EXHIBIT 10
S&S DRAFT
4/17/98
$75,000,000
CREDIT AGREEMENT
Dated as of April __, 1998
Among
IPC INFORMATION SYSTEMS, INC.
as Parent Borrower
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and
IPC FUNDING CORP.
as Sub Borrower
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and
THE INITIAL LENDERS AND THE INITIAL ISSUING BANK
NAMED HEREIN
as Initial Lenders and Initial Issuing Bank
-- ------- ------- --- ------- ------- ----
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
as Administrative Agent, Syndication Agent and Arranger
-- -------------- ----- ----------- ----- --- --------
and
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
as Documentation 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..................................................25
1.03. Accounting Terms.............................................................25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances and Letters of Credit...........................................25
2.02. Making the Advances..........................................................26
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit...........27
2.04. Repayment of Advances........................................................28
2.05. Termination or Reduction of the Commitments..................................29
2.06. Prepayments..................................................................30
2.07. Interest.....................................................................31
2.08. Fees.........................................................................32
2.09. Conversion of Advances.......................................................33
2.10. Increased Costs, Etc.........................................................33
2.11. Payments and Computations....................................................35
2.12. Taxes........................................................................36
2.13. Sharing of Payments, Etc.....................................................38
2.14. Use of Proceeds..............................................................38
2.15. Defaulting Lenders...........................................................38
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit..........................41
3.02. Conditions Precedent to Each Borrowing and Issuance..........................47
3.03. Determinations Under Section 3.01............................................48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrowers..............................48
ii
Section Page
ARTICLE V
COVENANTS OF THE BORROWERS
5.01. Affirmative Covenants........................................................54
5.02. Negative Covenants...........................................................61
5.03. Reporting Requirements.......................................................68
5.04. Financial Covenants..........................................................72
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default............................................................73
6.02. Actions in Respect of the Letters of Credit upon Default.....................75
ARTICLE VII
THE AGENTS
7.01. Authorization and Action.....................................................76
7.02. Agents' Reliance, Etc........................................................76
7.03. ▇▇▇▇▇▇▇ ▇▇▇▇▇, MSSF and Affiliates...........................................77
7.04. Lender Party Credit Decision.................................................77
7.05. Indemnification..............................................................77
7.06. Successor Administrative Agents..............................................78
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc..............................................................79
8.02. Notices, Etc.................................................................80
8.03. No Waiver; Remedies..........................................................80
8.04. Costs and Expenses...........................................................80
8.05. Right of Setoff..............................................................82
8.06. Binding Effect...............................................................82
8.07. Assignments and Participations...............................................82
8.08. Execution in Counterparts....................................................85
8.09. No Liability of the Issuing Bank.............................................85
8.10. Confidentiality..............................................................85
8.11. Release of Collateral........................................................86
8.12. Jurisdiction, Etc............................................................86
8.13. Governing Law................................................................87
8.14. Waiver of Jury Trial.........................................................88
SCHEDULES
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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(m) - Plans
Schedule 4.01(z) - Open Years
Schedule 4.01(aa) - Income Tax Adjustments
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
Schedule 4.01(jj) - Investments
Schedule 4.01(kk) - Intellectual Property
Schedule 5.02(a) - Existing Liens
Schedule 5.02(g) - Sales of Stock to Equity Investors
EXHIBITS
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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 - Form of Opinion of Counsel to the Loan Parties
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 U.K. 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 __, 1998 among IPC INFORMATION SYSTEMS,
INC., a Delaware corporation (the "Parent Borrower"), IPC FUNDING CORP., a
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Delaware corporation (the "Sub Borrower" and, together with the Parent Borrower,
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the "Borrowers"), the banks, financial institutions and other institutional
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lenders listed on the signature pages hereof as the initial lenders (the
"Initial Lenders"), [____________________________], as the initial issuing bank
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(the "Initial Issuing Bank"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC. ("MSSF"), as
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syndication agent and arranger (together with any successor appointed pursuant
to Article VII, the "Syndication Agent"), ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
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("▇▇▇▇▇▇▇ ▇▇▇▇▇"), as documentation agent (together with any successor appointed
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pursuant to Article VII, the "Documentation Agent"), and MSSF, as administrative
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agent (together with any successor appointed pursuant to Article VII, the
"Administrative Agent", and, together with the Syndication Agent and the
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Documentation Agent, the "Agents") for the Lender Parties (as hereinafter
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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
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Agreement") between the Parent Borrower and Arizona Acquisition Corp., a
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Delaware corporation ("AAC"), AAC is merging into the Parent Borrower (the
---
"Merger").
