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EXHIBIT 10.3
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CREDIT AGREEMENT
DATED AS OF JUNE 29, 1999
BY AND AMONG
NATIONAL NETWORK TECHNOLOGIES, INC.
AND
EUROPEAN AMERICAN BANK,
AS ADMINISTRATIVE AGENT
AND
THE LENDERS PARTY HERETO
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.................................................................... 1
SECTION 1.01. Definitions............................................................. 1
SECTION 1.02. Terms Generally......................................................... 9
ARTICLE II
LOANS............................................................................................... 9
SECTION 2.01. Revolving Credit Commitment............................................. 9
SECTION 2.02. Note.................................................................... 11
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS................................................................................... 11
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans..................... 11
SECTION 3.02. Use of Proceeds......................................................... 12
SECTION 3.03. Optional Prepayments.................................................... 12
SECTION 3.04. Fees.................................................................... 12
SECTION 3.05. Increased Costs......................................................... 13
SECTION 3.06. Taxes................................................................... 14
SECTION 3.07. Pro Rata Treatment and Payments......................................... 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES...................................................................... 16
SECTION 4.01. Organization, Powers.................................................... 16
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations..................... 16
SECTION 4.03. Financial Condition..................................................... 17
SECTION 4.04. Taxes................................................................... 17
SECTION 4.05. Title to Properties..................................................... 18
SECTION 4.06. Litigation.............................................................. 18
SECTION 4.07. Agreements.............................................................. 18
SECTION 4.08. Compliance with ERISA................................................... 18
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds............................ 18
SECTION 4.10. Approvals............................................................... 19
SECTION 4.11. Subsidiaries............................................................ 19
SECTION 4.12. Hazardous Materials..................................................... 19
SECTION 4.13. Investment Company Act.................................................. 19
SECTION 4.14. No Default.............................................................. 19
SECTION 4.15. Material Contracts...................................................... 19
SECTION 4.16. Permits and Licenses.................................................... 20
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SECTION 4.17. Compliance with Law..................................................... 20
SECTION 4.18. Y2K..................................................................... 20
SECTION 4.19. Disclosure.............................................................. 20
SECTION 4.20. Security Agreements..................................................... 21
SECTION 4.21. Pledge Agreement........................................................ 21
ARTICLE V
CONDITIONS OF LENDING............................................................................... 21
SECTION 5.01. Conditions to Loans..................................................... 21
SECTION 5.02. Conditions to all Extensions of Credit.................................. 24
ARTICLE VI
AFFIRMATIVE COVENANTS............................................................................... 24
SECTION 6.01. Existence, Properties, Insurance........................................ 24
SECTION 6.02. Payment of Indebtedness and Taxes....................................... 25
SECTION 6.03. Financial Statements, Reports, etc...................................... 25
SECTION 6.04. Books and Records; Access to Premises................................... 27
SECTION 6.05. Notice of Adverse Change................................................ 28
SECTION 6.06. Notice of Default....................................................... 28
SECTION 6.07. Notice of Litigation.................................................... 28
SECTION 6.08. Notice of Default in Other Agreements................................... 28
SECTION 6.09. Notice of ERISA Event................................................... 28
SECTION 6.10. Notice of Environmental Law Violations.................................. 29
SECTION 6.11. Notice Regarding Material Contracts..................................... 29
SECTION 6.12. Compliance with Applicable Laws......................................... 29
SECTION 6.13. Subsidiaries............................................................ 29
SECTION 6.14. Environmental Laws...................................................... 30
SECTION 6.15. Further Assurances...................................................... 30
ARTICLE VII
NEGATIVE COVENANTS.................................................................................. 30
SECTION 7.01. Liens................................................................... 30
SECTION 7.02. Indebtedness............................................................ 31
SECTION 7.03. Guaranties.............................................................. 32
SECTION 7.04. Sale of Assets.......................................................... 33
SECTION 7.05. Sales of Receivables.................................................... 33
SECTION 7.06. Loans and Investments................................................... 33
SECTION 7.07. Nature of Business...................................................... 33
SECTION 7.08. Sale and Leaseback...................................................... 33
SECTION 7.09. Federal Reserve Regulations............................................. 33
SECTION 7.10. Accounting Policies and Procedures...................................... 33
SECTION 7.11. Hazardous Materials..................................................... 34
SECTION 7.12. Limitations on Fundamental Changes...................................... 34
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SECTION 7.13. Financial Covenants..................................................... 34
SECTION 7.14. Subordinated Debt....................................................... 35
SECTION 7.15. Dividends............................................................... 35
SECTION 7.16. Transactions with Affiliates............................................ 35
SECTION 7.17. Impairment of Security Interest......................................... 36
ARTICLE VIII
EVENTS OF DEFAULT................................................................................... 36
SECTION 8.01. Events of Default....................................................... 36
ARTICLE IX
THE ADMINISTRATIVE AGENT............................................................................ 38
SECTION 9.01. Appointment, Powers and Immunities...................................... 38
SECTION 9.02. Reliance by Administrative Agent........................................ 39
SECTION 9.03. Events of Default....................................................... 39
SECTION 9.04. Rights as a Lender...................................................... 40
SECTION 9.05. Indemnification......................................................... 40
SECTION 9.06. Non-Reliance on Administrative Agent and Other Lenders.................. 40
SECTION 9.07. Failure to Act.......................................................... 41
SECTION 9.08. Resignation of the Administrative Agent................................. 41
SECTION 9.09. Sharing of Collateral and Payments...................................... 41
ARTICLE X
MISCELLANEOUS....................................................................................... 42
SECTION 10.01. Notices................................................................. 42
SECTION 10.02. Effectiveness; Survival................................................. 43
SECTION 10.03. Expenses................................................................ 43
SECTION 10.04. Amendments and Waivers.................................................. 44
SECTION 10.05. Successors and Assigns; Participations.................................. 45
SECTION 10.06. No Waiver; Cumulative Remedies.......................................... 47
SECTION 10.07. APPLICABLE LAW.......................................................... 48
SECTION 10.08. SUBMISSION TO JURISDICTION.............................................. 48
SECTION 10.09. Severability............................................................ 48
SECTION 10.10 Right of Setoff......................................................... 49
SECTION 10.11. Headings................................................................ 49
SECTION 10.12. Construction............................................................ 49
SECTION 10.13. Counterparts............................................................ 50
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SCHEDULES
Schedule I - Subsidiaries
Schedule II - Existing Liens
Schedule III - Existing Indebtedness
Schedule IV - Existing Guarantees
Schedule V - Material Contracts
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Company Security Agreement
Exhibit B-2 - Form of Guarantor Security Agreement
Exhibit C - Form of Corporate Guaranty
Exhibit D - Form of Individual Guaranty
Exhibit E - Reserved
Exhibit F - Form of Opinion of Counsel
Exhibit G-1 - Form of Subordination Agreement (▇.▇'▇▇▇▇)
Exhibit G-2 - Form of Subordination Agreement (▇.▇'▇▇▇▇/▇.▇'▇▇▇▇)
Exhibit H - Form of Pledge Agreement
Exhibit I - Form of Assignment an Acceptance Agreement
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CREDIT AGREEMENT dated as of June 29, 1999, by and among NATIONAL
NETWORK TECHNOLOGIES, INC., a Delaware corporation (the "Company"), STATE BANK
OF LONG ISLAND, a New York banking corporation ("SBLI"), EUROPEAN AMERICAN BANK,
a New York banking corporation ("EAB"); with SBLI, each a "Lender" and
collectively, the "Lenders") and EUROPEAN AMERICAN BANK, as Administrative Agent
for the Lenders (in such capacity the "Administrative Agent").
RECITALS
The Company has requested the Lenders to extend credit to the Company
from time to time and the Lenders are willing to extend such credit to the
Company, subject to the terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following words and terms
shall have the following meanings:
"Affiliate" shall mean with respect to a specified Person, another
Person which, directly or indirectly, controls or is controlled by or is under
common control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the power, direct or indirect, to direct or
cause the direction of the management or policies of such Person whether through
the ownership of voting securities, by contract or otherwise; provided that, in
any event, any Person who owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interest of any Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person.
"Administrative Agent" shall mean EAB in its capacity as administrative
and collateral agent for the Lenders under this Agreement or its successor
Administrative Agent permitted pursuant to Section 9.08.
"Agreement" shall mean this Credit Agreement, dated as of June 29, 1999,
as it may hereafter be amended, restated, supplemented or otherwise modified
from time to time.
"Assignment and Acceptance Agreement" shall mean the Assignment and
Acceptance Agreement substantially in the form of Exhibit I attached hereto.
"Borrowing Date" shall mean, with respect to any Loan, the date on which
such Loan is disbursed to the Company.
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"Business Day" shall mean any day not a Saturday, Sunday or legal
holiday, on which banks in New York City are open for business
"Capital Expenditures" shall mean additions to property and equipment of
the Company and its consolidated Subsidiaries which, in conformity with
Generally Accepted Accounting Principles, are included as "additions to
property, plant or equipment" or similar items which would be reflected in the
consolidated statement of cash flow of the Company, including, without
limitation, property and equipment which are the subject of Capital Leases.
"Capital Lease" shall mean any lease the obligations of which are
required to be capitalized on the balance sheet of a Person in accordance with
Generally Accepted Accounting Principles.
"Chief Financial Officer" shall mean the Chief Financial Officer of the
Company.
"Closing Date" shall mean June 29, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment Proportion" shall mean, with respect to each Lender, the
proportion its Revolving Credit Commitment bears to the Total Revolving Credit
Commitment.
"Company" shall have the meaning set forth in the preamble hereto.
"Consolidated EBITDA" shall mean for the Company and its consolidated
Subsidiaries for any period, the Consolidated Net Income for such period, plus
the sum, without duplication, of (a) gross interest expense, (b) depreciation
and amortization expenses, (c) all income taxes to any government or
governmental instrumentality expensed on the Company's, and any Subsidiary's
books (whether paid or accrued), (d) the cumulative effect of changing
accounting treatment with respect to the completed contract method on jobs whose
duration are expected to be 90 days or less) and (e) any non-cash charges
attributable to options outstanding to purchase shares of the Company minus the
sum of (a) all extraordinary or unusual gains and (b) all non-cash income or
gain attributable to options outstanding to purchase shares of the Company, in
each case determined on a consolidated basis for the Company and its
consolidated Subsidiaries in accordance with Generally Accepted Accounting
Principles, applied on a consistent basis. All of the foregoing categories shall
be calculated over the four fiscal quarters next preceding the date of
calculation thereof.
"Consolidated Fixed Charge Ratio" shall mean, for any period, the ratio
of (a) the sum of (i) Consolidated EBITDA plus (ii) Consolidated Rent Expense
plus (iii) operating lease expense, less Capital Expenditures to (b) the sum of
(i) Consolidated Interest Expense plus (ii) the Current Portion of Long Term
Debt plus (iii) Consolidated Rent Expense and (iv) operating lease expense. All
the foregoing categories shall be calculated over the four fiscal quarters next
preceding the date of calculation thereof.
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"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (a) Consolidated EBITDA less consolidated Capital Expenditures to (b)
Consolidated Interest Expense. All the foregoing categories shall be calculated
over the four fiscal quarters next preceding the date of calculation thereof.
"Consolidated Interest Expense" shall mean the gross interest expense of
the Company and its consolidated Subsidiaries determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis that is
required to be or is paid in cash.
"Consolidated Leverage Ratio" shall mean, for any period, the ratio of
(a) total consolidated liabilities of the Company and its consolidated
Subsidiaries excluding Subordinated Debt to (b) the sum of (i) Consolidated
Tangible Net Worth plus (ii) Subordinated Debt, in each case, determined in
accordance with Generally Accepted Accounting Principles, applied on a
consistent basis.
"Consolidated Net Income" shall mean, for any period, the net income (or
net loss) of the Company and its consolidated Subsidiaries for such period
determined in accordance with Generally Accepted Accounting Principles applied
on a consistent basis.
"Consolidated Rent Expense" shall mean rent expense of the Company and
its consolidated Subsidiaries determined in accordance with Generally Accepted
Accounting Principles, less all rents reimbursable to the Company or any of its
consolidated Subsidiaries by their customers pursuant to a contractual
obligation.
"Consolidated Tangible Net Worth" shall mean (a) total consolidated
assets of the Company and its consolidated Subsidiaries, except that there shall
be excluded therefrom (i) all obligations due to the Company or Subsidiary from
any Affiliate, and (ii) all intangible assets including, without limitation,
organizational expenses, patents, trademarks, copyrights, goodwill, covenants
not to compete, research and development costs, training costs and all
unamortized debt discount and deferred charges less (b) total consolidated
liabilities of the Company and its consolidated Subsidiaries, in each case,
determined in accordance with Generally Accepted Accounting Principles, applied
on a consistent basis.
"Contingent Commitment" shall have the meaning specified in Section
2.01(f).
"Corporate Guarantors" shall mean, collectively, National Network
Technologies, LLC, a Delaware limited liability company, ▇▇▇▇ ▇'▇▇▇▇ Electric
Co. LLC, a Delaware limited liability company and each Person who, from time to
time, is required to execute a Corporate Guaranty in accordance with Section
6.13.
"Corporate Guaranty" shall mean the Corporate Guaranty in the form
attached hereto as Exhibit C to be executed and delivered by each Corporate
Guarantor on the Closing Date and, thereafter, by any Person who may be required
to execute the same pursuant to Section 6.13, as each
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of the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Current Portion of Long Term Debt" means that portion of long term
indebtedness of the Company and its consolidated Subsidiaries which is required
to be paid in the immediately succeeding twelve month period, as determined in
accordance with Generally Accepted Accounting Principles consistently applied,
but excluding the Loans).
"Default" shall mean any condition or event which upon notice, lapse of
time or both would constitute an Event of Default.
"Dollar" and the symbol "$" shall mean lawful money of the United States
of America.
