after the Closing Date, Agent shall have received a certificate from the
Secretary of the State of New York, certifying that Administrative Borrower is in good standing in
the State of New York.
Schedule 3.1-1
Schedule 5.1
Deliver to Agent, with copies to each Lender, each of the financial statements, reports, or
other items set forth set forth below at the following times in form satisfactory to Agent:
As soon as available, but in any
event within 30 days after the
end of each month (other than
any month that is the end of one
of Parent’s fiscal quarters)
|
(a) an unaudited consolidated and consolidating balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period and setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year, | |
| (b) an unaudited consolidated and consolidating balance sheet, income statement, and statement of cash flow covering each Specified Subsidiary’s operations during such period and setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year, and | ||
| (c) a Compliance Certificate. | ||
As soon as available, but in any
event within 5 days after the
date on which the financial
statements described in clause
(a) above are delivered
|
(d) as it pertains to the financial statements described in clause (a) above, a reconciliation to the most recent Projections delivered to Agent for such period, together with a written explanation of any material variances for such period. | |
As soon as available, but in any
event within 45 days after the
end of each of Parent’s fiscal
quarters
|
(e) an unaudited consolidated and consolidating balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period and setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year (it being understood and agreed that the foregoing delivery requirement shall be deemed satisfied with respect to each of the first three fiscal quarters of each of Parent’s fiscal years by Parent’s delivery to Agent, with copies to each Lender, of a copy of its Form 10-O quarterly report for such period), | |
| (f) an unaudited consolidated and consolidating balance sheet, income statement, and statement of cash flow covering each Specified Subsidiary’s operations during such period and setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year, and | ||
| (g) a Compliance Certificate. | ||
As soon as available, but in any
event within 5 days after the
date on which the financial
statements described in clause
(e) above are delivered
|
(h) as it pertains to the financial statements described in clause (e) above, a reconciliation to the most recent Projections delivered to Agent for such period, together with a written explanation of any material variances for such period. |
Schedule 5.1-1
As soon as available, but in any
event within 90 days after the
end of each of Parent’s fiscal
years
|
(i) consolidated and consolidating financial statements of Parent and its Subsidiaries and Specified Subsidiaries for each such fiscal year, setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year, which consolidated financial statements shall be audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications (including any (i) “going concern” or like qualification or exception, (ii) qualification or exception as to the scope of such audit, or (iii) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, and statement of cash flow and, if prepared, such accountants’ letter to management) (it being understood and agreed that the foregoing delivery requirement shall be deemed satisfied by Parent’s delivery to Agent, with copies to each Lender, of a copy of its Form 10-K annual report for such fiscal year), and | |
| (j) an unaudited consolidated balance sheet, income statement, and statement of cash flow covering Parent’s and its Subsidiaries’ operations during such period and setting forth, in each case, in comparative form, the figures for the corresponding period of the immediately preceding fiscal year, | ||
| (k) a Compliance Certificate. | ||
As soon as available, but in any
event within 5 days after the
date on which the financial
statements described in clause
(i) above are delivered
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(l) as it pertains to the financial statements described in clause (i) above, a reconciliation to the most recent Projections delivered to Agent for such period, together with a written explanation of any material variances for such period. | |
As soon as available, but in any
event within 30 days after the
end of each of Parent’s fiscal
years,
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(m) copies of Parent’s Projections, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, for the forthcoming 3 years, year by year, and for the forthcoming fiscal year, month by month, certified by the chief financial officer of Parent as being such officer’s good faith estimate of the financial performance of Parent and its Subsidiaries during the period covered thereby. | |
If and when filed by Parent or
any of its Subsidiaries,
|
(n) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports, | |
| (o) any other filings made by Parent or any of its Subsidiaries with the SEC, and | ||
| (p) any other information that is provided by Parent or any of its Subsidiaries to its shareholders generally. |
Schedule 5.1-2
Promptly, but in any event
within 5 days after Parent or
any of its Subsidiaries have
knowledge of any event or
condition that constitutes a
Default or an Event of Default,
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(q) notice of such event or condition and a statement of the curative action that such Person proposes to take with respect thereto. | |
Promptly after the commencement
thereof, but in any event within
5 days after the service of
process with respect thereto on
Parent or any of its
Subsidiaries,
|
(r) notice of all actions, suits, or proceedings brought by or against Parent or any of its Subsidiaries before any Governmental Authority which reasonably could be expected to result in a Material Adverse Change. | |
Immediately after receipt or delivery thereof, |
(s) copies of any notices evidencing the expiration, cancellation or other termination of any Material Contract. | |
Immediately after Parent or any
of its Subsidiaries has
knowledge of any labor
negotiations which could result
in a labor strike,
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(t) notice of the nature and status of such negotiations, together with a statement of action that the Parent proposes to take with respect thereto. | |
Upon the request of Agent,
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(u) any other information reasonably requested relating to the financial condition of Parent or its Subsidiaries. |
Schedule 5.1-3
Schedule 5.2
Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the
documents set forth below at the following times in form satisfactory to Agent and in electronic
format where indicated when such reporting is implemented pursuant to Section 5.2 of the
Credit Agreement:
Monthly (no later than the 15th day
of each month)
|
(a) a Borrowing Base Certificate as of the then most recently concluded calendar month, | |
| (b) a detailed aging, by total, of Parent’s and its Subsidiaries’ Accounts together with a reconciliation and supporting documentation for any reconciling items noted (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting), | ||
| (c) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, if Borrowers have not implemented electronic reporting, | ||
| (d) a summary aging, by vendor, of Parent’s and its Subsidiaries’ accounts payable and any book overdraft (delivered electronically in an acceptable format, if Borrowers have implemented electronic reporting) and an aging, by vendor, of any held checks, | ||
| (e) a detailed report regarding Parent’s and its Subsidiaries’ cash and Cash Equivalents, including an indication of which amounts constitute (i) Qualified Cash, (ii) proceeds of Accounts, and (iii) other Collections, | ||
| (f) a monthly Account roll-forward, in a format acceptable to Agent in its discretion, tied to the beginning and ending account receivable balances of Parent’s and its Subsidiaries’ general ledger, | ||
| (g) a report regarding Parent’s and its Subsidiaries’ accrued, but unpaid taxes and royalties, including ad valorem taxes, and | ||
| (h) a detailed report, by customer, showing (i) all deferred revenue and deferred accommodation liabilities as set forth in Loan Parties’ balance sheets for the prior month, and (ii) the portion of such deferred revenue and deferred accommodation liabilities that has previously been paid in cash, | ||
Monthly (no later than the 30th day
of each month)
|
(i) a reconciliation of Accounts and trade accounts payable of Parent’s and its Subsidiaries’ general ledger accounts to its monthly financial statements including any book reserves related to each category. | |
Annually
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(j) a detailed list of Parent’s and its Subsidiaries’ customers, with address and contact information. | |
Upon request by Agent
|
(k) copies of purchase orders and invoices for Inventory and Equipment acquired by Parent or its Subsidiaries, | |
| (l) a schedule showing unbilled Accounts and/or accrued royalties of Parent and its Subsidiaries, and | ||
| (l) such other reports as to the Collateral or the financial condition of Parent and its Subsidiaries, as Agent may reasonably request. |
Schedule 5.2-1