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(2) Simultaneously in connection therewith and to finance the Merger in
part, the Parent Borrower is issuing up to $180,000,000 in principal amount of
___% 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
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(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 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ III, L.P. ("LSH" and, together
--- ---
with CVC and CSI, the "Equity Investors") are making a common equity
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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")].
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(4) Concurrently with the consummation of the Merger, the Parent Borrower
will acquire all of the shares of common stock of International Exchange
Networks, Inc., a Delaware corporation ("IXnet"), not already owned by the
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Parent Borrower in exchange for common stock of the Parent Borrower (the "Share
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Exchange" and, together with the Merger, the Equity Investment, the issuance of
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the Senior Notes and the other transactions contemplated by the Loan Documents
and the Related Documents (as hereinafter defined), the "Transaction") pursuant
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to the Share Exchange and Termination Agreement (as hereinafter defined).
(5) The Borrowers have requested that the Lender Parties make available a
$75,000,000 five-year secured revolving credit facility, which will be used (i)
to refinance Existing Debt (as hereinafter defined) of the Parent Borrower and
(ii) for other 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.
2
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
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parties to this Agreement.
"Administrative Agent's Account" means the account of the
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Administrative Agent maintained by the Administrative Agent with [____] at
its office at ____________________, New York, New York _____, Account No.
__________, Attention: _______________.
"Administrative Agent's Fee Letter" means a letter dated April ___,
---------------------------------
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 from time to time.
"Advance" means a Working Capital Advance or a Letter of Credit
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Advance.
"Affiliate" means, as to any Person, any other Person that, directly
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or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "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
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Agreement.
"Agreement Value" means, for any Hedge Agreement on any date of
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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) ▇▇▇▇-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.
3
"Applicable Lending Office" means, with respect to each Lender Party,
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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
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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
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Level I 1.50% 2.50%
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Level II 1.50% 2.25%
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Level III 1.50% 2.00%
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Level IV 1.50% 1.75%
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Level V 1.50% 1.50%
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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
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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 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
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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
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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
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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
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in Section 2.07(a)(i).
4
"BBA" means the British Bankers Association.
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"Borrowers" has the meaning specified in the recital of parties to
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this Agreement.
"Borrowing" means a borrowing consisting of simultaneous Advances of
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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
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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
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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.
"Capitalized Leases" means all leases that have been or should be, in
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accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by
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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 ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's,
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"CERCLA" means the Comprehensive Environmental Response, Compensation
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and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
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and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"Citibank" means Citibank, N.A., a national banking association.
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"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.
5
"Collateral Documents" means the Security Agreement, the Intercompany
--------------------
Notes, the Foreign Security Documents, the Debenture, 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
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Commitment.
"Consolidated" refers to the consolidation of accounts in accordance
------------
with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
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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
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Corporate Opportunity Agreement dated as of December 18, 1997 among
▇▇▇▇▇▇▇▇▇▇▇ Electric Company, Inc. (NY), ▇▇▇▇▇▇▇▇▇▇▇ 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.
"CSI" has the meaning specified in the Preliminary Statements.
---
"CVC" has the meaning specified in the Preliminary Statements.
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"Debenture" means the debenture dated as of April 30, 1998 made by the
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U.K. Subsidiaries in favor of the Administrative 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.
"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,
6
accounts and contract rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Debt.
"Default" means any Event of Default or any event that would
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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
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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
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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
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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
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parties to this Agreement.
"Domestic Guarantors" means each of the Subsidiaries of the Parent
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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).
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"Domestic Lending Office" means, with respect to any Lender Party, the
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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.
7
"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
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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
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for purposes of calculating EBITDA, such calculation shall be made without
giving effect to (i) the amortization or write-off of any expense incurred
in connection with the Transaction and (ii) [except as otherwise provided,]
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
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forth in Article III shall have been satisfied.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
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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 Agents 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, such approval not to be unreasonably
withheld or delayed; provided, however, that neither any Loan Party nor any
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Affiliate of a Loan Party shall qualify as an Eligible Assignee under this
definition.