"Eligible Investments" shall mean (a) direct obligations of the United
States of America or any governmental agency thereof which are fully guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; or (b) dollar denominated
certificates of time deposit maturing within one year issued by any bank
organized and existing under the laws of the United States or any state thereof
and having aggregate capital and surplus in excess of $1,000,000,000; or (c)
money market mutual funds having assets in excess of $2,500,000,000; or (d)
commercial paper rated not less than P-1 or A-1 or their equivalent by ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Ratings Group, respectively; or (e)
tax exempt securities of a U.S. issuer rated A or better by Standard and Poor's
Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.
"Environmental Law" shall mean any law, ordinance, rule, regulation, or
policy having the force of law of any Governmental Authority relating to
pollution or protection of the environment or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations
promulgated pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or any Affiliate of the Company would be
deemed to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall have the meaning set forth in Article VIII.
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"Executive Officer" shall mean any of the President, the Chief Executive
Officer, the Chief Financial Officer or the Secretary of the Company or any
Corporate Guarantor, as applicable, and their respective successors, if any,
designated by the board of directors thereof.
"Existing Indebtedness" shall mean the aggregate indebtedness of the
Company and ▇▇▇▇ ▇'▇▇▇▇ Electric Co. LLC to SBLI on the Closing Date as
evidenced by two (2) Notes, one in the original principal amount of $3,500,000,
and the other in the original principal amount of $1,000,000, each dated as of
February 22, 1999.
"Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles in the United States of America, as in effect
from time to time.
"Governmental Authority" shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
"Guaranties" shall mean, collectively, the Individual Guaranties and the
Corporate Guaranties.
"Guarantors" shall mean, collectively, the Individual Guarantors and the
Corporate Guarantors.
"Hazardous Materials" shall mean any explosives, radioactive materials,
or other materials, wastes, substances, or chemicals regulated as toxic
hazardous or as a pollutant, contaminant or waste under any applicable
Environmental Law.
"Indebtedness" shall mean, without duplication, as to any Person or
Persons (a) indebtedness for borrowed money; (b) indebtedness for the deferred
purchase price of property or services; (c) indebtedness evidenced by bonds,
debentures, term notes or other similar instruments; (d) obligations and
liabilities secured by a Lien upon property owned by such Person, whether or not
owing by such Person and even though such Person has not assumed or become
liable for the payment thereof; (e) obligations and liabilities directly or
indirectly guaranteed by such Person; (f) obligations or liabilities created or
arising under any conditional sales contract or other title retention agreement
with respect to property used and/or acquired by such Person; (g) obligations of
such Person as lessee under Capital Leases; (h) net liabilities of such Person
under foreign currency exchange agreements, as calculated on a basis
satisfactory to the Administrative Agent and in accordance with accepted
practice; and (i) all obligations, contingent or otherwise of such Person as an
account party or applicant in respect of letters of credit.
"Individual Guarantors" shall mean ▇▇. ▇▇▇▇ ▇'▇▇▇▇, ▇▇. and ▇▇. ▇▇▇▇▇
▇'▇▇▇▇.
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"Individual Guaranty" shall mean the Individual Guaranty in the form
attached as Exhibit D to be executed and delivered by the Individual Guarantor
on the Closing Date, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Interest Payment Date" shall mean the last day of each month during the
term hereof.
"Lenders" shall have the meaning set forth in the preamble hereto.
"Lending Office" shall mean, for each Lender, the office specified under
such Lender's name on the signature pages hereof with respect to each Loan, or
such other office as such Lender may designate in writing from time to time to
the Company and the Administrative Agent with respect to such Loan.
"Lien" shall mean any lien (statutory or otherwise), security interest,
mortgage, deed of trust, pledge, charge, conditional sale, title retention
agreement, Capital Lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Security Documents, the Guaranties, the Subordination Agreements and each
other agreement executed in connection with the transactions contemplated hereby
or thereby, as each of the same may hereafter be amended, restated, supplemented
or otherwise modified from time to time.
"Loans" shall mean the Revolving Credit Loans.
"Material Adverse Effect" shall mean a material adverse effect upon (a)
the business, operations, property, prospects or condition (financial or
otherwise) of the Company or any Guarantor, or (b) the ability of the Company or
any Guarantor to perform in any material respect any obligations under any Loan
Document to which it is a party.
"Material Contract" shall mean each contract, instrument or agreement
(a) to which the Company or any Corporate Guarantor is a party which is material
to the business, operations or condition (financial or otherwise), performance,
prospects, or properties of the Company or any Corporate Guarantor or (b) which
requires the payment during the term thereof in excess of $100,000.
"Notes" shall have the meaning set forth in Section 2.02.
"Obligations" shall mean all obligations, liabilities and indebtedness
of the Company to the Lenders and the Administrative Agent, whether now existing
or hereafter created, absolute or contingent, direct or indirect, due or not,
whether created directly or acquired by assignment or otherwise, arising under
or relating to this Agreement, the Notes or any other Loan Document including,
without limitation, all obligations, liabilities and indebtedness of the Company
with respect
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to the principal of and interest on the Loans, and all fees, costs, expenses and
indemnity obligations of the Company hereunder or under any other Loan Document.
"Participant" shall have the meaning set forth in Section 10.05(b).
"Payment Office" shall mean the Administrative Agent's office located at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the
Administrative Agent may designate from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" shall mean the Liens specified in clauses (a) through
(i) of Section 7.01.
"Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, business trust, joint venture,
association, company, partnership or Governmental Authority.
"Pledge Agreement" shall mean the Pledge Agreement in the form attached
hereto as Exhibit H to be executed and delivered on the Closing Date by the
Company as the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Plan" shall mean any multi-employer or single-employer plan defined in
Section 4001 of ERISA, which covers, or at any time during the five calendar
years preceding the date of this Agreement covered, employees of the Company,
any Corporate Guarantor or an ERISA Affiliate on account of such employees'
employment by the Company, any Corporate Guarantor or an ERISA Affiliate.
"Prime Rate" shall mean the rate per annum announced by the entity which
is the Administrative Agent from time to time as its prime rate in effect at its
principal office. Each change in the Prime Rate shall be effective on the date
such change is announced to become effective.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30 day notice requirement has not
been waived by the PBGC.
"Required Lenders" shall mean (a), if there are two or fewer Lenders,
all the Lenders, and (b), if there are three or more Lenders, Lenders owed at
least 66 2/3% of the sum of the aggregate unpaid principal amount of the Loans
or, if no Loans are outstanding, Lenders having at least 66 2/3% of the
Revolving Credit Commitment.
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"Revolving Credit Loan" and "Revolving Credit Loans" has the meaning
assigned to such terms in subsection 2.01.
"Revolving Credit Commitment" shall mean with respect to each Lender the
obligation of such Lender to make Revolving Credit Loans to the Company
initially in an aggregate amount not to exceed $5,000,000 with respect to SBLI
and $5,000,000 with respect to EAB; provided, however, in the event the
Contingent Commitment is in effect, EAB's Revolving Credit Commitment shall be
increased by $2,500,000.
"Revolving Credit Commitment Period" shall mean the period from and
including the date hereof to but not including the Revolving Credit Expiration
Date or such earlier date as the Revolving Credit Commitment shall terminate as
provided herein.
"Revolving Credit Commitment Termination Date" shall mean the third
anniversary of the date hereof.
"Security Agreements" shall mean, collectively, with respect to the
Company, the Security Agreement in the form attached hereto as Exhibit B-1, and,
with respect to each Corporate Guarantor, the Guarantor Security Agreement in
the form attached hereto as Exhibit B-2 to be executed and delivered on the
Closing Date by the Company and each Corporate Guarantor, and, thereafter, by
any Person who may be required to execute the same pursuant to Section 6.13, as
each of the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Security Documents" shall mean the Security Agreements, the Pledge
Agreement and each other collateral security document delivered to the
Administrative Agent hereunder.
"Shareholders Agreement" shall mean collectively, the Shareholders
Agreement, dated as of July 23, 1998, among National Network Technologies, Inc.
and the Stockholders of the Corporation identified on Annex I thereto and the
Directed Share Agreement, dated as of July 23, 1998, by and among National
Network Technologies, Inc. and the Investors named on Schedule I thereto.
"Solvent" shall mean with respect to any Person as of the date of
determination thereof that (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required on its debts as such debts become absolute
and matured, (c) such Person will not have as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such Person
will be able to pay its debts as they mature.
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"Subordinated Debt" shall mean all debt which is subordinated in right
of payment to the prior final and indefeasible payment in full of the
obligations of the Company and/or of any Corporate Guarantor to the Lenders
hereunder and under any other Loan Document on terms satisfactory to and
approved in writing by the Required Lenders.
"Subordination Agreements" shall mean the Subordination Agreements in
the forms attached hereto as Exhibit G-1 and Exhibit G-2 to be executed and
delivered on the Closing Date by ▇▇. ▇▇▇▇ ▇'▇▇▇▇, ▇▇., ▇▇. ▇▇▇▇▇ ▇'▇▇▇▇ and ▇▇.
▇▇▇▇▇ ▇'▇▇▇▇ as the same may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Subsidiaries" shall mean with respect to any Person any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled, directly
or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Taxes" shall have the meaning set forth in Section 3.06.
"Total Revolving Credit Commitments" shall mean, at any time, the
aggregate of the Revolving Commitments in effect at such time, which shall be
initially $10,000,000, subject to adjustment in the Contingent Commitment is in
effect.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the present value of the accrued benefits under the Plan as of the
close of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and the neuter. Except as otherwise
herein specifically provided, each accounting term used herein shall have the
meaning given to it under Generally Accepted Accounting Principles. The term
"including" shall not be limited or exclusive, unless specifically indicated to
the contrary. The word "will" shall be construed to have the same meaning in
effect as the word "shall". The words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto, all of which are by this reference incorporated
into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. REVOLVING CREDIT COMMITMENT. (a) Subject to the terms and
conditions, and relying upon the representations and warranties set forth
herein, each Lender severally but not jointly agrees to make loans (individually
a "Revolving Credit Loan" and, collectively, the
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"Revolving Credit Loans") to the Company from time to time during the Revolving
Credit Commitment Period up to but not exceeding at any one time outstanding the
amount of its Revolving Credit Commitment; provided, however, that no Revolving
Credit Loan shall be made if, after giving effect to such Revolving Credit Loan,
the aggregate outstanding principal amount of all Revolving Credit Loans at such
time would exceed the Revolving Credit Commitment in effect at such time. During
the Revolving Credit Commitment Period, the Company may from time to time
borrow, repay and reborrow hereunder on or after the date hereof and prior to
the Revolving Credit Commitment Termination Date, subject to the terms,
provisions and limitations set forth herein.
(b) The Company may borrow under the Revolving Credit Commitment
during the Revolving Credit Commitment Period on any Business Day; provided that
the Company shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 11:00 a.m. New York time
on the day of the requested borrowing) for the Revolving Credit Loan. Such
notice shall be irrevocable and shall specify (i) the amount of the proposed
borrowing, (ii) the proposed use of the loan proceeds, and (iii) the proposed
Borrowing Date. Upon receipt of such notice from the Company, the Administrative
Agent shall promptly notify each Lender thereof. Each borrowing pursuant to the
Revolving Credit Commitment shall be in an aggregate principal amount of (i)
$200,000 or whole multiples of $100,000 in excess thereof (or, if less, an
amount equal to the Revolving Credit Commitment in effect at such time).
(c) The Company shall have the right, upon not less than three
Business Days' prior written notice to the Administrative Agent, to terminate
the Revolving Credit Commitment or from time to time to permanently reduce the
amount of the Revolving Credit Commitment; provided, however, that no such
termination or reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the effective date
thereof, the aggregate outstanding principal amount of all Revolving Credit
Loans at such time would exceed the Revolving Credit Commitment as then reduced.
The Administrative Agent shall promptly notify each Lender of each notice from
the Company to terminate or permanently reduce the amount of the Revolving
Credit Commitment pursuant to this Section 2.01. Any such reduction shall be in
the amount of $1,000,000 or whole multiples of $100,000 in excess thereof, and
shall reduce permanently the amount of the Revolving Credit Commitment then in
effect.
(d) [RESERVED]
(e) The several agreement of the Lenders to make Revolving Credit
Loans pursuant to Section 2.01 shall automatically terminate on the Revolving
Credit Commitment Termination Date. Upon such termination, the Company shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.
(f) At the request of the Company, EAB, in its sole and absolute
discretion, upon five (5) Business Days' written notice to the Lenders may elect
to increase the Revolving Credit Commitment by $2,500,000 (such increased
portion the "Contingent Commitment"). In the event the Revolving
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Credit Commitment is so increased then notwithstanding anything to the contrary
in this Agreement all Revolving Credit Loans in excess of the Revolving Credit
Commitment as in effect prior to the Contingent Commitment shall be funded by
EAB as a Lender and no other Lender shall have any other obligation to fund such
Revolving Credit Loans. The provisions of this Section 2.01(f) shall be binding
upon any assignee of EAB pursuant to Section 10.05(c) to the extent of such
assignee's pro rata portion of EAB's Revolving Credit Commitment immediately
prior to such assignment.
SECTION 2.02. NOTE. The Revolving Credit Loans made by each Lender shall
be evidenced by a promissory note of the Company (individually a "Note" and,
collectively, the "Notes"), substantially in the form attached hereto as Exhibit
A, each appropriately completed, duly executed and delivered on behalf of the
Company and payable to the order of such Lender in a principal amount equal to
the Revolving Credit Commitment of such Lender. Each Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Revolving Credit Commitment
Termination Date, and (c) bear interest from the date thereof until paid in full
on the unpaid principal amount thereof from time to time outstanding as provided
in Section 3.01. Each Lender is authorized to record the date and amount of each
Revolving Credit Loan and the date and amount of each payment or prepayment of
principal of each Revolving Credit Loan in such Lender's records or on the grid
schedule annexed to the Note; provided, however, that the failure of a Lender to
set forth each such Revolving Credit Loan, payment and other information shall
not in any manner affect the obligation of the Company to repay each Revolving
Credit Loan made by such Lender in accordance with the terms of its Note and
this Agreement. The Note, the grid schedule and the books and records of each
Lender shall constitute presumptive evidence of the information so recorded
absent clear and obvious error.
