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EXECUTION VERSION
U.S. $4,950,000
BRIDGE CREDIT AGREEMENT
Dated as of August 8, 2000
Among
ORBCOMM GLOBAL, L.P.
as Borrower
and
TELEGLOBE HOLDING CORP.
as Lender
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms.................................................1
SECTION 1.02. Computation of Time Periods...................................8
SECTION 1.03. Accounting Terms..............................................8
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCE
SECTION 2.01. The Advance...................................................9
SECTION 2.02. Making the Advance............................................9
SECTION 2.03. Repayment.....................................................9
SECTION 2.04. Reduction and Termination of the Commitments..................9
SECTION 2.05. Optional Prepayments..........................................9
SECTION 2.06. Interest......................................................9
SECTION 2.07. Payments and Computations....................................10
SECTION 2.08. Taxes........................................................10
SECTION 2.09. Use of Proceeds..............................................11
SECTION 2.10. Evidence of Debt.............................................11
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Borrowing............................11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower...............13
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants........................................18
SECTION 5.02. Negative Covenants...........................................20
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default............................................23
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc..............................................26
SECTION 7.02. Notices, Etc.................................................26
SECTION 7.03. No Waiver; Remedies..........................................26
SECTION 7.04. Indemnity....................................................26
SECTION 7.05. Right of Set-off.............................................27
SECTION 7.06. Integration..................................................27
SECTION 7.07. Binding Effect...............................................27
SECTION 7.08. GOVERNING LAW................................................27
SECTION 7.09. Execution in Counterparts....................................27
SECTION 7.10. WAIVER OF JURY TRIAL.........................................27
SCHEDULES:
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, etc
Schedule 4.01(k) - ERISA Events
Schedule 4.01(r) - Patents, Copyrights and other Intellectual Property
Schedule 4.01(s) - Scheduled Liens
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Notice of Borrowing
Exhibit C - Form of Security Agreement
Exhibit D - Business Plan
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BRIDGE CREDIT AGREEMENT
BRIDGE CREDIT AGREEMENT dated as of August 8, 2000 (this
"Agreement") between ORBCOMM GLOBAL, L.P., a Delaware limited partnership (the
"Borrower") and TELEGLOBE HOLDING CORP., a Delaware corporation (the "Lender").
Introductory Statement. As of the date hereof, Lender owns,
indirectly through subsidiaries, a majority interest in the Borrower. The
Borrower is soliciting additional capital from long-term investors or strategic
partners and contemplates a substantial reorganization of its business to
conserve funds while remaining a going concern. The Borrower requires an
immediate extension of credit to enable it to pay its expenses in the ordinary
course of business and prepare for an orderly sale and or restructuring. The
Lender is willing to provide Borrower up to $4,950,000 in secured loans for such
purposes, subject to the terms and conditions set forth herein. As of the date
hereof, the Lender has advanced $300,000 to the Borrower, which amount is deemed
part of the Advance (as defined below) made hereunder and is a secured loan
pursuant to the Collateral Documents (as defined below).
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Advance" means the advance by the Lender to the Borrower pursuant
to Article II hereof.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 10% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Borrower" has the meaning specified in the recital of parties to
this Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with First Union National Bank, Capital Management and
Institutional Trust Division at its office at 000 00xx Xxxxxx X.X., 0xx
Xxxxx, Xxxxxxxxxx, X.X., 00000, Account No. #000 000 0000.
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"Business Day" means a day of the year on which banks are not
required by law or authorized to close in New York City.
"Business Plan" means the Business Plan attached hereto as Exhibit
D.
"Capital Expenditures" means, with respect to any Person any
expenditures for, and any Debt (including obligations under Capitalized
Leases) assumed or incurred in connection with the acquisition of,
equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that are
required to be capitalized under GAAP on the balance sheet of such Person.
"Capital Stock" means any and all shares, interests, participations
or other equivalent ownership interests in Borrower and its Subsidiaries
and any and all warrants, rights or options to purchase any of the
foregoing.
"Capitalized Leases" has the meaning specified in clause (e) of the
definition of Debt.
"Cash Equivalents" means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date of
acquisition; (b) commercial paper of an issuer rated at least A-2 by S&P
or P-2 by Moody's, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally, and maturing
within one month from the date of acquisition; (c) repurchase obligations
of any commercial bank organized under the laws of the United States of
America or any state thereof having combined capital and surplus of not
less than $500,000,000, having a term of not more than 30 days, with
respect to securities issued or fully guaranteed or insured by the United
States government; (d) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of one month or
less from the date of acquisition issued by any commercial bank satisfying
the requirement of clause (c) of this definition; (e) securities with
maturities of one month or less from the date of acquisition backed by
standby letters of credit issued by any commercial bank satisfying the
requirements of clause (c) of this definition; or (f) shares of money
market mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (e) of this definition.
"Closing Date" means the date upon which the conditions precedent to
the making of the Advance set forth in Section 3.01 have been satisfied or
waived by the Lender.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all property that is subject to any Lien in favor of
the Lender.
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"Collateral Documents" means the Security Agreement.
"Commitment" means the commitment of the Lender to make Advances
hereunder in the aggregate amount of $4,950,000.
"Consolidated" refers to the consolidation of financial statements
in accordance with GAAP.
"Debt" of any Person means, without duplication, the following:
(a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price
of property or services (other than trade payables not overdue by more
than 90 days incurred in the ordinary course of such Person's business),
(c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession
or sale of such property),
(e) all obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases
("Capitalized Leases"),
(f) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities,
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or
any warrants, rights or options to acquire such capital stock, valued, in
the case of Redeemable Preferred Stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends,
(h) all obligations of such Person in respect of Hedge Agreements,
(i) all Debt of others referred to in clauses (a) through (h) above
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (ii) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds to or
in any other manner invest in the debtor
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(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss, and
(j) all Debt referred to in clauses (a) through (h) above secured by
(or for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of
such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Environmental Law" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal,
release or discharge of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" of any Person means any other Person that for
purposes of Title IV of ERISA is a member of the controlled group of
Borrower, or under common control with Borrower, within the meaning of
Section 414 of the Internal Revenue Code.
"ERISA Event" means (a)(i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
expected to occur with respect to such Plan within the following 30 days;
(b) the application for a minimum funding waiver with respect to a Plan;
(c) the provision by the administrator of any Plan of a notice of intent
to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including
any such notice with respect to a plan amendment referred to in Section
4041(e) of ERISA); (d) the cessation of operations at a facility of
Borrower or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by Borrower or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA shall
have been met with respect to any Plan; (g) the adoption of an
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amendment to a Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA; or (h) the institution by the PBGC of
proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the
occurrence of any event or condition described in Section 4042 of ERISA
that constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"Events of Default" has the meaning specified in Section 6.01
hereof.
"GAAP" has the meaning specified in Section 1.03 hereof.
"Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
(b) any other chemicals, materials or substances designated, classified or
regulated as hazardous or toxic or as a pollutant or contaminate under any
Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in interest rates or
foreign exchange rates.
"Indemnified Party" has the meaning specified in Section 7.04
hereof.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Internal Revenue Service" means the United States Internal Revenue
Service.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clauses (i) and (j) of
the definition of "Debt" in respect of such Person.
"Lender" has the meaning specified in the recital of parties to this
Agreement.
"Lender's Account" means the account of the Lender maintained by the
Lender with Bank of America at its office at New York, New York, Account
No. 12338-29451.
"Lending Office" means the office of the Lender specified in Section
7.02 hereof.
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"Lien" means any lien, security interest, mortgage or other charge
or encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means this Agreement, the Note (if any) and the
Collateral Documents.
"Material Contracts" has the meaning specified in Section 4.01(v)
hereof.
"Maturity Date" means September 15, 2000.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" of any Person means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and at least one
Person other than such Person and its ERISA Affiliates or (b) was so
maintained and in respect of which such Person or any of its ERISA
Affiliates could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"Note" has the meaning specified in Section 2.10 hereof.
"Notice of Borrowing" has the meaning specified in Section 2.02
hereof.
"Obligation" means, with respect to any Person, any obligation of
such Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to
payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or other similar proceeding. Without limiting the
generality of the foregoing, the Obligations under the Loan Documents
include (a) the obligation to pay principal, interest, charges, expenses,
indemnities and other amounts payable under any Loan Document and (b) the
obligation to reimburse any amount in respect of any of the foregoing that
the Lender, in its sole discretion, may elect to pay or advance on behalf
of Borrower.
"Other Taxes" has the meaning specified in 2.08(b) hereof.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means (a) Liens for taxes, assessments and
governmental charges or levies not yet due and payable or which are not
required to be paid under Section 5.01(b) hereof; (b) Liens imposed by
law, such as materialmen's, mechanics', carriers', workmen's and
repairmen's Liens and other similar Liens arising in the ordinary course
of business securing obligations that are not overdue for a period of more
than 60 days or that are being contacted in good faith by appropriate
proceedings; and (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan, Multiemployer Plan or a
Multiple Employer Plan.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Redeemable" means, with respect to any capital stock, Debt or other
right or obligation, any such right or obligation that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a
condition not solely within the control of the issuer or (b) is redeemable
at the option of the holder.
"Revenue Agent Report" means any report prepared by an agent of the
Internal Revenue Service in connection with an audit of the Borrower
recommending or otherwise setting forth positive adjustments to the
Federal income tax liability of the Borrower.
"S&P" means Standard & Poor's.
"Security Agreement" has the meaning specified in Section 3.01(a)(v)
hereof.
"Single Employer Plan" of any Person means a single employer plan,
as defined in Section 400(a)(15) of ERISA, that (a) is maintained for
employees of such Person or any of its ERISA Affiliates and no Person
other than such Person and its ERISA Affiliates or (b) was so maintained
and in respect of which such Person or any of its
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ERISA Affiliates could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of such
Person's other Subsidiaries.
"Taxes" has the meaning specified in Section 2.08(a) hereof.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the
happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(g) ("GAAP").
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ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCE
SECTION 2.01. The Advance. The Lender agrees, on the terms and
conditions hereinafter set forth, to make an Advance to the Borrower on the
Closing Date in the amount of the Commitment less $300,000, the emergency
advance made by the Lender to the Borrower on August 4, 2000, which emergency
advance shall henceforth be deemed an Advance hereunder secured by the
Collateral Documents.
SECTION 2.02. Making the Advance. Subject to Section 2.01 and
satisfaction of the conditions set forth in Section 3.01, the Advance shall be
made on August 8, 2000, pursuant to a notice of borrowing (a "Notice of
Borrowing"). Such Notice of Borrowing shall be by fax, in substantially the form
of Exhibit B hereto, specifying therein the requested (i) date of such borrowing
and (ii) aggregate amount of such borrowing. Upon fulfillment of the applicable
conditions set forth in Article III, the Lender will make such funds available
to the Borrower by wire transfer to the Borrower's Account.
SECTION 2.03. Repayment. The Borrower shall repay to the Lender the
outstanding principal amount of the Advance on the Maturity Date. When any of
the Obligations of the Borrower under the Loan Documents become due and payable
(by acceleration or otherwise), the Lender shall be entitled to immediate
payment of such Obligations.
SECTION 2.04. Reduction and Termination of the Commitments. (a)
Optional. The Borrower may, upon at least one Business Day's notice to the
Lender, terminate in whole or reduce the unused portion of the Commitment;
provided, however, that each partial reduction shall be in an aggregate amount
of $2,000,000 or an integral multiple of $1,000,000 in excess thereof.
(b) Mandatory. On the Maturity Date, the Commitment of the Lender
shall expire.
SECTION 2.05. Optional Prepayments. The Borrower may, upon at least
two Business Days' notice to the Lender stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay the outstanding principal amount of the Advance in whole or
ratably in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid, without premium or penalty; provided, however,
that each partial prepayment shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof.
SECTION 2.06. Interest. (a) Ordinary Interest. The Borrower shall
pay interest on the unpaid principal amount of the Advance owing to the Lender
from the date of such Advance until such principal amount shall be paid in full,
at 17% per annum, payable in arrears on the Maturity Date.
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(b) Default Interest. Upon the occurrence and during the continuance
of a Default, interest shall accrue on the unpaid principal amount of the
Advance owing to the Lender and on the unpaid amount of all interest, fees and
other amounts payable hereunder that is not paid when due, at a rate per annum
equal to 19%, payable in arrears on the dates referred to in subsection (a)
above and on demand.
SECTION 2.07. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Note, if any, without setoff, deduction or
counterclaim, not later than 2:00 P.M. (New York City time) on the day when due
at the Lender's Account in U.S. dollars in same day funds.
(b) All computations of interest and fees shall be made by the
Lender on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest, fees or commissions are payable. Each
determination by the Lender of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Note, if any, shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest, as the case may
be.
SECTION 2.08. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Note, if any, shall be made, in accordance with Section
2.08, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, net income taxes that are imposed by the United
States and franchise taxes and net income taxes that are imposed on the Lender
under the laws of the state which it is organized or any political subdivision
thereof and franchise taxes and net income taxes that are imposed on the Lender
by the state of its Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Note, if any, to the Lender, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.08), the Lender receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Note, if
any, or from the execution, delivery or
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registration of, or otherwise with respect to, this Agreement or the Note, if
any, (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify the Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.08) paid by
the Lender and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto. This indemnification
shall be made within 10 days from the date the Lender makes written demand
therefor.
(d) As soon as reasonably practicable after the date of any payment
of Taxes, the Borrower will furnish to the Lender, at its address referred to in
Section 7.02, appropriate evidence of payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.08 shall survive the payment in full of principal and interest
hereunder and under the Note, if any.
SECTION 2.09. Use of Proceeds. The proceeds of the Advance shall be
available, and shall be used, solely for payroll, severance, employee benefits,
withholding taxes, rent, utilities and other obligations integral to the
Borrower's continuing operations and the expenses of preparing for a filing
under Chapter 11 of the Bankruptcy Code, and the payment of interest and fees
and expenses in respect hereof all in accordance with the Business Plan.
SECTION 2.10. Evidence of Debt. The Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to the Lender resulting from the Advance owing to
the Lender from time to time, including the amounts of principal and interest
payable and paid to the Lender from time to time hereunder. The Borrower agrees
that upon notice by the Lender to the Borrower to the effect that a promissory
note or other evidence of indebtedness is required or appropriate in order for
the Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advance owing to, or to be made by, the Lender, the Borrower
shall promptly execute and deliver to the Lender a promissory note substantially
in the form of Exhibit A hereto (each a "Note"), payable to the order of the
Lender in a principal amount equal to the Commitment.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Borrowing. The obligation of
the Lender to make the Advance is subject to the following conditions precedent:
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(a) The Lender shall have received the following, each dated the
Closing Date (unless otherwise specified), in form and substance reasonably
satisfactory to the Lender:
(i) Evidence, reasonably satisfactory in form and substance to
the Lender, of due authorization of the execution, delivery and
performance by Borrower of its Obligations under this Agreement and
each other Loan Document;
(ii) A certificate signed on behalf of the Borrower by its
chief executive officer or chief financial officer, dated as of the
Closing Date (the statements made in which certificate shall be true
on and as of the Closing Date), certifying as to (A) a true and
correct copy of the formation documents of the Borrower as in effect
on the Closing Date, (B) the due formation and good standing of the
Borrower as a limited partnership organized under the laws of the
State of Delaware, and the absence of any proceeding for the
dissolution or liquidation of the Borrower, (C) the truth in all
material respects of the representations and warranties contained in
the Loan Documents, as though made on and as of the date of the
initial borrowing, before and after giving effect to such borrowing,
and to the application of the proceeds therefrom, and (D) the
absence of any event occurring and continuing, or resulting from the
initial borrowing or from the application of the proceeds therefrom,
that constitutes a Default or Event of Default;
(iii) (A) A certificate signed by a Secretary or an Assistant
Secretary of the Borrower certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement,
the Note (if any), each other Loan Document to which the Borrower is
or may be a party and the other documents to be delivered hereunder
and thereunder; and
(B) a certificate signed by a Secretary or Assistant Secretary of
the Borrower's general partner, and such general partner's managing
partner, certifying the names and the signatures of the officers of
the Borrower's general partner, and such general partner's managing
partner, authorized to sign on behalf of the Borrower this
Agreement, the Note (if any) and each other Loan Document to which
the Borrower is or may be a party and the other documents to be
delivered hereunder or thereunder;
(iv) If requested by the Lender, a Note to the order of the
Lender in substantially the form of Exhibit A hereto;
(v) A security agreement in substantially the form of Exhibit
C (as amended from time to time in accordance with its terms, the
"Security Agreement"), duly executed by the Borrower;
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(vi) The Lender shall have received the opinion of outside
counsel to the Borrower, satisfactory in form and substance to the
Lender, covering the matters set forth in paragraphs 4.01(a) through
(f) hereof.
(b) Lender shall have received the certificates representing the
shares of Capital Stock pledged pursuant to the Collateral Documents,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof.
(c) Each document (including, without limitation, any Uniform
Commercial Code financing statement and Patent and Trademark Office
filing) required by the Collateral Documents or under law or reasonably
requested by Lender to be filed, registered or recorded in order to create
in favor of Lender, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect
to Liens expressly permitted by Section 5.02(a)) shall be in proper form
for filing, registration or recordation in each jurisdiction in which the
filing, registration or recordation thereof is so required or requested.
(d) The Lender shall have received such other approvals, opinions or
documents as the Lender may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) It (i) is duly formed, validly existing and in good standing
under the laws of the jurisdiction of its formation, (ii) is duly
qualified and in good standing in each other jurisdiction in which it owns
or leases property or in which the conduct of its business requires it to
so qualify or be licensed except where the failure to so qualify or be
licensed would not have a material adverse effect on its business,
condition (financial or otherwise), operations, performance, properties or
prospects and (iii) has all requisite power and authority to own or lease
and operate its properties and to carry on its business as now conducted
and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all direct and indirect Subsidiaries of Borrower, showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
organization or formation, the number of interests or shares of each class
of Capital Stock authorized, and the number outstanding, on the date
hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by Borrower and the number of shares
covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof.
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All of the outstanding Capital Stock of all of such Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by Borrower
or one or more of its Subsidiaries free and clear of all Liens, except
those created by the Collateral Documents and any restrictions or
encumbrances on transferability of securities imposed by applicable
federal securities laws. Each such Subsidiary (i) is duly organized or
formed, validly existing and in good standing under the laws of the
jurisdiction of its organization or formation, (ii) is duly qualified and
in good standing in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify
or be licensed except where the failure to so qualify or be licensed would
not have a material adverse effect on its business, condition (financial
or otherwise), operations, performance, properties or prospects and (iii)
has all requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed
to be conducted.
(c) The execution, delivery and performance by each Borrower of this
Agreement, the Note, if any, and each other Loan Document to which it is
or is to be a party, and the other transactions contemplated hereby, are
within Borrower's powers, have been duly authorized by all necessary
partnership action, and do not (i) contravene Borrower's partnership
agreement, (ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934 and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting Borrower, any of its Subsidiaries or
any of their properties or (iv) result in or require the creation or
imposition of any Lien (other than those created under the Collateral
Documents) upon or with respect to any of the properties of Borrower or
any of its Subsidiaries. Neither Borrower nor any of its Subsidiaries is
in violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award, the violation or breach of
which is reasonably likely to have a material adverse effect on the
business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower or its Subsidiaries taken as a whole.
(d) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery and
performance by Borrower of this Agreement or any other Loan Document to
which it is or is to be a party, or the other transactions contemplated
hereby except (i) for authorizations, approvals, actions, notices or
filings described in Schedule 4.01(d) hereto, which authorizations,
approvals, actions, notices or filings have been obtained or made and are
in full force and effect, (ii) for authorizations, approvals, actions,
notices, or filings the failure of which to obtain or make and maintain in
full force and effect could not reasonably be expected to have a material
adverse effect
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on its business, condition (financial or otherwise), operations,
performance, properties or prospects, and (iii) the filings referred to in
Schedule 5 to the Security Agreement.
(e) This Agreement has been, and each other Loan Document when
delivered hereunder will have been, duly executed and delivered by
Borrower. This Agreement is, and each other Loan Document when delivered
hereunder will be the legal, valid and binding obligation of the Borrower,
enforceable against Borrower in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
(f) Upon execution and delivery thereof by the parties thereto, each
of the Collateral Documents will be effective to create in favor of Lender
a legal, valid and enforceable security interest in the collateral
described therein. Uniform Commercial Code financing statements have been
filed in each of the jurisdictions listed on Schedule 5 to the Security
Agreement or arrangements have been made for such filing in such
jurisdictions, and Patent and Trademark Office filings have been arranged
by Lender, and upon such filing, and upon the taking of possession by
Lender of the Pledged Securities referred to in any of the Collateral
Documents and any other collateral the security interests in which may be
perfected only by possession, such security interests will constitute
first priority perfected liens on, and security interests in, all right,
title and interest of the debtor party thereto in the collateral described
therein, except as permitted by Section 5.02(a).
(g) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1999, and the related Consolidated
statement of income and cash flow of the Borrower and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of Xxxxxx Xxxxxxxx,
X.X., independent public accountants, and the unaudited Consolidated
balance sheet of the Borrower and its Subsidiaries as at March 31, 2000,
and the related Consolidated statement of income and cash flow of the
Borrower and its Subsidiaries for the three months then ended, copies of
which have been furnished to the Lender, fairly present the Consolidated
results of the operations of the Borrower and its Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis.
(h) No information, exhibit or report furnished to the Lender in
connection with the negotiation of the Loan Documents or pursuant to the
terms of the Loan Documents contained as of the date such information,
exhibit or report was so furnished any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements made
therein not misleading.
(i) There is no action, suit, investigation, litigation or
proceeding affecting, pending or, to the knowledge of the Borrower,
threatened before any court, governmental agency or arbitrator that (i)
could reasonably be expected to have a material adverse effect
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on the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its Subsidiaries
taken as a whole or (ii) purports to affect the legality, validity or
enforceability of this Agreement, any other Loan Document or the
consummation of the transactions contemplated hereby.
(j) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying "margin stock" within the
meaning of such quoted term under Regulation U of the Federal Reserve
Board as now and from time to time hereafter in effect, and no proceeds of
any Advance will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any
margin stock.
(k) Except as set forth on Schedule 4.01(k), no ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan of
the Borrower or any ERISA Affiliate.
(l) Neither Borrower nor any of its ERISA Affiliates has incurred or
is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(m) Neither Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no Multiemployer Plan to which Borrower or any
ERISA Affiliate belongs is reasonably expected to be in reorganization or
to be terminated, within the meaning of Title IV of ERISA.
(n) Neither the business nor the properties of Borrower or any
Subsidiary have been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not
covered by insurance) that could reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of Borrower and its
Subsidiaries taken as a whole.
(o) The operations and properties of Borrower and each of its
Subsidiaries comply in all material respects with all Environmental Laws
and neither utilize nor contain nor are affected by any Hazardous
Materials that are not treated in material compliance with all
Environmental Laws, and neither the Borrower nor any of its Subsidiaries
has any material liability, contingent or otherwise, under any
Environmental Law that could reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of Borrower and its
Subsidiaries taken as a whole.
(p) Each of Borrower and its Subsidiaries has filed, has caused to
be filed or has been included in all tax returns (Federal, state, local
and foreign) required to be filed and has paid all taxes shown thereon to
be due, together with applicable interest and
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penalties, (i) the amount of which, either individually or in the
aggregate, could reasonably be expected to have a material adverse effect
on the business, condition (financial or otherwise), operations,
performance, properties or prospects of Borrower and its Subsidiaries
taken as a whole or (ii) the amount, applicability or validity of which is
being contested in good faith and by appropriate proceedings and with
respect to which the Borrower or such Subsidiary, as the case may be, has
established adequate reserves in accordance with generally accepted
accounting principles. Neither the Borrower nor any of its Subsidiaries
knows of any basis for any other tax, fee or charge that either
individually or in the aggregate, could have a material adverse effect on
the business, condition (financial or otherwise), operations, performance,
properties or prospects of Borrower and its Subsidiaries taken as a whole.
(q) Borrower is not an "investment company", or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended. Neither the making of the Advance nor the application of the
proceeds or repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(r) Set forth on Schedule 4.01(r) hereto is a complete and accurate
list of all material patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, owned by
Borrower and each of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(s) There are no Liens (including liens or titles retained by
conditional vendors) of any nature whatsoever on any properties of the
Borrower or any of its Subsidiaries other than (i) Permitted Liens, (ii)
Liens created pursuant to the Loan Documents and (iii) the Liens set forth
on Schedule 4.01(s) hereto. The Liens granted by the Borrower to the
Lender pursuant to the Security Agreement are duly perfected Liens on the
Collateral. Except as disclosed on Schedule 4.01(s), neither Borrower nor
any of its Subsidiaries is a party to any contract, agreement, lease or
instrument the performance of which, either unconditionally or upon the
happening of an event, will result in or require the creation of a Lien on
its property or assets, other than Permitted Liens, or otherwise result in
a violation of this Agreement.
(t) All material contracts of the Borrower and each of its
Subsidiaries (i) are listed in filings made with the Securities and
Exchange Commission ("Material Contracts") and (ii) to the extent not
listed in any such filings, are listed on Schedule 1 to the Security
Agreement.
(u) The Borrower and its Subsidiaries possess all patents,
copyrights, trademarks, trade names, service marks, licenses, permits,
authorizations and rights
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thereto, in respect of the foregoing, all of which are shown on Schedule
4.01(r) hereto. The patents, copyrights, trademarks, trade names, service
marks, licenses, permits, authorizations and rights thereto set forth on
Schedule 4.01(r) are, in the Borrower's reasonable business judgment,
adequate for the conduct of its business as now conducted and, except for
any other necessary authorizations and approvals from applicable
governmental authorities, as planned to be conducted in the future,
without known conflict with any rights of others that could reasonably be
expected to have a material adverse effect on the business, condition
(financial or otherwise), operations, performance, properties or prospects
of Borrower and its Subsidiaries taken as a whole.
(v) Borrower has been represented by independent counsel and has
entered into this Agreement without any undue influence or duress of
Lender, and all other Persons having an ownership interest in the Borrower
have, or their duly authorized representatives, been notified of, and
consented to, the Borrower's entry into this Agreement.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as the Advance shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will, and will cause each of its Subsidiaries to, unless the Lender shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, in all material respects,
with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, compliance with ERISA, all applicable
Environmental Laws and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, before the same shall
become delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as to
which appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain insurance with responsible
and reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates.
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(d) Preservation of Existence, Etc. Preserve and maintain its
corporate or partnership status, rights (charter and statutory) and
franchises, except as may otherwise be permitted under Section 5.02(d).
(e) Visitation Rights. At any reasonable time and from time to time,
permit the Lender or any agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of account of, and
visit the properties of, the Borrower and its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries
with any of their officers or directors and with their independent
certified public accountants.
(f) Keeping of Books. Keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions
and their respective assets and business in accordance with GAAP.
(g) Maintenance of Properties, Etc. Maintain and preserve all of its
properties that are used or useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted, except as
may otherwise be permitted under Section 5.02(e).
(h) Transactions with Affiliates. Conduct all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on terms
that are no less favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate.
(i) Reporting Requirements. Furnish to the Lender:
(i) promptly and in any event within five Business Days after
Borrower or any of its ERISA Affiliates knows or has reason to know
that any ERISA Event has occurred, a statement of the chief
executive officer or chief financial officer of the Borrower
describing such ERISA Event and the action, if any, that Borrower or
such ERISA Affiliate has taken and proposes to take with respect
thereto;
(ii) promptly and in any event within five Business Days after
receipt thereof by Borrower or any of its ERISA Affiliates, copies
of each notice from the PBGC stating its intention to terminate any
Plan or to have a trustee appointed to administer any Plan;
(iii) promptly and in any event within 30 days after the
filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500
Series) with respect to each Plan of each Borrower;
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(iv) promptly and in any event within five Business Days after
receipt thereof by Borrower or any of its ERISA Affiliates from the
sponsor of a Multiemployer Plan, copies of each notice received by
Borrower or any of its ERISA Affiliates concerning (A) the
imposition of Withdrawal Liability by any Multiemployer Plan, (B)
the reorganization or termination, within the meaning of Title IV of
ERISA, of any Multiemployer Plan or (C) the amount of liability
incurred, or that may be incurred, by Borrower or any of its ERISA
Affiliates in connection with any event described in clause (A) or
(B);
(v) promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting Borrower or any Subsidiary of the
type described in Section 4.01(i);
(vi) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports that Borrower
or any Subsidiary sends to any holders of its debt or equity
securities, and copies of all regular, periodic and special reports,
and all registration statements, that Borrower files with the
Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities
exchange;
(vii) promptly after the furnishing thereof, copies of any
statement or report furnished to any other holder of the securities
of Borrower pursuant to the terms of any indenture, loan or credit
or similar agreement and not otherwise required to be furnished to
the Lender pursuant to any other clause of this Section 5.01(i);
(viii) promptly upon receipt thereof, copies of all material
notices, requests and other documents received by Borrower or any
Subsidiary under or pursuant to any document prepared or produced in
connection with any Material Contract;
(ix) within five Business Days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886), or other
written proposals of the Internal Revenue Service, that propose,
determine or otherwise set forth positive adjustments to the Federal
income tax liability of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the
Borrower is a member;
(x) such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or
prospects of Borrower and its Subsidiaries as the Lender may from
time to time reasonably request;
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(xi) within 10 days after the Closing Date, evidence of
insurance naming the Lender as insured and loss payee with such
responsible and reputable insurance companies or associations, and
in such amounts and covering such risks, as is reasonably
satisfactory to the Lender.
(j) The Business Plan. The Borrower shall comply, and cause its
Subsidiaries to comply, in all material respects with the Business Plan.
The Borrower shall not change, amend or otherwise modify the Business Plan
without the prior written consent of the Lender.
SECTION 5.02. Negative Covenants. So long as the Advance shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
will not, and will not permit any of its Subsidiaries to, without the written
consent of the Lender:
(a) Liens, Etc. Create, incur, assume or suffer to exist any Lien on
or with respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter acquired, or
assign, any accounts or other right to receive income, excluding, however,
from the operation of the foregoing restrictions the following:
(i) Permitted Liens;
(ii) Liens set forth on Schedule 4.01(u);
(iii) the replacement, extension or renewal of any Permitted
Lien or Lien set forth on Schedule 4.01(u) upon or in the same
property theretofore subject thereto or the replacement, extension
or renewal (without increase in the principal amount) of the Debt
secured thereby;
(iv) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business.
(v) Liens created by the Collateral Documents;
(vi) any interest or title of a lessor under any lease entered
into by Borrower or any of its Subsidiaries in the ordinary course
of business and covering only the assets so leased; and
(vii) judgment Liens not giving rise to an Event of Default.
(b) Debt. Create, incur, assume or suffer to exist any Debt other
than:
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(i) in the case of the Borrower, Debt under the Loan
Documents;
(ii) in the case of any of its Subsidiaries, Debt owed to the
Borrower or to a Subsidiary of the Borrower;
(iii) in the case of the Borrower, indorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business; and
(iv) Debt existing on the date hereof and any trade payables
that become overdue by more than 90 days after the date hereof and
any refinancings, refundings, renewals or extension thereof (without
any increase in the principal amount thereof or any shortening of
the maturity of any principal amount thereof).
(c) Lease Obligations. Create, incur, assume or suffer to exist any
obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii)
for the rental or hire of other real or personal property of any kind
under leases or agreements to lease including Capitalized Leases having an
original term of one year or more.
(d) Mergers, Etc. Merge with or into or consolidate with or into any
Person, except that any Subsidiary of the Borrower may merge or
consolidate with or into, any other Subsidiary of the Borrower, and any of
the Borrower's Subsidiaries may merge or consolidate with or into the
Borrower; provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that constitutes a
Default and in the case of any such merger to which the Borrower is a
party, the Borrower is the surviving corporation.
(e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of any of its assets except:
(i) sales of obsolete or worn out assets or equipment no
longer necessary to the operation of the Borrower's or such
Subsidiary's business or assets deemed in the reasonable business
judgment of the Borrower to be unnecessary to the conduct of its or
its Subsidiaries' business, the value of which shall not exceed
$50,000;
(ii) in connection with a transaction authorized by subsection
(d) of this Section; and
(iii) the sale of inventory in the ordinary course of
business.
(f) Investments in Other Persons. Make or hold (other than
Investments held as of the date hereof) any Investment in any Person,
except for Investments provided for
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in the Business Plan, and Investments otherwise approved in writing by the
Lender and as follows:
(i) extensions of trade credit in the ordinary course of
business;
(ii) investments in Cash Equivalents;
(iii) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, entertainment and
relocation expenses, but excluding commitments to pay relocation
expenses in an amount not to exceed $121,000) in an aggregate amount
for the Borrower and its Subsidiaries not to exceed $50,000 at any
one time outstanding; and
(iv) investments in assets useful in the Borrower's business
made by the Borrower or any of its Subsidiaries that are permitted
hereunder.
(g) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or
any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such capital
stock.
(h) Capital Expenditures. Make any Capital Expenditures except as
provided for in the Business Plan or otherwise approved in writing by the
Lender.
(i) Accounting Changes. Make or permit any change in accounting
policies or reporting practices, except as required by GAAP.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of, or interest on,
the Advance, or shall fail to make any other payment under any Loan
Document, in each case when the same becomes due and payable; or
(b) any representation or warranty under or in connection with any
Loan Document shall prove to have been incorrect in any material respect
when made; or
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(c) the Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Sections 5.01(d), 5.01(j) or 5.02 or
(ii) any other term, covenant or agreement contained in any Loan Document
on its part to be performed or observed if such failure shall remain
unremedied for 10 days after written notice thereof shall have been given
to the Borrower by the Lender; or
(d) any judgment or order for the payment of money in excess of
$10,000,000 shall be rendered against Borrower or any of its Subsidiaries
(which is not fully covered or paid by insurance) and either (i)
enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of 10 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(e) any non-monetary judgment or order shall be rendered against
Borrower or any of its Subsidiaries that could have a material adverse
effect on (i) the business, condition (financial or otherwise),
operations, performance, properties or prospects of Borrower and its
Subsidiaries taken as a whole, (ii) the ability of Borrower to perform its
obligations under any Loan Document to which it is a party or (iii) the
rights and remedies of the Lender under any Loan Document, and there shall
be any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(f) any provision of any Loan Document shall for any reason cease to
be valid and binding on or enforceable against Borrower, or Borrower shall
so state in writing; or the Borrower shall commence or join in any legal
proceeding to contest in any manner that the Loan Documents constitute
valid and enforceable agreements or Borrower shall commence or join in any
legal proceeding to assert in any manner that it has no further obligation
or liability under the Loan Documents; or
(g) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority Lien on the Collateral purported to be covered thereby; or
(h) (i) Borrower shall commence any case, proceeding or other action
(A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it,
or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed,
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undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against Borrower any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) Borrower shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii) or (iii) above; or
(i) any ERISA Event shall have occurred with respect to a Plan of
the Borrower or any ERISA Affiliate and the sum (determined as of the date
of occurrence of such ERISA Event) of the Insufficiency of such Plan and
the Insufficiency of any and all other Plans of the Borrower or any ERISA
Affiliate with respect to which an ERISA Event shall have occurred and
then exist (or the liability of the Borrower and its ERISA Affiliates
related to such ERISA Event) exceeds $1,000,000; or
(j) the Borrower or any ERISA Affiliate of the Borrower shall have
been notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower or any ERISA Affiliate as Withdrawal Liability
(determined as of the date of such notification), exceeds $1,000,000 or
requires payments exceeding $1,000,000 per annum; or
(k) the Borrower or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Borrower and its ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $1,000,000; or
(l) the Federal Communications Commission or any other governmental
authority shall have canceled any material license issued by the Federal
Communications Commission to Orbital Communications Corporation with
respect to the operation of the Borrower's low Earth orbit satellite
system or failed to renew any such license; or
(m) the Federal Communications Commission or any other governmental
authority shall have commenced any proceeding to cancel, revoke or suspend
any material license issued to Orbital Communications Corporation with
respect to the operation of the Borrower's low Earth orbit satellite
system, which proceeding for the cancellation, revocation or suspension
could reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), operations,
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performance, properties or prospects of the Borrower and its Subsidiaries
taken as a whole;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (h) above with respect to the Borrower,
automatically the Commitment shall immediately terminate and the Advances (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) the Lender may by written notice to the Borrower (i)
declare the Commitment to be terminated, whereupon the same shall forthwith
terminate, (ii) declare the Note, if any, the Advances and all interest thereon
and all other amounts payable under this Agreement and the other Loan Documents
to be forthwith due and payable, whereupon the Note, if any, the Advances and
all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, and (iii) exercise any and
all rights and remedies under this Agreement and the other Loan Documents
available to the Lender and all other rights and remedies provided under the
Uniform Commercial Code of the applicable jurisdiction and other applicable
laws, which rights and remedies shall be cumulative.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 7.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including fax communication) and
mailed, faxed or otherwise delivered, if to the Borrower, at its address at
00000 Xxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxx, 00000, fax number: (000) 000-0000,
Attention: Xxxx Xxxxx Xxxxxxxxx, Esq., Senior Vice President and General
Counsel, with a copy to Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000-0000, fax number: (000) 000-0000, Attention: Xxxxxx Flics, Esq.; if to the
Lender, at its address at c/o Teleglobe Communications Corp., 1000 de La
Gauchetiere Xxxx 00xx Xxxxx, Xxxxxxxx, Xxxxxx, Xxxxxx, X0X0X0, fax number: (514)
000-0000, Attention: Xxxxx Xxxxxxxxxxx, Esq., with a copy to Xxxxxxx Xxxxxxx &
Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, fax number: (212)
000-0000, Attention: Xxxx Xxxxxxxx, Esq.; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed or faxed, be
effective when deposited in the mails or transmitted by fax, respectively,
except that notices and communications to the Lender pursuant to Article II
shall not be effective until received by the Lender.
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SECTION 7.03. No Waiver; Remedies. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 7.04. Indemnity. The Borrower agrees to indemnify and hold
harmless the Lender and each of its Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with the transactions contemplated
hereby, whether or not an Indemnified Party is a party thereto and whether or
not the transactions contemplated hereby are consummated, except to the extent
such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.
SECTION 7.05. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any indebtedness at any time owing by the Lender to or for the credit or
the account of the Borrower against any and all of the Obligations of the
Borrower now or hereafter existing under this Agreement and any Note,
irrespective of whether the Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. The
Lender agrees promptly to notify the Borrower after any such set-off and
application made by the Lender; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Lender may
have.
SECTION 7.06. Integration. Except for the Memorandum of
Understanding, dated as of August 3, 2000, among Teleglobe, Inc., the Borrower,
Orbital Communications Corporation, Orbital Sciences Corporation and Teleglobe
Mobile Partners, this Agreement and the other Loan Documents represent the
entire agreement of the Borrower and the Lender with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Lender relative to the subject matter hereof not expressly set
forth herein or in the other Loan Documents.
SECTION 7.07. Binding Effect. This Agreement shall become effective
upon the execution hereof by all of the parties hereto and thereafter shall be
binding upon and inure to the benefit of each such party and their respective
successors and assigns, except that the Borrower
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shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Lender.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.09. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by fax shall be effective as delivery of an original executed
counterpart of this Agreement.
SECTION 7.10. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF THE LENDER
IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
ORBCOMM GLOBAL, L.P., as Borrower
By_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
By: Teleglobe Mobile Partners
Its General Partner
By: Teleglobe Mobile Investment, Inc.
Its Managing Partner
By_________________________________
Name: Xxxxx Xxxxxxxxxxx
Title:
TELEGLOBE HOLDING CORP., as Lender
By_________________________________
Name:
Title:
