Exhibit 10.22
EXECUTION COPY
$55,000,000
CREDIT AGREEMENT
Dated as of April 30, 1998
Among
IPC INFORMATION SYSTEMS, INC.
AS PARENT BORROWER
and
IPC FUNDING CORP.
AS SUB BORROWER
and
THE INITIAL LENDERS AND THE INITIAL ISSUING BANK
NAMED HEREIN
AS INITIAL LENDERS AND INITIAL ISSUING BANK
and
XXXXXX XXXXXXX SENIOR FUNDING, INC.
AS ADMINISTRATIVE AGENT, SYNDICATION AGENT AND ARRANGER
and
XXXXXXX SACHS CREDIT PARTNERS L.P.
AS DOCUMENTATION AGENT
and
GENERAL ELECTRIC CAPITAL CORPORATION
AS COLLATERAL AGENT
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T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. CERTAIN DEFINED TERMS.............................................................................2
1.02. COMPUTATION OF TIME PERIODS......................................................................28
1.03. ACCOUNTING TERMS.................................................................................29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. THE ADVANCES AND LETTERS OF CREDIT...............................................................29
2.02. MAKING THE ADVANCES..............................................................................30
2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF CREDIT...............................31
2.04. REPAYMENT OF ADVANCES............................................................................32
2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS......................................................33
2.06. PREPAYMENTS......................................................................................34
2.07. INTEREST.........................................................................................35
2.08. FEES.............................................................................................36
2.09. CONVERSION OF ADVANCES...........................................................................37
2.10. INCREASED COSTS, ETC.............................................................................37
2.11. PAYMENTS AND COMPUTATIONS........................................................................39
2.12. TAXES............................................................................................40
2.13. SHARING OF PAYMENTS, ETC.........................................................................42
2.14. USE OF PROCEEDS..................................................................................43
2.15. DEFAULTING LENDERS...............................................................................43
ARTICLE III
CONDITIONS OF LENDING
3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT..............................................45
3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND ISSUANCE..............................................52
3.03. DETERMINATIONS UNDER SECTION 3.01................................................................53
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS..................................................53
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SECTION PAGE
ARTICLE V
COVENANTS OF THE BORROWERS
5.01. AFFIRMATIVE COVENANTS............................................................................60
5.02. NEGATIVE COVENANTS...............................................................................69
5.03. REPORTING REQUIREMENTS...........................................................................76
5.04. FINANCIAL COVENANTS..............................................................................81
ARTICLE VI
EVENTS OF DEFAULT
6.01. EVENTS OF DEFAULT................................................................................82
6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT.........................................85
ARTICLE VII
THE AGENTS
7.01. AUTHORIZATION AND ACTION.........................................................................85
7.02. AGENTS' RELIANCE, ETC............................................................................85
7.03. XXXXXXX XXXXX, XX CAPITAL, MSSF AND AFFILIATES...................................................86
7.04. LENDER PARTY CREDIT DECISION.....................................................................86
7.05. INDEMNIFICATION..................................................................................86
7.06. SUCCESSOR AGENTS.................................................................................88
ARTICLE VIII
MISCELLANEOUS
8.01. AMENDMENTS, ETC..................................................................................88
8.02. NOTICES, ETC.....................................................................................89
8.03. NO WAIVER; REMEDIES..............................................................................89
8.04. COSTS AND EXPENSES...............................................................................90
8.05. RIGHT OF SETOFF..................................................................................91
8.06. BINDING EFFECT...................................................................................91
8.07. ASSIGNMENTS AND PARTICIPATIONS...................................................................92
8.08. EXECUTION IN COUNTERPARTS........................................................................94
8.09. NO LIABILITY OF THE ISSUING BANK.................................................................94
8.10. CONFIDENTIALITY..................................................................................95
8.11. RELEASE OF COLLATERAL............................................................................96
8.12. JURISDICTION, ETC................................................................................96
8.13. GOVERNING LAW....................................................................................96
8.14. WAIVER OF JURY TRIAL.............................................................................97
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SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Guarantors
Schedule III - Excluded Subsidiaries
Schedule 4.01(a) - Stock Ownership
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Approvals
Schedule 4.01(ff) - Existing Debt
Schedule 4.01(gg) - Surviving Debt
Schedule 4.01(hh) - Owned Real Property
Schedule 4.01(ii) - Material Contracts and Executive Employment Agreements
Schedule 4.01(jj) - Investments
Schedule 4.01(kk) - Intellectual Properties
Schedule 5.02(a) - Existing Liens
Schedule 5.02(g) - Sales of Stock to Equity Investors
EXHIBITS
Exhibit A-1 - Form of Working Capital Note of Parent Borrower
Exhibit A-2 - Form of Working Capital Note of Sub Borrower
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E-1 - Form of Domestic Guaranty
Exhibit E-2 - Form of Foreign Guaranty
Exhibit F-1 - Form of Opinion of Counsel to the Loan Parties
Exhibit F-2 - Form of Opinion of General Counsel of the Parent Borrower
Exhibit G-1 - Form of Solvency Certificate
Exhibit G-2 - Form of Solvency Opinion
Exhibit H - Form of Borrowing Base Certificate
Exhibit I-1 - Form of Specified Intercompany Note
Exhibit I-2 - Form of Loan Party Intercompany Note
Exhibit J - Form of Administrative Agency Agreement
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of April 30, 1998 among IPC
INFORMATION SYSTEMS, INC., a Delaware corporation (the "PARENT BORROWER"), IPC
FUNDING CORP., a Delaware corporation (the "SUB BORROWER" and, together with the
Parent Borrower, the "BORROWERS"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as the initial
lenders (the "INITIAL LENDERS"), the bank listed on the signature pages hereof,
as the initial issuing bank (the "INITIAL ISSUING BANK"), XXXXXX XXXXXXX SENIOR
FUNDING, INC. ("MSSF"), as syndication agent and arranger (together with any
successor appointed pursuant to Article VII, the "SYNDICATION AGENT"), XXXXXXX
SACHS CREDIT PARTNERS L.P. ("XXXXXXX XXXXX"), as documentation agent (together
with any successor appointed pursuant to Article VII, the "DOCUMENTATION
AGENT"), GENERAL ELECTRIC CAPITAL CORPORATION ("GE CAPITAL"), as collateral
agent (together with any successor appointed pursuant to Article VII, the
"COLLATERAL AGENT"), and MSSF, as administrative agent (together with any
successor appointed pursuant to Article VII, the "ADMINISTRATIVE AGENT", and,
together with the Syndication Agent, the Documentation Agent and the Collateral
Agent, the "AGENTS") for the Lender Parties (as hereinafter defined).
PRELIMINARY STATEMENTS:
(1) Pursuant to an Amended and Restated Agreement and Plan of
Merger dated as of December 18, 1997 (as the same may be amended, supplemented
or otherwise modified from time to time in accordance with its terms, to the
extent permitted in accordance with the Loan Documents (as hereinafter defined),
the "MERGER AGREEMENT") between the Parent Borrower and Arizona Acquisition
Corp., a Delaware corporation ("AAC"), AAC is merging into the Parent Borrower
(the "MERGER").
(2) Simultaneously in connection therewith and to finance the
Merger in part, the Parent Borrower is issuing up to $180,000,000 in original
issue amount of 10-7/8% senior unsecured notes (as the same may be amended,
supplemented or otherwise modified from time to time, to the extent permitted in
accordance with the Loan Documents, the "SENIOR NOTES") pursuant to the Senior
Notes Indenture (as hereinafter defined).
(3) In connection with the Merger, Citicorp Venture Capital,
Ltd., a New York corporation ("CVC"), Cable Systems International, Inc., a
Delaware corporation ("CSI"), and Xxxxxxxx, Xxxxx & Xxxxx III, L.P. ("LSH" and,
together with CVC and CSI, the "EQUITY INVESTORS") are making a common equity
contribution to AAC of at least $43,200,000 and up to $72,000,000 in exchange
for between 2,057,143 and 3,428,572 shares of common stock of the Parent
Borrower (the "EQUITY INVESTMENT").
(4) Immediately following the consummation of the Merger, the
Parent Borrower will acquire all of the shares of common stock of International
Exchange Networks, Ltd., a Delaware corporation ("IXNET"), not already owned by
the Parent Borrower in exchange for common stock of the Parent Borrower (the
"SHARE EXCHANGE" and, together with the Merger, the Equity Investment, the
issuance of the Senior Notes and the other transactions contemplated by the Loan
Documents and the Related
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Documents (as hereinafter defined), the "TRANSACTION") pursuant to the Share
Exchange and Termination Agreement (as hereinafter defined).
(5) It is intended that the Sub Borrower act as a borrower
hereunder so as to be an agent for the Specified Subsidiaries.
(6) The Borrowers have requested that the Lender Parties make
available a $55,000,000 five-year secured revolving credit facility, which will
be used for general corporate purposes of the Parent Borrower and its
Subsidiaries (as hereinafter defined). The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN 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):
"AAC" has the meaning specified in the Preliminary Statements.
"ADMINISTRATIVE AGENCY AGREEMENT" has the meaning specified in
Section 3.01(m)(ix).
"ADMINISTRATIVE AGENT" has the meaning specified in the
recital of parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent with IBJ
Xxxxxxxx Bank & Trust Company at its office at 0 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Account No. 00000000, ABA No. 000000000,
Attention: Dept 332; Reference IPC or such other account as the
Administrative Agent shall
specify in writing to the Lender Parties.
"ADMINISTRATIVE AGENT'S FEE LETTER" means a letter dated April
30, 1998 from the Administrative Agent to the Parent Borrower
regarding, among other things, the fees to be paid by the Parent
Borrower to the Administrative Agent in connection with the rendering
of services by the Administrative Agent pursuant to this Agreement, as
such letter may be amended, supplemented or otherwise modified or
replaced from time to time.
"ADVANCE" means a Working Capital Advance or a Letter of
Credit Advance.
"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
3
Person. For purposes of this definition, the term "control" (including
the terms "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.
"AGENTS" has the meaning specified in the recital of parties
to this Agreement.
"AGREEMENT VALUE" means, for any Hedge Agreement on any date
of determination, an amount equal to the greater of (a) the amount, if
any, that would be payable by any Loan Party or any of its
Subsidiaries in respect of "agreement value" as though such Hedge
Agreement were terminated on such date, calculated as provided in the
International Swap Dealers Association Inc. Code of Standard Wording,
Assumptions and Provisions for Swaps, 1992 Edition, and (b)
xxxx-to-market, in which the unrealized gain (or loss) on such Hedge
Agreement is calculated as the amount by which the present value of
the future cash flows to be received exceeds (or is less than) the
present value of the future cash flows to be paid pursuant to such
Hedge Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a
Base Rate Advance and such Lender Party's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means (a) during the period from the date
hereof until the date that is 6 months after the date hereof, 1.50% per
annum for Base Rate Advances and 2.50% per annum for Eurodollar Rate
Advances, and (b) thereafter, a percentage per annum determined by
reference to the Leverage Ratio as follows:
Level Base Rate Advances Eurodollar Rate Advances
------------------------------------ ----------------------------------- -----------------------------------
Level I 1.50% 2.50%
Level II 1.50% 2.25%
Level III 1.50% 2.00%
Level IV 1.50% 1.75%
Level V 1.50% 1.50%
==================================== =================================== ===================================
The Applicable Margin for each Base Rate Advance shall be determined by
reference to the Leverage Ratio in effect from time to time and the
Applicable Margin for each Eurodollar Rate Advance shall be determined
by reference to the Leverage Ratio in effect on the first day of each
Interest Period for such Advance; PROVIDED, HOWEVER, that (A)(x) no
change in the Applicable Margin shall be effective until three Business
Days after the date on which the Administrative Agent receives the
financial statements required to be delivered pursuant to Section
5.03(b) or (c) and a certificate of the chief financial officer of the
Parent Borrower demonstrating such ratio and (y) not more than one
decrease in the Applicable Margin shall occur in any three-month period
and (B) the Applicable Margin shall be at Level I for so long as the
Parent Borrower has not submitted
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to the Administrative Agent the information described in clause (A)(x)
of this proviso as and when required under Section 5.03(b) or (c), as
the case may be.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender Party and an Eligible Assignee, and accepted
by the Administrative Agent, in accordance with Section 8.07 and in
substantially the form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time
with all conditions to drawing).
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the rate of interest announced publicly by
Citibank at its head office in New York, from time to time, as
the base rate of Citibank; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BBA" means the British Bankers Association.
"BORROWERS" has the meaning specified in the recital of
parties to this Agreement.
"BORROWING" means a borrowing consisting of simultaneous
Advances of the same Type made by the Lenders.
"BORROWING BASE CERTIFICATE" means a certificate in
substantially the form of Exhibit H hereto, duly certified by the chief
financial officer of the Parent Borrower.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period,
the sum of (a) all expenditures made, directly or indirectly, by such
Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should
be, in accordance with GAAP, reflected as additions to property, plant
or equipment on a Consolidated balance sheet of such Person or have a
useful life of more than one year PLUS (b) the aggregate principal
amount of all Debt (including Obligations under Capitalized Leases)
assumed or incurred in connection with any such expenditures.
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"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Parent Borrower or any of its Subsidiaries free and clear
of all Liens other than Liens created under the Collateral Documents
and having a maturity of not greater than 90 days from the date of
issuance thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality
thereof or obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured certificates
of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause
(c), is organized under the laws of the United States or any State
thereof and has combined capital and surplus of at least $1,000,000,000
or (c) commercial paper issued by any corporation organized under the
laws of any State of the United States and rated at least "Prime-1" (or
the then equivalent grade) by Xxxxx'x Investors Service, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Inc.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CITIBANK" means Citibank, N.A., a national banking
association.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to
be subject to any Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Intercompany Notes, the Foreign Security Documents, the Local Pledges,
and any other agreement that creates or purports to create a Lien in
favor of the Administrative Agent for the benefit of the Secured
Parties.
"COMMITMENT" means a Working Capital Commitment or a Letter of
Credit Commitment.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"CORPORATE OPPORTUNITY AGREEMENT" means the Amended and
Restated Corporate Opportunity Agreement dated as of December 18, 1997
among Xxxxxxxxxxx Electric Company, Inc. (NY), Xxxxxxxxxxx Electric
Company, Inc. (NJ) and IPC Information Systems, Inc., as
6
amended, supplemented or otherwise modified from time to time in
accordance with its terms, to the extent permitted in accordance with
the Loan Documents.
"CSI" has the meaning specified in the Preliminary Statements.
"CVC" has the meaning specified in the Preliminary Statements.
"DEBENTURE" means the debentures each dated as of April 30,
1998 made by each of the U.K. Subsidiaries and IPC Hong Kong in favor
of the Administrative Agent, in each case as amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"DEBT" of any Person means, without duplication for purposes
of calculating financial ratios, (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 60 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
Obligations of such Person 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 Capitalized Leases, (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter of
credit or similar facilities, (g) all Obligations, contingent or
otherwise, of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any capital stock of or other
ownership or profit interest in such Person or any other 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 or clause (j) below 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 (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 (i) above of
another Person 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.
"DEED OF CHARGE OVER SHARES" means the deed of charge over
shares dated April 30, 1998 made by HNG Corp., RIE Corp. and
International Exchange Networks, Ltd. in favor of the Administrative
Agent, as security agent, as amended, supplemented or otherwise
modified from time to time in accordance with its terms, to the extent
permitted in accordance with the Loan Documents.
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"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.
"DEFAULTED ADVANCE" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender
Party to either Borrower pursuant to Section 2.01 or 2.02 at or prior
to such time which has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(d) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section
2.01 on the same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to any
Agent or any other Lender Party hereunder or under any other Loan
Document at or prior to such time which has not been so paid as of such
time, including, without limitation, any amount required to be paid by
such Lender Party to (a) the Issuing Bank pursuant to Section 2.03(c)
to purchase a portion of a Letter of Credit Advance made by the Issuing
Bank, (b) the Administrative Agent pursuant to Section 2.02(d) to
reimburse the Administrative Agent for the amount of any Advance made
by the Administrative Agent for the account of such Lender Party, (c)
any other Lender Party pursuant to Section 2.13 to purchase any
participation in Advances owing to such other Lender Party and (d) any
Agent or the Issuing Bank pursuant to Section 7.05 to reimburse such
Agent or the Issuing Bank for such Lender Party's ratable share of any
amount required to be paid by the Lender Parties to such Agent or the
Issuing Bank as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be paid hereunder or under any
other Loan Document on the same date as the Defaulted Amount so deemed
paid in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take any action or be the subject of any action or proceeding of
a type described in Section 6.01(f).
"DOCUMENTATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"DOMESTIC GUARANTORS" means the Parent Borrower and each of
the Subsidiaries of the Parent Borrower listed on Part A of Schedule II
hereto and all Domestic Subsidiaries that shall be required to deliver
a Domestic Guaranty pursuant to Section 5.01(o).
"DOMESTIC GUARANTY" has the meaning specified in Section
3.01(m)(x).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party,
as the case may be, or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrowers and the
Administrative Agent.
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"DOMESTIC SUBSIDIARIES" means each of the Subsidiaries of the
Parent Borrower that are incorporated or organized under the laws of
any State of the United States of America or the District of Columbia.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss), (b) interest
expense, (c) income tax expense, (d) depreciation expense and (e)
amortization expense and (f) all other non-cash items reducing net
income (other than items that will require cash payments and for which
an accrual or reserve is, or is required by GAAP to be, made), less all
non-cash items increasing net income, in each case of the Parent
Borrower and its Subsidiaries, determined in accordance with GAAP for
such period; PROVIDED, HOWEVER, that for purposes of calculating
EBITDA, such calculation shall be made without giving effect to, and
without duplication of, (i) the amortization or write-off of any
expense incurred in connection with the Transaction and (ii) the
amortization of any amounts required or permitted by Account Principles
Board Opinion Nos. 16 and 17.
"EFFECTIVE DATE" means the first date on which the conditions
set forth in Article III shall have been satisfied.
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; and (c) a commercial bank, insurance company, financial
institution, fund or other Person that regularly purchases interests in
loans or extensions of credit of the types made pursuant to this
Agreement, any other Person that would constitute a "qualified
institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933 as in effect on the date of the Initial
Extension of Credit or other "accredited investor" (as defined in
Regulation D of the Securities Act of 1933, as amended), in each case,
which bank, insurance company, financial institution, fund or other
Person is approved by the Administrative Agent and, so long as no
Default shall have occurred and be continuing at the time any
assignment is effected pursuant to Section 8.07, the Parent Borrower,
in each case such approval not to be unreasonably withheld or delayed;
PROVIDED, HOWEVER, that neither any Loan Party nor any Affiliate of a
Loan Party shall qualify as an Eligible Assignee under this definition.
"ELIGIBLE COLLATERAL" means, collectively, Eligible Inventory
and Eligible Receivables.
"ELIGIBLE INVENTORY" means only such Inventory of the Parent
Borrower and the Domestic Guarantors, in the case of Advances made to
the Parent Borrower, and of the U.K. Subsidiaries, in the case of
Advances made to the Sub Borrower, as the Collateral Agent, in its
reasonable business judgment on the basis of standards customarily
applied by lenders in transactions of the type contemplated by the Loan
Documents, shall from time to time elect to consider Eligible Inventory
for purposes of this Agreement. The value of such Inventory shall be
determined by the Collateral Agent in its reasonable discretion taking
into consideration, among other factors, the lower of its cost and its
book value determined in accordance with GAAP. By way of example only,
and without limiting the discretion of the Collateral Agent as set
forth above to consider any Inventory not to be Eligible Inventory, the
Collateral Agent may consider any of the following classes of Inventory
not to be Eligible Inventory:
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(a) Inventory located on leaseholds as to which the
lessor has not entered into a consent and agreement providing
the Administrative Agent with the right to receive notice of
default, the right to repossess such Inventory at any time and
such other rights as may be acceptable to the Collateral
Agent;
(b) Inventory that is obsolete, unusable or otherwise
unavailable for sale;
(c) Inventory with respect to which the
representations and warranties set forth in Section 9 of the
Security Agreement applicable to Inventory are not true and
correct;
(d) Inventory consisting of promotional, marketing,
packaging or shipping materials and supplies;
(e) Inventory that fails to meet all standards
imposed by any governmental agency, or department or division
thereof, having regulatory authority over such Inventory
or its use or sale;
(f) Inventory that is subject to any licensing,
patent, royalty, trademark, trade name or copyright agreement
with any third party from whom the Parent Borrower, any
Domestic Guarantor or any U.K. Subsidiary, as applicable, has
received notice of a dispute in respect of any such agreement;
(g) Inventory located outside the United States or
outside the United Kingdom, as applicable;
(h) Inventory that is not in the possession of or
under the sole control of the Parent Borrower, any Domestic
Guarantor or any U.K. Subsidiary, as applicable;
(i) Inventory consisting of work in process; and
(j) Inventory in respect of which the Collateral
Documents, after giving effect to the related filings of
financing statements and the filing of the Debenture in the
Companies House that have then been made, if any, does not or
has ceased to create a valid and perfected first priority lien
or security interest in favor of the Administrative Agent for
the benefit of the Secured Parties securing the Secured
Obligations.
"ELIGIBLE RECEIVABLES" means only such Receivables of the
Parent Borrower and the Domestic Guarantors, in the case of Advances
made to the Parent Borrower, and of the U.K. Subsidiaries, in the case
of Advances made to the Sub Borrower, as the Collateral Agent, in its
reasonable business judgment on the basis of standards customarily
applied by lenders in transactions of the type contemplated by the Loan
Documents, shall from time to time elect to consider Eligible
Receivables for purposes of this Agreement. The value of such
Receivables shall be determined by the Collateral Agent in its
reasonable discretion taking into consideration, among other factors,
their book value determined in accordance with GAAP. By way of example
only, and without limiting the discretion of the Collateral Agent as
set forth above to consider any
10
Receivables not to be Eligible Receivables, the Collateral Agent may
consider any of the following classes of Receivables not to be
Eligible Receivables:
(a) Receivables that do not arise out of sales of
goods or rendering of services in the ordinary course of the
business of the Parent Borrower, the Domestic Guarantors
and the U.K. Subsidiaries, as applicable;
(b) Receivables on terms other than those normal or
customary in the business of the Parent Borrower, the Domestic
Guarantors and the U.K. Subsidiaries, as applicable;
(c) Receivables owing from any Person that is an
Affiliate of the Parent Borrower, any Domestic Guarantor or
any U.K. Subsidiary or any of their respective Subsidiaries
unless such Person has waived any right of setoff in a manner
acceptable to the Collateral Agent, other than Citibank and
its Affiliates and Xxxxxxxxxxx Electric Company, Inc. to the
extent that the aggregate amount of Receivables owing from
each such Affiliate does not exceed 10% of Eligible
Receivables;
(d) Receivables more than 120 days past original
invoice date or more than 60 days past the date due;
(e) Receivables owing from any Person from which an
aggregate amount of more than 30% of the Receivables owing is
more than 60 days past due;
(f) Receivables owing from any Person that (i) has
disputed liability for any Receivable owing from such Person,
PROVIDED, HOWEVER, that if such disputed liability represents
less than 10% of the value of all such Receivables owing from
such Person, such Receivables shall be excluded only to the
extent of such disputed liability, or (ii) has otherwise
asserted any claim, demand or liability, whether by action,
suit, counterclaim or otherwise;
(g) Receivables owing from any Person that shall take
or be the subject of any action or proceeding of a type
described in Section 6.01(f);
(h) Receivables (i) owing from any Person that is
also a supplier to or creditor of the Parent Borrower, any
Domestic Guarantor or any U.K. Subsidiary, as applicable, or
(ii) representing any manufacturer's or supplier's credits,
discounts, incentive plans or similar arrangements entitling
the Parent Borrower, any Domestic Guarantor or any U.K.
Subsidiary, as applicable, to discounts on future purchase
therefrom except to the extent that the value of such
Receivables exceeds the amount owing to the Parent Borrower,
such Domestic Guarantor or such U.K. Subsidiary, as
applicable, or the value of such credits, discounts, incentive
plans or other arrangements, as the case may be;
(i) Receivables arising out of sales to account
debtors located outside the United States or outside the
United Kingdom, as applicable;
11
(j) Receivables arising out of sales on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on
approval or consignment basis or subject to any right of
return, setoff or charge-back;
(k) Receivables owing from an account debtor that is
an agency, department or instrumentality of the United States
or any State thereof or the United Kingdom or any other
foreign country unless the Parent Borrower, such Domestic
Guarantor or such U.K. Subsidiary, as the case may be, shall
have satisfied the requirements of the Assignment of Claims
Act of 1940, as amended, and any similar State or foreign
legislation and the Collateral Agent is satisfied as to the
absence of setoffs, counterclaims and other defenses on the
part of such account debtor;
(l) Receivables owing under any service contract for
which the services to be performed under such contract shall
not yet have been performed, PROVIDED that for purposes of
calculating the value of such Receivables, the related amount
contained in the applicable Loan Party's deferred revenue
account may be used (it being understood that the amount
contained in such deferred revenue account shall be greater
than or equal to the value of such Receivables);
(m) Receivables the full and timely payment of which
the Collateral Agent in its reasonable discretion believes
to be doubtful; and
(n) Receivables in respect of which the Collateral
Documents, after giving effect to the related filings of
financing statements and the filing of the Debenture in the
Companies House that have then been made, if any, does not or
has ceased to create a valid and perfected first priority lien
or security interest in favor of the Administrative Agent for
the benefit of the Secured Parties securing the Secured
Obligations.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental
Law, any Environmental Permit or Hazardous Material or arising from
alleged injury or threat to health, safety or the environment,
including, without limitation, (a) by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory
authority or third party for damages, contribution, indemnification,
cost recovery, compensation or injunctive relief.
"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 having the full force and effect of law 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.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
12
"EQUITY INVESTMENT" has the meaning specified in the
Preliminary Statements.
"EQUITY INVESTORS" has the meaning specified in the
Preliminary Statements.
"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" means any Person that for purposes of Title
IV of ERISA is a member of the controlled group of any Loan Party, or
under common control with any Loan Party, 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 subsection (1)
of Section 4043(b) of ERISA (without regard to subsection (2) of such
Section) are met 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 any Loan Party or any ERISA Affiliate in
the circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party 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 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.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender Party as such Lender Party may from
time to time specify to the Borrowers and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an
interest rate per annum obtained by dividing (a) the BBA Interest
Settlement Rate per annum at which deposits in U.S. dollars are offered
in London, England to prime banks in the London interbank market for
such Interest Period as displayed on Telerate Screen page 3750 as of
11:00 A.M. (London time) two Business Days before the first day
13
of such Interest Period in an amount substantially equal to such
Eurodollar Rate Advances comprising part of such Borrowing to be
outstanding during such Interest Period by (b) a percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Interest
Period. Telerate Screen page 3750 means the display designated as page
3750 on the Dow Xxxxx Telerate Service (or such other page as may
replace page 3750 on that service or such other service as may be
nominated by the BBA as the information vendor for the purpose of
displaying BBA Interest Settlement Rates for U.S. dollars). If such
rate does not appear on Telerate Screen page 3750 on any relevant date
for the determination of the Eurodollar Rate, the Eurodollar Rate shall
be an interest rate equal to the rate per annum obtained by dividing
(i) the average (rounded upward to the nearest whole multiple of 1/16
of 1% per annum, if such average is not such a multiple) of the rate
per annum at which deposits in U.S. dollars are offered by the
principal office of Citibank in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days
before the first day of such Interest Period in an amount substantially
equal to the Administrative Agent's Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period
(or, if the Administrative Agent shall not have such a Eurodollar Rate
Advance, $1,000,000) and for a period equal to such Interest Period by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same Borrowing
means the reserve percentage applicable two Business Days before the
first day of such Interest Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference to which
the interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCLUDED SUBSIDIARY" means, at any time, each Subsidiary of
the Parent Borrower listed on Schedule III hereto, and any Subsidiary
of the Parent Borrower formed or acquired after the Effective Date that
does not engage in any material business of any kind, other than the
holding of licenses and/or acting as an agent for a Loan Party at such
time and that does not hold assets or have annual revenues or net
income in the aggregate in excess of $150,000 at such time, in each
case determined based on the most recent financial statements required
to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be, or if such information cannot be determined
based on such financial statements, in the case of a newly formed
Subsidiary, based on the Parent Borrower's good faith pro forma
estimate of such Subsidiary's assets, annual revenues and net income,
and in the case of a newly acquired Subsidiary, based on such
Subsidiary's assets, annual revenues and net income as of the end of
the most recently ended 12-
14
month period for which financial statements are available, but
excluding, in each case, any such Subsidiary that is or becomes a Loan
Party.
"EXISTING DEBT" has the meaning specified in Section 4.01(ff)
hereof.
"FACILITY" means the Working Capital Facility or the Letter of
Credit Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to 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 for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FISCAL YEAR" means a fiscal year of the Parent Borrower and
its Consolidated Subsidiaries ending on September 30 in any calendar
year.
"FOREIGN GUARANTORS" means each of the Subsidiaries of the
Parent Borrower listed on Part B of Schedule II hereto and all Foreign
Subsidiaries that shall be required to deliver a Foreign Guaranty
pursuant to Section 5.01(o).
"FOREIGN GUARANTY" has the meaning specified in Section
3.01(m)(x).
"FOREIGN SECURITY DOCUMENTS" has the meaning specified in
Section 3.01(m)(ix).
"FOREIGN SUBSIDIARIES" means each of the Subsidiaries of the
Parent Borrower other than the Domestic Subsidiaries.
"FUNDED DEBT" of any Person means Debt in respect of the
Advances owing by either Borrower, in the case of such Borrower, and
all other Debt of such Person that by its terms matures more than one
year after the date of its creation or matures within one year from
such date but is renewable or extendible, at the option of such Person,
to a date more than one year after such date or arises under a
revolving credit or similar agreement that obligates the lender or
lenders to extend credit during a period of more than one year after
such date, including, without limitation, all amounts of Funded Debt of
such Person required to be paid or prepaid within one year after the
date of its determination.
"GAAP" has the meaning specified in Section 1.03.
"GE CAPITAL" has the meaning specified in the recital of
parties to this Agreement.
"XXXXXXX SACHS" has the meaning specified in the recital of
parties to this Agreement.
"GUARANTIES" means the Domestic Guaranty and the Foreign
Guaranty.
"GUARANTORS" means the Domestic Guarantors and the Foreign
Guarantors.
15
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum
products, petroleum by-products or petroleum 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 contaminant 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.
"HEDGE BANK" means any Lender Party or an Affiliate of a
Lender Party in its capacity as a party to a Secured Hedge Agreement.
"HONG KONG SUBSIDIARIES" means IPC Hong Kong and International
Exchange Networks (Hong Kong) Limited, a corporation organized under
the laws of Hong Kong and an indirect wholly owned Subsidiary of the
Parent Borrower.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of
the initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"INITIAL ISSUING BANK" has the meaning specified in the
recital of parties to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of
parties to this Agreement.
"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.
"INTERCOMPANY NOTES" means the Specified Intercompany Notes
and the Loan Party Intercompany Notes.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the
date of such Eurodollar Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurodollar Rate Advance, and ending on
the last day of the period selected by the applicable Borrower pursuant
to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by such Borrower
pursuant to the provisions below. The duration of each such Interest
Period shall be one, three, six, nine or twelve months (so long as an
Interest Period of any such duration is available to all of the
Lenders), as the applicable Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the first day of such Interest Period,
select; PROVIDED, HOWEVER, that:
(a) neither Borrower may select any Interest Period
that ends after the Termination Date;
16
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day; PROVIDED, HOWEVER, that, if
such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last
day of such Interest Period shall occur on the next preceding
Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such
succeeding calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of
the Security Agreement.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities or the assets comprising a substantial part or all of
the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including,
without limitation, any acquisition by way of a merger or consolidation
and any arrangement pursuant to which the investor incurs Debt of the
types referred to in clause (i) or (j) of the definition of "DEBT" in
respect of such Person.
"INVESTORS AGREEMENT" means the Investors Agreement dated as
of December 18, 1997 among IPC Information Systems, Inc., Cable Systems
Holding, LLC and certain other Persons named therein, as amended,
supplemented or otherwise modified from time to time in accordance with
its terms, to the extent permitted in accordance with the Loan
Documents.
"IPC BRIDGE" means IPC Bridge, Inc., a Delaware corporation.
"IPC CANADA" means IPC Information Systems Canada, Inc., a
corporation organized under the laws of Canada.
"IPC HONG KONG" means IPC Information Systems Asia Pacific,
Ltd., a corporation organized under the laws of Hong Kong.
"ISSUING BANK" means the Initial Issuing Bank (or any bank
designated by the Initial Issuing Bank to act as Issuing Bank
hereunder) and each Eligible Assignee to which the Letter of Credit
Commitment hereunder has been assigned pursuant to Section 8.07.
17
"IXNET" has the meaning specified in the Preliminary
Statements.
"IXNET FRANCE" means International Exchange Networks, SAS, a
corporation organized under the laws of France and an indirect wholly
owned Subsidiary of the Parent Borrower.
"IXNET GERMANY" means International Exchange Networks, GmbH, a
corporation organized under the laws of Germany and an indirect wholly
owned Subsidiary of the Parent Borrower.
"LABOR POOL AGREEMENTS" means the Amended and Restated Labor
Pool Agreement dated as of December 18, 1997 between Xxxxxxxxxxx
Electric Company, Inc. (NY) and IPC Information Systems, Inc., as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, to the extent permitted in accordance with
the Loan Documents, and the Amended and Restated Labor Pool Agreement
dated as of December 18, 1997 between Xxxxxxxxxxx Electric Company,
Inc. (NJ) and IPC Information Systems, Inc., as amended, supplemented
or otherwise modified from time to time in accordance with its terms,
to the extent permitted in accordance with the Loan Documents.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(b)(ii)(A).
"LENDER PARTY" means any Lender or the Issuing Bank.
"LENDERS" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07.
"LETTER OF CREDIT ADVANCE" means an advance made by the
Issuing Bank or any Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to any
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Letter of Credit Commitment" or,
if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 8.07(d) as such Lender's
"Letter of Credit Commitment", as such amount may be reduced at or
prior to such time pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, the amount of
the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant
to Section 2.05.
"LETTER OF CREDIT FEE RATE" means (a) during the period from
the date hereof until the date that is 6 months after the date hereof,
2.25% per annum and (b) thereafter, a percentage per annum
determined by reference to the Leverage Ratio as follows:
18
Level Letter of Credit Fee Rate
----------------------------------------------------- -----------------------------------------------------
Level I 2.25%
Level II 2.00%
Level III 1.75%
Level IV 1.50%
Level V 1.25%
===================================================== =====================================================
PROVIDED, HOWEVER, that (A) (x) no change in the Letter of Credit Fee
Rate shall be effective until three Business Days after the date on
which the Administrative Agent receives the financial statements
required to be delivered pursuant to Section 5.03(b) or (c) and a
certificate of the chief financial officer of the Parent Borrower
demonstrating such ratio and (y) not more than one decrease in the
Letter of Credit Fee Rate shall occur in any three-month period and (B)
the Letter of Credit Fee Rate shall be at Level I for so long as the
Parent Borrower has not submitted to the Administrative Agent the
information described in clause (A)(x) of this proviso as and when
required under Section 5.03(b) or (c), as the case may be.
"LETTERS OF CREDIT" has the meaning specified in Section
2.01(b).
"LEVEL I" means a Leverage Ratio of 5.5:1.0 or greater.
"LEVEL II" means a Leverage Ratio of 5.0:1.0 or greater, but
less than 5.5:1.0.
"LEVEL III" means a Leverage Ratio of 4.5:1.0 or greater, but
less than 5.0:1.0.
"LEVEL IV" means a Leverage Ratio of 4.0:1.0 or greater, but
less than 4.5:1.0.
"LEVEL V" means a Leverage Ratio of less than 4.0:1.0.
"LEVERAGE RATIO" means, at any time of determination, the
ratio of the aggregate amount of Consolidated Debt of the Parent
Borrower and its Subsidiaries as of the end of the most recently ended
fiscal quarter of the Parent Borrower and its Subsidiaries for which
financial statements are required to be delivered to the Lender Parties
pursuant to Section 5.03(b) or (c), as the case may be, to Consolidated
EBITDA of the Parent Borrower and its Subsidiaries for such fiscal
quarter and for the preceding three fiscal quarters of the Parent
Borrower.
"LIEN" means any lien, security interest 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 (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for
19
purposes of the Foreign Guaranty, the Specified Intercompany Notes, the
Administrative Agency Agreement, the Security Agreement (solely with
respect to the Foreign Subsidiaries party thereto and their Obligations
thereunder) and the Foreign Security Documents and any amendment,
supplement or modification thereof, (i) this Agreement, (ii) the Notes,
(iii) each Guaranty, (iv) the Collateral Documents, (v) each Letter of
Credit Agreement, (vi) the Administrative Agent's Fee Letter, (vii) the
Administrative Agency Agreement and (viii) each Secured Hedge Agreement
and (b) for purposes of the Foreign Guaranty, the Specified
Intercompany Notes, the Administrative Agency Agreement, the Security
Agreement (solely with respect to the Foreign Subsidiaries party
thereto and their Obligations thereunder) and the Foreign Security
Documents, and any amendment, supplement or modification thereof, (i)
the Foreign Guaranty, (ii) each Specified Intercompany Note, (iii) the
Administrative Agency Agreement, (iv) the Security Agreement (solely
with respect to the Foreign Subsidiaries party thereto and their
Obligations thereunder), and (iv) each Foreign Security Document, in
each case as amended, supplemented or otherwise modified from time to
time.
"LOAN PARTIES" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for purposes of the
Foreign Guaranty, the Specified Intercompany Notes, the Administrative
Agency Agreement, the Security Agreement (solely with respect to the
Foreign Subsidiaries party thereto and their Obligations thereunder)
and the Foreign Security Documents and any amendment, supplement or
modification thereof, (i) each Borrower and (ii) each Guarantor and (b)
for purposes of the Foreign Guaranty, the Specified Intercompany Notes,
the Administrative Agency Agreement, the Security Agreement (solely
with respect to the Foreign Subsidiaries party thereto and their
Obligations thereunder) and the Foreign Security Documents, and any
amendment, supplement or modification thereof, (i) each Specified
Subsidiary and (ii) each Foreign Guarantor.
"LOAN PARTY INTERCOMPANY NOTE" means a promissory note of a
Loan Party payable to the order of any other Loan Party, in
substantially the form of Exhibit I-2 hereto, evidencing the aggregate
intercompany indebtedness of such Loan Party to such other Loan Party,
as amended, supplemented or otherwise modified from time to time, but
excluding, in any event, the Specified Intercompany Notes.
"LOAN VALUE" means:
(a) in the case of the Parent Borrower, an amount
equal to the sum of: (i) with respect to Eligible Inventory of
the Parent Borrower and the Domestic Guarantors, 25% of the
value thereof, and (ii) with respect to Eligible Receivables
of the Parent Borrower and the Domestic Guarantors, 80% of the
value thereof LESS (iii) a reserve equal to the sum of (x) 3%
(or such different percentage as may be determined in
accordance with the following proviso) of Eligible Receivables
consisting of billed and outstanding progress payments
relating to turrets and (y) 35% (or such different percentage
as may be determined in accordance with the following proviso)
of Eligible Receivables consisting of billed and outstanding
progress payments relating to cabling systems, PROVIDED,
HOWEVER, in each case that if the actual labor costs
(calculated on a monthly basis) associated with performing the
services in connection with which such progress payments are
payable as a percentage of such Eligible Receivables vary from
the percentage set forth in clause (x) or (y) above, as the
case may be, then (1) if such costs vary by more than 25%, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be determined
20
by the Collateral Agent in its reasonable discretion, and (2)
in all other cases, the percentage set forth in clause (x) or
(y) above, as applicable, shall be mutually agreed between the
Parent Borrower and the Collateral Agent, PROVIDED that until
the Parent Borrower and the Collateral Agent shall have agreed
to a different percentage pursuant to this subclause (2), the
percentage shall remain the percentage in effect immediately
prior to the occurrence of such variance; and
(b) in the case of the Sub Borrower, an amount equal
to the sum of: (i) with respect to Eligible Inventory of the
U.K. Subsidiaries, 25% of the value thereof, and (ii) with
respect to Eligible Receivables of the U.K. Subsidiaries, 80%
of the value thereof LESS (iii) a reserve equal to the sum of
(x) 3% (or such different percentage as may be determined in
accordance with the following proviso) of Eligible Receivables
consisting of billed and outstanding progress payments
relating to turrets and (y) 35% (or such different percentage
as may be determined in accordance with the following proviso)
of Eligible Receivables consisting of billed and outstanding
progress payments relating to cabling systems, PROVIDED,
HOWEVER, in each case that if the actual labor costs
(calculated on a monthly basis) associated with performing the
services in connection with which such progress payments are
payable as a percentage of such Eligible Receivables vary from
the percentage set forth in clause (x) or (y) above, as the
case may be, then (1) if such costs vary by more than 25%, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be determined by the Collateral Agent in its
reasonable discretion, and (2) in all other cases, the
percentage set forth in clause (x) or (y) above, as
applicable, shall be mutually agreed between the Parent
Borrower and the Collateral Agent, PROVIDED that until the
Parent Borrower and the Collateral Agent shall have agreed to
a different percentage pursuant to this subclause (2), the
percentage shall remain the percentage in effect immediately
prior to the occurrence of such variance;
PROVIDED, HOWEVER, that during such periods when collections of
Eligible Receivables are less than 80%, the Collateral Agent may, in
its reasonable discretion, reduce the percentage in the foregoing
clauses (a)(ii) and (b)(ii) to a percentage below 80%.
"LOCAL PLEDGES" means the Deed of Charge over Shares and each
other pledge, charge and similar agreement pursuant to which the Parent
Borrower or a Domestic Subsidiary pledges the stock of, or other
ownership interest in, a Foreign Subsidiary to the Administrative
Agent, in each case as amended, supplemented or otherwise modified from
time to time.
"LSH" has the meaning specified in the Preliminary Statements.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
(a) the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities (including, without
limitation, tax, ERISA and environmental liabilities) or prospects of
the Parent Borrower and its Subsidiaries, taken as a whole, or (b) the
ability of either Borrower or any Specified Subsidiary to perform its
Obligations under any Loan Document or Related Document to which it is
or is to be a party.
21
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, assets, nature of assets, liabilities (including, without
limitation, tax, ERISA and environmental liabilities) or prospects of
the Parent Borrower and its Subsidiaries, taken as a whole, (b) the
rights and remedies of any Agent or any Lender Party under any Loan
Document or Related Document or (c) the ability of either Borrower or
any Specified Subsidiary to perform its Obligations under any Loan
Document or Related Document to which it is or is to be a party.
"MATERIAL CONTRACT" means, with respect to any Person, each
contract to which such Person is a party involving aggregate
consideration payable to or by such Person of $15,000,000 or more or
otherwise material to the business, condition (financial or otherwise),
operations, performance, assets, nature of assets, liabilities
(including, without limitation, tax, ERISA and environmental
liabilities) or prospects of such Person, but shall not include the
Related Documents.
"MERGER" has the meaning specified in the Preliminary
Statements.
"MERGER AGREEMENT" has the meaning specified in the
Preliminary Statements.
"MORTGAGE POLICIES" has the meaning specified in Section
5.01(q)(ii)(B).
"MORTGAGES" has the meaning specified in Section 5.01(q)(ii).
"MSSF" has the meaning specified in the recital of parties to
this Agreement.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party 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" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"MXNET" means MXnet Inc., a Delaware corporation.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance of
any Debt or capital stock or other ownership or profit interest, any
securities convertible into or exchangeable for capital stock or other
ownership or profit interest or any warrants, rights, options or other
securities to acquire capital stock or other ownership or profit
interest by any Person, the aggregate amount of cash received from time
to time (whether as initial consideration or through payment or
disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only
(without duplication) (a) reasonable and customary brokerage
commissions, underwriting fees and discounts, legal fees, finder's fees
and other similar fees and commissions, (b) the amount of taxes
22
payable in connection with or as a result of such transaction and (c)
the amount of any Debt secured by a Lien on such asset that, by the
terms of the instrument evidencing such Debt, is required to be repaid
upon such 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 to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are
properly attributable to such transaction or to the asset that is the
subject thereof.
"NON-HOSTILE ACQUISITION" means any acquisition by the Parent
Borrower or any of its Subsidiaries of a Person, so long as (a) the
board of directors (or other governing body) of such Person shall have
approved such acquisition at the time such acquisition is first
publicly announced, (b) if such Person shall have been soliciting bids
for its acquisition, the board of directors (or other governing body)
of such Person shall not have determined either to accept no offer or
to accept an offer other than an offer by the Parent Borrower or any of
its Subsidiaries or (c) such Person shall not have been soliciting bids
for its acquisition or if the board of directors (or other governing
body) of such Person shall have solicited bids for its acquisition but
shall have initially determined either to accept no offer or to accept
an offer other than an offer by the Parent Borrower or any of its
Subsidiaries, in each case the existence, amount and availability for
the acquisition of such Person of the Commitments hereunder shall not
have been disclosed, orally or in writing, until after such time as the
board of directors (or other governing body) of such Person shall have
approved such acquisition by the Parent Borrower or any of its
Subsidiaries and so long as, in any case, such acquisition is otherwise
permitted hereunder.
"NOTE" means a promissory note of either Borrower payable to
the order of any Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of such Borrower to such Lender
resulting from the Working Capital Advances made by such Lender, as
amended, supplemented or otherwise modified from time to time.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other 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 proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
23
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PARENT BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"PARENT BORROWER'S ACCOUNT" means the account of the Parent
Borrower maintained by the Parent Borrower with The Bank of New York at
its office at 0 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Account No. 00-000-00000, Attention: Xxxxxxx X. Pan-Kita or such other
account as the Parent Borrower shall specify in writing to the
Administrative Agent (subject to the requirements of Section 5.01(n)).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ENCUMBRANCES" has the meaning specified in the
Mortgages.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and
governmental charges or levies to the extent not required to be paid
under Section 5.01(b); (b) Liens imposed by law (whether statutory or
common law), such as landlords', 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 30 days; (c) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation or
to secure public or statutory obligations; and (d) easements, rights of
way and other encumbrances on title to real property that do not render
title to the property encumbered thereby unmarketable or materially
adversely affect the use of such property for its current present
purposes.
"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 or a Multiple Employer
Plan.
"PLEDGED DEBT" has the meaning specified in the Security
Agreement.
"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.
"PRO RATA SHARE" of any amount means, with respect to any
Lender at any time, the product of such amount TIMES a fraction the
numerator of which is the amount of such Lender's Working Capital
Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's Working
Capital Commitment as in effect immediately prior to such termination)
and the denominator of which is the Working Capital Facility at such
time (or, if the Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Working Capital Facility as in effect
immediately prior to such termination).
24
"RECEIVABLES" means all Receivables referred to in Section
1(c) of the Security Agreement.
"REDEEMABLE" means, with respect to any capital stock or other
ownership or profit interest, 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.
"REDUCTION AMOUNT" has the meaning specified in Section
2.06(b)(iv).
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Merger Agreement, the Senior
Notes, the Senior Notes Indenture, the Share Exchange and Termination
Agreement, the Stock Option Plan, the Investors Agreement, the Labor
Pool Agreements and the Corporate Opportunity Agreement.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time and (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit are
outstanding at such time, Lenders holding at least a majority in
interest of the aggregate of the Working Capital Commitments; PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders at
such time (A) the aggregate principal amount of the Advances owing to
such Lender (in its capacity as a Lender) and outstanding at such time,
(B) such Lender's Pro Rata Share of the aggregate Available Amount of
all Letters of Credit outstanding at such time and (C) the aggregate
Unused Working Capital Commitments of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Letter
of Credit Advances owing to the Issuing Bank and the Available Amount
of each Letter of Credit shall be considered to be owed to the Lenders
ratably in accordance with their respective Working Capital
Commitments.
"RESPONSIBLE OFFICER" means any executive officer of any Loan
Party or any of its Subsidiaries.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement required
or permitted under Article V that is entered into by and between the
Parent Borrower and any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in Section 2
of the Security Agreement.
"SECURED PARTIES" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof and for all other purposes other than for purposes of the
Foreign Guaranty, the Specified Intercompany Notes, the Administrative
Agency Agreement, the Security Agreement (solely with respect to the
Foreign Subsidiaries party thereto
25
and their Obligations thereunder) and the Foreign Security Documents
and any amendment, supplement or modification thereof, (i) the Agents,
(ii) the Lender Parties and (iii) the Hedge Banks and (b) for purposes
of the Foreign Guaranty, the Specified Intercompany Notes, the
Administrative Agency Agreement, the Security Agreement (solely with
respect to the Foreign Subsidiaries party thereto and their Obligations
thereunder) and the Foreign Security Documents, and any amendment,
supplement or modification thereof, the Administrative Agent; PROVIDED,
HOWEVER, that solely for purposes of the granting of Liens by the
Foreign Guarantors to the Administrative Agent for the benefit of the
Sub Borrower as required by Section 5.02(b)(ii)(A) and the
administrative agency appointment by the Sub Borrower pursuant to the
Administrative Agency Agreement, the term "Secured Parties" shall
include the Sub Borrower; PROVIDED FURTHER, HOWEVER, that
notwithstanding the immediately preceding proviso, the Sub Borrower
shall have no voting or other rights or remedies as a Secured Party
under the Loan Documents.
"SECURITY AGREEMENT" has the meaning specified in Section
3.01(m)(viii).
"SENIOR NOTES" has the meaning specified in the Preliminary
Statements.
"SENIOR NOTES INDENTURE" means the Indenture dated as of April
30, 1998, between the Parent Borrower, as issuer, and United States
Trust Company of New York, as trustee, pursuant to which the Senior
Notes were issued, as such Indenture may be amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"SHARE EXCHANGE" has the meaning specified in the Preliminary
Statements.
"SHARE EXCHANGE AND TERMINATION AGREEMENT" means the Share
Exchange and Termination Agreement dated as of December 18, 1997 among
the Parent Borrower, IXnet and certain other parties thereto, as such
Agreement may be amended, supplemented or otherwise modified from time
to time in accordance with its terms, to the extent permitted in
accordance with the Loan Documents.
"SINGLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and no Person other
than the Loan Parties and the ERISA Affiliates or (b) was so maintained
and in respect of which any Loan Party or any ERISA Affiliate could
have liability under Section 4069 of ERISA in the event such plan has
been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent
26
liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"SPECIFIED INTERCOMPANY NOTE" means a promissory note of a
Specified Subsidiary payable to the order of the Sub Borrower, in
substantially the form of Exhibit I-1 hereto, evidencing the aggregate
intercompany indebtedness of such Specified Subsidiary to the Sub
Borrower, as amended, supplemented or otherwise modified from time to
time.
"SPECIFIED SUBSIDIARIES" means IPC Canada, a direct wholly
owned Subsidiary of the Parent Borrower, and the U.K. Subsidiaries.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"STOCK OPTION PLAN" means the IPC Information Systems, Inc.
Stock Option Plan, a copy of which has been furnished to the Lender
Parties prior to the Effective Date, as amended, supplemented or
otherwise modified from time to time in accordance with its terms, to
the extent permitted in accordance with the Loan Documents.
"SUB BORROWER" has the meaning specified in the recital of
parties to this Agreement.
"SUB BORROWER'S ACCOUNT" means such account of the Sub
Borrower as the Sub Borrower shall specify in writing to the
Administrative Agent (subject to the requirements of Section
5.01(n)).
"SUBORDINATED DEBT" means any Debt of either Borrower that is
subordinated to the Obligations of such Borrower under the Loan
Documents on, and that otherwise contains, terms
and conditions satisfactory to the Required Lenders.
"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.
"SUPERMAJORITY LENDERS" means, at any time, Lenders owed or
holding at least 70% of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time and (b) the aggregate
Available Amount of all Letters of Credit outstanding at such time, or,
if no such principal amount and no Letters of Credit are outstanding at
such time, Lenders holding at least 70% of the aggregate of the Working
Capital Commitments; PROVIDED, HOWEVER, that if any Lender shall be a
Defaulting Lender at such time, there shall be excluded from the
determination of
27
Supermajority Lenders at such time (A) the aggregate principal amount
of the Advances owing to such Lender (in its capacity as a Lender) and
outstanding at such time, (B) such Lender's Pro Rata Share of the
aggregate Available Amount of all Letters of Credit outstanding at such
time and (C) the aggregate Unused Working Capital Commitments of such
Lender at such time. For purposes of this definition, the aggregate
principal amount of Letter of Credit Advances owing to the Issuing Bank
and the Available Amount of each Letter of Credit shall be considered
to be owed to the Lenders ratably in accordance with their respective
Working Capital Commitments.
"SURVIVING DEBT" has the meaning specified in Section 3.01(g).
"SYNDICATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"TAX CERTIFICATE" has the meaning specified in Section
5.03(o).
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of April 30, 2003 and the
date of termination in whole of the Letter of Credit Commitment and the
Working Capital Commitments pursuant to Section 2.05 or 6.01.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a
supplier of Inventory to the Parent Borrower or any of its Subsidiaries
to effect payment for such Inventory, the conditions to drawing under
which include the presentation to the Issuing Bank of negotiable bills
of lading, invoices and related documents sufficient, in the judgment
of the Issuing Bank, to create a valid and perfected lien on or
security interest in such Inventory, bills of lading, invoices and
related documents in favor of the Issuing Bank.
"TRANSACTION" has the meaning specified in the Preliminary
Statements.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"U.K. SUBSIDIARIES" means IXnet U.K., Limited (formerly known
as IXnet, Limited) and IPC Information Systems, each a corporation
organized under the laws of England and Wales and each an indirect
wholly owned Subsidiary of the Parent Borrower after giving effect to
the Transaction.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any
Lender at any time, (a) such Lender's Working Capital Commitment at
such time MINUS (b) the sum of (i) the aggregate principal amount of
all Working Capital Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time PLUS
(ii) such Lender's Pro Rata Share of (A) the aggregate Available Amount
of all Letters of Credit outstanding at such time and (B) the aggregate
principal amount of all Letter of Credit Advances made by the Issuing
Bank pursuant to Section 2.03(c) and outstanding at such time.
28
"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 if 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, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section
2.01(a).
"WORKING CAPITAL COMMITMENT" means, with respect to any Lender
at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Working Capital Commitment" or, if
such Lender has entered into one or more Assignments and Acceptances,
set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as such Lender's
"Working Capital Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate
amount of the Lenders' Working Capital Commitments at such time.
"YEAR 2000 COMPLIANT" means the ability of the software and
other processing capabilities of the Parent Borrower and its
Subsidiaries correctly to interpret and manipulate all data, in
whatever form, including printed form, screen displays, financial
records, calculations and loan-related data, so as to avoid errors in
processing that may otherwise occur because of the inability of the
software or other processing capabilities to recognize accurately the
year 2000 or subsequent dates.
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 mean "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(f) ("GAAP").
29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. THE ADVANCES AND LETTERS OF CREDIT. (a) THE
WORKING CAPITAL ADVANCES. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "WORKING CAPITAL
ADVANCE") to either Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an amount for each
such Advance not to exceed (i) in the case of the Parent Borrower, the lesser of
(x) such Lender's Unused Working Capital Commitment at such time and (y) such
Lender's Pro Rata Share of the Loan Value of the applicable Eligible Collateral
at such time, and (ii) in the case of the Sub Borrower, the lesser of (x) such
Lender's Unused Working Capital Commitment at such time and (y) such Lender's
Pro Rata Share of the Loan Value of the applicable Eligible Collateral at such
time; PROVIDED, HOWEVER, that notwithstanding the foregoing, no Advances shall
be made hereunder until the condition set forth in Section 5.01(q)(vii) shall
have been satisfied in a manner reasonably acceptable to the Administrative
Agent. Each Borrowing shall be in an aggregate amount of $1,000,000 or an
integral multiple of $100,000 in excess thereof and shall consist of Working
Capital Advances made simultaneously by the Lenders ratably according to their
Working Capital Commitments. Within the limits of each Lender's Unused Working
Capital Commitment in effect from time to time, the Borrowers may borrow under
this Section 2.01(a), prepay pursuant to Section 2.06(a) and reborrow under this
Section 2.01(a).
(b) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue letters of credit (the "LETTERS
OF CREDIT") for the account of the Parent Borrower from time to time on any
Business Day during the period from the Effective Date until 60 days before the
Termination Date (i) in an aggregate Available Amount for all Letters of Credit
not to exceed at any time the Issuing Bank's Letter of Credit Commitment at such
time and (ii) in an Available Amount for each such Letter of Credit not to
exceed the lesser of (x) the Unused Working Capital Commitments of the Lenders
at such time and (y) the Loan Value of the applicable Eligible Collateral at
such time. No Letter of Credit shall have an expiration date (including all
rights of the Parent Borrower or the beneficiary to require renewal) later than
the earlier of 30 days before the Termination Date and (A) in the case of
Standby Letters of Credit, one year after the date of issuance thereof and (B)
in the case of a Trade Letter of Credit, 60 days after the date of issuance
thereof; PROVIDED, HOWEVER, that notwithstanding the foregoing, (x) no Letters
of Credit shall be issued hereunder after the Effective Date until the condition
set forth in Section 5.01(q)(vii) shall have been satisfied in a manner
reasonably acceptable to the Administrative Agent and (y) no Letters of Credit
shall be issued hereunder after the Effective Date (unless the Initial Issuing
Bank otherwise agrees) until the Initial Issuing Bank shall have assigned its
Letter of Credit Commitment to an Eligible Assignee acceptable to it and the
Letters of Credit issued on the Effective Date shall have been replaced by
Letters of Credit issued by such Eligible Assignee or shall have otherwise
expired or terminated. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Parent Borrower may request the
issuance of Letters of Credit under this Section 2.01(b), repay any Letter of
Credit Advances resulting from drawings thereunder pursuant to Section 2.03(c)
and request the issuance of additional Letters of Credit under this Section
2.01(b).
SECTION 2.02. MAKING THE ADVANCES. (a) Except as
otherwise provided in Section 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the
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third Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances, or the first Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the applicable Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telex or telecopier. Each such notice of a Borrowing (a "NOTICE OF BORROWING")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
in substantially the form of Exhibit B hereto, specifying therein the requested
(i) date of such Borrowing, (ii) Type of Advances comprising such Borrowing,
(iii) aggregate amount of such Borrowing and (iv) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Lender shall, before 11:00 A.M. (New York City time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in accordance
with the respective Working Capital Commitments of such Lender and the other
Lenders. After the Administrative Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent shall make such funds available to such Borrower by
crediting the Parent Borrower's Account or the Sub Borrower's Account, as
applicable; PROVIDED, HOWEVER, that the Administrative Agent shall first make a
portion of such funds equal to the aggregate principal amount of any Letter of
Credit Advances made by the Issuing Bank and by any other Lender and outstanding
on the date of such Borrowing, plus interest accrued and unpaid thereon to and
as of such date, available to the Issuing Bank and such other Lenders for
repayment of such Letter of Credit Advances.
(b) Anything in subsection (a) of this Section 2.02 to the
contrary notwithstanding, (i) neither Borrower may select Eurodollar Rate
Advances for any Borrowing if the aggregate amount of such Borrowing is less
than $3,000,000 or if the obligation of the Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii) the
Working Capital Advances may not be outstanding as part of more than 12 separate
Borrowings.
(c) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower giving such Notice of Borrowing. In the case of any Borrowing
that the related Notice of Borrowing specifies is to be comprised of Eurodollar
Rate Advances, the applicable Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the applicable Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable portion available to the Administrative Agent,
such Lender and such Borrower severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay
interest thereon, for each day from the date such amount is made available to
such Borrower until the date such amount is repaid or paid to the Administrative
Agent, at
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(i) in the case of such Borrower, the interest rate applicable at such time
under Section 2.07 to Advances comprising such Borrowing and (ii) in the case of
such Lender, the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid shall
constitute such Lender's Advance as part of such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such Borrowing,
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 the date of any Borrowing.
SECTION 2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER
LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Parent Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Lender prompt notice thereof by telex or
telecopier. Each such notice of issuance of a Letter of Credit (a "NOTICE OF
ISSUANCE") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, specifying therein the requested (A) date of such issuance (which
shall be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of Credit, and
shall be accompanied by such application and agreement for letter of credit as
the Issuing Bank may specify to the Parent Borrower for use in connection with
such requested Letter of Credit (a "LETTER OF CREDIT AGREEMENT"). If (x) the
requested form of such Letter of Credit is acceptable to the Issuing Bank in its
sole discretion and (y) the Issuing Bank has not received notice from the
Administrative Agent or the Required Lenders that the conditions to issuing such
Letter of Credit have not been satisfied or duly waived, the Issuing Bank shall,
upon fulfillment of the applicable conditions set forth in Article III, make
such Letter of Credit available to the Parent Borrower at its office referred to
in Section 8.02 or as otherwise agreed with the Parent Borrower in connection
with such issuance. In the event and to the extent that the provisions of any
Letter of Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern. At the Parent Borrower's request, the Issuing Bank
shall provide the Parent Borrower with a copy of the form of Letter of Credit to
be issued for the Parent Borrower's review and approval prior to issuance.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish
(A) to the Administrative Agent on the first Business Day of each week a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the previous week and drawings during such week under all Letters of
Credit, (B) to each Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (C) to the Administrative Agent and each Lender on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter of all Letters
of Credit.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank
of a draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Letter of Credit Advance,
which shall be a Base Rate Advance, in the amount of such draft. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Lender shall purchase from the Issuing Bank, and the Issuing Bank
shall sell and assign to each such
32
Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of the
Issuing Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. The Parent Borrower hereby agrees to each such sale and
assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank; PROVIDED that notice of such demand is given not later
than 11:00 A.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is given after
such time. Upon any such assignment by the Issuing Bank to any Lender of a
portion of a Letter of Credit Advance, the Issuing Bank represents and warrants
to such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any Liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Lender agrees to pay
to the Administrative Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by the Issuing Bank until
the date such amount is paid to the Administrative Agent, at the Federal Funds
Rate for its account or the account of the Issuing Bank, as applicable. If such
Lender shall pay to the Administrative Agent such amount for the account of the
Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of
any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. REPAYMENT OF ADVANCES. (a) WORKING CAPITAL
ADVANCES. Each Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders on the Termination Date the aggregate outstanding
principal amount of the Working Capital Advances then outstanding and owing by
such Borrower.
(b) LETTER OF CREDIT ADVANCES. (i) The Parent Borrower shall
repay to the Administrative Agent for the account of the Issuing Bank and each
other Lender that has made a Letter of Credit Advance on the earlier of demand
and the Termination Date the outstanding principal amount of
each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Parent Borrower under this
Agreement, any Letter of Credit Agreement and any other agreement or instrument
relating to any Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement, such
Letter of Credit Agreement and such other agreement or instrument under all
circumstances, including, without limitation, the following circumstances (it
being understood that any such payment by the Parent Borrower is without
prejudice to, and does not constitute a waiver of, any rights that the Parent
Borrower might have
33
or might acquire as a result of the payment by the Issuing Bank of any draft or
the reimbursement by the Parent Borrower thereof):
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the
foregoing being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Parent
Borrower in respect of any L/C Related Document or any other amendment
or waiver of or any consent to departure from all or any of the L/C
Related
Documents;
(C) the existence of any claim, setoff, defense or other right
that the Parent Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank or any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(E) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or
consent to departure from the Domestic Guaranty or any other guarantee,
for all or any of the Obligations of the Parent Borrower in respect of
the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including, without limitation, any
other circumstance that might otherwise constitute a defense available
to, or a discharge of, the Parent Borrower or a Domestic Guarantor
or any other guarantor.
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Parent Borrower may, upon at least five Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part the unused
portions of the Letter of Credit Facility and the Unused Working Capital
Commitments; PROVIDED, HOWEVER, that each partial reduction of a Facility or a
Commitment (i) shall be in an aggregate amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof and (ii) shall be made ratably among the
Lenders in accordance with their Commitments with respect to such Facility or
such Commitments.
(b) MANDATORY. (i) The Working Capital Facility shall be
automatically and permanently reduced on a pro rata basis on each date on which
prepayment thereof is required to be made pursuant to Section 2.06(b)(i) in an
amount equal to the applicable Reduction Amount; PROVIDED that each
34
such reduction of the Working Capital Facility shall be made ratably among the
Lenders in accordance with their Working Capital Commitments; PROVIDED FURTHER,
HOWEVER, that, notwithstanding the foregoing and Section 2.06(b)(iv), in no
event shall the Working Capital Facility be reduced, pursuant to this
Section 2.05(b)(i), to less than $20,000,000.
(ii) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Working Capital Facility after giving effect to such
reduction of the Working Capital Facility.
SECTION 2.06. PREPAYMENTS. (a) OPTIONAL. Either Borrower may,
upon at least five Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given such Borrower shall, prepay the outstanding aggregate principal
amount of the Advances comprising part of the same Borrowing and owing by such
Borrower in whole or ratably in part, together with accrued interest to the date
of such prepayment on the aggregate principal amount prepaid; PROVIDED, HOWEVER,
that (x) each partial prepayment shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof and (y) no such
prepayment of a Eurodollar Rate Advance shall be made other than on the last day
of an Interest Period therefor.
(b) MANDATORY. (i) The Parent Borrower shall, on the date of
receipt (or such later date as may be specified in Section 5.02(e)) of the Net
Cash Proceeds by any Loan Party or any of their respective Subsidiaries from (A)
the sale, lease, transfer or other disposition of any assets of any Loan Party
or any of their respective Subsidiaries (other than any sale, lease, transfer or
other disposition of assets pursuant to clause (i), (ii) or (v) of Section
5.02(e) or, to the extent no prepayment is required under such clause, clause
(iv) of Section 5.02(e)), (B) the incurrence or issuance by any Loan Party or
any of their respective Subsidiaries of any Debt (other than Debt incurred or
issued pursuant to clause (i), (ii), (iii) or (iv) of Section 5.02(b) (other
than pursuant to subclause (iii)(C)(2) thereof)), and (C) the sale or issuance
by any Loan Party or any of their respective Subsidiaries of any capital stock
or other ownership or profit interest, any securities convertible into or
exchangeable for capital stock or other ownership or profit interest or any
warrants, rights or options to acquire capital stock or other ownership or
profit interest (other than any such sale or issuance permitted under Section
5.02(g)), prepay an aggregate principal amount of the Advances comprising part
of the same Borrowings and deposit in the L/C Cash Collateral Account an amount
equal to the amount of such Net Cash Proceeds. Each such prepayment shall be
applied to the Working Capital Facility as set forth in clause (iv) of this
Section 2.06(b).
(ii) (A) The Sub Borrower shall, on each Business Day, prepay
an aggregate principal amount of the Working Capital Advances owing by the Sub
Borrower and comprising part of the same Borrowings in an amount equal to the
amount by which (x) the sum of the aggregate principal amount of the Working
Capital Advances owing by the Sub Borrower then outstanding exceeds (y) the
lesser of the Working Capital Facility and the Loan Value of the applicable
Eligible Collateral on such Business Day.
(B) The Parent Borrower shall, on each Business Day,
prepay an aggregate principal amount of the Working Capital Advances owing by
the Parent Borrower and comprising part of the same Borrowings and the Letter of
Credit Advances and deposit in the L/C Cash Collateral Account
35
an amount equal to the amount by which (x) the sum of the aggregate principal
amount of (I) the Working Capital Advances owing by the Parent Borrower and (II)
the Letter of Credit Advances then outstanding PLUS the aggregate Available
Amount of all Letters of Credit then outstanding exceeds (y) the lesser of the
Working Capital Facility and the Loan Value of the applicable Eligible
Collateral on such Business Day.
(iii) The Parent Borrower shall, on each Business Day, pay to
the Administrative Agent for deposit in the L/C Cash Collateral Account an
amount sufficient to cause the aggregate amount on deposit in such Account to
equal the amount by which the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Letter of Credit Facility on such Business
Day.
(iv) Prepayments of the Working Capital Facility made pursuant
to clause (i) or (ii) of this Section 2.06(b) shall be FIRST applied to prepay
Letter of Credit Advances then outstanding until such Advances are paid in full,
SECOND applied to prepay Working Capital Advances then outstanding comprising
part of the same Borrowings until such Advances are paid in full and THIRD
deposited in the L/C Cash Collateral Account to cash collateralize 100% of the
Available Amount of the Letters of Credit then outstanding; and, in the case of
prepayments of the Working Capital Facility required pursuant to clause (i)
above, the amount remaining (if any) after the prepayment in full of the
Advances then outstanding and the 100% cash collateralization of the aggregate
Available Amount of Letters of Credit then outstanding (the sum of such
prepayment amounts, cash collateralization amounts and remaining amount being
referred to herein as the "REDUCTION AMOUNT") may be retained by the Parent
Borrower and the Working Capital Facility shall be permanently reduced as set
forth in Section 2.05(b)(i). Upon the drawing of any Letter of Credit for which
funds are on deposit in the L/C Cash Collateral Account, such funds shall be
applied to reimburse the Issuing Bank or Lenders, as applicable.
(v) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.07. INTEREST. (a) SCHEDULED INTEREST. Each
Borrower shall pay interest on the unpaid principal amount of each Advance owing
by such Borrower to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is
a Base Rate Advance, a rate per annum equal at all times to the sum of
(A) the Base Rate in effect from time to time PLUS (B) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September and December during such
periods and on the date such Base Rate Advance shall be Converted or
paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A)
the Eurodollar Rate for such Interest Period for such Advance PLUS (B)
the Applicable Margin in effect on the first day of such Interest
Period, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on
each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such
Eurodollar Rate Advance shall be Converted or paid in full.
36
(b) DEFAULT INTEREST. Upon the occurrence and during the
continuance of an Event of Default, each Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing by such Borrower to each Lender,
payable in arrears on the dates referred to in clause (a)(i) or (a)(ii) of this
Section 2.07 and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid on such Advance pursuant to
clause (a)(i) or (a)(ii) of this Section 2.07 and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
hereunder that is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant
to clause (a)(i) or (a)(ii) of this Section 2.07, and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) of this Section 2.07.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a
Notice of Borrowing pursuant to Section 2.02(a), the Administrative Agent shall
give notice to the Borrower giving such Notice of Borrowing and each Lender of
the applicable interest rate determined by the Administrative Agent for
purposes of Section 2.07(a)(i) or 2.07(a)(ii).
SECTION 2.08. FEES. (a) COMMITMENT FEE. The Parent
Borrower shall pay to the Administrative Agent for the account of the Lenders a
commitment fee, from the date hereof in the case of each Initial Lender and from
the effective date specified in the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender until the Termination Date,
payable in arrears on the date of the initial Borrowing hereunder, and
thereafter quarterly on the last Business Day of each March, June, September and
December, commencing June 30, 1998, and on the Termination Date, at the rate of
0.50% per annum on the daily aggregate Unused Working Capital Commitment of such
Lender; PROVIDED, HOWEVER, that any commitment fee accrued with respect to any
of the Commitments of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Parent Borrower so long as such Lender shall be a Defaulting
Lender except to the extent that such commitment fee shall otherwise have been
due and payable by the Parent Borrower prior to such time; and PROVIDED FURTHER
that no commitment fee shall accrue on any of the Commitments of a Defaulting
Lender so long as such Lender shall be a Defaulting Lender.
(b) LETTER OF CREDIT FEES, ETC. (i) The Parent Borrower shall
pay to the Administrative Agent for the account of each Lender a commission,
payable in arrears quarterly on the last Business Day of each March, June,
September and December, commencing June 30, 1998, and on the earliest to occur
of the full drawing, expiration, termination or cancellation of any Letter of
Credit and on the Termination Date, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of all Letters of
Credit outstanding from time to time at the Letter of Credit Fee Rate in effect
from time to time.
(ii) The Parent Borrower shall pay to the Issuing Bank, for
its own account, (A) a fronting fee for each Letter of Credit in an amount equal
to 0.25% of the Available Amount of such Letter of Credit on the date of
issuance of such Letter of Credit, payable on such date and (B) such
commissions, issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit as the
Parent Borrower and the Issuing Bank shall agree.
37
(c) AGENTS' FEES. The Parent Borrower shall pay to the
Administrative Agent for its account the fees described in the Administrative
Agent's Fee Letter.
SECTION 2.09. CONVERSION OF ADVANCES. (a) OPTIONAL. Either
Borrower may on any Business Day, upon notice given to the Administrative Agent
not later than 11:00 A.M. (New York City time) on the third Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.07 and 2.10, Convert all or any portion of the Advances of one Type comprising
the same Borrowing and owing by such Borrower into Advances of the other Type;
PROVIDED, HOWEVER, that any Conversion of Eurodollar Rate Advances into Base
Rate Advances shall be made only on the last day of an Interest Period for such
Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount specified
in Section 2.02(b), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b) and each Conversion of Advances
comprising part of the same Borrowing shall be made ratably among the Lenders in
accordance with their Working Capital Commitments. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower giving such notice of Conversion.
(b) MANDATORY. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $3,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the applicable Borrower shall fail to select the
duration of any Interest Period for any Eurodollar Rate Advances in accordance
with the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent shall forthwith so notify such Borrower and the
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
(iii) Upon the occurrence and during the continuance of any
Event of Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. INCREASED COSTS, ETC. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining Letters of Credit or of agreeing to make or
of making or maintaining Letter of Credit Advances (excluding, for purposes of
this Section 2.10, any such increased costs resulting from (x) Taxes or Other
Taxes (as to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States or
by the foreign jurisdiction or state under the laws of which such Lender Party
is organized or has its Applicable Lending Office or any political subdivision
thereof), then each Borrower hereby jointly and severally agrees from time to
time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), to pay to the Administrative Agent for the account of
such
38
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrowers by such Lender Party, shall
be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender Party determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder and
other commitments of such type or the issuance or maintenance of the Letters of
Credit (or similar contingent obligations), then each Borrower hereby jointly
and severally agrees, upon demand by such Lender Party (with a copy of such
demand to the Administrative Agent), to pay to the Administrative Agent for the
account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or to
the issuance or maintenance of any Letters of Credit. A certificate as to such
amounts submitted to the Borrowers by such Lender Party shall be conclusive and
binding for all purposes, absent manifest error. Each Lender Party shall use its
reasonable efforts to notify the Borrowers as to the existence of any change of
circumstance described in this Section 2.10(b) as promptly as practicable after
gaining knowledge thereof, but the failure to give notice required hereby shall
not affect the right of any Lender Party to any payment to which it would
otherwise be entitled hereunder.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so notify the
Borrowers and the Lenders, whereupon (i) each such Eurodollar Rate Advance shall
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to each Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance shall
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrowers that such Lender has determined that the circumstances causing such
suspension no longer exist.
(e) Any Lender Party claiming any additional amounts payable
pursuant to clause (a), (b) or (c) of this Section 2.10 agrees to use its
reasonable efforts (consistent with its internal policy and
39
legal and regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased costs or additional amounts that may thereafter
accrue and would not, in the sole judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party.
SECTION 2.11. PAYMENTS AND COMPUTATIONS. (a) Each Borrower
shall make each payment hereunder and under the Notes issued by such Borrower,
irrespective of any right of counterclaim or setoff (except as otherwise
provided in Section 2.15), not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds. The Administrative Agent shall promptly
thereafter cause like funds to be distributed (i) if such payment by either
Borrower is in respect of principal, interest, commitment fees or any other
Obligation then payable hereunder and under the Notes issued by such Borrower to
more than one Lender Party, to such Lender Parties for the account of their
respective Applicable Lending Offices ratably in accordance with the amounts of
such respective Obligations then payable to such Lender Parties and (ii) if such
payment by either Borrower is in respect of any Obligation then payable
hereunder to one Lender Party, to such Lender Party for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(d), from and after the effective date of such Assignment and
Acceptance, the Administrative Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) Each Borrower hereby authorizes each Lender Party, if and
to the extent payment owed to such Lender Party is not made when due hereunder
or, in the case of a Lender, under the Note issued by such Borrower and held by
such Lender, to charge from time to time against any or all of such
Borrower's accounts with such Lender Party any amount so due.
(c) The computation of interest on Base Rate Advances using an
interest rate determined pursuant to clause (a) of the definition of "Base Rate"
and the computation of the fees payable pursuant to Section 2.08(a) shall each
be made by the Administrative Agent on the basis of a year of 365 days or 366
days, as the case may be, in each case for the actual number of days (including
the first but excluding the last day) occurring in the period for which such
interest or commissions are payable. All other computations of interest, fees
and commissions shall be made by the Administrative Agent 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 Administrative Agent
of an interest rate, fee or commission hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes 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 or commitment fee, as
the case may be; PROVIDED, HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
40
(e) Unless the Administrative Agent shall have received notice
from the applicable Borrower prior to the date on which any payment is due to
any Lender Party hereunder that such Borrower will not make such payment in
full, the Administrative Agent may assume that such Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
such Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent such Borrower shall not have so made such
payment in full to the Administrative Agent, each such Lender Party shall repay
to the Administrative Agent forthwith on demand such amount distributed to such
Lender Party together with interest thereon, for each day from the date such
amount is distributed to such Lender Party until the date such Lender Party
repays such amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. TAXES. (a) Any and all payments by either
Borrower hereunder or under the Notes issued by such Borrower shall be made, in
accordance with Section 2.11, 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, in the case
of each Lender Party and each Agent, taxes that are imposed on its net income by
the United States and taxes that are imposed on its net income (and franchise
taxes imposed in lieu thereof) by the state or foreign jurisdiction under the
laws of which such Lender Party or such Agent (as the case may be) is organized
or any political subdivision thereof and, in the case of each Lender Party,
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction of such Lender Party's
Applicable Lending Office or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If either Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note issued by such Borrower to any Lender Party or any Agent, (i) the sum
payable by such Borrower shall be increased as may be necessary so that after
such Borrower and the Administrative Agent have made all required deductions
(including deductions applicable to additional sums payable under this Section
2.12) such Lender Party or such Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (ii)
such Borrower shall make all such deductions and (iii) such Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, each Borrower shall pay any present or future
stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made hereunder or under the Notes issued by such Borrower
or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes issued by such Borrower
(hereinafter referred to as "OTHER TAXES").
(c) The Borrowers shall jointly and severally indemnify each
Lender Party and each Agent for and hold them harmless against the full amount
of Taxes and Other Taxes, and for the full amount of taxes of any kind imposed
by any jurisdiction on amounts payable under this Section 2.12, imposed on or
paid by such Lender Party or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or such Agent (as the case may be) makes written
demand therefor.
41
(d) Within 30 days after the date of any payment of Taxes, the
applicable Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing such payment.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender or
Initial Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender Party in the case of each other
Lender Party, and from time to time thereafter as requested in writing by either
Borrower (but only so long thereafter as such Lender Party remains lawfully able
to do so), provide each of the Administrative Agent and such Borrower with two
original Internal Revenue Service forms 1001 or 4224 or (in the case of a Lender
that has certified in writing to the Administrative Agent and such Borrower that
it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue
Code) form W-8 (and, if such Lender delivers a form W-8, a certificate
representing that such Lender is not a "bank" for purposes of Section 881(c) of
the Internal Revenue Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of such Borrower and is
not a controlled foreign corporation related to such Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or
any successor or other form prescribed by the Internal Revenue Service,
certifying that such Lender Party is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the
Notes issued by such Borrower or, in the case of a Lender providing a form W-8,
certifying that such Lender is a foreign corporation, partnership estate or
trust. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; PROVIDED, HOWEVER, that, if, at the date of the
Assignment and Acceptance pursuant to which a Lender Party becomes a party to
this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) of this Section 2.12 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee on such date.
For purposes of this subsection (e) and subsection (f) of this Section 2.12, the
terms "UNITED STATES" and "UNITED STATES PERSON" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(f) For any period with respect to which a Lender Party has
failed to provide the applicable Borrower with the appropriate form described in
subsection (e) above (OTHER THAN if such failure is due to a change in law
enacted or promulgated after the date on which a form originally was required to
be provided or if such form otherwise is not required under subsection (e) of
this Section 2.12), such Lender Party shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed
by the United States by reason of such failure; PROVIDED, HOWEVER, that should a
Lender Party become subject to Taxes because of its failure to deliver a form
required hereunder, such Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(g) In the event that a Lender Party determines in its
reasonable discretion, that it has actually and finally realized a refund of or
credit for taxes withheld or paid pursuant to this Section 2.12,
42
which credit or refund is identifiable by such Lender Party as being a result of
taxes withheld in connection with sums payable hereunder or under any other Loan
Document, such Lender Party shall promptly notify the Administrative Agent and
the Parent Borrower and shall remit to the Parent Borrower or the Sub Borrower,
as applicable, the amount of such refund or credit allocable to payments made
hereunder or under the other Loan Documents; PROVIDED, HOWEVER, that in the
event of any subsequent disallowance of any such refund or credit on account of
which such Lender Party has made a payment pursuant to this subsection (g), the
amount so disallowed shall be deemed to be a Tax (notwithstanding any exclusions
in the definition of "Taxes") for which such Lender Party shall be entitled to
indemnification under subsection (c) of this Section 2.12, but only to the
extent of any payment by such Lender Party pursuant to this subsection (g).
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of setoff, or otherwise) (a) on account of Obligations
due and payable to such Lender Party hereunder and under the Notes at such time
in excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such participations in the Obligations due and payable or
owing to them, as the case may be, as shall be necessary to cause such
purchasing Lender Party to share the excess payment ratably with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
other Lender Party shall be rescinded and such other Lender Party shall repay to
the purchasing Lender Party the purchase price to the extent of such Lender
Party's ratable share (according to the proportion of (i) the purchase price
paid to such Lender Party to (ii) the aggregate purchase price paid to all
Lender Parties) of such recovery together with an amount equal to such Lender
Party's ratable share (according to the proportion of (i) the amount of such
other Lender Party's required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or
payable by the purchasing Lender Party in respect of the total amount so
recovered. Each Borrower agrees that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.13 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of setoff) with respect to such participation as fully as
if such Lender Party were the direct creditor of such Borrower in the amount of
such participation.
SECTION 2.14. USE OF PROCEEDS. The proceeds of the Advances
and issuances of Letters of Credit to the Parent Borrower shall be available
(and the Parent Borrower agrees that it shall use such proceeds and Letters of
Credit) solely to finance ongoing working capital requirements and for other
general corporate purposes, including, without limitation, Non-hostile
Acquisitions, of the Parent Borrower and its Subsidiaries. The proceeds of the
Advances to the Sub Borrower shall be available (and the Sub Borrower agrees
that it shall use such proceeds) solely to be lent to the Specified Subsidiaries
and to be used
43
by the Specified Subsidiaries solely to finance ongoing working capital
requirements and for other general corporate purposes of the Specified
Subsidiaries.
SECTION 2.15. DEFAULTING LENDERS. (a) In the event that, at
any one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to either Borrower and (iii)
such Borrower shall be required to make any payment hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then such
Borrower may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set off and otherwise
apply the Obligation of such Borrower to make such payment to or for the account
of such Defaulting Lender against the obligation of such Defaulting Lender to
make such Defaulted Advance. In the event that, on any date, such Borrower shall
so set off and otherwise apply its Obligation to make any such payment against
the obligation of such Defaulting Lender to make any such Defaulted Advance on
or prior to such date, the amount so set off and otherwise applied by such
Borrower shall constitute for all purposes of this Agreement and the other Loan
Documents an Advance by such Defaulting Lender made on the date under the
Facility pursuant to which such Defaulted Advance was originally required to
have been made pursuant to Section 2.01. Such Advance shall be a Base Rate
Advance and shall be considered, for all purposes of this Agreement, to comprise
part of the Borrowing in connection with which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01, even if the
other Advances comprising such Borrowing shall be Eurodollar Rate Advances on
the date such Advance is deemed to be made pursuant to this subsection (a). Each
Borrower shall notify the Administrative Agent at any time such Borrower
exercises its right of setoff pursuant to this subsection (a) and shall set
forth in such notice (A) the name of the Defaulting Lender and the Defaulted
Advance required to be made by such Defaulting Lender and (B) the amount set off
and otherwise applied in respect of such Defaulted Advance pursuant to this
subsection (a). Any portion of such payment otherwise required to be made by
such Borrower to or for the account of such Defaulting Lender that is paid by
such Borrower, after giving effect to the amount set off and otherwise applied
by such Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted
Amount to any Agent or any of the other Lender Parties and (iii) either Borrower
shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Agents or
such other Lender Parties and to the fullest extent permitted by applicable law,
apply at such time the amount so paid by such Borrower to or for the account of
such Defaulting Lender to the payment of each such Defaulted Amount to the
extent required to pay such Defaulted Amount. In the event that the
Administrative Agent shall so apply any such amount to the payment of any such
Defaulted Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan Documents
payment, to such extent, of such Defaulted Amount on such date. Any such amount
so applied by the Administrative Agent shall be retained by the Administrative
Agent or distributed by the Administrative Agent to such other Agents or such
other Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
such Borrower shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, the other Agents and the other
Lender Parties, in the following order of priority:
44
(i) FIRST, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent;
(ii) SECOND, to any other Agents for any Defaulted Amounts
then owing to such other Agents, ratably in accordance with such
respective Defaulted Amounts then owing to such other Agents; and
(iii) THIRD, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing
to such other Lender Parties.
Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) either Borrower, any Agent or
any other Lender Party shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower, such Agent or such other Lender Party
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted by
applicable law, hold in escrow such amount otherwise held by it. Any funds held
by the Administrative Agent in escrow under this subsection (c) shall be
deposited by the Administrative Agent in an account with IBJ Xxxxxxxx Bank &
Trust Company, in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be IBJ Xxxxxxxx Bank & Trust
Company's standard terms applicable to escrow accounts maintained with it. Any
interest credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative Agent
from time to time in accordance with the provisions of, this subsection (c). The
Administrative Agent shall, to the fullest extent permitted by applicable law,
apply all funds so held in escrow from time to time to the extent necessary to
make any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent, any other Agents or any other Lender
Party, as and when such Advances or amounts are required to be made or paid and,
if the amount so held in escrow shall at any time be insufficient to make and
pay all such Advances and amounts required to be made or paid at such time, in
the following order of priority:
(i) FIRST, to the Administrative Agent for any amount then due
and payable by such Defaulting Lender to the Administrative Agent
hereunder;
(ii) SECOND, to any other Agents for any amount then due and
payable by such Defaulting Lender to such other Agents hereunder,
ratably in accordance with such respective amounts then due and payable
to such other Agents;
45
(iii) THIRD, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iv) FOURTH, to the applicable Borrower for any Advance then
required to be made to such Borrower by such Defaulting Lender pursuant
to a Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under
this Section 2.15 are in addition to other rights and remedies that the
Borrowers may have against such Defaulting Lender with respect to any Defaulted
Advance and that the Administrative Agent, any Agent or any Lender Party may
have against such Defaulting Lender with respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF
CREDIT. The obligation of each Lender to make an Advance or of the Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Transaction, including all of the terms and conditions
thereof, shall have been duly approved by the board of directors and
(if required by applicable law) the shareholders of the parties
thereto, and all Related Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and effect.
The representations and warranties set forth in the Related Documents
shall be true and correct in all material respects as if made on and as
of the date of the Initial Extension of Credit, except to the extent
that such representations and warranties are stated to relate to a
specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date.
(b) The Merger shall have been consummated strictly in
accordance with the terms of the Merger Agreement, and the Share
Exchange shall have been consummated strictly in accordance with the
terms of the Share Exchange and Termination Agreement, in each case
without any waiver or amendment not consented to by the Agents and the
Lender Parties of any material term, provision or condition set forth
therein, and in compliance with all applicable laws.
(c) The Agents and the Lender Parties shall be satisfied with
the corporate and legal structure, ownership and capitalization of each
Loan Party and each of its Subsidiaries, including the terms and
conditions of the charter, bylaws and each class of capital stock of
each Loan Party
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and each such Subsidiary and of each agreement or instrument relating
to such structure, ownership or capitalization.
(d) The Parent Borrower shall have received at least
$149,935,000 (exclusive of any over funding amount) in Net Cash
Proceeds from the issuance of the Senior Notes.
(e) The Parent Borrower shall have received Net Cash Proceeds
from the issuance of common stock to the Equity Investors in an amount
at least equal to the product of $80,000,000 and the percentage of
common stock of the Parent Borrower to be owned, directly or
indirectly, by the Equity Investors after giving effect to the
Transaction, all on terms and conditions satisfactory to the Agents and
the Lender Parties.
(f) No Borrowings shall be required or made on the Effective
Date in connection with the consummation of the Transaction.
(g) The Agents and the Lender Parties shall be satisfied that
all Existing Debt, other than the Debt identified on Schedule 4.01(gg)
hereto (the "SURVIVING DEBT"), has been prepaid, redeemed or defeased
in full or otherwise satisfied and extinguished and that all such
Surviving Debt shall be on terms and conditions satisfactory to the
Agents and the Lender Parties.
(h) Before giving effect to the Transaction, there shall have
occurred no Material Adverse Change since September 30, 1997.
(i) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or, to the best of either Borrower's knowledge,
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of the
Transaction, any Loan Document, any Related Document or the
consummation of the Transaction.
(j) Nothing shall have come to the attention of the Lender
Parties during the course of their due diligence investigation to lead
them to believe (i) that the information relating to the Loan Parties
furnished to the Lender Parties prior to the Effective Date was or has
become misleading, incorrect or incomplete in any material respect,
(ii) that, following the consummation of the Transaction, the Parent
Borrower and its Subsidiaries would not have good and marketable title
to all material assets of the Parent Borrower and its Subsidiaries
reflected in the information relating to the Loan Parties furnished to
the Lender Parties prior to the Effective Date and (iii) that the
Transaction will have a Material Adverse Effect; without limiting the
generality of the foregoing, the Lender Parties shall have been given
such access to the management, records, books of account, contracts and
properties of the Parent Borrower and its Subsidiaries as they shall
have requested.
(k) All accrued costs, fees and expenses of the Agents and the
Lender Parties to the extent due shall have been paid (including the
accrued costs, fees and expenses of counsel to the
Agents and local counsel to the Lender Parties).
47
(l) The Agents and the Lender Parties shall be satisfied that
(i) all requisite governmental and other third party licenses, permits,
approvals and consents necessary in connection with the Initial
Extension of Credit and for the consummation of the Transaction shall
have been obtained (without the imposition of any conditions that are
not acceptable to the Agents and the Lender Parties) and remain in
effect, and all applicable appeal periods and all applicable waiting
periods (including, without limitation, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended) in connection with the
Transaction shall have expired without any action being taken by any
competent authority, and no law or regulation shall be applicable in
the judgment of the Lender Parties, in each case, that restrains,
prevents or imposes adverse conditions upon the consummation of the
Transaction or the rights of the Loan Parties or their Subsidiaries
freely to the transfer or otherwise dispose of, or to create any Lien
on, any properties now owned or hereafter acquired by any of them and
(ii) the Initial Extension of Credit, and all other financing for the
Transaction (including, without limitation, the issuance of common
stock of the Parent Borrower to AAC and the issuance of the Senior
Notes) shall be in full compliance with all legal and regulatory
requirements, including, without limitation, Regulations T, U and X of
the Board of Governors of the Federal Reserve System.
(m) The Administrative Agent shall have received on or before
the date of the Initial Extension of Credit the following, each dated
such day (unless otherwise specified), in form and substance
satisfactory to the Agents and the Lender Parties (unless otherwise
specified) and (except for the Notes) in sufficient copies for each
Lender Party:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of (A) the resolutions of the
Board of Directors (or persons performing similar functions)
of each Loan Party approving the Transaction, each Loan
Document and each Related Document to which it is or is to be
a party, and (B) all documents evidencing other necessary
corporate action and governmental and other third party
approvals and consents, if any, with respect to the
Transaction, each Loan Document and each Related Document to
which it is or is to be a party.
(iii) A copy of a certificate of the Secretary of
State or other appropriate governmental official of the
jurisdiction of incorporation of each Loan Party other than
IPC Hong Kong, dated reasonably near the date of the Initial
Extension of Credit, certifying, where applicable, (A) as to a
true and correct copy of the charter or other constitutive
document of such Loan Party and each amendment thereto on file
in that office and (B) that (1) such amendments are the only
amendments to such Loan Party's charter or other constitutive
document on file in that office, (2) such Loan Party has paid
all franchise taxes to the date of such certificate and (3)
such Loan Party is duly incorporated and in good standing or
presently subsisting under the laws of the jurisdiction of its
incorporation and a copy of a certificate of the Hong Kong
Registrar of Companies dated reasonably near the date of the
Initial Extension of Credit, certifying that IPC Hong Kong is
presently on the Register.
(iv) A copy of a certificate of the Secretary of
State of the States of Connecticut and New York and, where
applicable, a certificate of such other appropriate
48
governmental official in all other appropriate jurisdictions,
in each case, dated reasonably near the date of the Initial
Extension of Credit, stating that each Loan Party other than
IPC Hong Kong is duly qualified and in good standing as a
foreign corporation in such State or other jurisdiction and
has filed all annual reports required to be filed to the
date of such certificate.
(v) Certified copies of a certificate of merger or
other confirmation from the Secretary of State of the State of
Delaware satisfactory to the Agents and the Lender
Parties of the consummation of the Merger.
(vi) A certificate of each Loan Party, signed on
behalf of such Loan Party by its Chief Financial Officer or
any Vice President or, in the case of any Foreign
Subsidiary, a Director and its Secretary or any Assistant
Secretary, dated the date of the Initial Extension of Credit
(the statements made in which certificate shall be true on
and as of the date of the Initial Extension of Credit),
certifying as to (A) the absence of any amendments to the
charter of such Loan Party since the date of the Secretary
of State's certificate referred to in Section 3.01(m)(iii),
(B) a true and correct copy of the bylaws of such Loan Party
as in effect on the date on which the resolutions referred
to in Section 3.01(m)(ii) were adopted and on the date of
the Initial Extension of Credit, (C) the due incorporation
and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of
its incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (D) the truth
of the representations and warranties contained in the Loan
Documents and the Related Documents as though made on and as
of the date of the Initial Extension of Credit and (E) the
absence of any event occurring and continuing, or resulting
from the Initial Extension of Credit, that constitutes a
Default.
(vii) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to
sign each Loan Document and each Related Document to which it
is or is to be a party and the other documents to be delivered
hereunder and thereunder.
(viii) A security agreement in substantially the form
of Exhibit D hereto (together with each other security
agreement and security agreement supplement delivered pursuant
to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "SECURITY AGREEMENT"), duly executed by each
Borrower, each Domestic Guarantor and IPC Canada, together
with:
(A) certificates representing the Pledged
Shares referred to therein accompanied by undated
stock powers executed in blank and instruments,
including, without limitation, the Intercompany
Notes, evidencing the Pledged Debt referred to
therein indorsed in blank,
(B) executed copies of Uniform Commercial
Code financing statements, to be filed under the
Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable
in order to perfect
49
and protect the first priority liens and security
interests created under the Security Agreement,
covering the Collateral described in the Security
Agreement,
(C) completed requests for information,
dated on or before the date of the Initial Extension
of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B)
above that name any Loan Party as debtor, together
with copies of such other financing statements,
(D) duly executed copies of the Collateral
Assignments referred to in the Security Agreement and
evidence of the completion of all recordings and
filings of or with respect to the Intellectual
Property Collateral referred to in the Security
Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect and
protect the Liens created thereunder, except to the
extent that such recordings and filings are to be
made, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date,
(E) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement that the Administrative Agent may
deem necessary or desirable in order to perfect and
protect the Liens created thereby, except to the
extent that such recordings and filings are to be
made, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date.
(F) evidence of the insurance required by
the terms of the Security Agreement,
(G) copies of the Assigned Agreements
referred to in, and set forth on Schedule II to, the
Security Agreement, together with a consent to such
assignment, in substantially the form of Exhibit B to
the Security Agreement, duly executed by each party
to such Assigned Agreements other than the Loan
Parties, and
(H) evidence that all other action that the
Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority
liens and security interests created under the
Security Agreement has been taken (including, without
limitation, delivering the duly executed Deed of
Charge over Shares and the other Local Pledges to the
Administrative Agent), except to the extent that such
actions are to be taken, and such evidence is to be
delivered, pursuant to Section 5.01(q) as notified to
the Administrative Agent by the Parent Borrower on or
prior to the Effective Date.
(ix) The Debenture and such other security
agreements, pledges, mortgages, assignments, charges and other
agreements and documents (in each case, as amended,
supplemented or otherwise modified in accordance with its
terms, the "FOREIGN SECURITY DOCUMENTS"), in each case in form
and substance satisfactory to the Administrative Agent,
50
as the Administrative Agent may request to secure payment of
all Obligations of the Specified Subsidiaries and the other
Foreign Guarantors under the Loan Documents, duly executed by
the applicable Foreign Guarantor, together with:
(A) an administrative agency agreement in
substantially the form of Exhibit J hereto (as
amended, supplemented or otherwise modified from time
to time in accordance with its terms, the
"ADMINISTRATIVE AGENCY AGREEMENT"), duly executed by
the Sub Borrower and the Administrative Agent, and
(B) evidence that all actions that may be
necessary or, in the reasonable discretion of the
Administrative Agent, desirable in order to perfect
and protect the first priority liens, security
interests, pledges and charges created by the Foreign
Security Documents under the laws of the jurisdiction
of the applicable Foreign Guarantor have been taken,
except to the extent that such actions are to be
taken, and such evidence is to be delivered, pursuant
to Section 5.01(q) as notified to the Administrative
Agent by the Parent Borrower on or prior to the
Effective Date.
(x) A guaranty in substantially the form of Exhibit
E-1 hereto (together with each other guaranty and guaranty
supplement delivered by a Domestic Guarantor pursuant to
Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "DOMESTIC GUARANTY"), duly executed by each
Domestic Guarantor, and a guaranty in substantially the form
of Exhibit E-2 hereto (together with each other guaranty and
guaranty supplement delivered by a Foreign Guarantor pursuant
to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its
terms, the "FOREIGN GUARANTY"), duly executed by each Foreign
Guarantor.
(xi) Certified copies of each of the Related
Documents duly executed by each of the parties thereto and in
form and substance satisfactory to the Agents and the Lender
Parties, together with all agreements, instruments and other
documents delivered in
connection therewith.
(xii) Such financial, business and other information
regarding each Loan Party and each of its Subsidiaries as the
Lender Parties shall have requested, including, without
limitation, information as to possible contingent liabilities,
tax matters, environmental matters, obligations under Plans,
Multiemployer Plans and Welfare Plans, collective bargaining
agreements and other arrangements with employees, audited
annual financial statements dated September 30, 1997, interim
financial statements dated the end of the most recent fiscal
quarter for which financial statements are available (or, in
the event the Lender Parties' due diligence review reveals
material changes since such financial statements, as of a
later date within 45 days of the day of the Initial Extension
of Credit), pro forma financial statements as to the Parent
Borrower and forecasts prepared by management of the Parent
Borrower, in form and substance satisfactory to the Agents and
the Lender Parties, of balance sheets, income statements and
cash flow statements on a
51
monthly basis for the first year following the day of the
Initial Extension of Credit and on an annual basis for each
year thereafter until the Termination Date.
(xiii) Certificates, in substantially the form of
Exhibit G-1 hereto, attesting to the Solvency of each Loan
Party (other than IXnet, MXnet, IPC Bridge, IPC Hong Kong and
IPC Canada (as to which no certificates shall be delivered))
after giving effect to the Transaction, from its chief
financial officer or other authorized officer familiar with
the financial condition of such Loan Party and a letter, in
substantially the form of Exhibit G-2 hereto, attesting to the
solvency of the Parent Borrower and its Subsidiaries on a
Consolidated basis after giving effect to the Transaction,
from Xxxxxxxx Xxxxx Xxxxxx & Xxxxx.
(xiv) A copy of the Phase I EnviroAudit Environmental
Site Assessment, dated May 9, 1996 by EnviroAudit, Ltd.; the
Phase I Environmental Site Assessment Update, dated April 29,
1997, by NorthStar Environmental Management; the Contaminant
Assessment, dated June 27, 1997, by NorthStar Environmental
Management; and the Remedial Action and Post-Remediation
Groundwater Monitoring Report, dated December 3, 1997, as to
any hazards, costs or liabilities under Environmental Laws to
which any Loan Party or any of its Subsidiaries may be
subject, the amount and nature of which and the Parent
Borrower's plans with respect to which shall be acceptable to
the Agents and the Lender Parties, together with evidence, in
form and substance satisfactory to the Agents and the Lender
Parties, that all applicable Environmental Laws shall have
been complied with, except for such non-compliance that is not
reasonably likely to result in a Material Adverse Effect. To
the extent either the report or any other information that may
become available to the Agents and the Lender Parties shall
disclose any hazards, costs or liabilities under Environmental
Laws or otherwise that the Agents or the Lender Parties deem
material, the Agents and the Lender Parties shall be satisfied
that such hazards, costs or liabilities were adequately
reflected in the Parent Borrower's financial reserves shown on
the financial statements furnished to the Lender Parties prior
to the Effective Date or that, to the extent not so reflected,
the Parent Borrower has made adequate provision for such
hazards, costs or liabilities.
(xv) Evidence of insurance naming the Administrative
Agent as additional 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 Agents.
(xvi) Certified copies of each employment agreement
and other compensation arrangement with each executive officer
of each Loan Party and each of its Subsidiaries as the
Administrative Agent may request.
(xvii) Certified copies of all Material Contracts of
each Loan Party and each of its Subsidiaries as the
Administrative Agent may request.
(xviii) A Borrowing Base Certificate.
52
(xix) A favorable opinion of Xxxxxx, Xxxxx & Xxxxxxx
LLP, counsel for the Borrowers and the Domestic Guarantors, in
substantially the form of Exhibit F-1 hereto and as to such
other matters as any Lender Party through the Administrative
Agent may reasonably request.
(xx) A favorable opinion of Xxxxxxx Xxxxxxxx & Wood,
Xxxxxx, Xxxxx & Xxxxxxx LLP, Xxxxx Sapte and Osler, Xxxxxx &
Harcourt, local counsel to the Loan Parties in Connecticut,
the United Kingdom, Hong Kong and Canada, respectively, in
form and substance satisfactory to the Lender Parties and as
to such other matters as any Lender Party through the
Administrative Agent may reasonably request.
(xxi) A favorable opinion of Xxxxxx Xxxxxxx, General
Counsel of the Parent Borrower, in substantially the form of
Exhibit F-2 hereto and as to such other matters as any Lender
Party through the Administrative Agent may reasonably request.
(xxii) A favorable opinion of Shearman & Sterling,
counsel for the Administrative Agent and the Syndication
Agent, in form and substance reasonably satisfactory to the
Administrative Agent and the Syndication Agent.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING AND
ISSUANCE. The obligation of each Lender to make an Advance (other than a Letter
of Credit Advance made by the Issuing Bank or a Lender pursuant to Section
2.03(c)) on the occasion of each Borrowing (including the Initial Extension of
Credit), and the obligation of the Issuing Bank to issue a Letter of Credit
(including the initial issuance), shall be subject to the further conditions
precedent that on the date of such Borrowing or issuance (a) the following
statements shall be true and each of the giving of the applicable Notice of
Borrowing or Notice of Issuance and the acceptance by the applicable Borrower of
the proceeds of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by such Borrower that both on the date of such
notice and on the date of such Borrowing or issuance such statements are true:
(i) the representations and warranties contained in each Loan
Document are true and correct on and as of such date, before and after
giving effect to such Borrowing or issuance and to the application of
the proceeds therefrom, as though made on and as of such date other
than any such representations or warranties that, by their terms, refer
to a specific date other than the date of such Borrowing or issuance,
in which case as of such specific date;
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default; and
(iii) (A) in the case of any Advance to be made to the Parent
Borrower or any issuance of a Letter of Credit for the account of the
Parent Borrower, the sum of the Loan Values of the applicable Eligible
Collateral exceeds the aggregate principal amount of the Working
Capital Advances owing by the Parent Borrower PLUS Letter of Credit
Advances to be outstanding PLUS the aggregate Available Amount of all
Letters of Credit to be outstanding, in each case after giving effect
to such Advance or issuance, respectively and (B) in the case of any
Advance to be made to the Sub Borrower, the sum of the Loan Values of
the applicable Eligible Collateral exceeds the
53
aggregate principal amount of the Working Capital Advances owing by the
Sub Borrower after giving effect to such Advance;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender Party through the Administrative Agent may
reasonably request.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE
BORROWERS. Each Borrower represents and warrants as follows:
(a) Each Loan Party (other than the U.K. Subsidiaries and the
Hong Kong Subsidiaries) and each of its Subsidiaries (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and (ii) is duly
qualified and in good standing as a foreign corporation 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 could not have a
Material Adverse Effect, and IPC Information Systems is an unlimited
liability company and each other U.K. Subsidiary and each Hong Kong
Subsidiary is a limited liability company, in each case, incorporated
under the laws of England and Wales or Hong Kong, as the case may be.
Each Loan Party and each of its Subsidiaries has all requisite
corporate power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted
and as proposed to be conducted. All of the outstanding capital stock
of each Loan Party has been validly issued, is fully paid and
non-assessable and is owned by those Persons listed on Schedule 4.01(a)
hereto in the amounts specified thereon free and clear of all Liens,
except those created under the Collateral Documents.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of 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 such Loan Party and the number of shares covered by
all outstanding options, warrants, rights of conversion or purchase and
similar rights at the date hereof. All of the outstanding capital stock
of all of such Subsidiaries has been validly issued, is
54
fully paid and non-assessable and is owned by such Loan Party or one or
more of its Subsidiaries free and clear of all Liens, except those
created under the Loan Documents.
(c) The execution, delivery and performance by each Loan Party
of each Loan Document and each Related Document to which it is or is to
be a party, and the consummation of the Transaction, are within such
Loan Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such Loan Party's
memorandum and articles of association, in the case of the U.K.
Subsidiaries and the Loan Parties organized under the laws of Hong Kong
and Canada, or charter or bylaws, in the case of each other Loan Party,
(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
loan agreement, indenture, mortgage, deed of trust or other instrument
or material contract or material lease binding on or affecting any Loan
Party, any of its Subsidiaries or any of their respective properties or
(iv) except for the Liens created under the Loan Documents, result in
or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its Subsidiaries.
No Loan Party nor any of its Subsidiaries is in violation of any such
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other
instrument, the violation or breach of which could have a Material
Adverse Effect.
(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 (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Loan Document or any Related Document to which it is or is to be a
party, or for the consummation of the Transaction, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created by
the Collateral Documents (including the first priority nature thereof)
or (iv) the exercise by any of the Agents or any of the Lender Parties
of its rights under the Loan Documents or the remedies in respect of
the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken,
given or made and are in full force and effect. All applicable waiting
periods in connection with the Transaction have expired without any
action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the
Transaction or the rights of the Loan Parties or their Subsidiaries
freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the Notes, each other
Loan Document and each Related Document when delivered hereunder will
have been, duly executed and delivered by each Loan Party thereto. This
Agreement is, and each of the Notes, each other Loan Document and each
Related Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party thereto, enforceable against such
Loan Party in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation,
55
all laws relating to fraudulent transfers), reorganization, moratorium
or similar law affecting creditors' rights generally.
(f) The Consolidated balance sheet of the Parent Borrower and
its Subsidiaries as at September 30, 1997, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Parent Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an unqualified opinion of Coopers & Xxxxxxx L.L.P.,
independent public accountants, and the consolidating balance sheet of
the Parent Borrower and its Subsidiaries as at September 30, 1997, and
the related consolidating statement of income of the Parent Borrower
and its Subsidiaries for the fiscal year then ended, duly certified by
the chief financial officer of the Parent Borrower, and the
Consolidated and consolidating balance sheets of the Parent Borrower
and its Subsidiaries as at December 31, 1997, and the related
Consolidated and consolidating statements of income and Consolidated
statement of cash flows of the Parent Borrower and its Subsidiaries for
the three months then ended, duly certified by the chief financial
officer of the Parent Borrower, copies of which have been furnished to
each Lender Party, fairly present, subject, in the case of said balance
sheets as at December 31, 1997, and said statements of income and cash
flows for the three months then ended, to year-end audit adjustments,
the Consolidated and consolidating financial condition of the Parent
Borrower and its Subsidiaries as at such dates and the Consolidated and
consolidating results of the operations of the Parent Borrower and its
Subsidiaries for the periods ended on such dates, all in accordance
with generally accepted accounting principles applied on a consistent
basis, and, since September 30, 1997, there has been no Material
Adverse Change.
(g) The Consolidated pro forma balance sheet of the Parent
Borrower and its Subsidiaries as at March 31, 1998, and the related
Consolidated pro forma statements of income and cash flows of the
Parent Borrower and its Subsidiaries for the six months then ended,
certified by the chief financial officer of the Parent Borrower, copies
of which have been furnished to each Lender Party, fairly present the
Consolidated pro forma financial condition of the Parent Borrower and
its Subsidiaries as at such date and the Consolidated pro forma results
of operations of the Parent Borrower and its Subsidiaries for the
period ended on such date, in each case after giving effect to the
Transaction, all in accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income
statements and cash flows statements of the Parent Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(m)(xii) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Parent Borrower's best
estimate of its future financial performance.
(i) None of the information, exhibits or reports furnished by
or on behalf of any Loan Party to any Agent or any Lender Party in
connection with the negotiation of the Loan Documents or pursuant to
the terms of the Loan Documents contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements made therein not misleading.
(j) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or, to the best of
56
either Borrower's knowledge, threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of the Transaction, this Agreement, any
Note, any other Loan Document or any Related Document or the
consummation of the Transaction.
(k) No proceeds of any Advance or drawings under any Letter of
Credit will be used to acquire any equity security of a class that is
registered pursuant to Section 12 of the Securities Exchange Act of
1934 (other than, to the extent applicable, in connection with (i) the
transactions contemplated by the Merger Agreement or (ii) a Non-hostile
Acquisition).
(l) Neither Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, no
proceeds of any Advance made to the Sub Borrower 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, and following
application of the proceeds of each Advance or drawing under each
Letter of Credit, not more than 25 percent of the value of the assets
(either of the Parent Borrower only or of the Parent Borrower and its
Subsidiaries on a Consolidated basis) subject to the provisions of
Section 5.02(a) or 5.02(e) or subject to any restriction contained in
any agreement or instrument between the Parent Borrower and any Lender
Party or any Affiliate of any Lender Party relating to Debt within the
scope of Section 6.01(e) will be Margin Stock.
(m) With respect to each scheme or arrangement mandated by a
government other than the United States (a "FOREIGN GOVERNMENT SCHEME
OR ARRANGEMENT") and with respect to each employee benefit plan
maintained or contributed to by any Loan Party or any Subsidiary of any
Loan Party that is not subject to United States law (a "FOREIGN PLAN"),
except as could not be reasonably likely in the aggregate to have a
Material Adverse Effect:
(i) Any employer and employee contribution required
by law or by the terms of any Foreign Government Scheme or
Arrangement or any Foreign Plan have been made, or, if
applicable, accrued, in accordance with normal accounting
practices.
(ii) The fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for any
Foreign Plan funded through insurance or the book reserve
established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the
accrued benefit obligations, as of the date hereof, with
respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations
most recently used to account for such obligations in
accordance with applicable generally accepted accounting
principles.
(iii) Each Foreign Plan required to be registered has
been registered and has been maintained in good standing with
applicable regulatory authorities.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has had or could be reasonably
likely to have a Material Adverse Effect.
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(o) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and, with respect to any
Plan of the Loan Parties, furnished to the Agents and the Lender
Parties, is complete and accurate and fairly presents the funding
status of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(p) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan that has had or could be reasonably likely to
have a Material Adverse Effect.
(q) Neither any Loan Party nor any ERISA Affiliate 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, where such reorganization or termination has had or
could be reasonably likely to have a Material Adverse Effect, and no
such Multiemployer Plan is reasonably expected to be in reorganization
or to be terminated, within the meaning of Title IV of ERISA, where
such reorganization or termination could be reasonably likely to have a
Material Adverse Effect.
(r) Except as set forth in the financial statements referred
to in this Section 4.01 and in Section 5.03, the Loan Parties and their
respective Subsidiaries have no liability with respect to "expected
post retirement benefit obligations" within the meaning of Statement of
Financial Accounting Standards No. 106 that has had or could be
reasonably likely to have a Material
Adverse Effect.
(s) Neither the business nor the properties of any Loan Party
or any of its Subsidiaries are 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 be reasonably
likely to have a Material Adverse Effect.
(t) The operations and properties of each Loan Party and each
of its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, except for any
noncompliance that is not reasonably likely to have a Material Adverse
Effect, all past noncompliance with such Environmental Laws and
Environmental Permits has been resolved without material ongoing
obligations or costs, and no circumstances exist that would be
reasonably likely to (i) form the basis of an Environmental Action
against any Loan Party or any of its Subsidiaries or any of their
properties that could be reasonably likely to have a Material Adverse
Effect or (ii) cause any such property to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(u) None of the properties currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries is listed or, to
the knowledge of any Loan Party, proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list; there are no
and never have been any underground or aboveground storage tanks or any
surface impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed
on any property currently owned or operated by any Loan Party or any of
its Subsidiaries or, to the best of its knowledge, on any property
formerly owned or operated by any
58
Loan Party or any of its Subsidiaries which could be reasonably likely
to have a Material Adverse Effect; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries which could be
reasonably likely to have a Material Adverse Effect; and Hazardous
Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or
any of its Subsidiaries in a manner that could be reasonably likely to
result in a Material Adverse Effect.
(v) Neither any Loan Party nor any of its Subsidiaries is
undertaking or has completed, either individually or together with
other potentially responsible parties, any investigation or assessment
or remedial or response action relating to any actual or threatened
release, discharge or disposal of Hazardous Materials at any site,
location or operation, either voluntarily or pursuant to the order of
any governmental or regulatory authority or the requirements of any
Environmental Law which could be reasonably likely to have a Material
Adverse Effect; and all Hazardous Materials generated, used, treated,
handled or stored at, or transported to or from, any property currently
or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected
to result in a Material Adverse Effect.
(w) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that could be reasonably likely to have a Material Adverse
Effect.
(x) The Collateral Documents create a valid security interest
in the Collateral, securing the payment of the Secured Obligations; all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken or will have been duly
taken within the time period specified therefor in Section 5.01(q); and
upon making the filings and taking the other actions required under
Section 5.01(q), the Administrative Agent, for the benefit of the
Secured Parties, will have a perfected first priority security interest
in the Collateral. The Loan Parties are the legal and beneficial owners
of the Collateral free and clear of any Lien, except for the Liens and
security interests created or permitted under the Loan Documents.
(y) Each Loan Party and each of 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 penalties (except for
extensions that have been duly filed).
(z) [intentionally omitted].
(aa) There are no pending audits, examinations, investigations
or other proceedings in respect of federal, state, local or foreign
taxes relating to any Loan Party or any of its Subsidiaries which, if
determined adversely to such Loan Party or such Subsidiary, could
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(bb) There are no deficiencies or claims in respect of
Federal, state, local or foreign taxes relating to any Loan Party or
any of its Subsidiary which, if such deficiencies or claims were
resolved against such Loan Party or such Subsidiary, could reasonably
be expected, individually or in the aggregate, to have a Material
Adverse Effect.
59
(cc) The Merger will not be taxable to the Parent Borrower or
any of its Subsidiaries.
(dd) Neither any Loan Party nor any of its Subsidiaries is 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 any Advances, nor the issuance of any Letters of Credit, nor
the application of the proceeds or repayment thereof by either
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.
(ee) Each Loan Party (other than IXnet, Mxnet, IPC Bridge, IPC
Hong Kong and IPC Canada, as to which no representation as to Solvency
is made) is, individually and together with its Subsidiaries, Solvent.
(ff) Set forth on Schedule 4.01(ff) hereto is a complete and
accurate list of all Debt (other than Surviving Debt) of the Parent
Borrower and its Subsidiaries (the "EXISTING DEBT"), showing as of the
date hereof the principal amount outstanding thereunder.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and
accurate list of all Surviving Debt, showing as of the date hereof the
principal amount outstanding thereunder, the maturity date thereof and
the amortization schedule therefor.
(hh) Set forth on Schedule 4.01(hh) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of
its Subsidiaries, showing as of the date hereof the street address,
county or other relevant jurisdiction, State, record owner and book and
fair value thereof. Each Loan Party or such Subsidiary has good,
marketable and insurable fee simple title to such real property, free
and clear of all Liens, other than Liens created or permitted by the
Loan Documents.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and each of
its Subsidiaries, showing as of the date hereof the parties, subject
matter and term thereof and a complete and accurate list of all
employment agreements with each executive officer of each Loan Party
and each of its Subsidiaries. Each such Material Contract has been duly
authorized, executed and delivered by all parties thereto, has not been
amended or otherwise modified, is in full force and effect and is
binding upon and enforceable against all parties thereto in accordance
with its terms, and there exists no default under any Material Contract
by any party thereto.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and
accurate list of all Investments (other than equity Investments in
Subsidiaries) held by any Loan Party or any of its Subsidiaries,
showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.
(kk) Set forth on Schedule 4.01(kk) hereto is a complete and
accurate list of all trade names and all registered patents,
trademarks, service marks and copyrights, if any, and all applications
therefor and licenses thereof of each Loan Party and each of its
Subsidiaries, showing
60
as of the date hereof the jurisdiction in which registered, the
registration number, the date of registration and the expiration date.
(ll) No Excluded Subsidiary holds assets or has annual
revenues or net income in the aggregate in excess of $150,000 and the
aggregate amount of assets, revenues or net income of all Excluded
Subsidiaries does not exceed $1,000,000, in each case, determined based
on the most recent financial statements required to be delivered to the
Lender Parties pursuant to Section 5.03(b) or (c), as the case may be.
No Excluded Subsidiary is engaged in any business of any kind, other
than the holding of licenses and/or acting as agent for a Loan Party.
ARTICLE V
COVENANTS OF THE BORROWERS
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, each Borrower shall:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA, federal, state, local and
foreign tax laws, rules, regulations and orders, and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries to 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
in excess of $1,000,000 in the aggregate that, if unpaid, might by law
become a Lien upon its property; PROVIDED, HOWEVER, that neither the
Parent 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, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, to the extent required
by Environmental Laws; PROVIDED, HOWEVER, that neither the Parent
Borrower nor any of its Subsidiaries shall be required to undertake any
such cleanup, removal, remedial or other action to the extent that its
obligation to do so is being contested in good faith and by proper
proceedings and appropriate reserves are being maintained with respect
to such circumstances.
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(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to 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
Parent Borrower or such Subsidiary operates.
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
PROVIDED, HOWEVER, that the Parent Borrower may consummate the Merger
and the Parent Borrower and its Subsidiaries may consummate any other
merger or consolidation permitted under Section 5.02(d) and the Parent
Borrower and its Subsidiaries may sell or otherwise dispose of assets
to the extent permitted under Section 5.02(e); and PROVIDED FURTHER
that neither the Parent Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Parent Borrower or such
Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Parent Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Parent Borrower, such
Subsidiary or the Lender Parties.
(f) VISITATION RIGHTS. Upon reasonable notice and during
regular business hours, from time to time, permit any of the Agents or
any of the Lender Parties 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 Parent Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of
the Parent Borrower and any of its Subsidiaries with any of their
officers or directors and with their independent certified public
accountants; without limitation of the foregoing, the Collateral Agent
may conduct audits of the Collateral up to two times in each Fiscal
Year (unless an Event of Default shall have occurred and be continuing,
in which case the right of the Collateral Agent to perform audits of
the Collateral shall not be so limited), including, without limitation,
inspection, reviews, evaluation and performance of counts of the
Receivables, Inventory and other Collateral, PROVIDED that so long as
no Event of Default shall have occurred and be continuing, the
Collateral Agent shall coordinate its audits to coincide with the
Parent Borrower's regularly scheduled internal cycle counts, PROVIDED
FURTHER that in connection with any audit by the Collateral Agent, the
Parent Borrower shall reimburse each auditor of the Collateral Agent at
a rate of $650 per day plus actual out-of-pocket expenses (including,
without limitation, travel expenses), PROVIDED STILL FURTHER that the
Parent Borrower shall, at the request of the Collateral Agent, arrange
for Coopers & Xxxxxxx or, if an Event of Default shall have occurred
and be continuing, permit the Collateral Agent to perform test
verifications of the Collateral at such times as the Collateral Agent
may request but in any event, so long as no Event of Default shall have
occurred and be continuing, not more than two times in any Fiscal Year.
(g) PREPARATION OF ENVIRONMENTAL REPORTS. At the request of
the Required Lenders from time to time (i) upon the occurrence and
during the continuance of a Default, (ii) in the case of the Parent
Borrower's or any of its Subsidiaries' acquisition of real property
that could be reasonably likely to result in a Material Adverse Effect,
and (iii) at any time when any Lender believes after reasonable inquiry
that a condition or event exists or has occurred on any real property
owned or operated by the Parent Borrower or any of its Subsidiaries
that could be reasonably likely to result in a Material Adverse Effect,
provide, or cause such Subsidiary to
62
provide, to the Agents and the Lender Parties within 60 days after such
request, at the expense of the Parent Borrower or such Subsidiary, an
environmental site assessment report for any of its or its
Subsidiaries' properties described in such request, prepared by an
environmental consulting firm acceptable to the Required Lenders,
indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance, removal or remedial action in
connection with any Hazardous Materials on such properties; without
limiting the generality of the foregoing, if the Required Lenders
determine at any time that a material risk exists that any such report
will not be provided within the time referred to above and the Required
Lenders will be materially prejudiced by any such delay, the Required
Lenders may retain an environmental consulting firm to prepare such
report at the expense of the Parent Borrower, and the Parent Borrower
hereby grants and agrees to cause any Subsidiary that owns any property
described in such request to grant to the Agents, the Lender Parties,
such firm and any agents or representatives thereof, subject to the
rights of tenants, access to enter onto their respective properties to
undertake such an assessment; PROVIDED, HOWEVER, that no such Persons
shall unreasonably interfere with the operations conducted at such
property and the Parent Borrower shall be given at least 2 Business
Days' notice prior to such undertaking.
(h) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Parent Borrower and each such Subsidiary in accordance
with generally accepted accounting principles in effect from time to
time.
(i) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
cause each of its Subsidiaries to 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.
(j) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real
property to which the Parent Borrower or any of its Subsidiaries is a
party, keep such leases in full force and effect and not allow such
leases to lapse or be terminated or any rights to renew such leases to
be forfeited or canceled, notify the Administrative Agent of any
default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and
cause each of its Subsidiaries to do so, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be
reasonably expected to have a Material Adverse Effect.
(k) PERFORMANCE OF RELATED DOCUMENTS. Perform and observe all
of the terms and provisions of each Related Document to be performed or
observed by it, maintain each such Related Document in full force and
effect, enforce such Related Document in accordance with its terms,
take all such action to such end as may be from time to time requested
by the Administrative Agent and, upon request of the Administrative
Agent, make to each other party to each such Related Document such
demands and requests for information and reports or for action as any
Loan Party is entitled to make under such Related Document, except, in
any case, where the failure to do so, either individually or in the
aggregate, could not be reasonably expected to have a Material Adverse
Effect.
63
(l) PERFORMANCE OF MATERIAL CONTRACTS. Perform and observe all
of the terms and provisions of each Material Contract to be performed
or observed by it, maintain each such Material Contract in full force
and effect, enforce each such Material Contract in accordance with its
terms, take all such action to such end as may be from time to time
requested by the Administrative Agent and, upon request of the
Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for
action as either Borrower is entitled to make under such Material
Contract, and cause each of its Subsidiaries to do so, except, in any
case, where the failure to do so, either individually or in the
aggregate, could not be reasonably expected to have a Material Adverse
Effect.
(m) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the applicable Borrower or such
Subsidiary than it would otherwise obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
(n) CASH CONCENTRATION ACCOUNTS. Maintain, and cause each of
its Domestic Subsidiaries and the U.K. Subsidiaries to maintain (to the
extent such Domestic Subsidiaries and U.K. Subsidiaries maintain any
deposit accounts), from and after the date specified therefor in
Section 5.01(q)(vii) cash concentration accounts and Pledged Accounts
(as defined in the Security Agreement) into which all proceeds of
Collateral are paid with one or more banks acceptable to the
Administrative Agent that shall have accepted the assignment of such
accounts to the Administrative Agent pursuant to the Security
Agreement.
(o) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon
(v) notice from the Parent Borrower to the Administrative Agent that it
intends to cause an Excluded Subsidiary to become a Loan Party, (w) the
request of the Administrative Agent or the Required Lenders following
the occurrence and during the continuance of a Default, (x) the
formation or acquisition of any new direct or indirect Subsidiaries by
any Loan Party, (y) the acquisition of any personal property by any
Loan Party, and such property, in the reasonable opinion of the
Administrative Agent, shall not be subject to a perfected first
priority security interest in favor of the Administrative Agent for the
benefit of the Secured Parties, or (z) the request of the
Administrative Agent or the Required Lenders at any time with respect
to any or all of the real property listed on Schedule 4.01(hh) hereto
or any other real or personal property owned or leased by any Loan
Party or any of its Subsidiaries from time to time, then each Loan
Party shall, in each case at such Loan Party's expense:
(i) in connection with an Excluded Subsidiary
becoming a Loan Party or the formation or acquisition of a
Subsidiary, within 10 days after such notice, request,
formation or acquisition, cause each such Subsidiary, and
cause each direct and indirect parent of such Subsidiary (if
it has not already done so), to duly execute and deliver to
the Administrative Agent, if such Subsidiary is a Domestic
Subsidiary, a Domestic Guaranty or guaranty supplement
guaranteeing the Obligations of the Borrowers and the other
Loan Parties under the Loan Documents and, if such Subsidiary
is Foreign Subsidiary, a Foreign Guaranty or guaranty
supplement guaranteeing the Obligations of the Specified
Subsidiaries and the other Foreign Subsidiaries under the Loan
Documents, in each case, in substantially
64
the form of Exhibit E-1 or Exhibit E-2 hereto, as applicable,
or otherwise in form and substance satisfactory to the
Administrative Agent (except to the extent that any such
Guaranty by a Subsidiary of any Loan Party would result in
adverse tax consequences to such Loan Party or any of its
Subsidiaries),
(ii) within 10 days after such notice, request,
formation or acquisition, furnish to the Administrative Agent
a description of the real and personal properties of such Loan
Party and its Subsidiaries in detail satisfactory to the
Administrative Agent,
(iii) within 15 days after such notice, request,
formation or acquisition, duly execute and deliver, and cause
each such Subsidiary and each direct and indirect parent of
such Subsidiary (if it has not already done so) to duly
execute and deliver, to the Administrative Agent security
agreement supplements, mortgages, pledges, assignments,
debentures and other security agreements, as specified by and
in form and substance satisfactory to the Administrative
Agent, securing payment of all the obligations of the
applicable Loan Party, such Subsidiary or such parent, as the
case may be, under the Loan Documents and constituting Liens
on all such properties (except to the extent that any pledge
of the stock of a non-U.S. Subsidiary of a Loan Party would
result in adverse tax consequences to such Loan Party or any
of its Subsidiaries),
(iv) within 30 days after such notice, request,
formation or acquisition, take, and cause such Subsidiary or
such parent to take, whatever action (including, without
limitation, the recording of mortgages, the filing of Uniform
Commercial Code financing statements, the giving of notices
and the endorsement of notices on title documents) that may be
necessary or advisable in the opinion of the Administrative
Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it)
valid and perfected Liens on the properties purported to be
subject to the mortgages, pledges, assignments and security
agreements delivered pursuant to this Section 5.01(o)(iv),
enforceable against all third parties in accordance with their
terms,
(v) within 60 days after such notice, request,
formation or acquisition, deliver to the Administrative Agent,
upon the request of the Administrative Agent in its sole
discretion, a signed copy of a favorable opinion, addressed to
the Agents and the other Secured Parties, of counsel for the
Loan Parties acceptable to the Administrative Agent as to the
matters contained in clauses (i), (ii) and (iii) above, as to
such guaranties, mortgages, pledges, assignments and security
agreements being legal, valid and binding obligations of each
Loan Party party thereto enforceable in accordance with their
terms, as to the matters contained in clause (iv) above, as to
such recordings, filings, notices, endorsements and other
actions being sufficient to create valid and perfected first
priority Liens on such properties and as to such other matters
as the Administrative Agent may reasonably request,
(vi) as promptly as practicable after such notice,
request, formation or acquisition, deliver, upon the request
of the Administrative Agent in its sole discretion, to the
Administrative Agent with respect to each parcel of real
property owned or held by the entity that is the subject of
such request, formation or acquisition surveys and
engineering,
65
soils and other reports, and environmental assessment reports,
title reports, each in scope, form and substance satisfactory
to the Administrative Agent; PROVIDED, HOWEVER, that to the
extent that any Loan Party or any of its Subsidiaries shall
have otherwise received any of the foregoing items with
respect to such real property, such items shall promptly after
the receipt thereof be delivered to the Administrative Agent,
(vii) upon the occurrence and during the continuance
of a Default, promptly cause to be deposited any and all cash
dividends paid or payable to it or any of its Subsidiaries
from any of its Subsidiaries from time to time into the L/C
Cash Collateral Account, and with respect to all other
dividends paid or payable to it or any of its Subsidiaries
from time to time, promptly execute and deliver, or cause such
Subsidiary to promptly execute and deliver, as the case may
be, any and all further instruments and take or cause such
Subsidiary to take, as the case may be, all such other action
as the Administrative Agent may deem necessary or desirable in
order to obtain and maintain from and after the time such
dividend is paid or payable a perfected, first priority lien
on and security interest in such dividends, and
(viii) at any time and from time to time, promptly
execute and deliver any and all further instruments and
documents and take all such other action as the Administrative
Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of,
such guaranties, mortgages, pledges, assignments and security
agreements.
(p) FURTHER ASSURANCES. (i) Promptly upon request by the
Administrative Agent, or by any Lender Party through the Administrative
Agent, correct any material defect or error that may be discovered in
any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and
(ii) Promptly upon request by the Administrative Agent, or by
any Lender Party through the Administrative Agent, do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register any and all such further acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments,
financing statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and other
instruments as the Administrative Agent, or any Lender Party through
the Administrative Agent, may reasonably require from time to time in
order to (A) carry out more effectively the purposes of this Agreement,
the Notes or any other Loan Document, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now
or hereafter intended to be covered by any of the Collateral Documents,
(C) perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and any of the Liens intended to be
created thereunder and (D) assure, convey, grant, assign, transfer,
preserve, protect and confirm more effectively unto the Agents and the
Lender Parties the rights granted or now or hereafter intended to be
granted to the Agents and the Lender Parties under any Loan Document or
under any other instrument executed in connection with any Loan
Document to which any Loan Party or any of its Subsidiaries is or is to
be a party; without limitation of the foregoing, the Parent Borrower
shall, promptly upon the request of the Administrative Agent or the
Collateral Agent, (x) cause any unlimited liability
66
company to be converted to a limited liability company and (y) deliver,
or cause to be delivered, to the Administrative Agent stock
certificates of the Excluded Subsidiaries to the extent that the stock
of such Subsidiaries shall have been pledged to the Administrative
Agent pursuant to the Loan Documents.
(q) CONDITIONS SUBSEQUENT. (i) Within 30 days after the
Initial Extension of Credit (or such later date as may be agreed by the
Parent Borrower and the Administrative Agent), furnish to the
Administrative Agent evidence that all filings and other actions
necessary or desirable under the laws of any jurisdiction (other than
any State of the United States) to perfect and protect the first
priority liens and security interests created under the Collateral
Documents shall have been taken (including, without limitation,
delivering appropriate Foreign Guaranties, Foreign Security Documents,
Local Pledges and legal opinions relating thereto to the Administrative
Agent, all in form and substance satisfactory to the Administrative
Agent), PROVIDED that stock certificates of the Excluded Subsidiaries
shall only be delivered upon the request of the Administrative Agent;
(ii) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish the Administrative Agent, in form and
substance satisfactory to the Agents and in sufficient copies for each
Lender Party, deeds of trust, trust deeds, mortgages, leasehold
mortgages and leasehold deeds of trust and covering the properties
listed on Schedule 4.01(hh) hereto (together with the Assignments of
Leases and Rents referred to therein and each other mortgage delivered
pursuant to Section 5.01(o), in each case as amended, supplemented or
otherwise modified from time to time in accordance with their terms,
the "MORTGAGES"), duly executed by the appropriate Loan Party, together
with:
(A) evidence that counterparts of the Mortgages have
been duly recorded in all filing or recording offices that the
Administrative Agent may deem necessary or desirable in order
to create a valid first and subsisting Lien on the property
described therein in favor of the Secured Parties and that all
filing and recording taxes and fees have been paid,
(B) fully paid American Land Title Association
Lender's Extended Coverage title insurance policies (the
"MORTGAGE POLICIES") in form and substance, with endorsements
and in amount acceptable to the Administrative Agent, issued,
coinsured and reinsured by title insurers acceptable to the
Administrative Agent, insuring the Mortgages to be valid first
and subsisting Liens on the property described therein, free
and clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances,
excepting only Permitted Encumbrances, and providing for such
other affirmative insurance (including endorsements for future
advances under the Loan Documents and for mechanics' and
materialmen's Liens) and such coinsurance and direct access
reinsurance as the Administrative Agent may deem necessary or
desirable,
(C) American Land Title Association form surveys,
dated no more than 90 days after the date of the Initial
Extension of Credit, certified to the Administrative Agent and
the issuer of the Mortgage Policies in a manner satisfactory
to the Administrative Agent by a land surveyor duly registered
and licensed in the States in which the property described in
such surveys is located and acceptable to the Administrative
Agent, showing
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all buildings and other improvements, any off-site
improvements, the location of any easements, parking spaces,
rights of way, building set-back lines and other dimensional
regulations and the absence of encroachments, either by such
improvements or onto such property, and other defects, other
than encroachments and other defects acceptable to the
Administrative Agent,
(D) an appraisal of each of the properties described
in the Mortgages complying with the requirements of the
Federal Financial Institutions Reform, Recovery and
Enforcement Act of 1989, which appraisals shall be from a
Person acceptable to the Administrative Agent and otherwise in
form and substance satisfactory to the Agents and the Lender
Parties,
(E) engineering, soils and other reports as to the
properties described in the Mortgages, in form and substance
and from professional firms acceptable to the Administrative
Agent,
(F) the Assignments of Leases and Rents referred to
in the Mortgages, duly executed by the appropriate Loan Party,
(G) such consents and agreements of lessors and other
third parties, and such estoppel letters and other
confirmations, as the Administrative Agent may deem necessary
or desirable,
(H) evidence of the insurance required by the terms
of the Mortgages, and
(I) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to create valid first and subsisting Liens on the property
described in the Mortgages has been taken;
(iii) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative Agent evidence
that the Surviving Debt described on Part I of Schedule 4.01(gg) hereto
shall have been paid in full, and that all Liens securing such Existing
Debt shall have been released;
(iv) Within 90 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative Agent a signed
copy of a favorable opinion, addressed to the Agents and the other
Secured Parties, of Connecticut counsel for the Loan Parties acceptable
to the Administrative Agent as to the Mortgages referred to in
subsection (ii) above being legal, valid and binding obligations of
each Loan Party party thereto enforceable in accordance with their
terms, with respect to the actions referred to in subsection (ii)
above, as to such actions being sufficient to create valid and
perfected first priority Liens on the properties covered by such
Mortgages, and as to such other matters as the Administrative Agent may
reasonably request;
(v) Within 45 days after the Initial Extension of Credit (or
such later date as may be agreed by the Parent Borrower and the
Administrative Agent), furnish to the Administrative
Agent:
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(A) completed requests for information, listing the
financing statements referred to in Section 3.01(m)(viii)(B)
and all other effective financing statements filed in all
jurisdictions that the Administrative Agent may deem necessary
or desirable that name any Loan Party as debtor, together with
copies of such financing statements;
(B) evidence of the completion of all recordings and
filings of or with respect to the Intellectual Property
Collateral referred to in the Security Agreement that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the Liens created thereunder;
(C) evidence of the completion of all other
recordings and filings of or with respect to the Collateral
Documents that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority
liens and security interests created thereunder; and
(D) evidence that all other action that the
Administrative Agent may deem necessary or desirable in order
to perfect and protect the first priority liens and security
interest created under the Collateral Documents has been taken
(including, without limitation, delivery of such pledge,
charge or other similar agreements as the Administrative Agent
may request pursuant to which the Parent Borrower or a
Domestic Subsidiary pledges the stock of, or other ownership
interest in, a Foreign Subsidiary to the Administrative
Agent);
(vi) As soon as practicable and in any event within
10 days after the Initial Extension of Credit, furnish to the
Administrative Agent evidence of the filing of the Debenture
in the Companies House and such other filings in connection
with the Foreign Security Documents as the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Foreign Security Documents, covering the
Collateral described in the Foreign Security Documents, and
acknowledgment copies of proper financing statements, duly
filed under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable
in order to perfect and protect the first priority liens and
security interests created under the Security Agreement,
covering the Collateral described in the Security Agreement;
(vii) As soon as practicable and in any event within
60 days after the Initial Extension of Credit (or such later
date as may be agreed by the Parent Borrower and the
Administrative Agent), establish and thereafter maintain a
cash management system for the Loan Parties satisfactory to
the Administrative Agent and in connection therewith, enter
into such Pledged Account Letters (as defined in the Security
Agreement) with one or more commercial banks satisfactory to
the Administrative Agent as the Administrative Agent may deem
reasonably necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the applicable
Collateral described in the Security Agreement; and
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(viii) Within 60 days after the Initial Extension of
Credit (or such later date as may be agreed by the Parent
Borrower and the Administrative Agent), liquidate or cause
the liquidation of IXnet France and IXnet Germany.
(r) YEAR 2000 COMPLIANCE. Be, and cause each of its
Subsidiaries to be, Year 2000 Compliant on or before December 31, 1998
and at all times thereafter.
(s) INVENTORY CYCLE COUNTS. Perform, and cause its
Subsidiaries to perform, monthly Inventory cycle counts (in which the
Collateral Agent may participate upon request).
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, neither Borrower shall, at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to 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 sign or file or suffer to exist, or permit
any of its Subsidiaries to sign or file or suffer to exist, under the
Uniform Commercial Code of any jurisdiction, a financing statement that
names the Parent Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer
to exist, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit any
of its Subsidiaries to assign, any accounts or other right to receive
income; EXCLUDING, HOWEVER, from the operation of the foregoing
restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) purchase money Liens upon equipment acquired or
held by the Parent Borrower or any of its Subsidiaries (other
than the Sub Borrower) in the ordinary course of business to
secure the purchase price of such equipment or to secure Debt
incurred solely for the purpose of financing the acquisition
of any such equipment to be subject to such Liens, or Liens
existing on any such equipment at the time of acquisition
(other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing
for the same or a lesser amount; PROVIDED, HOWEVER, that no
such Lien shall extend to or cover any property other than the
equipment being acquired, and no such extension, renewal or
replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or
replaced; and PROVIDED FURTHER that the aggregate principal
amount of the Debt secured by Liens permitted by this clause
(iii) shall not exceed the amount permitted under Section
5.02(b)(iii)(B) at any time outstanding and that any such Debt
shall not otherwise be prohibited by the terms of the Loan
Documents;
70
(iv) Liens arising in connection with Capitalized
Leases permitted under Section 5.02(b)(iii)(C); PROVIDED that
no such Lien shall extend to or cover any Collateral or assets
other than the assets subject to such Capitalized Leases;
(v) Liens existing on the date hereof and described
on Schedule 5.02(a) hereto; and
(vi) the replacement, extension or renewal of any
Lien permitted by clause (v) above upon or in the same
property theretofore subject thereto or the replacement,
extension or renewal (without increase in the amount or change
in any direct or contingent obligor) of the Debt secured
thereby.
(b) DEBT. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist,
any Debt other than:
(i) in the case of the Parent Borrower,
(A) Debt in respect of Hedge Agreements with
one or more Secured Parties designed to hedge against
fluctuations in interest rates or foreign exchange
rates incurred in the ordinary course of business and
consistent with prudent business practice with the
aggregate Agreement Value thereof not to exceed
$1,000,000 at any time outstanding,
(B) Subordinated Debt in an aggregate amount
not to exceed $20,000,000 at any time outstanding
issued or incurred to finance, in whole or in part,
any acquisition under Section 5.02(f)(viii) which
Debt has been issued to the seller of the company or
business being acquired at the time of such
acquisition; PROVIDED, HOWEVER, that such Debt shall
be subordinated to the Obligations of the Loan
Parties under the Loan Documents on terms and
conditions satisfactory to the Required Lenders,
(C) Debt owed to a wholly owned Subsidiary
of the Parent Borrower (other than the Sub Borrower),
so long as no Default shall have occurred and be
continuing at the time of issuance or incurrence of
such Debt or would result therefrom and which Debt
(x) shall, in the case of Debt owed to a Loan Party,
constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall
be evidenced by promissory notes in form and
substance satisfactory to the Administrative Agent
and such promissory notes, in the case of Debt owed
to a Loan Party, shall be pledged as security for the
Obligations of the holder thereof under the Loan
Documents and delivered to the Administrative Agent
pursuant to the terms of the Security Agreement,
(D) Debt under the Senior Notes Indenture in
an aggregate principal amount not to exceed
$180,000,000 in original issue amount, and
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(E) unsecured Debt incurred in the ordinary
course of business and aggregating not more than
$5,000,000 at any one time outstanding,
(ii) in the case of the Parent Borrower's
Subsidiaries,
(A) in the case of the Specified
Subsidiaries, Debt owed to the Sub Borrower; PROVIDED
that, in each case, such Debt (w) shall constitute
Pledged Debt, (x) shall be on terms acceptable to the
Administrative Agent, (y) shall be evidenced by
promissory notes in substantially the form of Exhibit
I-1 hereto, such promissory notes shall be secured by
the personal property, and such other property as the
Administrative Agent shall require from time to time,
of the makers thereof and such promissory notes shall
be pledged as security for the Obligations of the Sub
Borrower under the Loan Documents and delivered to
the Administrative Agent pursuant to the terms of the
Security Agreement and Section 5.01(o) and (z) the
Obligations of the Specified Subsidiaries under such
promissory notes shall be guaranteed by the Foreign
Guarantors pursuant to the Foreign Guaranty, PROVIDED
FURTHER, HOWEVER, that no such Debt may be incurred
by any such Specified Subsidiary unless and until the
requirements of Section 5.01(q) and of clauses (w)
through (z) above, in each case relating to such
Specified Subsidiary, shall, in the judgment of the
Administrative Agent, have been satisfied, and
(B) in the case of any of the Subsidiaries
of the Parent Borrower (other than the Sub Borrower
and any Excluded Subsidiary), Debt owed to the Parent
Borrower; PROVIDED that, in each case, such Debt (x)
shall constitute Pledged Debt, (y) shall be on terms
acceptable to the Administrative Agent and (z) shall
be evidenced by promissory notes in substantially the
form of Exhibit I-2 hereto or otherwise in form and
substance satisfactory to the Administrative Agent
and such promissory notes shall be pledged as
security for the Obligations of the holder thereof
under the Loan Documents and delivered to the
Administrative Agent pursuant to the terms of the
Security Agreement and Section 5.01(o),
(iii) in the case of the Parent Borrower and its
Subsidiaries (other than the Sub
Borrower and the Excluded Subsidiaries),
(A) Debt under the Loan Documents,
(B) Debt secured by Liens permitted by
Section 5.02(a)(iii) not to exceed in the aggregate
$5,000,000 at any time outstanding,
(C) Debt consisting of Capitalized Leases
not to exceed in the aggregate at any time
outstanding the sum of (1) $5,000,000 and (2) an
amount equal to the amount by which the aggregate
Working Capital Commitments in effect immediately
prior to giving effect to the incurrence of such Debt
pursuant to this subclause (2) exceeds $20,000,000,
PROVIDED, HOWEVER, that immediately upon the
incurrence of any Debt pursuant to this subclause
(2), an amount equal
72
to the amount of such Debt shall be applied to prepay
the Advances pursuant to Section 2.06(b)(i) and the
Facilities shall be permanently reduced by the amount
of such Debt pursuant to Section 2.05(b)(i),
(D) the Surviving Debt, and any Debt
extending the maturity of, or refunding or
refinancing, in whole or in part, any Surviving Debt;
PROVIDED that the terms of any such extending,
refunding or refinancing Debt, and of any agreement
entered into and of any instrument issued in
connection therewith, are on substantially the same
terms as the Debt being extended, refunded or
refinanced otherwise permitted by the Loan Documents;
and PROVIDED FURTHER that the principal amount of
such Surviving Debt shall not be increased above the
principal amount thereof outstanding immediately
prior to such extension, refunding or refinancing,
and the direct and contingent obligors therefor shall
not be changed, as a result of or in connection with
such extension, refunding or refinancing, and
(E) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business, and
(iv) in the case of the Sub Borrower,
(A) Debt under the Loan Documents, and
(B) indorsement of negotiable instruments
for deposit or collection or similar transactions in
the ordinary course of business.
(c) LEASE OBLIGATIONS. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to 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, excluding
Capitalized Leases, having an original term of one year or more other
than, in the case of the Parent Borrower and its Subsidiaries (other
than the Sub Borrower), such obligations as would not cause the direct
and contingent liabilities of the Parent Borrower and its Subsidiaries,
on a Consolidated basis, in respect of all such obligations to exceed
$7,500,000 payable in any period of 12 consecutive months.
(d) MERGERS, ETC. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that (i) the Parent Borrower may consummate the Merger
and (ii) any Subsidiary of the Parent Borrower (other than the Sub
Borrower) may merge into or consolidate with any other Subsidiary of
the Parent Borrower (other than the Sub Borrower); PROVIDED that, in
the case of any such merger or consolidation, the Person formed by such
merger or consolidation (A) shall be a wholly-owned Subsidiary of the
Parent Borrower and (B) shall, if either Subsidiary party to such
merger or consolidation is a Guarantor, be a Guarantor; and PROVIDED
FURTHER that in each case, immediately after giving effect thereto, no
event shall occur and be continuing that constitutes a Default.
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(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any of its assets, or grant any option or
other right to purchase, lease or otherwise acquire any Collateral
other than Inventory to be sold in the ordinary course of its business,
EXCEPT, with respect to the Parent Borrower and its Subsidiaries (other
than the Sub Borrower):
(i) sales of Inventory in the ordinary course of its
business;
(ii) in a transaction authorized by subsection (d) of
this Section 5.02;
(iii) sales of assets for cash and for fair value in
an aggregate amount not to exceed $10,000,000 in any Fiscal
Year; PROVIDED, HOWEVER, that the Net Cash Proceeds of such
sales shall be applied on the date of receipt thereof to
prepay the Advances pursuant to Section 2.06(b)(i);
(iv) in addition to sales of assets permitted under
clause (iii) above, sales of assets for cash and for fair
value in an aggregate amount not to exceed $10,000,000 in any
Fiscal Year; PROVIDED, HOWEVER, that, except to the extent
that the Net Cash Proceeds of such sale shall be reinvested in
like assets within 180 days after such sale, any Net Cash
Proceeds of such sales not so reinvested shall be applied on
the 180th day after receipt thereof to prepay the Advances
pursuant to Section 2.06(b)(i); and
(v) IXnet Germany and IXnet France may be dissolved.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any
of its Subsidiaries to make or hold, any Investment in any Person other
than:
(i) Investments by the Parent Borrower and its
Subsidiaries (other than the Sub Borrower) in their respective
Subsidiaries outstanding on the date hereof and additional
Investments in their respective wholly-owned Subsidiaries
(other than the Excluded Subsidiaries) in an aggregate amount
invested from the date hereof not to exceed
$2,000,000;
(ii) loans and advances to employees of the Parent
Borrower and its Subsidiaries (other than the Sub Borrower) in
the ordinary course of business as presently conducted in an
aggregate principal amount not to exceed $2,000,000 at any
time outstanding;
(iii) Investments by the Parent Borrower and its
Subsidiaries (other than the Sub Borrower) in Cash
Equivalents;
(iv) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(i)(C) or (ii);
(v) Investments existing on the date hereof and
described on Schedule 4.01(jj) hereto;
74
(vi) Investments by the Parent Borrower in Hedge
Agreements permitted under Section 5.02(b)(i)(A); and
(vii) other Investments by the Parent Borrower and
its Subsidiaries (other than the Sub Borrower) in an aggregate
amount invested not to exceed $25,000,000; PROVIDED that with
respect to Investments made under this clause (vii), (1) any
newly acquired or created Subsidiary of the Parent Borrower or
any of its Subsidiaries shall be a wholly owned Subsidiary
thereof; (2) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or
would result therefrom; (3) any company or business acquired
or invested in pursuant to this clause (vii) shall be in the
same line of business as the business of the Parent Borrower
or any of its Subsidiaries; and (4) immediately before and
after giving effect to the acquisition of a company or
business pursuant to this clause (vii), the Parent Borrower
shall be in pro forma compliance with the covenants contained
in Section 5.04, calculated based on the financial statements
most recently delivered to the Lender Parties pursuant to
Section 5.03, as though such acquisition had occurred at the
beginning of the four quarter period covered thereby, as
evidenced by a certificate of the chief financial officer of
the Parent Borrower furnished to the Lender Parties
demonstrating such compliance.
(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, or permit
any of its Subsidiaries to do any of the foregoing or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any capital stock of either Borrower or any warrants, rights
or options to acquire such capital stock or to issue or sell any
capital stock or any warrants, rights or options to acquire such
capital stock; EXCEPT that, so long as no Default shall have occurred
and be continuing at the time of any action described in clauses (i)
and (ii) below or would result therefrom, (i) the Parent Borrower may
(A) declare and pay dividends and distributions payable only in common
stock of the Parent Borrower, (B) issue and sell shares of its capital
stock to the Equity Investors in the amounts and for the prices set
forth on Schedule 5.02(g), (C) the Parent Borrower may issue and sell
shares of its common stock to its management and employees pursuant to
and in accordance with the terms of the Stock Option Plan, and (D)
except to the extent the Net Cash Proceeds thereof are required to be
applied to the prepayment of the Advances pursuant to Section
2.06(b)(i), purchase, redeem, retire, defease or otherwise acquire
shares of its capital stock with the proceeds received from the issue
of new shares of its capital stock with equal or inferior voting
powers, designations, preferences and rights, and (ii) in the case of
the Parent Borrower's Subsidiaries (other than the Sub Borrower), (A)
any Subsidiary of the Parent Borrower may declare and pay cash
dividends to its parent or the Parent Borrower and (B) IXnet Germany
and IXnet France may be liquidated.
(h) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof. In the case of the Sub Borrower,
engage in any business other than the making of loans to the Specified
Subsidiaries from time to time to the extent permitted by Section
5.02(f)(iv).
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(i) CHARTER AMENDMENTS. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws in
any manner that would in any material respect impair the ability of any
Loan Party to perform its obligations under the Loan Documents or that
would impair in any material respect the rights or interests of any of
the Agents or any of the Lender
Parties.
(j) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) its accounting
policies or reporting practices, except as required by generally
accepted accounting principles or (ii) its Fiscal Year.
(k) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase,
defease or otherwise satisfy prior to the scheduled maturity thereof in
any manner, or make any payment in violation of any subordination terms
of, any Debt, other than (i) the prepayment of the Advances in
accordance with the terms of this Agreement, (ii) the prepayment of the
Surviving Debt described on Part I of Schedule 4.01(gg) hereto in
accordance with the terms hereof and thereof, and (iii) regularly
scheduled or required repayments or redemptions of Surviving Debt, or
amend, modify or change in any manner any term or condition of any
Surviving Debt or Subordinated Debt, or permit any of its Subsidiaries
to do any of the foregoing other than to prepay any Debt payable to
either Borrower.
(l) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate
any Related Document or consent to or accept any cancellation or
termination thereof, amend, modify or change in any manner any term or
condition of any Related Document or give any consent, waiver or
approval thereunder, waive any default under or any breach of any term
or condition of any Related Document, agree in any manner to any other
amendment, modification or change of any term or condition of any
Related Document or take any other action in connection with any
Related Document that would impair in any material respect the value of
the interest or rights of the Parent Borrower thereunder or that would
impair in any material respect the ability of any Loan Party to perform
its obligations under the Loan Documents or that would impair in any
material respect the rights or interests any of the Agents or any of
the Lender Parties, or permit any of its Subsidiaries to do any of the
foregoing.
(m) AMENDMENT, ETC., OF MATERIAL CONTRACTS. Without the
consent of the Required Lenders, cancel or terminate any Material
Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any
consent, waiver or approval thereunder, waive any default under or
breach of any Material Contract, agree in any manner to any other
amendment, modification or change of any term or condition of any
Material Contract or take any other action in connection with any
Material Contract that would impair in any material respect the value
of the interest or rights of either Borrower thereunder or that would
impair in any material respect the ability of any Loan Party to perform
its obligations under the Loan Documents or that would impair in any
material respect the interest or rights of any of the Agents or any of
the Lender Parties, or permit any of its Subsidiaries to do any of the
foregoing.
(n) OWNERSHIP CHANGE. Take, or permit any of its Subsidiaries
to take, any action that would result in an "ownership change" (as
defined in Section 382 of the Internal Revenue Code) with respect to
the Parent Borrower or any of its Subsidiaries or the application of
the "separate
76
return limitation year" or "consolidated return change of ownership"
limitations under the federal income tax consolidated return
regulations with respect to the Parent Borrower or any of its
Subsidiaries.
(o) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon
any of its property or assets other than (i) in favor of the Secured
Parties or (ii) in connection with any Surviving Debt.
(p) PARTNERSHIPS, ETC. Become a general partner in any general
or limited partnership or joint venture, or permit any of its
Subsidiaries to do so.
(q) SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions other than
Hedge Agreements permitted under Section 5.02(b).
(r) CAPITAL EXPENDITURES. Make, or permit any of its
Subsidiaries to make, any Capital Expenditures other than, in the case
of the Parent Borrower and its Subsidiaries (other than the Sub
Borrower), such Capital Expenditures as would not cause the aggregate
of all such Capital Expenditures made by the Parent Borrower and its
Subsidiaries in any Fiscal Year to exceed $35,000,000.
(s) EXCLUDED SUBSIDIARIES. Permit any Excluded Subsidiary to
individually hold assets in excess of $10,000 or collectively with all
other Excluded Subsidiaries hold assets in excess of $1,000,000 or
engage in any business of any kind, other than the holding of licenses
and/or acting
as agent for a Loan Party.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Parent Borrower shall furnish to
the Lender Parties and the Agents:
(a) DEFAULT NOTICE. As soon as possible and in any event
within two Business Days after any Responsible Officer knows or should
know of any Default or any event, development or occurrence reasonably
likely to have a Material Adverse Effect continuing on the date of such
statement, a statement of a Responsible Officer of the Parent Borrower
setting forth the details of such Default and the action that the
Parent Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year, Consolidated and consolidating balance sheets of
the Parent Borrower and its Subsidiaries as of the end of such quarter
and Consolidated and consolidating statements of income and a
Consolidated statement of cash flows of the Parent Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal quarter and ending with the end of such fiscal quarter and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flows of the Parent Borrower and its Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending
with the
77
end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding
Fiscal Year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer of the
Parent Borrower as having been prepared in accordance with GAAP,
together with (i) a certificate of said officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Parent Borrower has taken and proposes to take with respect thereto
and (ii) a schedule in form satisfactory to the Administrative Agent of
the computations used by the Parent Borrower in determining compliance
with the covenants contained in Section 5.04; PROVIDED that in the
event of any change in GAAP used in the preparation of such financial
statements, the Parent Borrower shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP.
(c) ANNUAL FINANCIALS. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the
Consolidated annual statements for such year of the Parent Borrower and
its Subsidiaries in the form provided to the Lender Parties pursuant to
Section 4.01(f) or in a form otherwise acceptable to the Lender
Parties, including the report of Coopers & Xxxxxxx L.L.P. or other
independent public accountants of recognized standing acceptable to the
Required Lenders, and a consolidating balance sheet of the Parent
Borrower and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of income of the Parent Borrower and its
Subsidiaries for such Fiscal Year, prepared by management of the Parent
Borrower together with (i) a report of such accounting firm to the
Agents and the Lender Parties stating that in the course of the regular
audit of the Consolidated financial statements of the Parent Borrower
and its Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, nothing has
come to the attention of such accounting firm that caused it to believe
that the Parent Borrower failed to comply with the terms of Section
5.04, in so far they relate to accounting matters; (ii) a schedule
prepared by the Parent Borrower in form satisfactory to the
Administrative Agent of the computations used by the Parent Borrower in
determining, as of the end of such Fiscal Year, compliance with the
covenants contained in Section 5.04; PROVIDED that in the event of any
change in GAAP used in the preparation of such financial statements,
the Parent Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP and (iii) a
certificate of the chief financial officer of the Parent Borrower
stating that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature thereof
and the action that the Parent Borrower has taken and proposes to take
with respect thereto.
(d) ANNUAL FORECASTS. As soon as available and in any event no
later than 15 days before the end of each Fiscal Year, forecasts
prepared by management of the Parent Borrower, in form satisfactory to
the Agents and the Lender Parties, of balance sheets, income statements
and cash flow statements on a monthly basis for the Fiscal Year
following such Fiscal Year and on an annual basis for each Fiscal Year
thereafter until the Termination Date.
(e) ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate knows
or has reason to know that any ERISA Event that could be reasonably
likely to have a Material Adverse Effect has occurred, a statement of
the
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chief financial officer of the Parent Borrower describing such ERISA
Event and the action, if any, that such Loan Party or such ERISA
Affiliate has taken and proposes to take with respect thereto and (ii)
on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section
4010 of ERISA, a copy of such records, documents and information.
(f) PLAN TERMINATIONS. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan, PROVIDED, HOWEVER, that there shall be no obligation to furnish
copies of any such notice received by an ERISA Affiliate that is not
received by a Loan Party unless such termination or appointment could
be reasonably likely to have a Material Adverse Effect.
(g) ACTUARIAL REPORTS. Promptly upon receipt thereof by any
Loan Party or any ERISA Affiliate, a copy of the annual actuarial
valuation report for each Plan of any Loan Party the funded current
liability percentage (as defined in Section 302(d)(8) of ERISA) of
which is less than 90% and the unfunded current liability of which
exceeds $5,000,000.
(h) PLAN ANNUAL REPORTS. Upon the request of any Lender Party,
copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan.
(i) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies of
each notice concerning (i) the imposition of Withdrawal Liability by
any such Multiemployer Plan, (ii) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer Plan
or (iii) the amount of liability incurred, or that may be incurred, by
such Loan Party or any ERISA Affiliate in connection with any event
described in clause (i) or (ii) of this Section 5.03(i), where such
Withdrawal Liability, reorganization or termination could be reasonably
likely to have a Material Adverse Effect.
(j) LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign,
affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(j).
(k) SECURITIES REPORTS. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(l) CREDITOR REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished generally to other holders
of the securities of any Loan Party or of any of its Subsidiaries
pursuant to the terms of any indenture, loan or credit or similar
agreement and not
79
otherwise required to be furnished to the Lender Parties pursuant to
any other subsection of this Section 5.03.
(m) AGREEMENT NOTICES, ETC. Promptly upon receipt thereof,
copies of all notices, requests and other documents received by any
Loan Party or any of its Subsidiaries under or pursuant to any Related
Document or Material Contract (except executive employment agreements
(other than those described in items 5 and 6 of Schedule 4.01(ii)
hereto)) or indenture, loan or credit or similar agreement regarding or
related to any breach or default by any party thereto or any other
event that could impair in any material respect the value of the
interests or the rights of any Loan Party or that otherwise could be
reasonably likely to have a Material Adverse Effect and copies of any
amendment, modification or waiver of any provision of any Related
Document or Material Contract or indenture, loan or credit or similar
agreement and of any amendment to the certificate of incorporation or
bylaws or other constitutive documents of any Loan Party and, from time
to time upon request by the Administrative Agent, such information and
reports regarding the Related Documents and the Material Contracts as
the Administrative Agent may reasonably request.
(n) REVENUE AGENT REPORTS. Within 10 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 Parent Borrower is a member aggregating $500,000 or more.
(o) TAX CERTIFICATES. Promptly, and in any event within five
Business Days after the due date (with extensions) for filing the final
federal income tax return in respect of each taxable year, a
certificate (a "TAX CERTIFICATE"), signed by the President or the chief
financial officer of the Parent Borrower, stating that the Parent
Borrower has paid to the Internal Revenue Service or other taxing
authority, or to the Parent Borrower, the full amount that such
affiliated group is required to pay in respect of federal income tax
for such year.
(p) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any real
property owned or leased by any Loan Party or any of its Subsidiaries
to be subject to any material restrictions on ownership, occupancy, use
or transferability under any Environmental Law.
(q) REAL PROPERTY. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report
supplementing Schedule 4.01(hh) hereto, including an identification of
all real and leased property disposed of by the Parent Borrower or any
of its Subsidiaries during such Fiscal Year, a list and description
(including the street address, county or other relevant jurisdiction,
State, record owner, book value thereof, and in the case of leases of
property, lessor, lessee, expiration date and annual rental cost
thereof) of all real property acquired or leased during such Fiscal
Year and a description of such other changes in the information
included in such Schedule as may be necessary for such Schedule to be
accurate and complete.
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(r) INSURANCE. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
each Loan Party and each of its Subsidiaries and containing such
additional information as any Lender Party, through the Administrative
Agent, may reasonably specify.
(s) BORROWING BASE CERTIFICATE. As soon as available and in
any event, in the case of the Collateral Agent (and the Collateral
Agent shall promptly deliver a copy thereof to the Administrative Agent
after the Collateral Agent shall have approved such Borrowing Base
Certificate), within 20 days after the end of each month, and in all
other cases, promptly following the Collateral Agent's approval of such
Borrowing Base Certificate, a Borrowing Base Certificate, as at the end
of the previous month, accompanied by, in the case of the Borrowing
Base Certificate being delivered to the Collateral Agent, the related
accounts receivable aging (setting forth domestic and foreign accounts
receivable), the related monthly trial balance showing Receivables
outstanding aged from invoice due date from 1 to 30 days, 31 to 60
days, 61 to 90 days, and 91 days or more, and the related perpetual
Inventory report, in each case in form and scope satisfactory to the
Collateral Agent, certified by the chief financial officer, the chief
accounting officer, the controller or the treasurer of the Parent
Borrower and the U.K. Subsidiaries.
(t) COLLATERAL REPORTS. Promptly after the preparation
thereof, copies (to the Collateral Agent only) of the results of each
physical verification, if any, which the Parent Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their
Inventory (and if an Event of Default shall have occurred and be
continuing, the Parent Borrower shall, upon the request of the
Collateral Agent, conduct, and the deliver the result of, such physical
verifications as the Collateral Agent may require), and promptly after
the request therefor, such other information (to the Collateral Agent
only) respecting the borrowing base and the Collateral as the
Collateral Agent may from time to time reasonably request.
(u) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
assets, nature of assets, liabilities (including, without limitation,
tax, ERISA and environmental liabilities) or prospects of any Loan
Party or any of its Subsidiaries as any Lender Party, through the
Administrative Agent, may from time to time reasonably request.
SECTION 5.04. FINANCIAL COVENANTS . So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
Party shall have any Commitment hereunder, the Parent Borrower shall:
(a) MINIMUM EBITDA. Maintain at the end of each fiscal quarter
of the Parent Borrower, EBITDA of not less than the amount set forth
below for each four consecutive fiscal quarter period set forth below:
FOUR FISCAL QUARTERS ENDING RATIO
September 30, 1998 $24,000,000
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FOUR FISCAL QUARTERS ENDING RATIO
December 31, 1998 $26,000,000
March 31, 1999 $28,600,000
June 30, 1999 $31,000,000
September 30, 1999 $36,000,000
December 31, 1999 $39,600,000
March 31, 2000 $44,000,000
June 30, 2000 $49,000,000
September 30, 2000 $54,000,000
December 31, 2000 $60,000,000
March 31, 2001 $63,000,000
June 30, 2001 $67,000,000
September 30, 2001 $71,000,000
December 31, 2001 $75,000,000
March 31, 2002 $81,000,000
June 30, 2002 $87,000,000
September 30, 2002 $93,000,000
December 31, 2002 $100,000,000
March 31, 2003
and thereafter $107,000,000
(b) INTEREST COVERAGE RATIO. Maintain at the end of each
fiscal quarter of the Parent Borrower a ratio of Consolidated EBITDA to
cash interest payable on all Debt of the Parent Borrower and its
Subsidiaries, in each case for the four quarter period then ending, of
not less than 4.00:1.00, except for the four quarter period ending
September 30, 2001, in which case such ratio shall be not less than
3.5:1.0.
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) (i) either Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) either
Borrower shall fail to pay any interest on any Advance, or any Loan
Party shall fail to make any other payment under any Loan Document, in
each case under this clause (ii) within 5 Business Days after the same
becomes due and payable; or
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(b) any representation or warranty made by any Loan Party (or
any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made;
or
(c) either Borrower shall fail to perform or observe any term,
covenant or agreement contained in Xxxxxxx 0.00, 0.00(x), (x), (x), (x)
or (q), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe 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
15 days after the earlier of the date on which (A) a Responsible
Officer becomes aware of such failure or (B) written notice thereof
shall have been given to the Parent Borrower by any of the Agents or
any of the Lender Parties; or
(e) any Loan Party or any of its Subsidiaries shall fail to
pay any principal of, premium or interest on or any other amount
payable in respect of any Debt that is outstanding in a principal or
notional amount of at least $5,000,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party
or such Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue
after the applicable grace period, if any, specified in the agreement
or instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, or other similar official for it or for any
substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
83
(g) any judgment or order for the payment of money in excess
of $5,000,000 shall be rendered against any Loan Party or any of its
Subsidiaries 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 15 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
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably expected to have a Material Adverse Effect, and there shall
be any period of 15 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
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 or 5.01(o) shall for any reason cease to be
valid and binding on or enforceable against any Loan Party party to it,
or any such Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01 or 5.01(o) shall for any reason (other than pursuant to
the terms thereof) cease to create a valid and perfected first priority
Lien on and security interest in the Collateral purported to be covered
thereby; or
(k) (i) the Equity Investors, collectively, shall cease to
beneficially own and control at least 50% of the Voting Stock of the
Parent Borrower; or (ii) any Person or two or more Persons acting in
concert other than the Equity Investors shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of the Parent Borrower (or
other securities convertible into such Voting Stock) representing 40%
or more of the combined voting power of all Voting Stock of the Parent
Borrower; or (iii) individuals who on the Effective Date constitute the
board of directors of the Parent Borrower (together with any new
directors whose election by the board of directors or whose nomination
by the board of directors for election by the Parent Borrower's
stockholders was approved by a vote of at least two-thirds of the
members of the board of directors then in office who either were
members of the board of directors on the Effective Date or whose
election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the members of the board of
directors of the Parent Borrower then in office; or (iv) any Person or
two or more Persons acting in concert other than the Equity Investors
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of control over Voting Stock of the Parent
Borrower (or other securities convertible into such securities)
representing 40% or more of the combined voting power of all Voting
Stock of the Parent Borrower; or
(l) any ERISA Event shall have occurred with respect to a Plan
that, when aggregated with any liability under Sections 6.01(m) and (n)
has had or could be reasonably likely to have a Material Adverse
Effect; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan and such liability,
when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and the ERISA Affiliates as
Withdrawal Liability (determined as of the date
84
of such notification) and with any liability under Sections 6.01(l) and
(n), has had or could be reasonably likely to have a Material Adverse
Effect; or
(n) any Loan Party 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 such reorganization or termination, when
aggregated with any liability under Sections 6.01(l) and (m), has had
or could be reasonably likely to have a Material Adverse Effect; or
(o) there shall occur in the judgment of the Required Lenders
any Material Adverse Change;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the obligation of each Lender to make Advances (other than Letter of
Credit Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and
of the Issuing Bank to issue Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the Notes,
all interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by each Borrower; PROVIDED, HOWEVER, that
in the event of an actual or deemed entry of an order for relief with respect to
any Loan Party or any of its Subsidiaries under the Federal Bankruptcy Code, (x)
the obligation of each Lender to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and of the
Issuing Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice of
any kind, all of which are hereby expressly waived by each Borrower.
SECTION 6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON
DEFAULT. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Parent Borrower to, and forthwith upon
such demand the Parent Borrower shall, pay to the Administrative Agent on behalf
of the Lender Parties in same day funds at the Administrative Agent's office
designated in such demand, for deposit in the L/C Cash Collateral Account, an
amount equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Administrative Agent and the Lender Parties or that the
total amount of such funds is less than the aggregate Available Amount of all
Letters of Credit, the Parent Borrower shall, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such right and
claim.
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ARTICLE VII
THE AGENTS
SECTION 7.01. AUTHORIZATION AND ACTION. Each Lender Party (in
its capacities as a Lender, the Issuing Bank (if applicable) and a potential
Hedge Bank) hereby appoints and authorizes each Agent to take such action as
agents on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Notes), no Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; PROVIDED, HOWEVER, that no Agent shall be
required to take any action that exposes such Agent to personal liability or
that is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender Party prompt notice of each notice given to it by
either Borrower pursuant to the terms of this Agreement.
SECTION 7.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, each Agent: (a)
may treat the payee of any Note as the holder thereof until, in the case of the
Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of the
Syndication Agent and the Documentation Agent, such Agent has received notice
from the Administrative Agent that it has received and accepted such Assignment
and Acceptance, in each case as provided in Section 8.07; (b) may consult with
legal counsel (including counsel for any Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) make no warranty or
representation to any Lender Party and shall not be responsible to any Lender
Party for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of any Loan
Party or to inspect the property (including the books and records) of any Loan
Party; (e) shall not be responsible to any Lender Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. XXXXXXX XXXXX, XX CAPITAL, MSSF AND AFFILIATES.
With respect to its Commitments, the Advances made by it and the Notes issued to
it, Xxxxxxx Xxxxx, XX Capital and MSSF shall have the same rights and powers
under the Loan Documents as any other Lender Party and may exercise the same as
though it were not the Documentation Agent, the Collateral Agent, the
Administrative
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Agent or the Syndication Agent, as the case may be; and the term "Lender Party"
or "Lender Parties" shall, unless otherwise expressly indicated, include Xxxxxxx
Xxxxx, XX Capital and MSSF in their respective individual capacities. Xxxxxxx
Xxxxx, XX Capital and MSSF and their respective Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Xxxxxxx
Xxxxx, XX Capital and MSSF were not the Documentation Agent, the Collateral
Agent, the Administrative Agent or the Syndication Agent, as the case may be,
and without any duty to account therefor to the Lender Parties.
SECTION 7.04. LENDER PARTY CREDIT DECISION. Each Lender Party
acknowledges that it has, independently and without reliance upon any of the
Agents or any of the other Lender Parties and based on the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any of the Agents or any of the other Lender Parties 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.
SECTION 7.05. INDEMNIFICATION. (a) Each Lender Party severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by the
Borrowers) from and against such Lender Party's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender Party agrees to
reimburse each Agent promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by either Borrower under Section 8.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by such Borrower. For purposes
of this subsection (a), the Lender Parties' respective ratable shares of any
amount shall be determined, at any time, according to the sum of (x) the
aggregate principal amount of the Advances outstanding at such time and owing to
the respective Lender Parties, (y) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time and
(z) their respective Unused Working Capital Commitments at such time; PROVIDED
that the aggregate principal amount of Letter of Credit Advances owing to the
Issuing Bank shall be considered to be owed to the Lenders ratably in accordance
with their respective Working Capital Commitments. In the event that any
Defaulted Advance shall be owing by any Defaulting Lender at any time, such
Lender Party's Commitment with respect to the Facility under which such
Defaulted Advance was required to have been made shall be considered to be
unused for purposes of this subsection (a) to the extent of the amount of such
Defaulted Advance. The failure of any Lender Party to reimburse an Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lender Party to such Agent as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse such Agent for its ratable
share of such amount, but no Lender Party shall be responsible for the failure
of any other Lender Party to reimburse such Agent for such other Lender Party's
ratable share of such amount.
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(b) Each Lender Party severally agrees to indemnify the
Issuing Bank (to the extent not promptly reimbursed by the Borrowers) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by the Issuing Bank under the Loan Documents; PROVIDED,
HOWEVER, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Issuing Bank's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
Party agrees to reimburse the Issuing Bank promptly upon demand for its ratable
share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by either Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by such Borrower. For purposes of this subsection (b), the Lender
Parties' respective ratable shares of any amount shall be determined, at any
time, according to the sum of (a) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (b) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time and (c) their respective Unused Working Capital
Commitments at such time; PROVIDED that the aggregate principal amount of Letter
of Credit Advances owing to the Issuing Bank shall be considered to be owed to
the Lenders ratably in accordance with their respective Working Capital
Commitments. In the event that any Defaulted Advance shall be owing by any
Defaulting Lender at any time, such Lender Party's Commitment with respect to
the Facility under which such Defaulted Advance was required to have been made
shall be considered to be unused for purposes of this subsection (b) to the
extent of the amount of such Defaulted Advance. The failure of any Lender Party
to reimburse the Issuing Bank promptly upon demand for its ratable share of any
amount required to be paid by the Lender Parties to the Issuing Bank as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse the Issuing Bank for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse the Issuing Bank for such other Lender Party's ratable share of such
amount.
(c) Without prejudice to the survival of any other agreement
of any Lender Party hereunder, the agreement and obligations of each Lender
Party contained in this Section 7.05 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the other
Loan Documents.
SECTION 7.06. SUCCESSOR AGENTS. Any Agent may resign at any
time and, if at any time the Administrative Agent shall cease to be a Lender,
the Administrative Agent shall promptly thereafter resign by giving written
notice thereof to the Lender Parties and the Borrowers and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent,
subject, so long as no Default shall have occurred and be continuing, to the
consent of the Parent Borrower, such consent not to be unreasonably withheld or
delayed, PROVIDED, HOWEVER, that, notwithstanding the foregoing, MSSF shall have
the right to resign as Administrative Agent and appoint a successor
Administrative Agent without the consent of the Lenders but subject, so long as
no Default shall have occurred and be continuing, to the consent of the Parent
Borrower, such consent not be unreasonably withheld. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lender Parties, appoint a successor Agent,
which shall be,
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in the case of the Administrative Agent, a Lender that is a financial
institution organized under the laws of the United States or of any State
thereof. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent and upon the execution and filing or recording of such financing
statements, or amendments thereto and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under the Loan Documents. After any retiring Agent's resignation or
removal hereunder as an Agent, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (i) waive any of the conditions specified in Section 3.02
or, in the case of the Initial Extension of Credit, Section 3.01, (ii) change
the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) to the extent
that a Guarantor has not been fully released from the Guaranty issued by such
Guarantor pursuant to Section 14 of such Guaranty, reduce or limit the
obligations of such Guarantor under Section 1 of the Guaranty issued by it or
otherwise limit the liability of such Guarantor with respect to the Obligations
owing to the Agents and the Lender Parties, (iv) release any material portion of
the Collateral in any transaction or series of related transactions or permit
the creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral in any transaction or series of related transactions
to secure any Obligations other than Obligations owing to the Secured Parties
under the Loan Documents, (v) amend this Section 8.01, (vi) increase the
Commitments of the Lenders or subject the Lenders to any additional obligations,
(vii) reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, (viii) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder or amend Section 2.06, or (ix) limit the liability of any Loan Party
under any of the Loan Documents; PROVIDED FURTHER that no amendment, waiver or
consent shall, unless in writing and signed by the Supermajority Lenders, waive
or amend Section 5.04(a); PROVIDED STILL FURTHER that no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Bank in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Issuing Bank under this Agreement; and PROVIDED FURTHER that no
amendment, waiver or consent shall, unless in writing and signed by each of the
Agents in addition to the Lenders required above to take such action, affect the
rights or duties of the Agents under this Agreement.
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SECTION 8.02. NOTICES, ETC. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to either Borrower, at its address at Xxxx
Xxxxxx Xxxxx, 00xx Xxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile
number: 000-000-0000, Attention: Chief Financial Officer with a copy to General
Counsel; if to any Initial Lender or the Initial Issuing Bank, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender Party, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender Party; if to the Administrative
Agent, at its address at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Dept. 332, Reference IPC; if to the Syndication Agent, at its address at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Dept. 332, Reference IPC; if to
the Collateral Agent, at its address at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxxx; and, if to the Documentation
Agent, at its address at Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx Xxxxxxx; or, as to either Borrower or the Administrative Agent,
at such other address as shall be designated by such party in a written notice
to the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrowers and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of
any Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note 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 8.04. COSTS AND EXPENSES. (a) Each Borrower agrees
jointly and severally to pay on demand (i) all reasonable out-of-pocket costs
and expenses of the Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan Documents
(including, without limitation, (A) all due diligence, collateral review,
syndication, transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of counsel for the Agents with respect thereto,
with respect to advising the Agents as to their respective rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
costs and expenses of the Agents and the Lender Parties in connection with the
enforcement of the Loan Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Agents and each Lender Party with respect thereto).
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(b) Each Borrower agrees jointly and severally to indemnify
and hold harmless each Agent, each Lender Party and each of their respective
Affiliates and their respective 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 (including, without limitation, in connection
with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of
the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition (including, without limitation, the
Transaction) by the Equity Investors or any of their respective Subsidiaries or
Affiliates of all or any portion of the stock or substantially all the assets of
the Parent Borrower or any of its Subsidiaries or by the Parent Borrower or any
of its Subsidiaries or Affiliates or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, 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 directly and primarily from such Indemnified
Party's bad faith, gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
subsection (b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Each Borrower also agrees not to assert any
claim against any Agent, any Lender Party or any of their Affiliates, or any of
their respective officers, directors, employees, attorneys or agents, on any
theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facilities, the actual or proposed
use of the proceeds of the Advances or the Letters of Credit, the Loan Documents
or any of the transactions contemplated thereby.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by either Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Parent Borrower pursuant to Section 8.07(a), such Borrower
shall, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party any amounts required to compensate such Lender Party for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by any Lender Party to fund or
maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
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(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.10 and 2.12 and this
Section 8.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. RIGHT OF SETOFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender Party or such Affiliate to or for
the credit or the account of either Borrower against any and all of the
Obligations of such Borrower now or hereafter existing under this Agreement and
the Note or Notes (if any) held by such Lender Party, irrespective of whether
such Lender Party shall have made any demand under this Agreement or such Note
or Notes and although such obligations may be unmatured. Each Lender Party
agrees promptly to notify the applicable Borrower after any such setoff and
application; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
Party and its respective Affiliates under this Section 8.05 are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) that such Lender Party and its Affiliates may have.
SECTION 8.06. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by each Borrower, the Administrative
Agent, the Documentation Agent and the Syndication Agent and when the
Administrative Agent shall have been notified by each Initial Lender and the
Initial Issuing Bank that such Initial Lender and the Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of
each Borrower, each Agent and each Lender Party and their respective successors
and assigns, except that neither Borrower shall have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
Lender Parties.
SECTION 8.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender
may and, so long as no Default shall have occurred and be continuing, if
demanded by the Parent Borrower (following a demand by such Lender pursuant to
Section 2.10) upon at least five Business Days' notice to such Lender and the
Administrative Agent, will assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Advances
owing to it and the Note or Notes held by it); PROVIDED, HOWEVER, that (i) each
such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of all of the Facilities, (ii)
except in the case of an assignment of all of a Lender's rights and obligations
under this Agreement, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) each such assignment shall be to an Eligible
Assignee, (iv) each such assignment made as a result of a demand by the Parent
Borrower pursuant to this Section 8.07(a) shall be arranged by the Parent
Borrower after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
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a result of a demand by the Parent Borrower pursuant to this Section 8.07(a)
unless and until such Lender shall have received one or more payments from
either the Parent Borrower or one or more Eligible Assignees in an aggregate
amount at least equal to the aggregate outstanding principal amount of the
Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, (vi) no such assignments shall be permitted without
the consent of the Syndication Agent until the Syndication Agent shall have
notified the Lender Parties that syndication of the Commitments hereunder has
been completed, and (vii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of (A) $1,500 if such
assignment is to an existing Lender Party, (B) $0 if such assignment is to an
Affiliate of the assigning Lender Party and (C) $3,000 in all other cases.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(x) 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, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing Bank
assignor thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's or Issuing Bank's rights and obligations under this
Agreement, such Lender or Issuing Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender Party assignor 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 Party 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 any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any Lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of either Borrower or any
other Loan Party or the performance or observance by any Loan Party of any of
its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and 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 the Agents, such assigning Lender Party or any other
Lender Party 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 confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agents on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations
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which by the terms of this Agreement are required to be performed by it as a
Lender or Issuing Bank, as the case may be.
(d) The Administrative Agent, acting for this purpose (but
only for this purpose) as the agent of the Borrowers, shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitment of, and principal amount
of the Advances owing to, each Lender Party from time to time (the "REGISTER").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agents and the Lender Parties
shall treat each Person whose name is recorded in the Register as a Lender Party
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by either Borrower or any Lender Party at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrowers and the other Agents. In the case of any assignment by a Lender,
within five Business Days after its receipt of such notice, each Borrower, at
its own expense, shall execute and deliver to the Administrative Agent in
exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto.
(f) The Issuing Bank may assign to an Eligible Assignee all
of its rights and obligations under its Letter of Credit Commitment at any time;
PROVIDED, HOWEVER, that (i) each such assignment shall be to an Eligible
Assignee and (ii) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance, together with a processing and recordation fee of
(A) $1,500 if such assignment is to an existing Lender Party, (B) $0 if such
assignment is to an Affiliate of the assigning Lender Party and (C) $3,000 in
all other cases.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); PROVIDED, HOWEVER, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any
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Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to either Borrower furnished to such
Lender Party by or on behalf of such Borrower; PROVIDED, HOWEVER, that, prior to
any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve in accordance with Section 8.10 the
confidentiality of any confidential information relating to any Loan Party
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.
SECTION 8.08. 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 telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.09. NO LIABILITY OF THE ISSUING BANK. The Parent
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the Issuing
Bank against presentation of documents that do not comply with the terms of a
Letter of Credit, including failure of any documents to bear any reference or
adequate reference to the Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under any Letter of Credit;
EXCEPT that the Parent Borrower shall have a claim against the Issuing Bank, and
the Issuing Bank shall be liable to the Parent Borrower, to the extent of any
direct, but not consequential, damages suffered by the Parent Borrower that the
Parent Borrower proves were caused by (i) the Issuing Bank's willful misconduct
or gross negligence in determining whether documents presented under any Letter
of Credit comply with the terms of the Letter of Credit or (ii) the Issuing
Bank's willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.
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SECTION 8.10. CONFIDENTIALITY. Each of the Lender Parties and
each of the Agents understands that some of the information furnished to it
pursuant to this Agreement may be received by it prior to the time that such
information shall have been made public, and each of the Lender Parties and each
of the Agents hereby agrees that it will keep, and will direct its officers and
employees to keep, all the information provided to it pursuant to this Agreement
confidential prior to its becoming public (through publication other than as a
result of action by one of the Lender Parties or the Agents in violation of this
Section 8.10), subject, however, to (a) disclosure to officers, directors,
employees, representatives, agents, auditors, consultants, advisors, lawyers and
Affiliates of such Lender Party or such Agent, as the case may be, in the
ordinary course of business, (b) disclosure to such officers, directors,
employees, representatives, agents and lawyers of a prospective assignee or
participant on a need-to-know basis in connection with the evaluation of a
possible assignment of, or participation in, the Advances hereunder (who will be
informed of the confidential nature of the material); (c) the obligations of the
Lender Parties or the Agents or a participant under applicable law, or pursuant
to subpoenas or other legal process, to make information available to
governmental agencies and examiners or to others and the right of the Lender
Parties and the Agents and participants to use such information in proceedings
to enforce their rights and remedies hereunder or under any other Loan Document
or in any proceeding against any Lender Party or any Agent or any participant in
connection with this Agreement or under any other Loan Document or the
transactions contemplated thereby; (d) disclosure to the extent such information
(i) becomes publicly available other than as a result of a breach of this
Agreement or (ii) becomes available to a Lender Party, an Agent or a participant
on a non-confidential basis, not, to the knowledge of such Lender Party, Agent
or participant, in breach of any agreement or other obligation to either
Borrower, from a source other than such Borrower; (e) disclosure to the extent
the applicable Borrower shall have consented to such disclosure in writing; or
(f) each Lender Party's or Agent's or participant's right to make information
available (i) to any corporation controlled by such Lender Party, Agent or
participant or under common control with such Lender Party, Agent or participant
in connection with an assignment or the sale of a participation by such Lender
Party or participant, or the assignment by such Agent of its rights and
obligations as an Agent, to such other corporation, PROVIDED that such
transferee agrees to be bound by confidentiality or (ii) in accordance with
Section 8.07(h).
SECTION 8.11. RELEASE OF COLLATERAL. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party in
accordance with the terms of the Loan Documents, the Administrative Agent shall,
at the Parent Borrower's expense, execute and deliver to such Loan Party such
documents as such Loan Party may reasonably request to evidence the release of
such item of Collateral from the assignment and security interest granted under
the Collateral Documents in accordance with the terms of the Loan Documents.
SECTION 8.12. JURISDICTION, ETC. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it is a
party, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party
96
may otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents in the courts of any other jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Loan Documents to which it is a party in any New York State or federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
SECTION 8.13. GOVERNING LAW. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.
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SECTION 8.14. WAIVER OF JURY TRIAL. Each of the Borrowers, the
Agents and the Lender Parties irrevocably waives 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 any Agent or any Lender Party in the negotiation,
administration, performance or enforcement thereof.
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.
IPC INFORMATION SYSTEMS, INC.
By /s/ Xxxxx Reach
---------------------------------------
Name: Xxxxx Reach
Title: Vice President
IPC FUNDING CORP.
By /s/ Xxxxx Reach
---------------------------------------
Name: Xxxxx Reach
Title: Vice President
XXXXXX XXXXXXX SENIOR FUNDING, INC., as
Administrative Agent, Syndication Agent
and Arranger
By /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Principal
XXXXXXX SACHS CREDIT PARTNERS L.P.,
as Documentation Agent
By /s/ Xxxxxxx XxXxxxxxx
---------------------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Managing Director
GENERAL ELECTRIC CAPITAL CORPORATION
as Collateral Agent
By /s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Duly Authorized Signatory
XXXXXX XXXXXXX SENIOR FUNDING, INC.
as Initial Issuing Bank
By /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Principal
INITIAL LENDERS
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Principal
XXXXXXX SACHS CREDIT PARTNERS L.P.
By /s/ Xx Xxxxx
---------------------------------------
Name: Xx Xxxxx
Title: Managing Director
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Duly Authorized Signatory