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. INTEREST RATE; CONTINUATION AND CONVERSION OF LOANS.
(a) Each Loan shall bear interest for the period from the
date thereof on the unpaid principal amount thereof at a fluctuating rate per
annum equal to the Prime Rate plus one-quarter of one percent (.25%).
(b) Upon the occurrence and during the continuance of an
Event of Default arising pursuant to Section 8.01(a), the outstanding principal
amount of the Loans (excluding any defaulted payment of principal accruing
interest in accordance with clause (e) below), shall, at the option of the
Required Lenders, bear interest payable on demand at a rate of interest 2% per
annum in excess of the interest rate otherwise then in effect.
(c) If the Company shall default in the payment of the
principal of or interest on any portion of any Loan or any other amount becoming
due hereunder, whether with respect to interest, fees, expenses or otherwise,
the Company shall pay interest on such defaulted amount accruing from the date
of such default (without reference to any period of grace) up to and including
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the date of actual payment (after as well as before judgment) at a rate of 2%
per annum in excess of the Prime Rate.
(d) Anything in this Agreement or in any Note to the
contrary notwithstanding, the obligation of the Company to make payments of
interest shall be subject to the limitation that payments of interest shall not
be required to be paid to a Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to such Lender
limiting the rates of interest that may be charged or collected by such Lender.
In each such event payments of interest required to be paid to such Lender shall
be calculated at the highest rate permitted by applicable law until such time as
the rates of interest required hereunder may lawfully be charged and collected
by such Lender. If the provisions of this Agreement or any Note would at any
time otherwise require payment by the Company to any Lender of any amount of
interest in excess of the maximum amount then permitted by applicable law, the
interest payments to such Lender shall be reduced to the extent necessary so
that such Lender shall not receive interest in excess of such maximum amount.
(e) Interest on each Loan shall be payable in arrears on
each Interest Payment Date and shall be calculated on the basis year of 360 days
and shall be payable for the actual days elapsed. Any rate of interest on the
Loans or other Obligations which is computed on the basis of the Prime Rate
shall change when and as the Prime Rate changes in accordance with the
definition thereof. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall, absent clear and obvious error, be
conclusive and binding for all purposes.
SECTION 3.02. USE OF PROCEEDS. The proceeds of the Loans shall be used
solely to refinance the Existing Indebtedness and for general corporate
purposes, including, without limitation, financing working capital, of the
Company and the Corporate Guarantors in the ordinary course of business.
SECTION 3.03. OPTIONAL PREPAYMENTS. The Company may at any time and from
time to time, prepay the then outstanding Loans, in whole or in part, without
premium or penalty, upon written notice to the Administrative Agent (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m. New
York, New York time, on the date of prepayment. Each notice shall be irrevocable
and shall specify the date and amount of prepayment. Upon receipt of such
notice, the Administrative Agent shall promptly notify each Lender thereof. If
such notice is given, the Company shall make such prepayment, and the amount
specified in such notice shall be due and payable, on the date specified therein
together with accrued interest to such date on the amount repaid. Each
prepayment shall be in the minimum principal amount of $100,000 or whole
multiples of $100,000 in excess thereof.
SECTION 3.04. FEES. (a) On the Closing Date, the Company agrees to pay
to the Administrative Agent for the benefit of the Lenders, a facility fee of
$37,500, $15,000 of which the Lenders acknowledge that they received prior to
the date hereof and $22,500 of which shall be payable on the Closing Date, such
fee to be distributed to the Lenders based upon their respective Commitment
Proportion.
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(b) The Company shall pay to each Lender, pro rata based on
each Lender's Commitment Proportion of the Revolving Credit Commitment, a
commitment fee on the average daily amount of the Revolving Credit Commitment
less the aggregate principal amount of the Revolving Credit Loans outstanding
from the date of this Agreement until the Revolving Credit Commitment
Termination Date at the rate of 1/8 of 1% per annum, based on a year of 360
days, payable in arrears on the last business day of each calendar quarter,
commencing June 30, 1999, and on the Revolving Credit Commitment Termination
Date and on any day the Revolving Credit Commitment is permanently reduced in
whole or in part.
SECTION 3.05. INCREASED COSTS. (a) In the event that any introduction of
or change in, on or after the date hereof, any applicable law, regulation,
treaty, order, directive or in the interpretation or application thereof
(including, without limitation, any request, guideline or policy, whether or not
having the force of law, of or from any central bank or other governmental
authority, agency or instrumentality and including, without limitation,
Regulation D), by any authority charged with the administration or
interpretation thereof shall occur, which:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Loan, or change
the basis of taxation of payments to such Lender of principal, interest,
fees or any other amount payable hereunder (other than any tax that is
measured with respect to the overall net income of such Lender or
Lending Office of such Lender and that is imposed by the United States
of America, or any political subdivision or taxing authority thereof or
therein, or by any jurisdiction in which such Lender's Lending Office is
located, or by any jurisdiction in which such Lender is organized, has
its principal office or is managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement (whether or not
having the force of law) against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of
any Lender; or
(iii) shall impose on any Lender any other condition, or
change therein;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining or participating in advances or extensions of
credit hereunder or to reduce any amount receivable hereunder, in each case by
an amount which such Lender deems material, then, in any such case, the Company
shall pay such Lender, upon demand, such additional amount or amounts as such
Lender shall have determined will compensate such Lender for such increased
costs or reduction.
(b) If any Lender shall have determined that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of any Lender) or any Lender's holding company, with any request
or directive regarding capital adequacy (whether or not having the force of the
law) of any such authority, central
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bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company as a consequence of its obligations hereunder to a level below that
which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies and the policies of
such Lender's holding company with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, the Company shall
pay to such Lender the additional amount or amounts as such Lender shall have
determined will compensate such Lender or such Lender's holding company for such
reduction. Such Lender's determination of such amounts shall be conclusive and
binding on the Company absent clear and obvious error.
(c) A certificate of a Lender setting forth the amount or
amounts payable pursuant to Sections 3.05(a) and 3.05(b) above shall be
conclusive absent clear and obvious error. The Company shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) In the event any Lender shall be entitled to
compensation pursuant to Section 3.05(a) or Section 3.05(b), it shall promptly
notify the Administrative Agent and the Company of the event by reason of which
it has become so entitled; provided, however, no failure on the part of any
Lender to demand compensation under clause (a) or clause (b) above on one
occasion shall constitute a waiver of its right to demand compensation on any
other occasion.
SECTION 3.06. TAXES. (a) Except as set forth in clause (c) below or as
required by law, all payments made by the Company under this Agreement shall be
made free and clear of, and without reduction for or on account of, any present
or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income and franchise taxes imposed on
the Administrative Agent or a Lender by (i) the United States of America or any
political subdivision or taxing authority thereof or therein, (ii) the
jurisdiction under the laws of which the Administrative Agent or such Lender is
organized or in which it has its principal office or is managed and controlled
or any political subdivision or taxing authority thereof or therein, or (iii)
any jurisdiction in which such Lender's Lending Office is located or any
political subdivision or taxing authority thereof or therein (such non-excluded
taxes being called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent, or any Lender hereunder, or under
the Notes, the amount so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Taxes and free and clear of all liability
in respect of such Taxes) interest or any such other amounts payable hereunder
at the rates or in the amounts specified in this Agreement and the Notes.
Whenever any Taxes are payable by the Company, as promptly as possible
thereafter, the Company shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt showing payment thereof. If the Company fails to
pay Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Company shall indemnify the Administrative Agent and the Lenders
for any incremental taxes, interest or penalties that may become payable by the
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Administrative Agent or such Lender as a result of any such failure together
with any expenses payable by the Administrative Agent or such Lender in
connection therewith.
(b) Prior to the first Interest Payment Date, each Lender
that is not organized under the laws of the United States or a state thereof
agrees that it will deliver to the Administrative Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States back-up withholding tax. Each
Lender which delivers to the Company and the Administrative Agent a Form 1001 or
4224 and Form W-8 or W-9 pursuant to the preceding sentence further undertakes
to deliver to the Administrative Agent two further copies of the said statement
and Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of certification, as the case may be, on or before the date that
any such letter or form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent letter and form previously
delivered by it to the Administrative Agent, and such extensions or renewals
thereof as may reasonably be requested by the Administrative Agent, certifying
in the case of a Form 1001 or 4224 that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes.
SECTION 3.07. PRO RATA TREATMENT AND PAYMENTS. Each borrowing by the
Company from each Lender, each payment by the Company on account of any fee and
any reduction of the Revolving Credit Commitment of the Lenders hereunder shall
be made pro rata according to the respective relevant Commitment Proportions of
the Lenders provided, however, the portion of the fee required to be paid
pursuant to Section 3.04(b) which is allocable to the Contingent Commitment
shall be paid solely to EAB for its account and any reduction of the Revolving
Credit Commitment shall first reduce the Contingent Commitment. Each payment
(including each prepayment) by the Company on account of principal of and
interest on each Loan shall be made pro rata according to the respective
outstanding principal amounts of such Loans held by each Lender; provided,
however, in the event EAB has funded any Revolving Credit Loans pursuant to the
Contingent Commitment, then all payments of principal received in respect to the
Revolving Credit Loans shall be applied first to the Revolving Credit Loans
funded by EAB pursuant to the Contingent Commitment until the principal amount
of all such Revolving Credit Loans have been paid in full. All payments
(including prepayments) to be made by the Company on account of principal,
interest, fees and reimbursement obligations shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders (or EAB as set forth above) at the Payment Office of the
Administrative Agent in Dollars in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds by wire transfer of each Lender's portion of such payment
to such Lender for the account of its Lending Office. The Administrative Agent
may, in its sole discretion, directly charge principal and interest payments due
in respect of the Loans to the Company's or any Corporate Guarantors' accounts
at the Payment Office or other office of the Administrative Agent. Except as
otherwise
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provided in the definition of "Interest Period", if any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent to enter
into this Agreement and to make the Loans herein provided for, the Company and
each Corporate Guarantor represents and warrants to each Lender and the
Administrative Agent that:
SECTION 4.01. ORGANIZATION, POWERS. The Company (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, (b) has the corporate power and authority to own its
properties and to carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect, and (d) has the corporate power
to execute, deliver and perform each of the Loan Documents to which it is a
party, including, without limitation, the power to obtain extensions of credit
hereunder and to execute and deliver the Notes. Each Guarantor is (a) a
corporation, limited liability company or a limited partnership, duly organized
or formed, as applicable, validly existing and in good standing under the laws
of the state of its incorporation or formation, (b) has the corporate, limited
partnership or limited liability company and authority to own or lease its
properties and carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect, and (d) has the corporate limited
liability company power or partnership power as applicable to execute, deliver
and perform each of the Loan Documents to which it is a party.
SECTION 4.02. AUTHORIZATION OF BORROWING, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by the Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings and the other
extensions of credit to the Company hereunder, and the execution, delivery and
performance by each of the Guarantors of the Loan Documents to which such
Guarantor is a party, (a) have, with respect to the Company and each Corporate
Guarantor, been duly authorized by all requisite corporate and limited liability
company action, as applicable, (b) will not violate or require any consent
(other than consents as have been made or obtained and which are in full force
and effect) under (i) any provision of law applicable to the Company or any
Guarantor, any rule or regulation of any Governmental Authority, or the
Certificate of Incorporation or By-laws or the Articles of Organization and
Operating Agreement, as applicable, of the Company or of any Corporate Guarantor
or (ii) any order of any court or other Governmental Authority binding on the
Company or any Guarantor or any indenture, agreement or other instrument to
which the Company or any Guarantor is a party, or by which the Company or any
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Guarantor or any of its property is bound, and (c) will not be in conflict with,
result in a breach of or constitute (with due notice and/or lapse of time) a
default under, any such indenture, agreement or other instrument, or result in
the creation or imposition of any Lien, of any nature whatsoever upon any of the
property or assets of the Company or any Guarantor other than as contemplated by
this Agreement or the other Loan Documents. This Agreement and each other Loan
Document to which the Company or any Guarantor is a party constitutes a legal,
valid and binding obligation of the Company and each such Guarantor, as the case
may be, enforceable against the Company and each such Guarantor, as the case may
be, in accordance with its terms except to the extent that enforcement may be
limited by applicable bankruptcy, reorganization, moratorium, insolvency and
similar laws affecting creditors' rights generally or by equitable principles of
general application, regardless of whether considered in a proceeding in equity
or at law.
SECTION 4.03. FINANCIAL CONDITION. (a) The Company has heretofore
furnished to each Lender (i) the audited consolidated balance sheet of the
Company and its Subsidiaries and the related consolidated statement of income,
retained earnings and cash flow of the Company and its Subsidiaries, audited by
Pricewaterhouse Coopers LLP, independent certified public accountants, for the
fiscal year ended December 31, 1998, and (ii) the unaudited consolidated and
consolidating balance sheet of the Company and its Subsidiaries and the related
consolidated and consolidating statements of income, retained earnings and cash
flow of the Company and its Subsidiaries for the three month period ended March
31, 1999. Such financial statements were prepared in conformity with Generally
Accepted Accounting Principles, applied on a consistent basis, and fairly
present the financial condition and results of operations of the Company and its
Subsidiaries, on a consolidated basis, as of the date of such financial
statements and for the periods to which they relate and, since March 31, 1999,
no Material Adverse Effect has occurred. The Company shall deliver to the
Administrative Agent, with a copy for each Lender a certificate of the Chief
Financial Officer of the Company to that effect on the Closing Date. Other than
obligations and liabilities arising in the ordinary course of business since
December 31, 1998, there are no obligations or liabilities contingent or
otherwise, of the Company or any of its Subsidiaries which are not reflected or
disclosed on such audited statements.
(b) The Company, individually and together with the
Corporate Guarantors, is Solvent and immediately after giving effect to the Loan
and the execution of each Loan Document, will be Solvent.
SECTION 4.04. TAXES. All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of the Company or
any Guarantor have been discharged or reserved against in accordance with
Generally Accepted Accounting Principles. The Company and each Guarantor has
filed or caused to be filed all federal, state and local tax returns which are
required to be filed, and has paid or has caused to be paid all taxes as shown
on said returns or on any assessment received by them, to the extent that such
taxes have become due, except taxes which are being contested in good faith and
which are reserved against in accordance with Generally Accepted Accounting
Principles.
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SECTION 4.05. TITLE TO PROPERTIES. The Company and each Corporate
Guarantor has good title to their respective properties and assets reflected on
the financial statements referred to in Section 4.03 hereof, except for such
properties and assets as have been disposed of since the date of such financial
statements as no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business, and
all such properties and assets are free and clear of all Liens other than
Permitted Liens.
SECTION 4.06. LITIGATION. (a) There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company or of any Guarantor)
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any Guarantor at law or in equity or before or by any Governmental
Authority, which involve any of the transactions contemplated herein or which,
if adversely determined against the Company or such Guarantor could reasonably
be expected to have a Material Adverse Effect or which involve a claim against
the Company or any Guarantor in excess of $200,000 which is not fully covered by
insurance (other than reasonable and customary deductibles); and (b) neither the
Company nor any Guarantor is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any Governmental Authority which could
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.07. AGREEMENTS. Neither the Company nor any Guarantor is a
party to any agreement or instrument or, with respect to the Company or any
Corporate Guarantor, subject to any charter or other corporate restriction or
any judgment, order, writ, injunction, decree or regulation which could
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any Guarantor is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any material
agreement or instrument to which it is a party.
SECTION 4.08. COMPLIANCE WITH ERISA. Each Plan is in compliance in all
material respects with ERISA; no Plan is insolvent or in reorganization, no Plan
or Plans have an Unfunded Current Liability, and no Plan has an accumulated or
waived funding deficiency; neither the Company, any Corporate Guarantor nor any
ERISA Affiliate has incurred any liability to or on account of a Plan pursuant
to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or reasonably expects to
incur any liability under any of the foregoing sections on account of the prior
termination of participation in or contributions to any such Plan; no
proceedings have been instituted to terminate any Plan; no condition exists
which could reasonably be expected to present a risk to the Company, any
Corporate Guarantor or any ERISA Affiliate of incurring a liability in excess of
$50,000 to or on account of a Plan pursuant to the foregoing provisions of ERISA
and the Code; no lien imposed under the Code or ERISA on the assets of the
Company, any Corporate Guarantor or any of its ERISA Affiliates exists or to the
knowledge of the Company is likely to arise on account of any Plan and the
Company and such Corporate Guarantor may terminate contributions to any other
employee benefit plans maintained by it without incurring any material liability
to any Person interested therein.
SECTION 4.09. FEDERAL RESERVE REGULATIONS; USE OF PROCEEDS. (a) Neither
the Company nor any Guarantor is engaged principally in, nor has as one of its
important activities, the
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business of extending credit for the purpose of purchasing or carrying any
"margin stock" (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States, as amended from time to time).
(b) No part of the proceeds of the Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or to carry margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock, or to refund indebtedness
originally incurred for such purposes, or (ii) for any purpose which violates or
is inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(c) The proceeds of the Loan shall be used solely for the purposes
permitted under Section 3.02.
SECTION 4.10. APPROVALS. No registration with or consent or approval of,
or other action by, any Governmental Authority or any other Person is required
in connection with the execution, delivery and performance of this Agreement by
the Company or any Guarantor, or with the execution and delivery of other Loan
Documents to which it is a party or, with respect to the Company, the borrowings
hereunder.
SECTION 4.11. SUBSIDIARIES. Attached hereto as Schedule I is a correct
and complete list of each of the Company's and each Corporate Guarantor's
Subsidiaries as of the Closing Date showing as to each Subsidiary, its name, the
jurisdiction of its incorporation, its shareholders or other owners of an
interest in each Subsidiary and the number of outstanding shares or other
ownership interest owned by each shareholder or other owner of an interest.
SECTION 4.12. HAZARDOUS MATERIALS. The Company and each Guarantor is in
compliance in all material respects with all applicable Environmental Laws and
neither the Company nor any Guarantor has used Hazardous Materials on, from, or
affecting any property now owned or occupied or hereafter owned or occupied by
the Company or any Guarantor in any manner which violates any applicable
Environmental Law. To the best of the Company's knowledge, no prior owner of any
such property or any tenant, subtenant, prior tenant or prior subtenant have
used Hazardous Materials on, from, or affecting such property in any manner
which violates any applicable Environmental Law.
SECTION 4.13. INVESTMENT COMPANY ACT. Neither the Company nor any
Corporate Guarantor is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.14. NO DEFAULT. No Default or Event of Default has occurred
and is continuing.
SECTION 4.15. MATERIAL CONTRACTS. All Material Contracts are disclosed
on Schedule V hereto. Each such Material Contract is in full force and effect
and is binding upon and enforceable
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against the Company and any Corporate Guarantor, in each case, to the extent
they are a party thereto, and, to the Company's knowledge, all other parties
thereto in accordance with its terms, and there exists no default, in any
material respect, under any Material Contract by the Company or any Corporate
Guarantor or, to the Company's knowledge, by any other party thereto which has
not been fully cured or waived.
SECTION 4.16. PERMITS AND LICENSES. The Company and each Corporate
Guarantor each has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except where the failure to obtain or retain such permits, licenses,
certifications, authorizations or approvals could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.17. COMPLIANCE WITH LAW. The Company and each Guarantor are
each in compliance, with all laws, rules, regulations, orders and decrees which
are applicable to the Company or any Guarantor, or to any of their respective
properties except where the failure to be in compliance cannot reasonably be
expected to result in a Material Adverse Effect.
SECTION 4.18. Y2K. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the Company's or any
Corporate Guarantor's computer systems and (b) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Company's or any Corporate Guarantor's systems interface, and the testing of all
such systems and equipment, as so reprogrammed, will be completed by June 30,
1999 except where the failure to complete such testing and reprogramming cannot
reasonably be expected to have a Material Adverse Effect; provided, however, for
purposes of this Section 4.18, a failure of the Company or the Guarantor's
billing or accounting systems to be properly functioning in and following the
year 2000 shall be deemed to have a Material Adverse Effect. The cost to the
Company and each Corporate Guarantor's of such reprogramming and testing and of
the reasonably foreseeable consequences of the year 2000 to the Company and each
Corporate Guarantor (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) will not result in a Default or Event
of Default or have a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Company and each Corporate
Guarantor are and, with ordinary course upgrading and maintenance, will continue
to be sufficient to permit the Company and each of its Subsidiaries to conduct
their respective businesses without having a Material Adverse Effect.
SECTION 4.19. DISCLOSURE. Neither this Agreement, any other Loan
Document, nor any other document, certificate or written statement furnished to
the Administrative Agent or any Lender by or on behalf of the Company or any
Guarantor for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which they were made.
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SECTION 4.20. SECURITY AGREEMENTS. Each Security Agreement executed by
the Company and each Corporate Guarantor shall constitute a valid and continuing
lien on and security interest in the collateral referred to in the Security
Agreement in favor of the Administrative Agent for the ratable benefit of the
Lenders, which shall be, upon the filing of the Uniform Commercial Code
financing statements delivered on the Closing Date on behalf of the Company and
each Corporate Guarantor at the offices in the jurisdictions listed on Schedule
C to each Security Agreement prior to all other Liens, claims and rights of all
other Persons and shall be enforceable as such against all other Persons.
SECTION 4.21. PLEDGE AGREEMENT. The Pledge Agreement executed by the
Company shall, pursuant to its terms, constitute a valid and continuing lien on
and security interest in the collateral referred to in such Pledge Agreement in
favor of the Administrative Agent, for the ratable benefit of the Lenders, which
shall be prior to all other Liens, claims and rights of all other Persons in
such collateral.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. CONDITIONS TO LOANS. The several obligations of each
Lender to make the Loan hereunder are subject to the following conditions
precedent:
(a) NOTES. On or prior to the Closing Date, each Lender shall have
received for the account of each Lender a Note, each duly executed by the
Company.
(b) GUARANTIES. On or prior to the Closing Date, the Administrative
Agent shall have received, with a counterpart for each Lender, the Guaranties
duly executed by each Guarantor.
(c) SECURITY DOCUMENTS. On or prior to the Closing Date, the
Administrative Agent shall have received (i) the Security Documents duly
executed by the Company and each Guarantor to the extent it is a party thereto
and (ii) such stock certificates or members certificates pledged pursuant to the
Pledge Agreement and stock powers, if applicable, duly executed in blank by the
Company, as shall be necessary.
(d) OPINION OF COUNSEL. On or prior to the Closing Date, the
Administrative Agent shall have received, with a copy for each Lender, a written
opinion of counsel for the Company and the Guarantors dated the Closing Date and
addressed to the Administrative Agent and the Lenders, substantially in the form
of Exhibit F attached hereto.
(e) SUPPORTING DOCUMENTS. On or prior to the Closing Date, the
Administrative Agent shall have received, with a copy for each Lender, (i) a
certificate of good standing for the Company and each Corporate Guarantor from
the secretary of state of the states of their organizational jurisdiction dated
as of a recent date; (ii) certified copies of the Certificate of Incorporation
and By-laws or Articles of Organization and Operating Agreement, as applicable,
of the Company and each
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Corporate Guarantor; (iii) a certificate of the Secretary or an Assistant
Secretary of the Company and each Corporate Guarantor dated the Closing Date and
certifying: (x) that neither the Certificate of Incorporation nor the By-laws or
the Articles of Organization or Operating Agreement, as applicable, of the
Company nor of any Corporate Guarantor has been amended since the date of their
certification (or if there has been any such amendment, attaching a certified
copy thereof); (y) that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of the Company and by the board of
directors or other governing body or Persons of each Corporate Guarantor
authorizing the execution, delivery and performance of each Loan Document to
which it is a party and, with respect to the Company, the borrowings and other
extensions of credit hereunder; and (z) the incumbency and specimen signature of
each officer of the Company and of each officer or other authorized Person of
each Corporate Guarantor executing each Loan Document to which the Company or
any Corporate Guarantor is a party and any certificates or instruments furnished
pursuant hereto or thereto, and a certification by another officer of the
Company and each Corporate Guarantor as to the incumbency and signature of the
Secretary or Assistant Secretary of the Company and each Corporate Guarantor;
and (iv) such other documents as the Administrative Agent may reasonably
request.
(f) INSURANCE. On or prior to the Closing Date, the Administrative
Agent shall have received a certificate or certificates of insurance from an
independent insurance broker or brokers confirming the insurance required to be
maintained pursuant to Section 6.01 hereof, and evidence that the Administrative
Agent has been named loss payee and additional insured with respect to each
policy of such insurance.
(g) FILINGS, REGISTRATIONS AND RECORDINGS. On or prior to the
Closing Date, the Administrative Agent shall have received each document,
including, without limitation, UCC-1 Financing Statements required by the
Security Documents or under the laws of any jurisdiction to be filed, registered
or recorded in order to create, in favor of the Administrative Agent for the
ratable benefit of the Lenders, a perfected first lien on the collateral
described in the Security Documents, in form to be properly filed, registered or
recorded, in each office in each such jurisdiction.
(h) ASSETS FREE FROM LIENS. Prior to the Closing Date, the
Administrative Agent shall have received UCC-1 financing statement, tax and
judgment lien searches evidencing that the Company's and each Corporate
Guarantor's accounts receivable, inventory, equipment and all other assets of
the Company and each Corporate Guarantor are free and clear of all Liens except
(i) Permitted Liens and (ii) Liens in favor of the Lenders.
(i) FEES AND EXPENSES. On or prior to the Closing Date, the
Administrative Agent shall have received for itself and for the account of the
Lenders (i) all fees payable to the Lenders pursuant to the Loan Documents on or
prior to the Closing Date and (ii) reimbursement of expenses in accordance with
Section 10.03.
(j) NO LITIGATION. There shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any Guarantor pending or
threatened before any court, governmental
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agency or arbiter that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(k) CONSENTS AND APPROVALS. All governmental and third party
consents and approvals necessary in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall have been
obtained (without the imposition of any conditions that are not acceptable to
the Required Lenders) and shall remain in effect, and no law or regulation shall
be applicable in the reasonable judgment of the Required Lenders that imposes
materially adverse conditions upon the transactions contemplated hereby.
(l) NO MATERIAL ADVERSE CHANGES. There shall not have occurred any
material adverse change in the business, operations, properties, prospects or
condition (financial or otherwise) of the Company or any Guarantor since March
31, 1999.
(m) PERSONAL FINANCIAL STATEMENTS. The Individual Guarantors shall
have furnished to the Administrative Agent prior to the Closing Date completed
personal financial statements on the Administrative Agent's form thereof
prepared as of a recent date, together with a schedule of contingent liabilities
and guarantees and letter certifying to the Lenders that since the date of those
financial statements no material increase in liabilities or material adverse
changes (financial or otherwise) have occurred and that each Individual
Guarantor maintains cash or cash equivalents in an amount at least equal to the
amount of cash and cash equivalents maintained by him as of the date of such
statements, and the Lenders shall have been satisfied in their sole discretion
with the form and substance thereof.
(n) DUE DILIGENCE. The Lenders shall have completed their due
diligence with respect to the Company and each Guarantor including, without
limitation, bank checkings, trade checkings, customer checkings and litigation
checkings and the Lenders shall have been satisfied with the result thereof.
(o) SUBORDINATION AGREEMENTS. On or prior to the Closing Date, the
Administrative Agent shall have received, with a copy for each Lender, each
Subordination Agreement, duly executed by ▇▇▇▇ ▇'▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇'▇▇▇▇ and
▇▇▇▇▇ ▇'▇▇▇▇, as applicable, with respect to the indebtedness described therein,
together with a copy of any note, agreement or other document evidencing such
Subordinated Indebtedness.
(p) ACCOUNTS RECEIVABLE AGING AND REVENUE SUMMARY. Prior to the
Closing Date, the Lenders shall have received the latest monthly accounts
receivable aging and revenue summary, which shall be in form and substance
satisfactory to the Lenders.
(q) REPORTS. Prior to the Closing Date, the Lenders shall have
received (i) the quarterly job progress report and completed contract report for
the fiscal quarter ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) accounts receivable reconciliation
reports with respect to the fiscal quarter ended March 31, 1999, which reports
shall be in form and substance satisfactory to the Lenders.
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(r) SHAREHOLDER AGREEMENT; PREFERRED STOCK. Prior to the Closing
Date, the Lenders shall have received a copy of the Shareholder Agreement and
any documents and agreements executed in connection therewith, including, but
not limited to all documents pertaining to the issuance of preferred stock of
the Company, and all such documents shall be in form and substance satisfactory
to the Lenders.
(s) COMPLETION OF PROCEEDINGS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by the Loan Documents, shall be satisfactory in form
and substance to the Administrative Agent, the Lenders and their counsel.
(t) OTHER INFORMATION, DOCUMENTATION. The Administrative Agent and
the Lenders shall have received such other and further information and
documentation as any of them may require, including, but not limited to, any
information or documentation relating to compliance by the Company and each
Corporate Guarantor with the requirements of all Environmental Laws.
SECTION 5.02. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation of
the Lenders to make each Loan hereunder, including, without limitation, the
initial Loan, is subject to the conditions precedent set forth in Section 5.01
and the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties by the Company and each Corporate Guarantor pursuant to this
Agreement and the other Loan Documents to which each is a party shall be true
and correct in all material respects on and as of the Borrowing Date, with the
same effect as though such representations and warranties had been made on and
as of such date unless such representation is as of a specific date, in which
case, as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on the Closing Date.
Each Borrowing hereunder shall constitute a representation and warranty of the
Company that the statements contained in clauses (a) and (b) of Section 5.02
are true and correct on and as of the Borrowing Date.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees with each Lender that so long as the
Revolving Credit Commitment remains in effect, or any of the principal of or
interest on the Notes or any other Obligations hereunder shall be unpaid it
will, and will cause each Corporate Guarantor to:
SECTION 6.01. EXISTENCE, PROPERTIES, INSURANCE. Do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate, partnership or limited liability company, as applicable, existence,
rights and franchises and comply in all material respects with all
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laws applicable to it; at all times maintain, preserve and protect all
franchises and trade names and preserve all of its property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted in the ordinary course at all times; and at all times
maintain insurance covering its assets and its businesses with financially sound
and reputable insurance companies or associations in such amounts and against
such risks (including, without limitation, hazard, business interruption, public
liability and product liability) as are usually carried by companies engaged in
the same or similar business. Each such policy of insurance shall provide for at
least thirty (30) days' prior written notice to the Administrative Agent of any
modification or cancellation of such policies and shall name the Administrative
Agent as loss payee and additional insured. The Company shall provide to the
Administrative Agent promptly upon receipt thereof evidence of the annual
renewal of each such policy.
SECTION 6.02. PAYMENT OF INDEBTEDNESS AND TAXES. (a) Pay all
indebtedness and obligations, now existing or hereafter arising, as and when due
and payable and (b) pay and discharge or cause to be paid and discharged
promptly all taxes, assessments and government charges or levies imposed upon it
or upon its income and profits, or upon any of its property, real, personal or
mixed, or upon any part thereof, before the same shall become in default, as
well as all lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however, that neither the Company nor any Corporate Guarantor
shall be required to pay and discharge or cause to be paid and discharged any
such tax, assessment, charge, levy or claim so long as the validity thereof
shall be contested in good faith by appropriate proceedings, and the Company or
such Corporate Guarantor, as the case may be, shall have set aside on its books
adequate reserves determined in accordance with Generally Accepted Accounting
Principles with respect to any such tax, assessment, charge, levy or claim so
contested; provided, further, that, subject to the foregoing proviso, the
Company and each Corporate Guarantor will pay or cause to be paid all such
taxes, assessments, charges, levies or claims upon the commencement of
proceedings to foreclose any lien which has attached as security therefor.
SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the
Administrative Agent and each Lender:
(a) (i) as soon as available, but in any event within one
hundred twenty (120) days after the end of each fiscal year of the
Company, a copy of the audited consolidated balance sheet of the Company
and its consolidated Subsidiaries as of the end of such year and the
related audited consolidated statements of income, shareholders equity
and cash flow for such year, in each case, prepared in accordance with
Generally Accepted Accounting Principles setting forth in comparative
form the respective figures as of the end of and for the previous fiscal
year, and accompanied by a report thereon of independent certified
public accountants of recognized standing selected by the Company and
satisfactory to the Lenders (the "Auditor"), which report shall be
unqualified; and (ii) as soon as available, but in any event within one
hundred twenty (120) days after the end of each fiscal year of the
Company, a
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copy of the management prepared consolidating financial statements of
the Company and its consolidated Subsidiaries setting forth in
comparative form the respective figures as of the end of and for the
previous fiscal year and which support the financial statements
delivered pursuant to clause (i), in each case of (i) and (ii) prepared
in accordance with Generally Accepted Accounting Principles, applied on
a consistent basis, and with respect to the statements referred to in
clause (ii) accompanied by a certificate to that effect executed by the
Chief Financial Officer;
(b) as soon as available, but in any event not later than
forty five (45) days after the end of each quarterly period of each
fiscal year of the Company, a copy of the unaudited interim consolidated
and consolidating balance sheet of the Company and its consolidated
Subsidiaries as of the end of each such quarter and the related
unaudited interim consolidated and consolidating statements of income,
shareholders equity and cash flow for such quarter and the portion of
the fiscal year through such date and setting forth in each case in
comparative form the respective figures for the corresponding date and
period in the previous fiscal year (except that the quarterly
comparisons to prior year shall not be required for the statement of
cash flow until the first quarter of 2000), in each case prepared by the
Chief Financial Officer in accordance with Generally Accepted Accounting
Principles, applied on a consistent basis, and accompanied by a
certificate to that effect executed by the Chief Financial Officer;
(c) a certificate prepared and signed by the Chief Financial
Officer with each delivery required by clauses (a)(ii) and (b), as to
whether or not, as of the close of such preceding period and at all
times during such preceding period, the Company or each of its
Subsidiaries, as the case may be, was in compliance with all the
provisions in this Agreement, showing computation of financial covenants
and quantitative negative covenants, and if the Chief Financial Officer
shall have obtained knowledge of any default in such compliance or
notice of such default, it shall disclose in such certificate such
default or defaults or notice thereof and the nature thereof, whether or
not the same shall constitute a Default or an Event of Default
hereunder;
(d) a certificate prepared and signed by the Auditor with
each delivery required by clause (a) above stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default or Event of Default (which certificate may be
limited to the extent required by any accounting rules or guidelines
binding upon the Auditors);
(e) at all times indicated in clause (a) above, a copy of
the management letter, if any, prepared by the Auditor;
(f) if applicable, promptly after filing thereof, copies of
all regular and periodic financial information, proxy materials and
other information and reports which the Company or any of its
Subsidiaries shall file with the Securities and Exchange Commission;
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(g) promptly after submission to any government or
regulatory agency, all documents and information furnished to such
government or regulatory agency other than such documents and
information prepared in the normal course of business and which could
not reasonably be expected to result in any materially adverse action to
be taken by such agency;
(h) as soon as available and, in any event, within one
hundred twenty (120) days after the end of each calendar year, financial
statements of each Individual Guarantor for the preceding year prepared
on the Administrative Agent's form thereof together with a schedule of
contingent liabilities and guaranties;
(i) as soon as available and, in any event, within thirty
(30) days of the filing thereof, the federal, state and local returns of
the Individual Guarantor, including schedules thereto;
(j) as soon as available and in any event within twenty one
(21) days after the end of each month, detailed monthly schedules of
accounts receivable and accounts payables aging and a revenue summary,
each in form and substance satisfactory the Lenders;
(k) forty-five (45) days after the end of each fiscal
quarter, a quarterly account receivable reconciliations report and
quarterly job progress and completed contract reports for jobs accounts
for on a percentage of completion basis; and
(l) promptly, from time to time, such other information
regarding the operations, business affairs and condition (financial or
otherwise) of the Company or any of its Subsidiaries as any Lender may
request.
SECTION 6.04. BOOKS AND RECORDS; ACCESS TO PREMISES. Keep adequate
records and proper books of record and account in which complete entries will be
made in a manner to enable the preparation of financial statements in accordance
with Generally Accepted Accounting Principles, and which shall reflect all
financial transactions of the Company and each of its Subsidiaries. At any time,
and from time to time (upon not less than three (3) Business Days' prior notice
if no Default or Event of Default has occurred and is continuing provided no
prior notice shall be required if a Default or Event of Default shall have
occurred and be continuing), permit any Lender or any agent or representative
thereof, to examine and make copies of any abstracts from the books and records
of such information which the Lenders deem necessary or desirable (including,
without limitation, the financial records of the Company and the Corporate
Guarantors) and to visit the properties of the Company or any Corporate
Guarantor and to discuss the affairs, finances and accounts of the Company or
any Corporate Guarantor with any of their respective executive officers or the
Company's independent accountants; and as often as required at any time upon
reasonable notice to the Company or any Corporate Guarantor and during normal
business hours, permit either any Lender or any agent or representative thereof,
to examine and audit at the expense of the Company the inventory and receivables
of the Company and such Corporate Guarantor, provided that so long as
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no Default or Event of Default has occurred and is then continuing, the Company
shall only be obligated to pay the costs and charges of one field audit in each
fiscal year (such costs and charges not to exceed $10,000 per audit), commencing
with the audit to be conducted on or about November 30, 1999.
SECTION 6.05. NOTICE OF ADVERSE CHANGE. Promptly notify each Lender in
writing of (a) any change in the business or the operations of the Company or
any Corporate Guarantor which could reasonably be expected to have a Material
Adverse Effect, and (b) any information which indicates that any financial
statements which are the subject of any representation contained in this
Agreement, or which are furnished to the Administrative Agent or the Lenders
pursuant to this Agreement, fail, in any material respect, to present fairly, as
of the date thereof and for the period covered thereby, the financial condition
and results of operations purported to be presented therein, disclosing the
nature thereof.
SECTION 6.06. NOTICE OF DEFAULT. Promptly notify each Lender of any
Default or Event of Default which shall have occurred, which notice shall
include a written statement as to such occurrence, specifying the nature thereof
and the action (if any) which is proposed to be taken with respect thereto.
SECTION 6.07. NOTICE OF LITIGATION. Promptly notify each Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against the
Company or any Guarantor on the basis of the allegations and information set
forth in the complaint or other notice of such action, suit or proceeding, or in
the amendments thereof, if any, could reasonably be expected to have a Material
Adverse Effect or which involve a claim against the Company or any Guarantor in
excess of $200,000 which is not fully covered by insurance (other than
reasonable and customary deductibles).
SECTION 6.08. NOTICE OF DEFAULT IN OTHER AGREEMENTS. Promptly notify
each Lender of any default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which the Company or any Guarantor is a party which default could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.09. NOTICE OF ERISA EVENT. Promptly deliver to each Lender a
certificate of the Chief Financial Officer of the Company setting forth details
as to such occurrence and such action, if any, which the Company, such Corporate
Guarantor or such ERISA Affiliate is required or proposes to take, together with
any notices required or proposed to be given to or filed with or by the Company,
such Corporate Guarantor ERISA Affiliate, the PBGC, a Plan participant or the
Plan administrator, with respect thereto: that a Reportable Event has occurred
with respect to a Plan, that an accumulated funding deficiency has been incurred
or an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan, that a Plan has been terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA, that one
or more Plans have an Unfunded
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Current Liability giving rise to a Lien under ERISA, that proceedings may be or
have been instituted to terminate a Plan, that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan,
or that the Company, any Corporate Guarantor or any ERISA Affiliate will incur
any liability (including any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4201 or 4204 of ERISA. The Company will deliver to each Lender a complete copy
of the annual report (Form 5500) of each Plan that is a single employer Plan
(within the meaning of Section 4001(a)(15) of ERISA), filed with the Internal
Revenue Service. In addition to any certificates or notices delivered to each
Lender pursuant to the first sentence hereof, copies of annual reports and any
other notices received by the Company or any Corporate Guarantor required to be
delivered to each Lender hereunder shall be delivered to each Lender no later
than ten days after the later of the date such report or notice has been filed
with the Internal Revenue Service or the PBGC, given to Plan participants or
received by the Company or a Corporate Guarantor.
SECTION 6.10. NOTICE OF ENVIRONMENTAL LAW VIOLATIONS. Promptly notify
each Lender of the receipt of any notice of an action, suit, and proceeding
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, pending against the Company or any
Guarantor relating to any alleged violation of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.11. NOTICE REGARDING MATERIAL CONTRACTS. Promptly notify each
Lender of (a) any termination (prior to the end of its stated term), material
amendment, material supplement or other material modification of any Material
Contract and (b) the occurrence of a default by the Company or by any other
party to any Material Contract of which the Company is aware.
SECTION 6.12. COMPLIANCE WITH APPLICABLE LAWS. Comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority.
SECTION 6.13. SUBSIDIARIES. Promptly notify the Lenders, prior to the
occurrence thereof, of the creation, establishment or acquisition, of any
Subsidiary of the Company or any Corporate Guarantor not existing on the date
hereof and cause (a) each Subsidiary to execute a Guaranty and such Security
Documents that the Lenders shall require, including, but not limited to a
Security Agreement and a Pledge Agreement, concurrently with the creation,
establishment or acquisition of such Subsidiary, and concurrently with the
delivery of each Security Agreement and Guaranty pursuant to this Section 6.13
provide to the Administrative Agent the supporting documents identified in
clauses (i), (ii), and (iii) of Section 5.01(e) in each case with respect to the
Subsidiary executing the same, together with a favorable written opinion of
counsel to such Subsidiary in form and substance satisfactory to the Lenders, as
to the due execution, delivery and enforceability of such documents and such
other matters as the Lenders may request.
SECTION 6.14. ENVIRONMENTAL LAWS. Comply in all material respects with
the requirements of all Environmental Laws, provide to the Lenders all
documentation in connection with such compliance that the Lenders may reasonably
request, and defend, indemnify, and hold harmless
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the Administrative Agent and each Lender and their respective employees, agents,
officers, and directors, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs, or expenses of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of, or in any way
related to, (a) the presence, disposal, or release of any Hazardous Materials on
any property at any time owned or occupied by the Company or any Guarantor; (b)
any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Materials; (c) any lawsuit
brought or threatened, settlement reached, or government order relating to such
Hazardous Materials, and/or (d) any violation of applicable Environmental Laws,
including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.
SECTION 6.15. FURTHER ASSURANCES. Execute any and all further documents,
agreements and instruments, and take all further actions, which the
Administrative Agent or the Lenders shall reasonably request in order to
effectuate the transactions contemplated by this Agreement and in order to
grant, preserve, protect and perfect the liens purported to be created hereunder
and under the Security Documents.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees with each Lender that so long as the
Revolving Credit Commitment remains in effect or any of the principal of or
interest on any Note or any other Obligations hereunder shall be unpaid, it will
not, and will not cause or permit any Corporate Guarantor, directly or
indirectly, to:
SECTION 7.01. LIENS. Incur, create, assume or suffer to exist any Lien
on any of their respective assets now or hereafter owned, other than:
(a) Liens existing on the date hereof as set forth on
Schedule II attached hereto, including any renewals or extensions thereof;
provided that no such Lien is extended to cover any additional property and that
the amount of Indebtedness secured thereby is not increased;
(b) Liens for taxes, assessments or other governmental
charges or levies not yet delinquent or which are being contested in good faith
by appropriate proceedings, provided, however, that adequate reserves with
respect thereto are maintained on the books of the Company or any of its
Subsidiaries in accordance with Generally Accepted Accounting Principles;
(c) carriers', warehousemens', mechanics', suppliers' or
other like Liens arising in the ordinary course of business and not overdue for
a period of more than 30 days or which are being contested in good faith by
appropriate proceedings in a manner which will not jeopardize or diminish in any
material respect the interest of the Administrative Agent in any of the
collateral subject to the Pledge Agreements;
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(d) Liens incurred or deposits to secure the performance of
tenders, bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety, performance and appeal bonds, and other
obligations of similar nature incurred in the ordinary course of business;
(e) any attachment, judgment or similar Lien arising in
connection with any court or governmental proceeding provided that the execution
or other enforcement of such Lien is effectively stayed;
(f) easements, rights of way, restrictions and other similar
charges or encumbrances which in the aggregate do not interfere in any material
respect with the occupation, use and enjoyment by the Company or any Corporate
Guarantor of the property or assets encumbered thereby in the normal course of
their respective business or materially impair the value of the property subject
thereto;
(g) deposits under workmen's compensation, unemployment
insurance and social security laws;
(h) purchase money liens for fixed or capital assets,
including obligations with respect to Capital Leases; provided in each case (i)
no Default or Event of Default shall have occurred and be continuing or shall
occur after giving effect to such Lien, (ii) such purchase money Lien does not
exceed 100% of the purchase price of, and encumbers only, the property acquired
and (iii) such purchase money Lien does not secure any Indebtedness other than
in respect of the purchase price of the asset acquired; and
(i) Liens granted to the Administrative Agent for the
ratable benefit of the Lenders pursuant to the Security Documents.
SECTION 7.02. INDEBTEDNESS. Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as
described in Schedule III attached hereto, including any renewals or extensions
thereof; provided such renewal or extension does not result in an increase in
the aggregate principal amount of such Indebtedness;
(b) Indebtedness to the Lenders, whether under this
Agreement, the Notes or any other Loan Document;
(c) Indebtedness for trade payables incurred in the ordinary
course of business; provided such payables shall be paid or discharged when due;
(d) Indebtedness consisting of guarantees permitted pursuant
to Section 7.03;
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(e) Subordinated Debt; provided, however, that no Default or
Event of Default shall have occurred and is continuing or would occur after
giving effect to the incurrence of such Subordinated Debt;
(f) Indebtedness owing by the Company to any Corporate
Guarantor or by any Corporate Guarantor to any other Corporate Guarantor;
(g) Indebtedness secured by purchase money Liens as
permitted under Section 7.01(h); provided that no Default or Event of Default
shall have occurred and be continuing or would occur after giving effect to the
incurrence of such Indebtedness; and
(h) Indebtedness owing to all or a portion of the purchase
price of an acquisition permitted pursuant to Section 7.12; provided, however,
that (i) such Indebtedness does not exceed more than 50% of the original
purchase price of such acquisition, (ii) prior to the incurrence of such
Indebtedness the Lender shall have received certificates executed by an
executive officer of the Company certifying that no default or Event of Default
has occurred and is continuing or would occur after giving effect to the
incurrence of such Indebtedness which certificate shall include calculation of
the financial covenants on a pro forma basis after giving effect to incurrence
of such Indebtedness and the consummation of such acquisition and such
Indebtedness shall be unsecured.
SECTION 7.03. GUARANTIES. Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
(a) guaranties executed prior to the date hereof as
described on Schedule IV attached hereto but not including any renewals or
extension thereof;
(b) endorsements of negotiable instruments for collection or
deposit in the ordinary course of business;
(c) guaranties of any Indebtedness under this Agreement or
any other Indebtedness; and
(d) guaranties by the Company of any Indebtedness of any
Corporate Guarantor permitted pursuant to Section 7.02 (other than Indebtedness
described in Section 7.02(e)).
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(e) guaranties by any Corporate Guarantor of any
Indebtedness of the Company or any other Corporate Guarantor permitted pursuant
to Section 7.02 (other than Indebtedness described in Section 7.02(e)).
SECTION 7.04. SALE OF ASSETS. Sell, lease, assign, transfer or otherwise
dispose of any of their now owned or hereafter acquired respective properties
and assets, whether or not pursuant to an order of a federal agency or
commission, except for (a) the sale of inventory disposed of in the ordinary
course of business, and (b) the sale or other disposition of properties or
assets no longer used or useful in the conduct of their respective businesses.
SECTION 7.05. SALES OF RECEIVABLES. Sell, transfer, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
the Company or any Corporate Guarantor, with or without recourse, except for
collection in the ordinary course of business.
SECTION 7.06. LOANS AND INVESTMENTS. Make or commit to make any advance,
loan, extension of credit, or capital contribution to or purchase or hold
beneficially any stock or other securities, or evidence of Indebtedness of,
purchase or acquire all or a substantial part of the assets of, make or permit
to exist any interest whatsoever in, any other Person except (a) for the
ownership of stock of any Subsidiaries existing as of the Closing Date or
created after the Closing Date or acquired after the date hereof, provided the
Company has complied with its obligations under Section 6.13 with respect to
such Subsidiary and (b) acquisitions expressly permitted pursuant to Section
7.12, and (c) Eligible Investments.
SECTION 7.07. NATURE OF BUSINESS. Change or alter, in any material
respect, the nature of its business from the nature of the business engaged in
by it on the date hereof.
SECTION 7.08. SALE AND LEASEBACK. Enter into any arrangement, directly
or indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, of it or any Corporate Guarantor, if at the time of such
sale or disposition it intends to lease or otherwise acquire the right to use or
possess (except by purchase) such property or like property for a substantially
similar purpose.
SECTION 7.09. FEDERAL RESERVE REGULATIONS. Permit any Loan or the
proceeds of any Loan to be used for any purpose which violates or is
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
SECTION 7.10. ACCOUNTING POLICIES AND PROCEDURES. Permit any change in
the accounting policies and procedures of the Company or any Corporate
Guarantor, including a change in fiscal year, provided, however, that any policy
or procedure required to be changed by the Financial Accounting Standards Board
(or other board or committee thereof) in order to comply with Generally Accepted
Accounting Principles may be so changed.
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SECTION 7.11. HAZARDOUS MATERIALS. Cause or permit any of its properties
or assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance with all applicable federal, state and local laws or regulations, or
cause or permit, as a result of any intentional or negligent act or omission on
the part of the Company or any Corporate Guarantor, a release of Hazardous
Materials onto such property or asset or onto any other property.
SECTION 7.12. LIMITATIONS ON FUNDAMENTAL CHANGES, LIMITATIONS ON
CONSIDERATION. Merge or consolidate with, or sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now or hereafter acquired) to, any
Person, or, acquire all of the stock or all or substantially all of the assets
or the business of any Person or liquidate, wind up or dissolve or suffer any
liquidation or dissolution provided, however, the Company or any Corporate
Guarantor may acquire the business or all or substantially all of the assets of
any Person provided that (i) no default or Event of Default shall have occurred
and be continuing or would occur after giving effect to the proposed acquisition
and (ii) the aggregate purchase price of all such acquisitions in any fiscal
year shall not exceed $250,000 in the aggregate, calculated inclusive of the
value of any common stock of the Company or any Corporate Guarantor issued to
the Seller in such acquisition, and (iii) in the event of acquisition of stock
of a Person, the Board of Directors of such Person has recommended the sale by
its shareholder to the Company or the Corporate Guarantor as the case may be.
SECTION 7.13. FINANCIAL COVENANTS.
(a) MINIMUM CONSOLIDATED EBITDA. Permit Consolidated EBITDA to be
less than $7,000,000.
(b) CONSOLIDATED FIXED CHARGE RATIO. Permit the Consolidated Fixed
Charge Ratio to be less 1.35:1.00.
(c) CONSOLIDATED INTEREST COVERAGE RATIO. Permit at any time
Consolidated Interest Coverage Ratio to be less than 4.50:1.00.
(d) CONSOLIDATED TANGIBLE NET WORTH PLUS SUBORDINATED DEBT. Permit
Consolidated Tangible Net Worth plus Subordinated Debt, as of the last day of
any fiscal quarter, to be less than the amount set forth below opposite the
relevant fiscal quarter:
Fiscal Quarter Ending Amount
--------------------- ------
June 30, 1999 $11,150,000
September 30, 1999 $11,150,000
December 31, 1999 $11,350,000
March 31, 2000 $11,350,000
June 30, 2000 $11,350,000
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September 30, 2000 $11,350,000
December 31, 2000 $11,600,000
March 31, 2001 $11,600,000
June 30, 2001 $11,600,000
September 30, 2001 $11,600,000
December 31, 2001 and $11,850,000
each fiscal year thereafter
(e) CONSOLIDATED NET LOSS. Suffer a consolidated net loss
(calculated exclusive of extraordinary gains but inclusive of extraordinary
losses) for any two consecutive fiscal quarters in any fiscal year of Company.
(f) CONSOLIDATED LEVERAGE RATIO. Permit at any time the Consolidated
Leverage Ratio to exceed 2.15:1.00.
SECTION 7.14. SUBORDINATED DEBT. Directly or indirectly prepay, defease,
purchase, redeem, or otherwise acquire any Subordinated Debt, except as provided
in the Subordination Agreement or amend, supplement or otherwise modify any of
the terms thereof without the prior written consent of the Required Lenders.
SECTION 7.15. DIVIDENDS. Declare any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of stock of the Company or any Corporate Guarantor, or warrant to
purchase any class of stock of the Company or any Corporate Guarantor, whether
now or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash, securities or property or in
obligations of the Company or any Corporate Guarantor or in any combination
thereof, or permit any Subsidiary to make any payment on account of, or purchase
or otherwise acquire, any shares of any class of the stock of the Company or any
Corporate Guarantor or any warrant to purchase any class of stock of the Company
or any Corporate Guarantor from any Person.
SECTION 7.16. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Company's or any Corporate
Guarantor's business and upon fair and reasonable terms no less favorable to the
Company or such Corporate Guarantor than they would obtain in a comparable
arms-length transaction with a Person not an Affiliate.
SECTION 7.17. IMPAIRMENT OF SECURITY INTEREST. Take or omit to take any
action which could reasonably be expected to have the result of impairing the
security interest in any property subject to a security interest in favor of the
Administrative Agent or the Lenders or grant to any person any interest
whatsoever in any property which is subject to a security interest in favor of
the Administrative Agent for the ratable benefit of the Lenders.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. In the case of the happening of any of
the following events (each an "Event of Default"):
(a) failure to pay the principal of or interest on any Loan,
or any fees under this Agreement as and when due and payable, and with
respect to interest payments and fee payments only, such failure shall
continue unremedied for a period of three Business Days;
(b) default shall be made in (i) the due observance or
performance of any covenant, condition or agreement of the Company or
any Corporate Guarantor to be performed pursuant to Section 6.01 of this
Agreement and such failure shall continue unremedied for a period of ten
(10) days, or (ii) the due observance or performance of any other
covenant, condition or agreement of the Company or any Corporate
Guarantor to be performed pursuant to this Agreement or any other Loan
Document (other than those specified in clause (a) of this Section
8.01);
(c) any representation or warranty made or deemed made in
this Agreement or any other Loan Document shall prove to be false or
misleading in any material respect when made or given or when deemed
made or given;
(d) any report, certificate, financial statement or other
instrument furnished in connection with this Agreement or any other Loan
Document or the borrowings hereunder, shall prove to be false or
misleading in any material respect when made or given or when deemed
made or given;
(e) default in the performance or compliance in respect of
any agreement or condition relating to any Indebtedness of the Company
or any Corporate Guarantor in excess of $50,000 individually or in the
aggregate (other than the Notes), if the effect of such default is to
accelerate the maturity of such Indebtedness or to permit the holder or
obligee thereof (or a trustee on behalf of such holder or obligee) to
cause such Indebtedness to become due prior to the stated maturity
thereof, or, any such Indebtedness shall not be paid when due;
(f) the Company or any Guarantor shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code or any other federal or state bankruptcy,
insolvency or similar law, (ii) consent to the institution of, or fail
to controvert in a timely and appropriate manner, any such proceeding or
the filing of any such petition, (iii) apply for or consent to the
employment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any Guarantor or for a substantial part of
its property; (iv) file an answer admitting the material allegations of
a petition filed against it
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in such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) take corporate action for the purpose of effecting any
of the foregoing, or (vii) become unable or admit in writing its
inability or fail generally to pay its debts as they become due;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company or any Guarantor or of a
substantial part of their respective property, under Title 11 of the
United States Code or any other federal or state bankruptcy insolvency
or similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for the Company or any Guarantor or for
a substantial part of their property, or (iii) the winding-up or
liquidation of the Company or any Guarantor and such proceeding or
petition shall continue undismissed for 30 days or an order or decree
approving or ordering any of the foregoing shall continue unstayed and
in effect for 30 days;
(h) One or more orders, judgments or decrees for the payment
of money in excess of $50,000 in the aggregate shall be rendered against
the Company or any Corporate Guarantor and the same shall not have been
paid in accordance with such judgment, order or decree or settlement and
either (i) an enforcement proceeding shall have been commenced by any
creditor upon such judgment, order or decree, or (ii) there shall have
been a period of thirty (30) days during which a stay of enforcement of
such judgment, order or decree, by reason of pending appeal or
otherwise, was not in effect;
(i) any Plan shall fail to maintain the minimum funding
standard required for any Plan year or part thereof or a waiver of such
standard or extension of any amortization period is applied for or
granted under Section 412 of the Code, any Plan is terminated by the
Company or any ERISA Affiliate or the subject of termination proceedings
under ERISA, any Plan shall have an Unfunded Current Liability, a
Reportable Event shall have occurred with respect to a Plan or the
Company, any Corporate Guarantor, or any ERISA Affiliate shall have
incurred a liability to or on account of a Plan under Section 515, 4062,
4063, 4201 or 4204 of ERISA, and there shall result from any such event
or events the imposition of a lien upon the assets of the Company or any
Corporate Guarantor, the granting of a security interest on such assets,
or a liability to the PBGC or a Plan or a trustee appointed under ERISA
or a penalty under Section 4971 of the Code;
(j) any material provision of any Loan Document shall for
any reason cease to be in full force and effect in accordance with its
terms or the Company or any Corporate Guarantor shall so assert in
writing;
(k) ▇▇▇▇▇ ▇'▇▇▇▇ and ▇▇▇▇ ▇'▇▇▇▇, ▇▇. shall cease to own
beneficially and of record at least 51% of the voting capital stock the
Company and each Corporate Guarantor which is not a wholly owned
subsidiary of the Company or another Corporate Guarantor;
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(l) any of the Liens purported to be granted pursuant to any
Security Document shall fail or cease for any reason to be legal, valid
and enforceable liens on the collateral purported to be covered thereby
or shall fail or cease to have the priority purported to be created
thereby; or
(m) any Guarantor shall fail to perform or observe any term
or provision of such Guarantor's Guaranty or any representation or
warranty made by any Guarantor in connection with such Guarantor's
Guaranty shall prove to have been incorrect in any material respect when
made or deemed made,
then, at any time thereafter during the continuance of any such event, the
Administrative Agent may, and, upon the request of the Required Lenders, shall,
by written or telephonic notice to the Company, take either or both of the
following actions, at the same or different times, (a) terminate the Revolving
Credit Commitment and (b) declare (i) the Notes, both as to principal and
interest and (ii) all other Obligations, to be forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(f) or (g) shall have occurred, the Revolving Credit Commitment
shall automatically terminate and interest, principal and amounts referred to in
the preceding clauses (i), (ii), and (iii) shall be immediately due and payable
without presentment, demand, protest, or other notice of any kind, all of which
are expressly waived, anything contained herein or in the Notes to the contrary
notwithstanding.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder, under the Security Documents and the other Loan Documents with such
powers as are specifically delegated to the Administrative Agent by the terms of
this Agreement, the Security Documents and the other Loan Documents together
with such other powers as are reasonably incidental thereto. The Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement, the Security Documents and the other Loan Documents and shall
not be a trustee for any Lender, nor is the Administrative Agent acting in a
fiduciary capacity of any kind under this Agreement, the Security Documents or
the other Loan Documents or in respect thereof or in respect of any Lender. The
Administrative Agent shall be not responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement, the
Security Documents, or the other Loan Documents, in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, the Security Documents or the other Loan Documents, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Security Documents or the other Loan Documents or any other
document referred to or provided for herein or therein or for the collectibility
of the Loans or for the validity, effectiveness or value of any interest or
security covered by the Security Documents or for the value of any collateral or
for the validity or effectiveness of any assignment, mortgage, pledge, security
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agreement, financing statement, document or instrument, or for the filing,
recording, re-filing, continuing or re-recording of any thereof or for any
failure by the Company or any Corporate Guarantor to perform any of its
obligations hereunder or under the other Loan Documents. The Administrative
Agent may take all actions by itself and/or it may employ agents and
attorneys-in-fact, and shall not be responsible, except as to money or the
securities received by it or its authorized agents, for the negligence or
misconduct of itself or its employees or of any such agents or
attorneys-in-fact, if such agents or attorneys-in-fact are selected by it with
reasonable care. No Administrative Agent nor any of its directors, officers,
employees or agents shall be liable or responsible for any action taken or
omitted to be taken by it or them hereunder, under the Security Documents or the
other Loan Documents or in connection herewith or therewith, except for its or
their own gross negligence or willful misconduct.
SECTION 9.02. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Administrative Agent. As to any matters not
expressly provided for by this Agreement, the Security Documents or the other
Loan Documents, the Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder, under the Security Documents
or the other Loan Documents in accordance with instructions signed by the
Required Lenders, or such other number of Lenders as is specified in Section
10.04 hereof, and such instructions of the Required Lenders or other number of
Lenders as aforesaid and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders.
SECTION 9.03. EVENTS OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on the Loans to the
extent the same is required to be paid to the Administrative Agent for the
account of the Lenders) unless the Administrative Agent has received notice from
a Lender or the Company specifying such Default or Event of Default and stating
that such notice is a "Notice of Default". In the event that the Administrative
Agent receives such a notice of the occurrence of a Default, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall (subject to Section 9.07 hereof) take such action with respect to such
Default as shall be directed by the Required Lenders, except as otherwise
provided in Section 10.04 hereof; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but is not obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
SECTION 9.04. RIGHTS AS A LENDER. With respect to its Revolving Credit
Commitment and the Loans made by it, the Administrative Agent in its capacity as
a Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders"
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shall, unless the context otherwise indicates, include the entity which is the
Administrative Agent in its individual capacity. The entity which is the
Administrative Agent and its Affiliates may (without having to account therefor
to any Lender) accept deposits from, lend money to and generally engage in any
kind of banking, trust or other business with the Company or its Affiliates, as
if it were not acting as the Administrative Agent, and, except to the extent
otherwise herein specifically set forth, the entity which is the Administrative
Agent may accept fees and other consideration from the Company or its
Affiliates, for services in connection with this Agreement, the Security
Documents or any of the other Loan Documents or otherwise without having to
account for the same to the Lenders.
SECTION 9.05. INDEMNIFICATION. The Lenders shall indemnify the
Administrative Agent (to the extent not reimbursed by the Company under Section
10.03 hereof), ratably in accordance with the aggregate outstanding principal
amount of the Loans made by the Lenders (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Revolving Credit
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in its capacity as the Administrative Agent in
any way relating to or arising out of this Agreement, the Security Documents or
any of the other Loan Documents or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby and
thereby (including, without limitation, the costs and expenses which the Company
is obligated to pay under Section 10.03 hereof or under the applicable
provisions of any other Loan Document) or the enforcement of any of the terms
hereof or of the Security Documents, or of any other Loan Document, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Administrative Agent.
SECTION 9.06. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement, the Security Documents or the other Loan
Documents. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Company of this Agreement,
the Security Documents or the other Loan Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Company. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or under the Security Documents, or the other
Loan Documents, the Administrative Agent shall not have any duty or ability to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Company, which may come into the
possession of the Administrative Agent or any of its Affiliates.
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SECTION 9.07. FAILURE TO ACT. Except for action expressly required of
the Administrative Agent hereunder or under the Security Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder or thereunder unless it shall be indemnified to its
satisfaction by the Lenders against any and all liability (except gross
negligence and willful misconduct) and expense which may be incurred by it by
reason of taking or continuing to take any such action.
SECTION 9.08. RESIGNATION OF THE ADMINISTRATIVE AGENT. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section 9.08, the Administrative Agent may resign at any time by notifying
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Company to appoint a successor to
the Administrative Agent. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the resigning Administrative Agent gives notice of its resignation, then the
resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a bank with an office in New York,
New York, or an Affiliate of any such bank with an office in New York, New York.
Upon the acceptance of its appointment as Administrative Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Administrative Agent, and
the resigning Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.03 shall continue in effect for the benefit of such resigning
Administrative Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent.
SECTION 9.09. SHARING OF COLLATERAL AND PAYMENTS. In the event that at
any time any Lender shall obtain payment in respect of a Note or interest
thereon, or receive any collateral in respect thereof, whether voluntarily or
involuntarily, through the exercise of a right of banker's lien, set-off or
counterclaim against the Company or otherwise, in a greater proportion than the
proportion received by any other Lender in respect of the corresponding Note
held by it or interest thereon, then the Lender so receiving such greater
proportionate payment shall purchase for cash from the other Lender or Lenders
such portion of each such other Lender's or Lenders' Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause the Lender receiving the proportionate
over-payment to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders each of which shall have a lien on its
ratable portion of the amount described hereafter obtained from the Company;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from the Lender which received the proportionate
over-payment, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company agrees, to the extent it may do so under applicable law, that each
Lender so purchasing a portion of another Lender's Loan may exercise all rights
of payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Lender were the direct holder of such portion.
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ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
telecopy), and unless otherwise expressly provided herein, shall be conclusively
deemed to have been received by a party hereto and to be effective on the day on
which delivered by hand to such party or one Business Day after being sent by
overnight mail to the address set forth below, or, in the case of telecopy
notice, when acknowledged as received, or if sent by registered or certified
mail, three (3) Business Days after the day on which mailed in the United
States, addressed to such party at such address:
(a) if to the Agent, at
European American Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Relationship Manager
National Network Technologies, Inc.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, at
National Network Technologies, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇'▇▇▇▇, ▇▇.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Lender, to its address set forth in the
signature page of this Agreement and to the person so
designated
- and -
(d) as to each such party at such other address as such
party shall have designated to the other in a written
notice complying as to delivery with the provisions of
this Section 10.01.
SECTION 10.02. EFFECTIVENESS; SURVIVAL. This Agreement shall become
effective on the date on which all parties hereto shall have signed a
counterpart copy hereof and shall have delivered the same to the Administrative
Agent. All representations and warranties made herein and in the other Loan
Documents and in the certificates delivered pursuant hereto or thereto shall
survive the making by the Lenders of the Loans as herein contemplated and the
execution and delivery to the Lenders of the Notes evidencing the Loans and
shall continue in full force and effect so long as the
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48
Obligations hereunder are outstanding and unpaid and the Revolving Credit
Commitments are in effect. The obligations of the Company pursuant to Section
3.05, Section 3.06, Section 3.07 and Section 10.03 shall survive termination of
this Agreement and payment of the Obligations.
SECTION 10.03. EXPENSES. The Company agrees (a) to indemnify, defend and
hold harmless the Administrative Agent and each Lender and their respective
officers, directors, employees, and affiliates (each, an "indemnified person")
from and against any and all losses, claims, damages, liabilities or judgments
to which any such indemnified person may be subject and arising out of or in
connection with the Loan Documents, the financings contemplated hereby, the use
of any proceeds of such financings or any related transaction or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any of such indemnified persons is a party thereto, and to
reimburse each of such indemnified persons upon demand for any reasonable, legal
or other expenses incurred in connection with the investigation or defending any
of the foregoing; provided that the foregoing indemnity will not, as to any
indemnified person, apply to losses, claims, damages, liabilities, judgments or
related expenses to the extent arising from the wilful misconduct or gross
negligence of such indemnified person, (b) to pay or reimburse the
Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of and any amendment,
supplement or modification to this Agreement, the Notes any other Loan
Documents, and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including without limitation, the reasonable fees and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇▇, P.C., counsel to the Administrative Agent and Lamb and ▇▇▇▇▇▇▇▇, LLP,
special counsel to SBLI (provided that such fees and expenses of Lamb and
▇▇▇▇▇▇▇▇, LLP are not in excess of $3,500), (c) to pay or reimburse each Lender
and the Administrative Agent for all their costs and expenses incurred in
connection with the enforcement and preservation of any rights under this
Agreement, the Notes, the other Loan Documents, and any other documents prepared
in connection herewith or therewith, including, without limitation, the
reasonable fees and disbursements of counsel (including, without limitation,
in-house counsel) to the Administrative Agent and to the several Lenders,
including all such out-of-pocket expenses incurred during any work-out,
restructuring or negotiations in respect of the Obligations and (d) to pay or
reimburse the Administrative Agent on demand for all costs, expenses and charges
incurred by the Administrative Agent in connection with conducting an inspection
or audit in accordance with Section 6.04, provided that such reimbursement shall
not exceed $10,000 per audit.
SECTION 10.04. AMENDMENTS AND WAIVERS. With the written consent of the
Required Lenders, the Administrative Agent and the Company may, from time to
time, enter into written amendments, supplements or modifications hereto for the
purpose of adding any provisions to this Agreement or the Notes or any of the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Company hereunder or thereunder, and with the written consent of the
Required Lenders the Administrative Agent on behalf of the Lenders may execute
and deliver to the Company a written instrument waiving, on such terms and
conditions as the Administrative Agent or the Required Lenders may specify in
such instrument, any of the requirements of this Agreement or the Notes or any
of the other Loan Documents or any Event of Default; provided, however, that no
such waiver and no such amendment, or supplement or modification shall (a)
extend the maturity
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of any Note, or any installment thereof, (b) reduce the rate or extend the time
of payment of interest on any Note or any fees payable to the Lenders hereunder,
(c) reduce the principal amount of any Note, (d) except as provided in 2.01(f),
increase the Total Revolving Credit Commitment, (e) amend, modify or waive any
provision of this Section 10.04, (f) reduce the percentage specified in the
definition of Required Lenders or amend or modify any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination granting consent
hereunder, (g) consent to the assignment or transfer by the Company or any
Corporate Guarantor of any of its rights or obligations under this Agreement,
(h) except as expressly permitted pursuant to this Agreement or any other Loan
Document release any collateral security granted to the Administrative Agent
under the Security Documents or (i) release any Guarantor from its Guaranty, or
limit any Guarantor's liability with respect to its Guaranty, in each case
specified in clauses (a) through (i) above without the written consent of all
the Lenders; and provided, further, that no such waiver and no such amendment,
supplement or modification shall (i) amend, modify, supplement or waive any
provision of Article IX with respect to the Administrative Agent without the
written consent of the Administrative Agent or (ii) increase the amount of any
Lender's Revolving Credit Commitment without the written consent of such Lender.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Company, the
Lenders, the Administrative Agent and all future holders of the Notes.
SECTION 10.05. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) This
Agreement shall be binding upon and inure to the benefit of the Company, the
Lenders, the Administrative Agent, all future holders of the Notes and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other financial institutions ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Revolving
Credit Commitment of such Lender or any other interest of such Lender hereunder.
In the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other parties
under this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement, and the Company and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
The Company agrees that each Participant shall be entitled to the benefits of
Sections 3.05, 3.06 and 3.07 with respect to its participation in the Revolving
Credit Commitments and in the Loans outstanding from time to time; provided,
however, that no Participant shall be entitled to receive any greater amount
pursuant to such sections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred. No
Participant shall have the right to consent to any amendment to, or waiver of,
any provision of this Agreement, except the transferor Lender may provide in its
agreement with the
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Participant that such Lender will not, without the consent of the Participant,
agree to any amendment or waiver described in clause (a) through clause (j) of
Section 10.04.
(c) Subject to the last sentence of this paragraph (c) any Lender
may, in the ordinary course of its commercial banking business and in accordance
with applicable law, at any time sell to any Lender or any domestic banking
affiliate thereof, and to one or more additional banks or financial institutions
provided that such Purchasing Lender is a bank organized under the laws of the
United States of America or any state thereof and which has combined capital and
surplus of at least $200,000,000 ("Purchasing Lenders") all or any part of its
rights and obligations under this Agreement and the Notes pursuant to an
Assignment and Acceptance Agreement, executed by such Purchasing Lender, such
transferor Lender and the Administrative Agent (and, in the case of an
Assignment and Acceptance Agreement relating to a Purchasing Lender that is not
then a Lender or a domestic banking affiliate thereof, also executed by the
Company), and delivered to the Administrative Agent for its acceptance. Upon
such execution, delivery and acceptance from and after the effective date
specified in such Assignment and Acceptance Agreement, (i) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, have the rights and obligations of a Lender
hereunder with Revolving Credit Commitments as set forth therein and (ii) the
transferor Lender thereunder shall, to the extent provided in such Assignment
and Acceptance Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance Agreement covering all or the
remaining portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto except as to
Sections 3.05, 3.06, 3.07 and 10.03 for the period prior to the effective date).
Such Assignment and Acceptance Agreement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Proportions arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under or in respect of this Agreement
and the Notes. On or prior to the effective date specified in such Assignment
and Acceptance Agreement, the Company, at its own expense, shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Notes, new
Notes to the order of such Purchasing Lender in an amount equal to the Revolving
Credit Commitments assumed by it pursuant to such Assignment and Acceptance
Agreement and, if the transferor Lender has retained any Revolving Credit
Commitment hereunder, a new Note to the order of the transferor Lender in an
amount equal to such Revolving Credit Commitment retained by it hereunder. Such
new Notes shall be in a principal amount equal to the principal amount of such
surrendered Notes, shall be dated the date of the Notes they replace and shall
otherwise be in the form of the Notes replaced thereby. The Notes surrendered by
the transferor Lender shall be returned by the Administrative Agent to the
Company marked "cancelled". Anything in this Section 10.05 to the contrary
notwithstanding, (i) no transfer to a Purchasing Lender shall be made pursuant
to this paragraph (c) if such transfer by any one transferor Lender to any one
Purchasing Lender (other than a Purchasing Lender which is a Lender hereunder
prior to such transfer) (x) is in respect of less than $1,000,000 of the
Revolving Credit Commitments of such transferor Lender or (y) if less than all
of the Revolving Credit Commitment of such transferor Lender is transferred,
after giving effect to such transfer the amount held by any Transferor Lender
would be less than $1,000,000 and (ii) each transfer to a
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51
Purchasing Lender shall be made in the same pro-rata portion with respect to the
Revolving Credit Commitments.
(d) The Administrative Agent shall maintain at its address referred
to in Section 10.01 a copy of each Assignment and Acceptance Agreement delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the commitments of, and principal amount of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of clear and obvious error and the Company, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loans recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance Agreement
executed by a transferor Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an Affiliate thereof, by the
Company) together with payment by the Purchasing Lender to the Administrative
Agent of a registration and processing fee of $3,500 if the Purchasing Lender is
not a Lender prior to the execution of an Assignment and Acceptance Agreement
and $2,500 if the Purchasing Lender is a Lender prior to the execution of an
Assignment and Acceptance Agreement, the Administrative Agent shall (i) accept
such Assignment and Acceptance Agreement, (ii) record the information contained
therein in the Register, and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Company and its Affiliates which has been delivered to such
Lender by or on behalf of the Company pursuant to this Agreement or which has
been delivered to such Lender by the Company in connection with such Lender's
credit evaluation of the Company and Corporate Guarantor prior to entering into
this Agreement.
(g) If, pursuant to this Section 10.05, any interest in this
Agreement, a participation agreement, or any Note is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Administrative Agent and the Company) that under applicable law and treaties
no taxes will be required to be withheld by the Administrative Agent, the
Company, or the transferor Lender with respect to any payments to be made to
such Transferee in respect of the Loans, (ii) to furnish to the Administrative
Agent, the transferor Lender and the Company either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such
Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and (iii) to agree (for the
benefit of the Administrative Agent, the transferor Lender and the Company) to
provide the Administrative Agent, the transferor Lender and the Company a new
Form 4224 or Form 1001 upon the expiration or
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52
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
(h) Any Lender may at any time pledge or assign or grant a security
interest in all or any part of its rights under this Agreement and its Notes to
a Federal Reserve Bank, provided that no such assignment shall release the
transferor Lender from its Revolving Credit Commitments or its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
to this Agreement.
SECTION 10.06. NO WAIVER; CUMULATIVE REMEDIES. Neither any failure nor
any delay on the part of any Lender or the Administrative Agent in exercising
any right, power or privilege hereunder or under any Note or any other Loan
Document shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any other right,
power or privilege. The rights, remedies, powers and privileges herein provided
or provided in the other Loan Documents are cumulative and not exclusive of any
rights, remedies powers and privileges provided by law.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 10.08. SUBMISSION TO JURISDICTION; JURY WAIVER. THE COMPANY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN
THE ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ OF NASSAU OR COUNTY OF SUFFOLK
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL OR
STATE COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT
REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER HEREOF THEREOF MAY NOT BE
LITIGATED IN OR BY SUCH FEDERAL OR STATE COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY AGREES NOT TO (i) SEEK AND HEREBY WAIVES THE RIGHT
TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH
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FEDERAL OR STATE COURT BY ANY FEDERAL OR STATE COURT OF ANY OTHER NATION OR
JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT
OR (ii) ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE
COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR
REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY
METHOD AUTHORIZED BY THE LAWS OF NEW YORK. EACH PARTY HERETO WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT.
SECTION 10.09. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
SECTION 10.10 RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, the Administrative Agent, each Lender and each
Affiliate of each Lender are each hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and 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 the Administrative Agent, any
Lender or any Affiliate of any Lender to or for the credit or the account of the
Company against any and all of the Obligations of the Company now and hereafter
existing under this Agreement and the Notes held by such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement or
any Note and although such obligations may be unmatured. The rights of the
Administrative Agent, each Lender and each Affiliate of each Lender under this
Section 10.10 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which they may have.
SECTION 10.11. HEADINGS. Section headings used herein are for
convenience of reference only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.
SECTION 10.12. CONSTRUCTION. This Agreement is the result of
negotiations between, and has been reviewed by, each of the Company, the
Administrative Agent, the Lenders and their respective counsel. Accordingly,
this Agreement shall be deemed to be the product of each party hereto, and no
ambiguity shall be construed in favor of or against either the Company, the
Administrative Agent, or any Lender.
SECTION 10.13. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Company, the Administrative Agent and the
Lenders have caused this Agreement to be duly executed by their duly authorized
officers, as of the day and year first above written.
NATIONAL NETWORK TECHNOLOGIES, INC.
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
EUROPEAN AMERICAN BANK
AS ADMINISTRATIVE AGENT AND AS A LENDER
By: /s/ ▇▇▇▇▇▇▇▇ ▇. NOBET
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Nobet
Title: Vice President
Lending Office:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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STATE BANK OF LONG ISLAND,
AS A LENDER
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Lending Office:
State Bank of ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
State Bank of Long Island
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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AMENDMENT dated as of November __, 1999 (this
"Amendment") to the Credit Agreement dated as of June
29, 1999, as amended (the "Credit Agreement") by and
among LEXENT INC. (formerly known as National Network
Technologies, Inc.), a Delaware corporation (the
"Company"), EUROPEAN AMERICAN BANK, a New York banking
corporation ("EAB"), as Administrative Agent and the
Lenders Party Thereto.
WHEREAS, the Company has requested and the Administrative Agent and the Lenders
have agreed, subject to the terms and conditions of this Amendment, to amend
Schedule III to the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:
1. The Company has advised the Administrative Agent and the Lenders that it
has changed its name to Lexent Inc. Notwithstanding anything to the contrary
herein, in the Credit Agreement or any Loan Document, all references to the
terms "National Network Technologies, Inc." and "Company" in the Credit
Agreement and the Loan Documents shall be deemed references to Lexent Inc.
2. AMENDMENT. Schedule III to the Credit Agreement shall be amended and
restated and replaced with Schedule III attached to this Amendment.
3. MISCELLANEOUS.
Capitalized terms used herein and not otherwise defined herein shall have the
same meanings as defined in the Credit Agreement.
Except as expressly amended hereby, the Credit Agreement shall remain in full
force and effect in accordance with the original terms thereof.
The amendments herein contained are limited specifically to the matters set
forth above and do not constitute directly or by implication an amendment or
waiver of any other provision of Credit Agreement or any default which may occur
or may have occurred under the Credit Agreement.
The Company hereby represents and warrants that (a) after giving effect to this
Amendment, the representations and warranties by the Company and each Corporate
Guarantor pursuant to the Credit Agreement and the Loan Documents to which each
is a party are true and correct in all material respects as of the date hereof
with the same effect as those such representations and warranties have been made
on and as of such date, unless such representation is as of a specific date, in
which case, as of such date, (b) after giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing.
This Amendment may be executed in one or more counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
but one Amendment. This Amendment shall become
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57
effective when duly executed counterparts hereof which, when taken together,
bear the signatures of each of the parties hereto shall have been delivered to
the Administrative Agent.
This Amendment shall constitute a Loan Document.
IN WITNESS WHEREOF, the Company and the Administrative Agent, as authorized on
behalf of the Required Lenders, have caused this Amendment to be duly executed
by their duly authorized officers, all as of the day and year first above
written.
LEXENT INC. (formerly known as National Network
Technologies, Inc.)
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President, CFO
EUROPEAN AMERICAN BANK, as Administrative Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
The undersigned, not as parties to the Credit Agreement, but as Guarantors under
the Guarantees, each dated as of June 29, 1999, do hereby accept and agree to
the terms of this Amendment and Waiver and further acknowledge that their
respective Guaranty is in full force and effect with respect to such Guarantor.
NATIONAL NETWORK TECHNOLOGIES, LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Executive Vice President, CFO
▇▇▇▇ ▇'▇▇▇▇ ELECTRIC CO. LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Executive Vice President, CFO
/s/ ▇▇▇▇ ▇. ▇'▇▇▇▇, ▇▇.
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▇▇▇▇ ▇'▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇
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▇▇▇▇▇ ▇'▇▇▇▇
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58
Schedule III
(Ref: Sec. 7.02)
Existing Indebtedness
Amended and Restated Promissory Note issued July 23, 1998, subordinated,
payable to ▇▇▇▇▇ ▇. ▇'▇▇▇▇. Principal amount outstanding as of May 31, 1999
(excluding unpaid accrued interest): $7,516,695.
Amended and Restated Promissory Note issued July 23, 1998, subordinated,
payable to ▇▇▇▇▇ ▇. ▇'▇▇▇▇. Principal amount outstanding as of May 31, 1999
(excluding unpaid accrued interest): $227,654.
Amended and Restated Promissory Note issued July 23, 1998, subordinated,
payable to ▇▇▇▇ ▇. ▇'▇▇▇▇. Principal amount outstanding as of May 31, 1999
(excluding unpaid accrued interest): $161,922.
Notes payable pursuant to financing arrangements on vehicles and
equipment in the aggregate amount of $789,000 as disclosed in Note 7 to the
Company's Consolidated Financial Statements as of December 31, 1998.
Additional notes payable pursuant to financing arrangements on vehicles
and equipment in the aggregate amount of $373,000 incurred subsequent to
December 31, 1998 through May 31, 1999.
Indebtedness payable to Lease Plan U.S.A. Inc. pursuant to financing
arrangements on vehicles, in the aggregate amount of $519,500.
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