"Eligible Inventory" means only such Inventory of the Parent Borrower,
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the Domestic Guarantors and the U.K. Subsidiaries as the Administrative
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 Administrative 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 Administrative
Agent as set forth above to consider any Inventory not to be Eligible
Inventory, the Administrative Agent may consider any of the following
classes of Inventory not to be Eligible Inventory:
(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
Administrative 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;
8
(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 has received notice of a dispute in respect of any such
agreement;
(g) Inventory located outside the United States and outside the
United Kingdom;
(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;
(i) Inventory consisting of work in process; and
(j) Inventory in respect of which the Security Agreement, 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 Secured Parties securing the Secured
Obligations.
"Eligible Receivables" means only such Receivables of the Parent
--------------------
Borrower, the Domestic Guarantors and the U.K. Subsidiaries, as the
Administrative 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 Administrative 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 Administrative Agent as set forth
above to consider any Receivables not to be Eligible Receivables, the
Administrative 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
Borrowers, the Domestic Guarantors and the U.K. Subsidiaries;
(b) Receivables on terms other than those normal or customary in
the business of the Borrowers, the Domestic Guarantors and the U.K.
Subsidiaries;
(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 other than Citibank and its Affiliates and
▇▇▇▇▇▇▇▇▇▇▇ Electric Company, Inc. to the extent that the aggregate amount
of Receivables owing from all such Affiliates do not exceed __% of Eligible
Receivables;
(d) Receivables more than [120] days past original invoice date
or more than 60 days past the date due;
9
(e) Receivables owing from any Person from which an aggregate
amount of more than 20% 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 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 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 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 and outside the United Kingdom;
(j) Receivables arising out of sales on a ▇▇▇▇-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
unless the 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 legislation and the
Administrative Agent is satisfied as to the absence of setoffs,
counterclaims and other defenses on the part of such account debtor;;
(l) Receivables the full and timely payment of which the
Administrative Agent in its sole discretion believes to be doubtful; and
(m) Receivables in respect of which the Security Agreement, 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 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
10
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.
"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
11
time) two Business Days before the first day 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 ▇▇▇▇▇ 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 MSSF's Eurodollar Rate
Advance comprising part of such Borrowing to be outstanding during such
Interest Period (or, if MSSF 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 each Subsidiary of the Parent Borrower
-------------------
listed on Schedule III hereto, but excluding any such Subsidiary that is a
Loan Party.
"Existing Debt" has the meaning specified in Section 4.01(ff) hereof.
-------------
"Extraordinary Receipt" means any cash received by or paid to or for
---------------------
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof), indemnity
payments and any purchase price adjustment received in connection with any
purchase agreement.
"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
12
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.
----
"▇▇▇▇▇▇▇ 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.
----------
"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.
"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.
13
"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 U.K. 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;
(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
14
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.
"Issuing Bank" means the Initial Issuing Bank and each Eligible
------------
Assignee to which the Letter of Credit Commitment hereunder has been
assigned pursuant to Section 8.07.
"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 among ▇▇▇▇▇▇▇▇▇▇▇ 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 among
▇▇▇▇▇▇▇▇▇▇▇ 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.
15
"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:
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 purposes of the
16
Foreign Guaranty, the U.K. Intercompany Notes, the Administrative Agency
Agreement, the Security Agreement (solely with respect to the Foreign
Subsidiaries 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 U.K. Intercompany Notes, the Administrative Agency Agreement, the
Security Agreement (solely with respect to the Foreign Subsidiaries and
their Obligations thereunder) and the Foreign Security Documents, and any
amendment, supplement or modification thereof, (i) the Foreign Guaranty,
(ii) each U.K. Intercompany Note, (iii) the Administrative Agency
Agreement, (iv) the Security Agreement (solely with respect to the Foreign
Subsidiaries 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 U.K.
Intercompany Notes, the Administrative Agency Agreement, the Security
Agreement (solely with respect to the Foreign Subsidiaries 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 U.K.
Intercompany Notes, the Administrative Agency Agreement, the Security
Agreement (solely with respect to the Foreign Subsidiaries and their
Obligations thereunder) and the Foreign Security Documents, and any
amendment, supplement or modification thereof, (i) each U.K. 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 U.K.
Intercompany Notes.
"Loan Value" means an amount equal to the sum of: (a) with respect to
----------
Eligible Inventory, [25]% of the value thereof; and (b) with respect to
Eligible Receivables, 80% of the value thereof.
"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 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.
"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 any Significant Loan Party 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
17
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,
or any Extraordinary Receipt received by or paid to or for the account of
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 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
18
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.
"OECD" means the Organization for Economic Cooperation and
----
Development.
"Open Year" has the meaning specified in Section 4.01(z).
---------
"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 ____________________, New York, New York _____, Account No. __________,
Attention: ____________.
"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
19
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.
----
"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).
"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
Tax 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
20
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
U.K. Intercompany Notes, the Administrative Agency Agreement, the Security
Agreement (solely with respect to the Foreign Subsidiaries 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 U.K. Intercompany Notes, the Administrative Agency
Agreement, the Security Agreement (solely with respect to the Foreign
Subsidiaries 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 __,
----------------------
1998, between the Parent Borrower, as issuer, and ________, 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.
"Significant Loan Party" means, at any time of determination, each
----------------------
Borrower and each other Loan Party other than any Subsidiary listed on
Schedule III hereto that does not have assets, revenues or net
21
income in excess of $[10,000] at such time and that does not engage in any
business of any kind[, other than the holding of licenses] at such time.
"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 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.
"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 the account of the Sub Borrower
----------------------
maintained by the Sub Borrower with The Bank of New York at its office at
____________________, New York, New York _____, Account No. __________,
Attention: ____________.
"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.
"Surviving Debt" has the meaning specified in Section 3.01(g).
--------------
22
"Syndication Agent" has the meaning specified in the recital of
-----------------
parties to this Agreement.
["Tax Agreement" means the [Tax Agreement dated as of ________, ____
-------------
among the Loan Parties and __________], 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.]
"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 __, 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. Intercompany Note" means a promissory note of a U.K. 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 U.K. Subsidiary to the Sub Borrower, as amended, supplemented or
otherwise modified from time to time.
"U.K. Sublimit" means $25,000,000, as such amount may be reduced
-------------
pursuant to Section 2.05.
"U.K. Subsidiaries" means IXnet [(U.K.)], Ltd., [(formerly known as
-----------------
IXnet, Ltd.] and IPC Information Systems, each a corporation organized
under the laws of England and each a wholly owned Subsidiary of the Parent
Borrower.
"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.
"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.
23
"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.
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").
----
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, such Lender's Unused Working
Capital Commitment 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) the U.K. Sublimit in effect at such time. Each Borrowing shall be in an
aggregate amount of $100,000 or an integral multiple of $1,000,000 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 Unused Working Capital Commitments of the Lenders 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
24
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. 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 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.
[S&S TO PREPARE BREAKAGE INDEMNITY LETTER]
(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
25
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 (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) it 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 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
26
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 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
27
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 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 $40,000,000.
(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.
(iii) The U.K. Sublimit 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 U.K. Sublimit 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.
28
(b) Mandatory. (i) The Parent Borrower shall, on the date of receipt
---------
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 (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) or (iii) 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) The Sub Borrower shall (or, if there shall be no Advances owing
by the Sub Borrower at such time, the Parent Borrower shall), on each Business
Day, prepay an aggregate principal amount of the Working Capital Advances
comprising part of the same Borrowings and the Letter of Credit Advances and
deposit in the L/C Cash Collateral Account an amount equal to the amount by
which (A) the sum of the aggregate principal amount of (x) the Working Capital
Advances and (y) the Letter of Credit Advances then outstanding plus the
----
aggregate Available Amount of all Letters of Credit then outstanding exceeds (B)
the lesser of the Working Capital Facility and the Loan Value of 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 relevant 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,
29
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.
(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
30
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.
(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 Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost. A certificate as to the
31
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 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
32
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.
(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
33
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.
(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
34
by such forms; provided, however, that, if, at the date of the Assignment and
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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, 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.
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
35
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 pay fees and expenses related to the Transaction, refinance
certain Existing Debt of the Parent Borrower and 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 U.K. Subsidiaries and to be used by the U.K. Subsidiaries
solely to finance ongoing working capital requirements and for other general
corporate purposes of the U.K. 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 which 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
36
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:
(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 [____], 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
[____]'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;
(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
37
(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 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
38
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).
(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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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,
39
including, without limitation, Regulations G, 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, 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.
(iv) A copy of a certificate of the Secretary of State of the
States of Connecticut, New York and _________________ and, where
applicable, a certificate of such other appropriate 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
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 President or any Vice President 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
40
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 Loan
------------------
Party, 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) acknowledgment copies or stamped receipt copies of proper
financing statements, duly filed on or before the date of the Initial
Extension of Credit 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,
(C) completed requests for information, dated on or before the
date of the Initial Extension of Credit, listing the financing statements
referred to in clause (B) above and all other 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) 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 hereunder.
(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, including, without limitation,
(F) evidence of the insurance required by the terms of the
Security Agreement,
(G) copies of the Assigned Agreements referred to in 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,
41
(H) the Pledged Account Letters referred to in the Security
Agreement, duly executed by each Pledged Account Bank referred to in the
Security Agreement, and
(I) 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, such pledge, charge or other
similar agreements as the Administrative Agent may request pursuant to
which a Domestic Subsidiary pledges stock or other ownership interest in a
Foreign Subsidiary to the Administrative Agent).
(ix) Such 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, as the Administrative Agent may
request to secure payment of all Obligations of the U.K. 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 sole 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.
(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
42
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 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 and letters, in substantially the form of
Exhibits G-1 and G-2 hereto, attesting to the Solvency of each Loan Party
after giving effect to the Transaction, from its chief financial officer
and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇.
(xiv) An environmental assessment report, in form and substance
satisfactory to the Agents and the Lender Parties, from an environmental
consulting firm acceptable to the Administrative Agent, 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.
(xix) A favorable opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel for the Borrowers and the Domestic Guarantors, in substantially the
form of Exhibit F hereto and as to such other matters as any Lender Party
through the Administrative Agent may reasonably request.
(xx) A favorable opinion of _______________, ▇▇▇▇▇▇, ▇▇▇▇▇ &
Bockius LLP, ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇ and ▇▇▇▇▇, ▇▇▇▇▇▇ & Harcourt, local
counsel to the Lender 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.
43
(xxi) 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) the sum of the Loan Values of the Eligible Collateral exceeds
the aggregate principal amount of the Working Capital Advances plus Letter
----
of Credit Advances to be outstanding plus the aggregate Available Amount of
----
all Letters of Credit to be outstanding after giving effect to such Advance
or issuance, respectively;
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 each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
44
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 each U.K. Subsidiary is a limited
liability company incorporated under the laws of England. 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 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, or charter or bylaws,
in each 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
45
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.
(f) The Consolidated and consolidating balance sheets of the Parent
Borrower and its Subsidiaries as at September 30, 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
fiscal year then ended, accompanied by an unqualified opinion of Coopers &
▇▇▇▇▇▇▇ L.L.P., independent public accountants, 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 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
46
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) Set forth on Schedule 4.01(m) hereto is a complete and accurate
list of all Plans and Multiemployer Plans.
(n) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(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 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.
(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, and no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(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 material liability with respect to
"expected post retirement benefit obligations" within the meaning of
Statement of Financial Accounting Standards No. 106.
(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 non-compliance
that is not reasonably likely to have a Material Adverse Effect, all past
non-compliance with such
47
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 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 and perfected first
priority security interest in the Collateral, securing the payment of the
Secured Obligations, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly
taken. 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 and Affiliates 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.
(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.
48
(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.
(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 ______, _______ and _______)] 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. 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, and all applications therefor and licenses thereof of
each Loan Party and each of its Subsidiaries, showing as of the date hereof
the jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(ll) No Excluded Subsidiary holds assets in excess of $[10,000] or has
revenues or net income in excess of $[10,000] and the aggregate amount of
assets, revenues or net income of all Excluded Subsidiaries
49
does not exceed $[_____]. No Excluded Subsidiary is engaged in any business
of any kind[, other than the holding of licenses].
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 $________
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.
(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,
50
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.
(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 reasonably 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, the Parent Borrower or such Subsidiary
shall 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 at the time of such request, 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
51
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.
(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 to maintain (to the extent such Domestic Subsidiaries
maintain any deposit accounts), cash concentration accounts with The Bank
of New York and Pledged Accounts (as defined in the Security Agreement)
into which all proceeds of Collateral are paid with The Bank of New York or
one or more banks acceptable to the Administrative Agent that 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 (w) the
---------------------------------------------------
request of the Administrative Agent 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 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 the formation or acquisition of a
Subsidiary, within 10 days after such 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 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 guaranteeing the
52
Obligations of the U.K. Subsidiaries and the other Foreign
Subsidiaries under the Loan Documents, in each case, in substantially
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 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 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 mortgages, pledges, assignments 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 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 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 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 Liens on such properties and
as to such other matters as the Administrative Agent may reasonably
request,
(vi) as promptly as practicable after such 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, 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,
53
(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.
(q) Conditions Subsequent. (i) Within __ days after the Initial
---------------------
Extension of Credit, 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 security interest created under the
Collateral Documents shall have been taken, and the Administrative Agent
shall have received evidence that all such filings and other actions have
been taken;
(ii) Within __ days after the Initial Extension of Credit, the
Administrative Agent shall have received, 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 Part I of 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:
54
(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 __ 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 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; and
55
(iii) Within __ days after the Initial Extension of Credit, the
Existing Debt described on Part I of Schedule 4.01(ff) hereto [FIRST UNION
MORTGAGE] shall have been paid in full, and all Liens securing such
Existing Debt shall have been released.
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;
(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:
56
(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
$__________ at any time outstanding,
(B) Subordinated Debt in an aggregate amount not to exceed
$__________ 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
Administrative Agent,
(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 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 shall be pledged
as security for the Obligations under the Loan Documents of the
holder thereof 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
(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 U.K. Subsidiaries, Debt owed to
the Sub Borrower; provided that, in each case, such Debt (w)
--------
shall constitute Pledged Debt (as defined in the Security
Agreement), (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 shall require
from time to time, of the makers thereof and such promissory
notes shall be pledged as security for the Obligations under
the Loan Documents to which the holder thereof is a party
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 U.K. Subsidiaries under such
promissory notes shall be guaranteed by the Foreign
Guarantors pursuant to the Foreign Guaranty, 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 or to
a wholly-owned Subsidiary of the Parent Borrower (other than
the Sub Borrower and any Excluded Subsidiary); provided
--------
that, in each case, such Debt (x) shall constitute Pledged
Debt (as defined in the Security Agreement),
57
(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 and such
promissory notes shall be pledged as security for the
Obligations under the Loan Documents to which the holder
thereof is a party 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 $40,000,000, provided, however, that immediately upon
-------- -------
the incurrence of any Debt pursuant to this subclause (2), an
amount equal 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, including Capitalized Leases, having an
58
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 $[5],000,000 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, (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) and (iii) IXnet Germany and IXnet France may merge
into or consolidate with the Parent 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.
(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 $__________ in any Fiscal Year; and
(iv) sales of assets for cash and for fair value in an aggregate
amount not to exceed $10,000,000 in any Fiscal Year; provided that the
--------
proceeds of such sale shall be reinvested within 180 days after such
sale in like assets.
(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
the 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)(ii);
59
(v) Investments existing on the date hereof and described on
Schedule 4.01(jj) hereto;
(vi) Investments by the Parent Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A); and
(vii) Investments by the Parent Borrower in IXnet and MXnet
outstanding on the date hereof and additional Investments in an
aggregate amount invested from the date hereof not to exceed (x) in
the case of IXnet, $_________ and (y) in the case of MXnet,
$_________; and
(viii) 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 (viii): (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
(viii) shall be in the same line of business as the business of the
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 (viii), 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
60
in any business other than the making of loans to the U.K. Subsidiaries
from time to time to the extent permitted by Section 5.02(f)(iv).
(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 and (ii) 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
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.
61
(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 period
set forth below to exceed the amount set forth below for such period:
FISCAL YEAR ENDING AMOUNT
September 30, 1998 $35,000,000
September 30, 1999 $35,000,000
September 30, 2000 $35,000,000
September 30, 2001 $35,000,000
September 30, 2002 $35,000,000
and thereafter
(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 $[_______] or engage
in any business of any kind[, other than the holding of licenses].
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
--------------
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
62
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 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 annual audit
report for such year for the Parent Borrower and its Subsidiaries,
including therein Consolidated and consolidating balance sheets of the
Parent Borrower and its Subsidiaries as of the end of such Fiscal Year and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flows of the Parent Borrower and its Subsidiaries for
such Fiscal Year, in each case accompanied by an opinion acceptable to the
Required Lenders of Coopers & ▇▇▇▇▇▇▇ L.L.P. or other independent public
accountants of recognized standing acceptable to the Required Lenders,
together with (i) a certificate of such accounting firm to the Agents and
the Lender Parties stating that in the course of the regular audit of the
business of the Parent Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as
to the nature thereof, (ii) a schedule in form satisfactory to the
Administrative Agent of the computations used by such accountants 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 has occurred, a statement of the 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.
63
(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.
(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 the funded current liability percentage (as defined in
Section 302(d)(8) of ERISA) of which is less than 90% or the unfunded
current liability of which exceeds $________.
(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(j).
(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
otherwise required to be furnished to the Lender Parties pursuant to any
other subsection of this Section 5.03.
(m) Agreement Notice, 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 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 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
64
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 and that the Parent Borrower
and its Subsidiaries have received any amounts payable to them, and have
not paid amounts in respect of taxes (Federal, state, local or foreign) in
excess of the amount they are required to pay, under the Tax Agreement in
respect of such taxable 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 Schedules
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 Schedules as may be necessary
for such Schedules to be accurate and complete.
(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
--------------------------
within 20 days after the end of each month, a Borrowing Base Certificate,
as at the end of the previous month, certified by the chief financial
officer, the chief accounting officer, the controller or the treasurer of
the Parent Borrower.
(t) 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:
65
FOUR FISCAL QUARTERS ENDING RATIO
--------------------------- -----
September 30, 1998 $ 24,000,000
December 31, 1998 $ 28,900,000
March 31, 1999 $ 31,500,000
June 30, 1999 $ 34,000,000
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.
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
(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
66
(c) either Borrower shall fail to perform or observe any term,
covenant or agreement contained in ▇▇▇▇▇▇▇ ▇.▇▇, ▇.▇▇(▇), (▇), (▇), (▇) 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
(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
67
(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 20% or more of the combined voting power of all
Voting Stock of the Parent Borrower; or (iii) during any period of up to 24
consecutive months, commencing after the date of this Agreement,
individuals who at the beginning of such 24-month period were directors of
the Parent Borrower shall cease for any reason to constitute a majority of
the board of directors of the Parent Borrower; 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 20% 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 and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of the Loan Parties and the ERISA Affiliates related to such
ERISA Event) exceeds $5,000,000; 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 in an amount that, 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 of such notification), exceeds $5,000,000 or requires
payments exceeding $1,000,000 per annum; 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 as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $1,000,000; or
(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
68
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.
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 the Administrative 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
69
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. ▇▇▇▇▇▇▇ ▇▇▇▇▇, MSSF and Affiliates. With respect to
----------------------------------
its Commitments, the Advances made by it and the Notes issued to it, ▇▇▇▇▇▇▇
Sachs 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 or the Administrative Agent and the Syndication Agent, as
the case may be; and the term "Lender Party" or "Lenders Parties" shall, unless
otherwise expressly indicated, include ▇▇▇▇▇▇▇ ▇▇▇▇▇ and MSSF in their
respective individual capacities. ▇▇▇▇▇▇▇ Sachs 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ and MSSF were not the Documentation Agent or
the Administrative Agent and 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 (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
70
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 (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.
(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 Administrative 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. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the
71
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, in the case of the
Administrative Agent, a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. 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 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.
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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, facsimile number: ▇▇▇-▇▇▇-▇▇▇▇, 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
72
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 or the Syndication Agent, at its address at ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: __________; and, if to the Documentation
Agent, at its address at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ____________; 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).
(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.
73
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.
(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
74
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 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
75
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 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, the Documentation Agent and the Syndication Agent. 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
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by it); provided, however, that (i) such Lender Party's obligations under this
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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
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 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
78
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.
79
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
-------------------------------------
Name:
Title:
IPC FUNDING CORP.
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as Administrative
Agent, Syndication Agent and Arranger
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Documentation Agent
By
-------------------------------------
Name:
Title:
80
INITIAL LENDERS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
By
-------------------------------------
Name:
Title:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
By
-------------------------------------
Name:
Title:
[GENERAL ELECTRIC CAPITAL CORPORATION]
By
-------------------------------------
Name:
Title: