EXHIBIT 10.31
CREDIT AND GUARANTY AGREEMENT
dated as of June 3, 1999
among
CONVERGENT COMMUNICATIONS, INC.,
CONVERGENT COMMUNICATIONS SERVICES, INC.,
CONVERGENT CAPITAL CORPORATION,
VARIOUS LENDERS,
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Administrative Agent
________________________________________________________
$10,000,000 SENIOR SECURED CREDIT FACILITY
________________________________________________________
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND INTERPRETATION......................................1
1.1. Definitions.........................................................1
1.2. Accounting Terms...................................................24
1.3. Interpretation, etc................................................24
SECTION 2. LOANS..............................................................24
2.1. Loans..............................................................24
2.2. Pro Rata Shares; Availability of Funds.............................25
2.3. Use of Proceeds....................................................26
2.4. Evidence of Debt; Register; Lenders' Books and Records; Notes......26
2.5. Interest Payments..................................................27
2.6. Default Interest.........................................................27
2.7. Commitment Fees....................................................28
2.8. Other Fees.........................................................28
2.9. Voluntary Prepayments/Reductions...................................28
2.10. Mandatory Prepayments/Reductions...................................29
2.11. General Provisions Regarding Payments....................................30
2.12. Ratable Sharing....................................................31
2.13. Making or Maintaining Eurodollar Rate Loans..............................31
2.14. Increased Costs; Capital Adequacy........................................32
2.15. Taxes; Withholding, Etc............................................33
2.16. Obligation to Mitigate.............................................35
2.17. Joint and Several Liability........................................35
SECTION 3. CONDITIONS PRECEDENT...............................................37
3.1. Closing Date.......................................................37
3.2. Conditions to Each Credit Extension................................39
SECTION 4. REPRESENTATIONS AND WARRANTIES.....................................40
4.1. Organization; Powers; Qualification................................40
4.2. Authorization of Credit Documents; No Conflict.....................40
4.3. Governmental Consents..............................................41
4.4. Binding Obligation.................................................41
4.5. Historical Financial Statements; Projections.......................41
4.6. No Material Adverse Change; No Restricted Junior Payments..........42
4.7. Adverse Proceedings, Etc...........................................42
4.8. Payment of Taxes...................................................42
4.9. Title to Properties................................................42
4.10. Collateral.........................................................42
4.11. Environmental......................................................43
4.12. No Defaults........................................................44
(i)
4.13. Governmental Regulation.............................................44
4.14. Margin Stock........................................................44
4.15. Employee Matters....................................................44
4.16. Employee Benefit Plans..............................................44
4.17. Certain Fees........................................................45
4.18. Solvency............................................................45
4.19. Related Agreements..................................................45
4.20. Year 2000 Issues....................................................45
4.21. Disclosure..........................................................45
SECTION 5. AFFIRMATIVE COVENANTS...............................................46
5.1. Financial Statements and Other Reports..............................46
5.2. Existence...........................................................48
5.3. Payment of Taxes and Claims.........................................49
5.4. Maintenance of Properties...........................................49
5.5. Insurance...........................................................49
5.6. Inspections; Audits of Inventory and Accounts; Lenders Meetings.....50
5.7. Compliance with Laws................................................50
5.8. Subsidiaries........................................................50
5.9. Year 2000 Issues....................................................50
5.10. Cash Management Arrangements........................................51
SECTION 6. NEGATIVE COVENANTS..................................................51
6.1. Indebtedness.........................................................51
6.2. Liens................................................................53
6.3. Equitable Lien; No Further Negative Pledges..........................55
6.4. Restricted Payments; Restrictions on Subsidiary Distributions........55
6.5. Investments..........................................................57
6.6. Financial Covenants..................................................58
6.7. Fundamental Changes; Disposition of Assets; Acquisitions.............60
6.8. Disposal of Subsidiary Interests.....................................61
6.9. Transactions with Shareholders and Affiliates........................61
6.10. Conduct of Business..................................................61
6.11. Amendments or Waivers of Related Agreements..........................62
6.12. Fiscal Year..........................................................62
SECTION 7. GUARANTY.............................................................62
7.1. Guaranty of the Obligations..........................................62
7.2. Contribution by Guarantors...........................................62
7.3. Payment by Guarantors................................................63
7.4. Liability of Guarantors Absolute.....................................63
7.5. Waivers by Guarantors................................................65
7.6. Guarantors' Rights of Subrogation, Contribution, Etc.................66
7.7. Subordination of Other Obligations...................................66
7.8. Continuing Guaranty..................................................67
(ii)
7.9. Authority of Guarantors or either Borrower...........................67
7.10. Financial Condition of either Borrower..............................67
7.11. Bankruptcy, Etc.....................................................67
7.12. Notice of Events....................................................68
7.13. Discharge of Guaranty Upon Sale of Guarantor........................68
SECTION 8. EVENTS OF DEFAULT...................................................68
8.1. Events of Default...................................................68
SECTION 9. ADMINISTRATIVE AGENTS...............................................71
9.1. Appointment of Administrative Agent.................................71
9.2. Powers and Duties...................................................71
9.3. General Immunity....................................................72
9.4. Administrative Agent Entitled to Act as Lender......................72
9.5. Lenders' Representations and Warranties.............................73
9.6. Right to Indemnity..................................................73
9.7. Successor Administrative Agent......................................74
9.8. Collateral Documents and Guaranties.................................74
SECTION 10. MISCELLANEOUS......................................................75
10.1. Notices............................................................75
10.2. Expenses...........................................................76
10.3. Indemnity..........................................................76
10.4. Set-Off............................................................77
10.5. Amendments and Waivers.............................................77
10.6. Successors and Assigns; Participations.............................79
10.7. Independence of Covenants..........................................81
10.8. Survival of Representations, Warranties and Agreements.............81
10.9. No Waiver; Remedies Cumulative.....................................81
10.10. Marshalling; Payments Set Aide....................................82
10.11. Severability......................................................82
10.12. Obligations Several; Independent Nature of Lenders' Rights........82
10.13. Headings..........................................................82
10.14. APPLICABLE LAW....................................................82
10.15. CONSENT TO JURISDICTION...........................................83
10.16. WAIVER OF JURY TRIAL..............................................83
10.17. Confidentiality...................................................84
10.18. Usury Savings Clause..............................................84
10.19. Counterparts; Effectiveness.......................................85
APPENDICES: A Loan Commitments
B Notice Addresses
SCHEDULES: 4.1 Organization, Etc.
(iii)
6.1 Certain Indebtedness
6.2 Certain Liens
6.3 Equitable Lien; No Further Negative Pledges
6.4 Restricted Payments
6.5 Certain Investments
6.9 Certain Affiliate Transactions
EXHIBITS: A Funding Notice
B Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-Bank Status
G Closing Date Certificate
H Counterpart Agreement
I Pledge and Security Agreement
(iv)
CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of June 3, 1999, is entered
into by and among CONVERGENT COMMUNICATIONS, INC., a Colorado corporation
("Holdings"), CONVERGENT COMMUNICATIONS SERVICES, INC., a Colorado corporation
("CCSI" or a "Borrower"), CONVERGENT CAPITAL CORPORATION, a Colorado corporation
("C/3/"or a "Borrower"; and together with CCSI, "Borrowers"), the Lenders party
hereto from time to time, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P. ("GSCP"), as
Administrative Agent (together with its permitted successors, in such
capacity,"Administrative Agent").
RECITALS:
WHEREAS, Lenders have agreed to extend certain Loans to Borrowers, as joint
and several obligors, in an aggregate principal amount not exceeding
$10,000,000, the proceeds of which will be used for working capital and other
general corporate purposes of Borrowers;
WHEREAS, Borrowers have agreed to secure their obligations hereunder by
granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
certain of their respective personal property; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Borrowers
hereunder and to secure their respective obligations hereunder by granting to
Administrative Agent, on behalf of Lenders, a First Priority Lien on certain of
their respective personal property.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, Guarantors, Lenders and
Administrative Agent agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. Definitions. The following terms used herein, including the preamble,
recitals, exhibits and schedules hereto, shall have the following meanings:
"Accounts" means all of each Borrower's accounts receivable, whether now or
hereafter existing, arising in the ordinary course of business from sales or
leases of goods or the rendition of services made by such Borrower.
"Acknowledgment of Pledge" as defined in the Pledge and Security Agreement.
"Acquired Indebtedness" means Indebtedness assumed by Holdings or any of
its Subsidiaries in connection with a Permitted Acquisition or with respect to
which a Person acquired pursuant to a Permitted Acquisition is obligated
immediately prior to the consummation of such
Permitted Acquisition; provided, such Indebtedness was not incurred in
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connection with or in contemplation of such Permitted Acquisition and such
Indebtedness, if secured, is only secured by Liens encumbering the assets
acquired (or the assets of such Persons acquired) by Holdings and its
Subsidiaries in connection with such Permitted Acquisition.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date
with respect to an Interest Period for a Loan that bears interest based upon the
Adjusted Eurodollar Rate, the rate per annum obtained by dividing (i) (a) the
rate per annum (carried out to the fifth decimal place) equal to the rate
determined by Administrative Agent to be the offered rate which appears on the
page of the Telerate Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number 3740
or 3750, as applicable) for deposits (for delivery on the first day of such
period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum (carried out to the fifth
decimal place) equal to the rate determined by Administrative Agent to be the
offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, by (ii) amount equal to (a) one minus (b)
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the Applicable Reserve Requirement.
"Administrative Agent" as defined in the preamble hereto.
"Adverse Proceeding" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of any Authorized Officer of Holdings or any of its Subsidiaries,
threatened against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries.
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Aggregate Amounts Due" as defined in Section 2.12.
"Aggregate Payments" as defined in Section 7.2.
"Agreement" means this Credit and Guaranty Agreement dated as of June 3,
1999, as it may be amended, supplemented or otherwise modified from time to
time.
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"Applicable Reserve Requirement" means, at any time any Loan bears interest
based upon the Adjusted Eurodollar Rate, the maximum rate at which reserves
(including, without limitation, any marginal, special, supplemental or emergency
reserves) are required to be maintained with respect thereto by a member of the
Federal Reserve System against "Eurocurrency liabilities" (as such term is
defined in Regulation D) under regulations issued from time to time by the Board
of Governors of the Federal Reserve System or other applicable banking
regulator. Without limiting the effect of the foregoing, the Applicable Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which includes
deposits by reference to which the applicable interest rate of a Loan is to be
determined, or (ii) any category of extensions of credit or other assets which
include Loans that bear interest based upon the Adjusted Eurodollar Rate. A
Loan that bears interest based upon the Adjusted Eurodollar Rate shall be deemed
to constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Loans that bear interest based upon the Adjusted Eurodollar
Rate shall be adjusted automatically on and as of the effective date of any
change in the Applicable Reserve Requirement.
"Asset Sale" means a sale, lease or sub-lease (as lessor or sublessor),
transference or disposition to any Person other than a Borrower or its
Subsidiary, in one transaction or a series of transactions, of all or any part
of Holdings' or any of its Subsidiaries' businesses, properties or assets,
whether now owned or hereafter acquired, other than (i) inventory sold or leased
or leased receivables discounted in the ordinary course of business, (ii)
disposals of obsolete, worn out or surplus property, (iii) licenses and
development arrangements pertaining to Intellectual Property entered into in the
ordinary course of its business and (iii) sales of assets not in excess of
$1,000,000 in the aggregate with respect to any transaction or series of
transactions.
"Assignment Agreement" means an Assignment Agreement in the form of Exhibit
E (with such amendments or modifications as may be approved by Administrative
Agent).
"Authorized Officer" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), president or vice
president (or the equivalent thereof), chief financial officer, treasurer or
general counsel or equivalent legal officer.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Beneficiary" means Administrative Agent, each Lender and each Lender
Counterparty.
"Borrower" as defined in the preamble hereto.
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of New York or Colorado or is a
day on which banking institutions located in either such state are authorized or
required by law or other governmental action to close, and with respect to all
notices, determinations, fundings and payments in connection
3
with the Adjusted Eurodollar Rate, that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
"Capitalization" shall mean, as of any date of determination, funded equity
and warrant contributions and all funded Indebtedness determined on a
consolidated basis for Holdings and its Subsidiaries in accordance with GAAP
(provided that such amount shall total $160,000,000 at all times with respect to
the Senior Notes, less the amount of restricted Cash held in collateral accounts
for the benefit of creditors (other than the Administrative Agent and Lenders)
to secure payments of principal or interest on Indebtedness).
"Capital Lease" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in any demand or deposit
account.
"Cash Equivalents" means (i) any evidence of Indebtedness issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
--------
States is pledged in support thereof or such Indebtedness constitutes a general
obligation of such country); (ii) deposits, certificates of deposit or
acceptances of any financial institution that is a member of the Federal Reserve
System, in each case having combined capital and surplus and undivided profits
(or any similar capital concept) of not less than $500.0 million and whose
senior unsecured debt is rated at least "A-l" by S&P or "P-l" by ▇▇▇▇▇'▇; (iii)
commercial paper with a maturity of 365 days or less issued by a corporation
(other than an Affiliate of the Company) organized under the laws of the United
States or any State thereof and rated at least "A-l" by S&P or "P-l" by ▇▇▇▇▇'▇;
(iv) repurchase agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally guaranteed by the United
States Government or issued by any agency thereof and backed by the full faith
and credit of the United States Government maturing within 365 days from the
date of acquisition and (v) money market funds which invest substantially all of
their assets in securities described in the preceding clauses (i) through (iv).
"CCSI" as defined in the preamble hereto.
"Certificate re Non-Bank Status" means a certificate in the form of
Exhibit F.
"Change of Control" means the occurrence of any of the following events:
(a) Permitted Holders, collectively, shall cease to own and control at least 10%
of the voting stock of Holdings or (b) any "Change of Control" as defined in the
Senior Notes shall occur or any change of control or similar event shall occur
under any other Material Contract of Holdings or either Borrower which gives
rise to any payment obligation or obligation to repurchase Indebtedness
thereunder in either case in an individual amount of $1,000,000 or $2,000,000 in
the aggregate.
"Closing Date" means the date on which the conditions set forth in Section
3.1 are satisfied.
4
"Closing Date Certificate" means a certificate in the form of Exhibit G.
"Collateral" means, collectively, the personal property (including capital
stock and other equity Securities) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Documents" means the Pledge and Security Agreement and all
other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to
grant to Administrative Agent, on behalf of Lenders, a Lien on any property of
that Credit Party as security for the Obligations.
"Collateral Warranties" means the representations and warranties made with
respect to the Collateral pursuant to Section 4.10 of this Agreement and
Sections 5 and 8.6 of the Pledge and Security Agreement.
"Comdisco Agreement" means the Program Agreement dated November 19, 1997 by
and among Comdisco, Inc., each Borrower and Holdings, as such agreement may be
amended from time to time to the extent permitted pursuant to Section 6.11.
"Compliance Certificate" means a certificate in the form of Exhibit C.
"Consolidated Adjusted EBITDA" means, for any period, an amount determined
for Holdings and its Subsidiaries on a consolidated basis equal (i) to the sum
of the amounts for such period, without duplication, of (a) Consolidated Net
Income, (b) Consolidated Interest Expense, (c) provisions for taxes based on
income, (d) total depreciation expense, (e) total amortization expense, and (f)
other non-cash items reducing Consolidated Net Income (excluding any such non-
cash item to the extent that it represents an accrual or reserve for potential
cash items in any future period or amortization of a prepaid cash item that was
paid in a prior period), minus (ii) other non-cash items increasing Consolidated
Net Income (excluding any such non-cash item to the extent it represents the
reversal of an accrual or reserve for potential cash items in any prior period).
"Consolidated Capital Expenditures" means, for any period, the aggregate of
all expenditures of Holdings and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in "purchase of property and equipment" or similar items reflected in the
consolidated statement of cash flows of Holdings and its Subsidiaries but
excluding (i) Permitted Acquisitions (ii) the amount of other such expenditures
financed with Indebtedness incurred pursuant to Section 6.1(i) and (iii) amounts
constituting Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds
that are reinvested in the business of Holdings and its Subsidiaries in
accordance with Section 2.10.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP, amortization of debt discount and capitalized interest) of Holdings
and its Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of Holdings and its Subsidiaries, including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and
5
net costs under Interest Rate Agreements (including amortization of discounts),
but excluding, however, any amounts referred to in Section 2.8 payable on or
before the Closing Date.
"Consolidated Net Income" means, for any period, (i) the net income (or
loss) of Holdings and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
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(ii) (a) the income of any Person (other than a Subsidiary of Holdings) in which
any other Person (other than Holdings or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Holdings or any of its Subsidiaries by such Person during such
period, (b) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Holdings or is merged into or consolidated with Holdings
or any of its Subsidiaries or that Person's assets are acquired by Holdings or
any of its Subsidiaries, (c) the income of any Subsidiary of Borrower to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (d) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets
of any Pension Plan, and (e) (to the extent not included in clauses (a) through
(d) above) any net extraordinary gains or y) prior to the consummation of an
IPO, net non-cash extraordinary losses and z) after the consummation of any IPO,
net extraordinary losses.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Holdings and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation" means, as applied to any Person, any provision of
any Security issued by that Person or of any material indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject.
"Counterpart Agreement" means a counterpart agreement in the form of
Exhibit H.
"Contributing Guarantors" as defined in Section 7.2.
"Credit Date" means the date of a Credit Extension.
"Credit Document" means any of this Agreement, the Notes, if any, the
Collateral Documents, the Warrant, and all other documents, instruments or
agreements executed and delivered by a Credit Party for the benefit of
Administrative Agent or any Lender in connection herewith.
"Credit Extension" means the making of a Loan.
"Credit Party" means each Person (other than any Agent or any Lender or any
other representative thereof) from time to time party to a Credit Document.
"C/3/" as defined in the preamble hereto.
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"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Holdings' and its Subsidiaries'
operations.
"Default" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Eligible Accounts Receivable" means the aggregate face amount of Accounts,
as reflected on the books and records of Borrowers in accordance with GAAP,
payable in Dollars, that conform to the warranties contained in this definition
and to the Collateral Warranties. Unless otherwise approved in writing by
Administrative Agent, no Account shall be deemed to be an Eligible Account
Receivable if:
(i) the Account is unpaid 90 days or more from the original
invoice date or more than 60 days from the original due date specified in
such invoice; or
(ii) such Account is from the same account debtor (or any affiliate
thereof) and fifty percent (50%) or more, in face amount, of other Accounts
from such account debtor (or any affiliate thereof) are ineligible under
the provisions of clause (i) above; or
(iii) the Account, when aggregated with all other Accounts of such
account debtor, exceeds ten percent (10%) in face value of all consolidated
Accounts then outstanding, to the extent of such excess; except that an
Account of any account debtor listed on Schedule A shall be deemed to be an
Eligible Account Receivable if such Account, when aggregated with all other
Accounts of such account debtor, does not exceed, in face value of all
consolidated Accounts then outstanding, the percentage set forth opposite
the name of such account debtor on Schedule A; or
(iv)(A) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or any
other Account due from such account debtor to a Borrower, which has not
been resolved, to the extent of such dispute or (B) the Account otherwise
is or may become subject to any right of setoff by the account debtor, to
the extent of the amount of such setoff provided, that any Account deemed
ineligible pursuant to this clause (iv) shall only be ineligible to the
extent of the amount owed by such Borrower to the account debtor, the
amount of such dispute, claim or defense, or the maximum amount at any time
of such right of set-off, as applicable; or
7
(v) to the knowledge of any Credit Party, the account debtor has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or made an assignment for the benefit of
creditors, or if a decree or order for relief has been entered by a court
having jurisdiction in the premises in respect to the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or if any other petition or other application for relief
under the federal bankruptcy laws has been filed by or against the account
debtor, or if the account debtor has failed, suspended business, ceased to
be solvent, or consented to or suffered a receiver, trustee, liquidator or
custodian to be appointed for it or for all or a significant portion of its
assets or affairs; or
(vi) the sale is to an account debtor outside the continental
United States, unless the sale is (a) on letter of credit, guaranty or
acceptance terms, in each case acceptable to Administrative Agent in its
sole discretion, or (b) otherwise approved by and acceptable to
Administrative Agent in its reasonable discretion; or
(vii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis or
made pursuant to any other written agreement providing for repurchase or
return except in accordance with ordinary course of business dealings or
customary practice including customary quality warranties or the general
right to return goods provided by the Borrowers; or
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
account holder duly and effectively assigns its rights to payment of such
Account to Administrative Agent pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. Section 3727 et seq.); or
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(ix) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or the services giving
rise to such Account have not been performed by a Borrower and accepted by
the account debtor or the Account otherwise does not represent a final sale
provided, that an Account may constitute a final sale notwithstanding that
further services or goods are to be provided to the account debtor under
the contract giving rise to the Account, so long as all necessary
conditions to payment of the Account under the contract have been satisfied
for the goods and services therefor provided; or
(x) the Account is not subject to a valid, enforceable and First
Priority perfected Lien in favor of Administrative Agent or is subject to
any Lien other than the Lien granted pursuant to the Collateral Documents
and other Liens contemplated by Section 10.5(e); or
(xi) the Account is associated with a lease in the form of an ENS
Service Agreement; or
(xii) the Account is associated with a lease in the form of an
agreement which does not separate accounts receivable for the sale or lease
of goods and accounts receivable for the rendition of services; or
8
(xiii) the Account is associated with a non-recourse sale of lease
receivables at a discount where the purchaser has recourse only to the
lease receivables.
"Eligible Assignee" means (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof) which is also a commercial bank
and/or other financial institution typically party to commercial loans and (ii)
any commercial bank, insurance company, investment or mutual fund or other
entity that is an "accredited investor" (as defined in Regulation D under the
Securities Act), which extends credit or buys loans as one of its businesses and
which is also a commercial bank and/or other financial institution typically a
party to commercial loans; provided, no Affiliate of Holdings shall be an
Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Holdings,
any of its Subsidiaries or any of their respective ERISA Affiliates.
"Employment Agreement" means each of (i) the Employment Agreement dated
December 15, 1996 (as amended through the Closing Date) between Holdings and
▇▇▇▇ ▇. ▇▇▇▇▇, in the form provided to Administrative Agent on the Closing Date,
(ii) the Employment Agreement dated December 15, 1996 (as amended through the
Closing Date) between Holdings and ▇▇▇▇▇ ▇. ▇▇▇▇▇, in the form provided to
Administrative Agent on the Closing Date, and (iii) the Employment Agreement
dated December 15, 1996 (as amended through the Closing Date) between Holdings
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case in the form provided to Administrative Agent
on the Closing Date, in each case as such Employment Agreement may be amended
from time to time to the extent permitted pursuant to Section 6.11.
"ENS Service Agreement" means an enterprise network service agreement in
substantially the form typically used by either Borrower as of the date of this
Agreement.
"Environmental Claim" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"Environmental Laws" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Holdings or any of its
Subsidiaries or any Facility.
9
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Holdings or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Holdings or such Subsidiary and with
respect to liabilities arising after such period for which Holdings or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Holdings, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan pursuant to Section 4042 of ERISA, or the occurrence of any event
or condition which would constitute grounds under Section 4042(c)(i) or (ii) of
ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of
ERISA; (vii) the withdrawal of Holdings, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets
10
thereof, or against Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Event of Default" means each of the events set forth in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Facility" means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Holdings or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"Fair Share" as defined in Section 7.2.
"Fair Share Contribution Amount" as defined in Section 7.2.
"Fair Share Shortfall" as defined in Section 7.2.
"Financial Officer Certification" means, with respect to the financial
statements or other financial information for which such certification is
required, the certification of the chief financial officer of Holdings that such
financial statements fairly present, in all material respects, the financial
condition of Holdings and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.
"Financial Plan" as defined in Section 5.1(i).
"First Priority" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that such Lien is the only
Lien to which such Collateral is subject, other than Permitted Liens.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries ending
on December 31 of each calendar year.
"Funding Guarantors" as defined in Section 7.2.
11
"Funding Notice" means a notice in the form of Exhibit A; provided, for any
Loan made on the Closing Date, the Funding Notice with respect thereto shall be
the Closing Date Certificate. A certificate indicating compliance with the
Minimum Receivables Ratio as of the last day of the most recently ended month
shall be attached to the Closing Date Certificate and each such Funding Notice.
"GAAP" means United States generally accepted accounting principles in
effect as of the date of determination thereof.
"Governmental Acts" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority.
"Governmental Authority" means any federal, state, municipal, national or
other governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"Guarantor" means each of Holdings and each Subsidiary of Holdings (other
than a Borrower).
"Guarantor Subsidiary" means each Subsidiary of Holdings that is a
Guarantor.
"Guaranty" means the guaranty of each Guarantor set forth in Section 7.
"Hazardous Materials" means any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
entered into in the ordinary course of Holdings' or any of its Subsidiaries'
businesses and not for speculative purposes.
12
"Highest Lawful Rate" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"Historical Financial Statements" means as of the Closing Date, (i) the
audited financial statements of Holdings and its Subsidiaries, for the
immediately preceding three Fiscal Years, consisting of balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
for such Fiscal Years, and (ii) the unaudited financial statements of Holdings
and its Subsidiaries as at the most recently ended Fiscal Quarter, consisting of
a balance sheet and the related consolidated statements of income, stockholders'
equity and cash flows for the three-, six-or nine-month period, as applicable,
ending on such date, and, in the case of clause (ii), certified by the chief
financial officer of Holdings as fairly presenting, in all material respects,
the financial condition of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.
"Holdings" as defined in the preamble hereto.
"HVAC" means heating, ventilation and air conditioning.
"Immaterial Subsidiary" means one or more Subsidiaries of the Borrower
designated in writing to the Administrative Agent as an Immaterial Subsidiary
and which subsidiaries, collectively, do not account for more than 5% of the
gross revenues of Holdings and its Subsidiaries.
"Indebtedness", as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA and ordinary course trade payables), which purchase price is (a) due
more than six months from the date of incurrence of the obligation in respect
thereof or (b) evidenced by a note or similar written instrument; (v) all
indebtedness secured by any Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person; (vi) the
face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii)
the direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another;
(viii) any obligation of such Person the primary purpose or intent of which is
to provide assurance to an obligee that the obligation of the obligor thereof
will be paid or discharged, or any agreement relating thereto will be complied
with, or the holders thereof will be protected (in whole or in part) against
loss in respect thereof; and (ix) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (a) to
purchase, repurchase or otherwise
13
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise) or (b) to maintain the
solvency or any balance sheet item, level of income or financial condition of
another if, in the case of any agreement described under subclauses (a) or (b)
of this clause (ix), the primary purpose or intent thereof is as described in
clause (viii) above; and (x) Obligations under Hedge Agreements.
"Indemnified Liabilities" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs
(including the costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make Credit Extensions or the use or intended
use of the proceeds thereof, or any enforcement of any of the Credit Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Holdings or either Borrower
with respect thereto; or (iii) any Environmental Claim or any Hazardous
Materials Activity relating to or arising from, directly or indirectly, any past
or present activity, operation, land ownership, or practice of Holdings or any
of its Subsidiaries.
"Indemnitee" as defined in Section 10.3.
"Intellectual Property" means "Intellectual Property" as such term is
defined in the Pledge and Security Agreement.
"Intellectual Property Collateral" means as all of the Intellectual
Property subject to the Lien of the Pledge and Security Agreement.
"Interest Payment Date" means the first Business Day of each month,
commencing on July 1, 1999.
"Interest Period" means, with respect to any Loan bearing interest based
upon the Adjusted Eurodollar Rate, an interest period of one month, the first
such Interest Period to commence on the Closing Date and each subsequent
Interest Period to commence on the day on which the immediately preceding
Interest Period expires; provided, (a) if an Interest Period would otherwise
--------
expire on a day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day
14
unless no further Business Day occurs in such month, in which case such Interest
Period shall expire on the immediately preceding Business Day; (b) any Interest
Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clauses (c) and (d), of this
definition, end on the last Business Day of a calendar month; and (c) no
Interest Period with respect to any portion of any Loans shall extend beyond the
Loan Maturity Date.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement, each of which is for the purpose of hedging the interest rate
exposure associated with Holdings's and/or its Subsidiaries' operations.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Investment" means (i) any direct or indirect purchase or other acquisition
by Holdings or any of its Subsidiaries of, or of a beneficial interest in, any
of the Securities of any other Person (other than a Borrower or a Guarantor
Subsidiary); (ii) any direct or indirect redemption, retirement, purchase or
other acquisition for value, by any Subsidiary of Holdings from any Person
(other than Holdings, a Borrower, or any Guarantor Subsidiary), of any equity
Securities of such Subsidiary; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Holdings or any of its Subsidiaries to any other Person
(other than a Borrower or any Guarantor Subsidiary), including all indebtedness
and accounts receivable from that other Person that are not current assets or
did not arise from sales to that other Person in the ordinary course of
business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Investment Property" as defined in the Pledge and Security Agreement.
"IPO" means one or more public offerings of common stock of Holdings
providing aggregate gross proceeds to Holdings of not less than $50,000,000.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"Lender" means each financial institution listed on the signature pages
hereto as a Lender, together with each such institution's successors and
permitted assigns.
15
"Lender Counterparty" means each Lender or any Affiliate thereof
counterparty to a Hedge Agreement.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loan" means a Loan made by a Lender to Borrowers pursuant to Section 2.1.
"Loan Commitment" means the Loan Commitment of a Lender to make or
otherwise fund Loans. The amount of each Lender's Loan Commitment is set forth
on Appendix A or in the applicable Assignment Agreement, subject to any
adjustment or reduction pursuant to the terms and conditions hereof.
"Loan Commitment Period" means the period from the Closing Date to but
excluding the earliest of (i) the date on which the aggregate outstanding
principal amount of all the Loans equals the aggregate principal amount of all
the Loan Commitments then in effect, (ii) the Loan Maturity Date (which shall
include the date of the termination of the Loan Commitments pursuant to Section
8.1) and (iii) the date the Loan Commitments are permanently reduced to zero
pursuant to Section 2.9 or 2.10.
"Loan Exposure" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Loan Commitments, such
Lender's Loan Commitment; and (ii) after the termination of the Loan
Commitments, the aggregate outstanding principal amount of the Loans of such
Lender.
"Loan Maturity Date" means the earlier to occur of (i) June 1, 2002 and
(ii) the date that all Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise.
"Margin Stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries on a consolidated basis or (ii) the
ability of any Agent or any Lender to enforce any of their rights or to collect
any of the Obligations then due and payable.
"Material Contract" means any contract or other arrangement to which any
Credit Party is a party (other than the Credit Documents) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected to
have a Material Adverse Effect.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc.
16
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means The National Association of Insurance Commissioners, and any
successor thereto.
"Narrative Report" means, with respect to the financial statements for
which such narrative report is required, at the option of Holdings either (y) a
narrative report describing the operations of Holdings and its Subsidiaries in
the form prepared for presentation to senior management thereof for the
applicable Fiscal Quarter or Fiscal Year and for the period from the beginning
of the then current Fiscal Year to the end of such period to which such
financial statements relate or (z) at any time Holdings is a reporting company
for purposes of the Exchange Act (including pursuant to the Indenture for the
Senior Notes), the report filed with the Securities and Exchange Commission with
respect to such financial statements.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, minus (ii) any bona
-----
fide direct costs incurred in connection with such Asset Sale, including (a)
income or gains taxes actually payable as a result of any gain recognized in
connection with such Asset Sale and (b) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in question and
that is required to be repaid under the terms thereof as a result of such Asset
Sale.
"Net Insurance/Condemnation Proceeds" means an amount equal to: (i) any
Cash payments or proceeds received by Holdings or any of its Subsidiaries with
respect to any of the Collateral (a) under any property insurance policy in
respect of a covered loss thereunder or (b) as a result of the taking of any
assets of Holdings or any of its Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a sale of any
such assets to a purchaser with such power under threat of such a taking, minus
------
(ii) (a) any actual and reasonable documented costs incurred by Holdings or any
of its Subsidiaries in connection with the adjustment or settlement of any
claims of Holdings or such Subsidiary in respect thereof, and (b) any bona fide
direct costs incurred in connection with any sale of such assets as referred to
in clause (i)(b) of this definition, including income taxes reasonably
estimated to be actually payable as a result of any gain recognized in
connection therewith.
"Non-US Lender" as defined in Section 2.15(c).
"Note" means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.
"Notice" means a Funding Notice.
17
"Obligations" means, with respect to any Credit Party, obligations of such
Credit Party, whether now existing or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or not
due, and however arising under or in connection herewith and any other Credit
Document and any Hedge Agreement with a Lender Counterparty, including those
arising under successive borrowing transactions hereunder which shall either
continue the Obligations of such Credit Party from time to time or renew them
after they have been satisfied and including interest which, but for the filing
of a petition in bankruptcy with respect to such Credit Party, would have
accrued on any Obligation, whether or not a claim is allowed against such Credit
Party for such interest in the related bankruptcy proceeding.
"Obligee Guarantor" as defined in Section 7.7.
"Organizational Documents" means (i) with respect to any corporation, its
certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended. In the event
any term or condition of this Agreement or any other Credit Document requires
any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such "Organizational Document" shall
only be to a document of a type customarily certified by such governmental
official.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"Permitted Acquisition" means any acquisition, whether by purchase, merger
or otherwise, of all or any substantial portion of the assets of, all of the
equity Securities of, or a business line or a division of, any Person; provided,
(i) immediately prior to, and after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing or would result therefrom, (ii)
all transactions in connection therewith shall be consummated in accordance with
all applicable laws and in conformity with all applicable Governmental
Authorizations, (iii) the equity Securities (except for any such Securities in
the nature of directors qualifying shares required pursuant to applicable law)
acquired or otherwise issued by such Person or any newly formed Subsidiary of
Holdings in connection with such acquisition shall be owned 100% by Holdings or
a Guarantor Subsidiary thereof, and Holdings shall have taken, or caused to be
taken, as of the date such Person becomes a Subsidiary of Holdings, each of the
actions set forth in Section 5.8, (iv) Holdings and its Subsidiaries shall be in
compliance with, immediately before and after giving pro forma effect to such
acquisition, Section 6.6 (other than subdivision (d) of Section 6.6), (v)
Holdings shall have delivered to Administrative Agent a certificate in the form
of a Compliance Certificate evidencing such compliance with Section 6.6 (other
than subdivision (d) of Section 6.6), together with all relevant financial
information for such acquired assets, (vi) any Person or assets or division as
acquired in accordance herewith shall be in similar or related lines of business
in which Holdings and/or its Subsidiaries are engaged as of the Closing Date,
and (vii) the aggregate cash consideration
18
paid by Holdings or its Subsidiaries in connection with all such acquisitions
(other than cash consideration representing the proceeds of equity offerings by
Holdings issued in connection with such acquisition) shall not exceed (y)
$10,000,000 prior to the consummation of an IPO; provided that in the event any
--------
Acquired Indebtedness (other than Purchase Money Indebtedness) is assumed by
Holdings or any of its Subsidiaries in connection with one or more Permitted
Acquisitions prior to the consummation of an IPO, the aggregate cash
consideration paid by Holdings and its Subsidiaries with respect to such
Permitted Acquisitions shall not exceed $2,000,000 in the aggregate and (z)
$30,000,000 after the consummation of an IPO; provided that in the event any
--------
Acquired Indebtedness (other than Purchase Money Indebtedness) is assumed by
Holdings or any of its Subsidiaries in connection with one or more Permitted
Acquisitions after the consummation of an IPO, the aggregate cash consideration
paid by Holdings and its Subsidiaries with respect to such Permitted
Acquisitions shall not exceed $15,000,000 in the aggregate.
"Permitted Holders" means (i) ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and their spouses, issue or other members of their immediate families (the
"▇▇▇▇▇ Family," the "▇▇▇▇▇ Family" and the "▇▇▇▇▇ Family," respectively), (ii)
trusts or other entities created for the benefit of any member of the ▇▇▇▇▇
Family, the ▇▇▇▇▇ Family or the ▇▇▇▇▇ Family, (iii) entities controlled by any
of the ▇▇▇▇▇ Family, the ▇▇▇▇▇ Family or the ▇▇▇▇▇ Family, and (iv) in the event
of the death of any member of the ▇▇▇▇▇ Family, the ▇▇▇▇▇ Family or the ▇▇▇▇▇
Family, the heirs or testamentary legatees of such member of the ▇▇▇▇▇ Family,
the ▇▇▇▇▇ Family or the ▇▇▇▇▇ Family.
"Permitted Liens" means each of the Liens permitted pursuant to
Section 6.2.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Plan of Correction" as defined in Section 4.20.
"Pledge and Security Agreement" means the Pledge and Security Agreement in
the form of Exhibit I, as it may be amended, supplemented or otherwise modified
from time to time.
"Principal Office" means Administrative Agent's or its designee "Principal
Office" as set forth on Appendix B, or such other office as Administrative Agent
or its designee may from time to time designate in writing to Borrowers and each
Lender.
"Projections" as defined in Section 4.5.
"Pro Rata Share" means with respect to all payments, computations and other
matters relating to the Loan of any Lender, the percentage obtained by dividing
(i) the Loan Exposure of that Lender by (ii) the aggregate Loan Exposure of all
Lenders.
19
"Purchase Money Indebtedness" has the meaning assigned to that term in
Section 6.1(i).
"Qualifying Receivables" means, at any date of determination, the aggregate
value of Eligible Accounts Receivable, less the sum of without duplication (a)
----
the amount of any reserves established by a Borrower, relating to Eligible
Account Receivables in accordance with the higher of (i) historical practices in
effect as of the Closing Date with respect to Accounts and (ii) actual reserves
taken and (b) the amount of Eligible Accounts Receivable equal to a dilution
estimate (expressed as a percentage of total Eligible Accounts Receivable)
prepared by Holdings in good faith and consistent with recent historical
performance.
"Qualifying Receivables Ratio" means, as of any date of determination the
ratio of y) Qualifying Receivables to z) the aggregate principal amount of
outstanding Loans.
"Register" as defined in Section 2.4(b).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Related Agreement" means the Senior Notes, the Senior Note Indenture, the
Comdisco Agreement, the Employment Agreements; the Sandler Agreements, the
Senior Notes Warrant Registration Rights Agreement, and the Senior Notes
Warrant Agreement.
"Related Fund" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.
"Requisite Lenders" means one or more Lenders having or holding Loan
Exposure representing more than 50% of the sum of the aggregate Loan Exposure of
all Lenders; provided that for purposes of determining Requisite Lenders, the
--------
Loan Exposure of any Lender shall give effect to any reservation of voting
rights by GSCP contractually agreed to by GSCP and any assignee of any of the
Loans or Loan Commitments.
"Restricted Junior Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Holdings
or either Borrower now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Holdings or either Borrower now or hereafter outstanding, (iii) any payment
made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of
20
Holdings or either Borrower now or hereafter outstanding, and (iv) any payment
or prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance),
sinking fund or similar payment with respect to, the Senior Notes and other
Indebtedness incurred by Holdings pursuant to Section 6.1(j).
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Corporation.
"Sandler Agreements" means the Securities Purchase Agreement dated March
17, 1999 among Sandler Capital Partners IV, L.P., Sandler Capital Partners IV,
FTE, L.P., the investors named therein and Holdings, and the documents delivered
pursuant thereto, as such agreements may be amended from time to time to the
extent permitted pursuant to Section 6.11.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Senior Debt" means, as at any date of determination, the aggregate stated
balance sheet amount of all Indebtedness of Holdings and its Subsidiaries
determined on a consolidated basis in accordance with GAAP, less the aggregate
----
principal amount of the outstanding Senior Notes and other Indebtedness of
Holdings outstanding pursuant to Section 6.1(j).
"Senior Note Indenture" means the indenture pursuant to which the Senior
Notes are issued, as such indenture may be amended from time to time to the
extent permitted pursuant to Section 6.11.
"Senior Notes" means the $160,000,000 in aggregate principal amount of 13%
Senior Notes due 2008 of Holdings issued pursuant to the Senior Note Indenture.
"Senior Notes Warrant Registration Rights Agreement" means the Warrant
Registration Rights Agreement dated as of April 2, 1998, among Holdings and
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, Bear,
▇▇▇▇▇▇▇ & Co. Inc. and BT Alex. ▇▇▇▇▇ Incorporated as such agreement may be
amended from time to time to the extent permitted pursuant to Section 6.11.
"Senior Notes Warrant Agreement" means the Warrant Agreement dated as of
April 2, 1998, by and between Holdings and American Stock Transfer & Trust
Company, as Warrant Agent
21
as such agreement may be amended from time to time to the extent permitted
pursuant to Section 6.11.
"Senior Ratio A" means the ratio, as of the last day of any Fiscal Quarter,
of (i) Senior Debt as of such day to (ii) Capitalization as of such day.
"Senior Ratio B" means the ratio, as of the last day of any Fiscal Quarter,
of (i) Senior Debt as of such day to (ii) Consolidated Adjusted EBITDA for the
Fiscal Quarter most recently ended times 4.
"Solvent" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"Supplemental Collateral Agent" as defined in Section 9.8(c).
"Systems" means any of the hardware, firmware or software systems
associated with information processing and delivery, operations or services
(e.g., security and alarms, elevators, communications, and HVAC) operated by,
provided to or otherwise reasonably necessary to the business or operations of
Holdings and its Subsidiaries.
"Tax" means any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed;
provided, "Tax on the overall net income" of a
22
Person shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its lending office).
"Total Utilization of Loan Commitments" means, as at any date of
determination, the aggregate principal amount of all outstanding Loans.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"Warrant" means the Warrant, of even date herewith, issued by Holdings for
the benefit of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or its registered assigns.
"Year 2000 Issues" means limitations in the capacity or readiness to handle
date information for the years beginning January 1, 2000 of any of the Systems.
1.2. Accounting Terms. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Holdings to Lenders pursuant to Section 5.1(a) and
5.1(b) shall be prepared in accordance with GAAP as in effect at the time of
such preparation (and delivered together with the reconciliation statements
provided for in Section 5.1(d), if applicable). Subject to the foregoing,
calculations in connection with the definitions, covenants and other provisions
hereof shall utilize accounting principles and policies in conformity with those
used to prepare the Historical Financial statements.
1.3. Interpretation, etc. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
23
SECTION 2. LOANS
2.1. Loans. (a) During the Loan Commitment Period, subject to the terms
and conditions hereof, each Lender holding a Loan Commitment agrees to make
Loans to Borrowers, as joint and several obligors, in an aggregate amount up to
but not exceeding such Lender's Loan Commitment; provided, after giving effect
to the making of any Loans in no event shall the Total Utilization of Loan
Commitments exceed the Loan Commitments then in effect. Amounts borrowed
pursuant to this Section 2.1(a) and repaid may not be reborrowed. Each Lender's
Loan Commitment shall expire on the Loan Maturity Date. All Loans and all other
amounts owed hereunder with respect to the Loans and the Loan Commitments shall
be paid in full no later than the Loan Maturity Date.
(b) Notwithstanding anything in this Agreement or in any other Credit
Document to the contrary, the Obligations of Borrowers hereunder and under each
other Credit Document are joint and several obligations of Borrowers.
(c) Loans shall be made in an aggregate minimum amounts of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount.
(d) Whenever Borrowers desire that Lenders make Loans, Borrowers shall
deliver to Administrative Agent a fully executed and delivered Funding Notice no
later than 10:00 a.m. (New York City time) at least five Business Days in
advance of the proposed Credit Date (or such shorter time period as may be
acceptable to Administrative Agent). During the period following delivery of
the Funding Notice, authorized representatives of Administrative Agent shall be
permitted to perform inspections and reviews as described in Section 5.6(a).
Except as otherwise provided herein, a Funding Notice for a Loan shall be
irrevocable and the Borrowers shall be bound to make a borrowing in accordance
therewith.
(e) Notice of receipt of each Funding Notice, together with the amount of
each Lender's Pro Rata Share thereof, shall be provided by Administrative Agent
to each Lender by telefacsimile with reasonable promptness, but (provided
Administrative Agent shall have received such notice by 11:00 a.m. (New York
City time)), not later than 2:00 p.m. (New York City time) on the same day as
Administrative Agent's receipt of such Funding Notice from the Borrowers.
(f) Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Credit Date by wire transfer of same day funds in Dollars, at the
Administrative Agent's Principal Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Loans available to the
Borrowers on the applicable Credit Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Loans received by Administrative
Agent from Lenders to be credited to the account of the Borrowers at the
Administrative Agent's Principal Office or such other account as may be
designated in writing to Administrative Agent by Borrowers.
2.2. Pro Rata Shares; Availability of Funds. (a) All Loans shall be made
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no
24
Lender shall be responsible for any default by any other Lender in such other
Lender's obligation to make a Loan requested hereunder or purchase a
participation required hereby nor shall the Loan Commitment of any Lender be
increased or decreased as a result of a default by any other Lender in such
other Lender's obligation to make a Loan requested hereunder or purchase a
participation required hereby.
(b) Unless Administrative Agent shall have been notified by a Lender
prior to the applicable Credit Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Credit Date, Administrative Agent may assume that such Lender has made such
amount available to Administrative Agent on such Credit Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make available
to the applicable Borrower a corresponding amount on such Credit Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Credit Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
interest rate payable hereunder on the Loans. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify the applicable Borrower and such
Borrower shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the interest rate payable
hereunder on the Loans. Nothing in this Section 2.2(b) shall be deemed to
relieve any Lender from its obligation to fulfill its Loan Commitments hereunder
or to prejudice any rights that either Borrower may have against any Lender as a
result of any default by such Lender hereunder.
2.3. Use of Proceeds. The proceeds of the Loans shall be applied by
Borrowers to finance the working capital and general corporate needs of
Borrowers and their respective Subsidiaries. No portion of the proceeds of any
Credit Extension shall be used by a Borrower, or any of its Subsidiaries in any
manner that might cause such Credit Extension or the application of such
proceeds to violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation thereof or to
violate the Exchange Act, in each case as in effect on the date or dates of such
Credit Extension and such use of proceeds.
2.4. Evidence of Debt; Register; Lenders' Books and Records; Notes. (a)
Each Lender shall maintain on its internal records an account or accounts
evidencing the indebtedness of Borrowers to such Lender, including the amounts
of the Loans made by it and each repayment and prepayment in respect thereof.
Any such recordation shall be conclusive and binding on the Borrowers, absent
manifest error; provided, failure to make any such recordation, or any error in
such recordation, shall not affect any Lender's Loan Commitments or Borrowers'
Obligations in respect of any Loans; and provided further, in the event of any
inconsistency between the Register and any Lender's records, the recordations in
the Register shall govern.
(b) Administrative Agent shall maintain at its Principal Office a register
for the recordation of the names and addresses of Lenders and the Loan
Commitments and Loans of each
25
Lender from time to time (the "Register"). The Register shall be available for
inspection by Borrowers or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Administrative Agent shall record in the
Register the Loan Commitments and the Loans, and each repayment or prepayment in
respect of the principal amount of the Loans, and any such recordation shall be
conclusive and binding on Borrowers and each Lender, absent manifest error;
provided, failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Loan Commitments or Borrowers'
Obligations in respect of any Loan. Borrowers hereby designate Administrative
Agent to serve as Borrower's agent solely for purposes of maintaining the
Register as provided in this Section 2.4, and Borrowers hereby agree that, to
the extent Administrative Agent serves in such capacity, Administrative Agent
and its officers, directors, partners, employees, agents and affiliates shall
constitute "Indemnitees".
(c) If so requested by any Lender by written notice to a Borrower (with a
copy to Administrative Agent) at least two Business Days prior to the Closing
Date, or at any time thereafter, the Borrowers shall execute and deliver to such
Lender (and/or, if applicable and if so specified in such notice, to any Person
who is an assignee of such Lender pursuant to Section 10.6) on the Closing Date
(or, if such notice is delivered after the Closing Date, promptly after such
Borrower's receipt of such notice) a Note to evidence such Lender's Loans.
2.5. Interest Payments. (a) Except as otherwise set forth herein, each
Loan shall bear interest on the unpaid principal amount thereof on each day
outstanding, from the date made through the date of repayment, at the higher of:
(1) 13.0% per annum; and (2) the Adjusted Eurodollar Rate plus 6% per annum, the
determination of the highest applicable rate to be made by Administrative Agent
as of 11:00 a.m. (New York City time) on each Business Day and apply until 11:00
a.m. (New York City time) on the next succeeding Business Day.
(b) Interest payable pursuant to Section 2.5(a) shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan and the date of payment of such Loan shall be
excluded; provided, if a Loan is repaid on the same day on which it is made, one
day's interest shall be paid on that Loan.
(c) Except as otherwise set forth herein, interest on each Loan shall be
payable in arrears on and to (i) each Interest Payment Date; (ii) the date of
any prepayment of that Loan, whether voluntary or mandatory, to the extent
accrued on the amount being prepaid; and (iii) at final maturity.
2.6. Default Interest. Upon the occurrence and during the continuance of
an Event of Default, the principal amount of all Loans and, to the extent
permitted by applicable law, any interest payments on the Loans or any fees or
other amounts owed hereunder not paid when due, in each case whether at stated
maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate that is 3% per annum in excess of the interest rate otherwise payable
hereunder with respect to the Loans. Payment or acceptance of the increased
rates of interest provided for in this Section 2.6 is not a permitted
alternative to timely
26
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.7. Commitment Fees. Borrowers agree jointly and severally to pay to
Lenders commitment fees equal to (i) the average of the daily excess of the Loan
Commitments over the sum of the aggregate principal amount of outstanding Loans,
times (ii) 1.0% per annum. All such fees shall be paid to Administrative Agent
at its Principal Office and upon receipt, Administrative Agent shall promptly
distribute to each Lender its Pro Rata Share thereof, and all such fees shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
and shall be payable monthly in arrears on each Interest Payment Date during the
Loan Commitment Period, commencing on the first such date to occur after the
Closing Date, and on the Loan Commitment Termination Date.
2.8. Other Fees. In addition to the foregoing fees, Holdings and Borrowers
agree to pay to Administrative Agent such other fees and other compensation in
the amounts and at the times described in that certain outline of proposed terms
dated April 15, 1999 provided by GSCP Holdings.
2.9. Voluntary Prepayments/Reductions. (a) Any time and from time to time,
Borrowers may prepay any Loans on any Business Day in whole or in part, in an
aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in
excess of that amount; provided that, the number of prepayments allowed pursuant
--------
to this Section 2.9(a) shall not exceed four (4) during the term of this
Agreement. All such prepayments shall be made upon not less than three Business
Days' prior written or telephonic notice, given to Administrative Agent by 12:00
noon (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (and Administrative Agent
will promptly transmit such telephonic or original notice for by telefacsimile
or telephone to each Lender). Upon the giving of any such notice, the principal
amount of the Loans specified in such notice shall become due and payable on the
prepayment date specified therein.
(b) Borrowers may, upon not less than three Business Days' prior written
or telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each applicable Lender), at any time
and from time to time terminate in whole or permanently reduce in part, without
premium or penalty, the Loan Commitments in an amount up to the amount by which
the Loan Commitments exceed the Total Utilization of Loan Commitments at the
time of such proposed termination or reduction; provided, any such partial
reduction of the Loan Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $500,000 in excess of that amount; provided
that, the number of reductions allowed pursuant to this Section 2.9(b) shall not
exceed four (4) during the term of this Agreement. Borrowers' notice to
Administrative Agent shall designate the date (which shall be a Business Day) of
such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Loan Commitments shall be effective on the date
specified in Borrowers' notice and shall reduce the Loan Commitment of each
Lender proportionately to its Pro Rata Share thereof.
27
2.10. Mandatory Prepayments/Reductions. (a) No later than the first
Business Day following the date of receipt by Holdings or any of its
Subsidiaries of any Net Asset Sale Proceeds, Borrowers shall prepay the Loans
(and, to the extent such Net Asset Sale Proceeds exceed the principal amount of
Loans outstanding, reduce the Loan Commitments by such excess) in an aggregate
amount equal to such Net Asset Sale Proceeds; provided, (i) so long as no
Default or Event of Default shall have occurred and be continuing, and (ii) to
the extent that aggregate Net Asset Sale Proceeds from the Closing Date through
the applicable date of determination do not exceed $10,000,000, Borrowers shall
have the option, directly or through one or more of its Subsidiaries, to invest
such Net Asset Sale Proceeds within one hundred eighty (180) days of receipt
thereof in productive assets of the general type used in the business of
Holdings and its Subsidiaries.
(b) No later than the first Business Day following the date of receipt by
Holdings or any of its Subsidiaries, or Administrative Agent as loss payee, of
any Net Insurance/Condemnation Proceeds, Borrowers shall pre-pay the Loans (and,
to the extent such Net Insurance/Condemnation Proceeds exceed the principal
amount of Loans outstanding, reduce the Loan Commitments by such excess) in an
aggregate amount equal to such Net Insurance/Condemnation Proceeds; provided,
(i) so long as no Default or Event of Default shall have occurred and be
continuing, and (ii) to the extent that aggregate Net Insurance/Condemnation
Proceeds from the Closing Date through the applicable date of determination do
not exceed $10,000,000, (or such greater amounts so long as Borrowers in their
reasonable judgment conclude that such greater amounts can be practicably
reinvested in long term productive assets within 180 days of receipt thereof
without giving rise to a Material Adverse Effect) Borrowers shall have the
option, directly or through one or more of their respective Subsidiaries to
invest such Net Insurance/Condemnation Proceeds within one hundred eighty (180)
days of receipt thereof in long term productive assets of the general type used
in the business of Holdings and its Subsidiaries, which investment may include
the repair, restoration or replacement of the applicable assets of Holdings or
its Subsidiaries.
(c) No later than the first Business Day following the day on which
Holdings, on a stand-alone basis, receives, from any source, (other than a
Restricted Junior Payment made by a Borrower or an intercompany loan made to
Holdings pursuant to Section 6.1), aggregate Cash or Cash Equivalents of greater
than $5,000,000 but less than or equal to $15,000,000 (such Cash or Cash
Equivalents being referred to herein as the "Controlled Cash Amount"), such
Controlled Cash Amount shall be used to pre-pay the Loans (and, to the extent
such Controlled Cash Amount exceeds the principal amount of Loans outstanding,
reduce the Loan Commitments by such excess) unless such Controlled Cash Amount
is otherwise (i) invested as a capital contribution in either Borrower, or (ii)
used to cash collateralize the Loans under arrangements reasonably acceptable to
Administrative Agent.
(d) Concurrently with any prepayment of the Loans and/or reduction of the
Loan Commitments pursuant to Sections 2.9(a) or 2.9(b), Holdings shall deliver
to Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds. In the event that
Holdings or either Borrower shall subsequently determine that the actual amount
received exceeded the amount set forth in such certificate, Borrowers shall
promptly make an additional prepayment of the Loans (and/or the Loan Commitments
shall be permanently reduced) in an amount equal to such excess, and Holdings
shall concurrently therewith deliver to
28
Administrative Agent a certificate of an Authorized Officer demonstrating the
derivation such excess.
2.11. General Provisions Regarding Payments. (a) All payments by Borrowers
of principal, interest, fees and other Obligations shall be made in Dollars in
same day funds, without defense, setoff or counterclaim, free of any restriction
or condition, and delivered to Administrative Agent not later than 12:00 Noon
(New York City time) on the date due at the Administrative Agent's Principal
Office for the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by Borrowers on the
next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.
(c) Administrative Agent shall promptly distribute to each Lender at such
address as such Lender shall indicate in writing, such Lender's applicable Pro
Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all commitment fees payable with respect thereto, to the extent
received by Administrative Agent.
(d) Whenever any payment to be made hereunder shall be stated to be due
on a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Loan Commitment fees
hereunder, as the case may be.
(e) Each Borrowers hereby authorize Administrative Agent to charge such
Borrower's accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts for
that purpose).
(f) Administrative Agent shall deem any payment by or on behalf of either
Borrower hereunder that is not made in same day funds prior to 12:00 noon (New
York City time) to be a non-conforming payment. Any such payment shall not be
deemed to have been received by Administrative Agent until the later of (i) the
time such funds become available funds, and (ii) the applicable next Business
Day. Administrative Agent shall give prompt telephonic notice to Borrowers and
each Lender (confirmed in writing) if any payment is non-conforming. Any non-
conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.6 from the date such amount was due and payable
until the date such amount is paid in full.
29
2.12. Ratable Sharing. Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment (other than a voluntary prepayment of
Loans made and applied in accordance with the terms hereof), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Credit
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to such Lender hereunder or under the other Credit
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of either Borrower or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without
interest. Borrowers expressly consent to the foregoing arrangement and agree
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by either Borrower to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that holder.
2.13. Making or Maintaining Eurodollar Rate Loans. (a) In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date when Loans would, pursuant to Section 2.5(a) bear interest
based upon the Adjusted Eurodollar Rate, that by reason of circum stances
affecting the London interbank market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on such basis, the Loans
shall bear interest at 13.0% per annum.
(b) In the event that on any date any Lender shall have determined
(which determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Borrower and
Administrative Agent) that the making, maintaining or continuation of its Loans
bearing interest based upon the Adjusted Eurodollar Rate has become unlawful as
a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful),
or has become impracticable, as a result of contingencies occurring after the
date hereof which materially and adversely affect the London interbank market or
the position of such Lender in that market, then, and in any such event, such
Lender shall on that day give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter the Loans of the Affected Lender shall bear interest at 13.0% per
annum.
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2.14.Increased Costs; Capital Adequacy. (a) Subject to the provisions of
Section 2.15 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable hereunder; (ii)
imposes, modifies or holds applicable any reserve (including any marginal,
emergency, supplemental, special or other reserve), special deposit, compulsory
loan, FDIC insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect to Loans
bearing interest based upon the Adjusted Eurodollar Rate that are reflected in
the definition of Adjusted Eurodollar Rate); or (iii) imposes any other
condition (other than with respect to a Tax matter) on or affecting such Lender
(or its applicable lending office) or its obligations hereunder or the London
interbank market; and the result of any of the foregoing is to increase the cost
to such Lender of agreeing to make, making or maintaining Loans hereunder or to
reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Borrowers shall
promptly pay to such Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Borrowers (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
Section 2.14(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
(b) In the event that any Lender shall have determined that the adoption,
effectiveness, phase-in or applicability after the date hereof of any law, rule
or regulation (or any provision thereof) regarding capital adequacy, or any
change therein or 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 its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reduces the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Loan Commitments or other obligations hereunder with
respect to the Loans to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such
31
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Borrowers from such Lender of
the statement referred to in the next sentence, such Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Borrowers (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.15. Taxes; Withholding, Etc. (a) All sums payable by any Credit Party
hereunder and the other Credit Documents shall (except to the extent required by
law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of any
Credit Party or by any federation or organization of which the United States of
America or any such jurisdiction is a member at the time of payment.
(b) If any Credit Party or any other Person is required by law to make any
deduction or withholding on account of any such Tax from any sum paid or payable
by any Credit Party to Administrative Agent or any Lender under any of the
Credit Documents: (i) Borrowers shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as either Borrower
becomes aware of it; (ii) such Borrower shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if the liability to
pay is imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (iii) the sum payable by
such Credit Party in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment, Administrative Agent
or such Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction, withholding or payment been
required or made; and (iv) within thirty (30) days after paying any sum from
which it is required by law to make any deduction or withholding, and within
thirty (30) days after the due date of payment of any Tax which it is required
by clause (ii) above to pay, Borrowers shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Each Lender that is organized under the laws of any jurisdiction other
than the United States or any state or other political subdivision thereof (a
"Non-US Lender") shall deliver to
32
Administrative Agent for transmission to Borrowers, on or prior to the Closing
Date (in the case of each Lender listed on the signature pages hereof on the
Closing Date) or on or prior to the date of the Assignment Agreement pursuant to
which it becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of either Borrower or
Administrative Agent (each in the reasonable exercise of its discretion), (i)
two original copies of Internal Revenue Service Form 1001 or 4224 (or any
successor forms), properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required under the Internal
Revenue Code or the regulations issued thereunder to establish that such Lender
is not subject to deduction or withholding of United States federal income tax
with respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Credit Documents, or (ii) if such Lender
is not a "bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form 1001 or
4224 pursuant to clause (i) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8 (or any successor
form), properly completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any of the
Credit Documents. Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax withholding
matters pursuant to this Section 2.15(c) hereby agrees, from time to time after
the initial delivery by such Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall promptly deliver to Administrative Agent for
transmission to Borrowers two new original copies of Internal Revenue Service
Form 1001 or 4224, or a Certificate re Non-Bank Status and two original copies
of Internal Revenue Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other certificate or statement
of exemption required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Credit Documents, or notify
Administrative Agent and Borrowers of its inability to deliver any such forms,
certificates or other evidence. Borrowers shall not be required to pay any
additional amount under Section 2.15(b)(iii) if such Lender shall have failed
(1) to deliver the forms, certificates or other evidence referred to in the
second sentence of this Section 2.15(c), or to notify Administrative Agent and
Borrowers of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of the first sentence of this Section 2.15(c) on the Closing Date
or on the date of the Assignment Agreement pursuant to which it became a Lender,
as applicable, nothing in this last sentence of Section 2.15(c) shall relieve
Borrowers of their obligation to pay any additional amounts pursuant to Section
2.14(a) in the event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described herein.
2.16. Obligation to Mitigate. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans becomes aware of the occurrence of
33
an event or the existence of a condition that would cause such Lender that would
entitle such Lender to receive payments under Section 2.14, or 2.15, it will, to
the extent not inconsistent with the internal policies of such Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (a) to make,
issue, fund or maintain its Credit Extensions, through another office of such
Lender, or (b) take such other measures as such Lender may deem reasonable, if
as a result thereof additional amounts which would otherwise be required to be
paid to such Lender pursuant to Section 2.14 or 2.15 would be materially reduced
and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Loan Commitments or Loans through such
other office or in accordance with such other measures, as the case may be,
would not otherwise materially adversely affect such Loan Commitments or Loans
or the interests of such Lender; provided, such Lender will not be obligated to
utilize such other office pursuant to this Section 2.16 unless Borrowers agree
to pay all incremental expenses incurred by such Lender as a result of utilizing
such other office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by Borrowers pursuant to this Section 2.14
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrowers (with a copy to Administrative Agent)
shall be conclusive absent manifest error.
2.17. Joint and Several Liability
(a) Joint and Several Liability. All Obligations of Borrowers under this
Agreement and other Credit Documents shall be joint and several Obligations of
each Borrower. Anything contained in this Agreement and the other Credit
Documents to the contrary notwithstanding, the Obligations of each Borrower
hereunder shall be limited to a maximum aggregate amount equal to the largest
amount that would not render its Obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under (S) 548 of the Bankruptcy Code, 11
U.S.C. (S) 548, or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Borrower, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Borrower in respect of intercompany indebtedness to any
other Credit Party or Affiliates of any other Credit Party to the extent that
such indebtedness would be discharged in an amount equal to the amount paid by
such Credit Party hereunder) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation or contribution of such Credit Party pursuant to (i)
applicable law or (ii) any agreement providing for an equitable allocation among
such Credit Party and other Affiliates of any Credit Party of Obligations
arising under guaranties by such parties.
(b) Subrogation. Until the Obligations shall have been paid in full in
cash, each Borrower shall withhold exercise of any right of subrogation,
contribution or any other right to enforce any remedy which it now has or may
hereafter have against the other Borrower or any other guarantor of the
Obligations. Each Borrower further agrees that, to the extent the waiver of its
rights of subrogation, contribution and remedies as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
such rights such Borrower may have against the other Borrower, any collateral or
security or any guarantor, shall be junior and subordinate to any rights
Administrative Agent or any Lender may have against any such Borrower, any such
collateral or security, and any such guarantor. Borrowers desire to allocate
among themselves, in a fair and
34
equitable manner, their Obligations as Borrowers arising under this Agreement
and the other Credit Documents. Accordingly, in the event any payment or
distribution is made on any date by either Borrower under this Agreement and the
other Credit Documents (the Borrower making such payment, a "Funding Borrower")
that exceeds its Fair Share (as defined below) as of such date, that Funding
Borrower shall be entitled to a contribution from the other Borrower in the
amount of such other Borrower's Fair Share Shortfall (as defined below) as of
such date, with the result that all such contributions will cause each
Borrower's Aggregate Payments (as defined below) to equal its Fair Share as of
such date. "Fair Share" means, with respect to a Borrower as of any date of
determination, an amount equal to (i) the ratio of (X) the Fair Share
Contribution Amount (as defined below) with respect to such Borrower to (Y) the
aggregate of the Fair Share Contribution Amounts with respect to both Borrowers,
multiplied by (ii) the aggregate amount paid or distributed on or before such
-------------
date by the Funding Borrower under this Agreement and the other Credit Documents
in respect of the Obligations guarantied. "Fair Share Shortfall" means, with
respect to a Borrower as of any date of determination, the excess, if any, of
the Fair Share of such Borrower over the Aggregate Payments of such Borrower.
"Fair Share Contribution Amount" means, with respect to a Borrower as of any
date of determination, the maximum aggregate amount of the Obligations of such
Borrower under this Agreement and the other Credit Documents that would not
render its Obligations hereunder or thereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law; provided tha
t, solely for purposes of calculating the "Fair Share Contribution Amount" with
respect to a Borrower for purposes of this provision, any assets or liabilities
of such Borrower arising by virtue of any rights to subrogation, reimbursement
or indemnification or any rights to or Obligations of contribution hereunder
shall not be considered as assets or liabilities of such Borrower. "Aggregate
Payments" means, with respect to a Borrower as of any date of determination, an
amount equal to (i) the aggregate amount of all payments and distributions made
on or before such date by such Borrower in respect of this Agreement and the
other Credit Documents (including in respect of this provision) minus (ii) the
-----
aggregate amount of all payments received on or before such date by such
Borrower from the other Borrower as contributions under this provision. The
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Borrower. The allocation among Borrowers of their Obligations as set forth in
this provision shall not be construed in any way to limit the liability of
either Borrower under this Agreement or under any other Credit Document.
SECTION 3. CONDITIONS PRECEDENT
3.1. Closing Date. This Agreement shall become effective on the date of
the satisfaction, or waiver in accordance with Section 10.5, of the following
conditions:
(a) Credit Documents. Administrative Agent shall have received sufficient
copies of each Credit Document originally executed and delivered by each
applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency. Administrative Agent shall have
received sufficient copies of each Organizational Document originally executed
and delivered by
35
each Credit Party, as applicable, and, to the extent applicable, certified as of
a recent date by the appropriate governmental official, for each Lender and its
counsel, each dated the Closing Date or a recent date prior thereto, together
with signature and incumbency certificates of the officers of such Person
executing the Credit Documents to which it is a party.
(c) Organizational and Capital Structure. The organizational structure and
the capital structure of Holdings and its Subsidiaries shall be as set forth on
Schedule 4.1.
(d) Certain Employees. Administrative Agent shall have received duly
executed copies of, and shall be satisfied with the form and substance of, the
Employment Agreements.
(e) Related Agreements. Administrative Agent shall have received complete
and correct copies of each Related Agreement and of all exhibits and schedules
thereto.
(f) Governmental Authorizations and Consents. Each Credit Party shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the transactions
contemplated by the Credit Documents and each of the foregoing shall be in full
force and effect. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
(g) Collateral. In order to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and, subject to any filing and/or recording
referred to herein, perfected First Priority security interest in the
Collateral, Administrative Agent shall have received:
(i) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all capital stock pledged pursuant to the Pledge and Security Agreement,
and Acknowledgments of Pledge from each applicable issuer of Securities
pledged pursuant to the Pledge and Security Agreement;
(ii) (1) the results of a recent search, by a Person satisfactory to
Administrative Agent, of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of any Credit Party, together
with copies of all such filings disclosed by such search, and (2) UCC
termination statements duly executed by all applicable Persons for filing
in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements or fixture filings disclosed in such
search (other than any such financing statements in respect of Permitted
Liens)
(iii) UCC financing statements, duly executed by each applicable
Credit Party with respect to all personal property Collateral of such
Credit Party, for filing in all jurisdictions as may be necessary or, in
the opinion of Administrative Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents;
36
(iv) all cover sheets or other documents or instruments required to be
filed in order to create or perfect Liens in respect of any Intellectual
Property Collateral;
(v) an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) with respect to the creation and
perfection of the security interests in favor of Administrative Agent in
such Collateral and such other matters governed by the laws of each
jurisdiction in which any Credit Party or any material amount of personal
property Collateral is located as Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Administrative Agent; and
(vi) evidence that each Credit Party shall have taken or caused to be
taken any other action, executed and delivered or caused to be executed and
delivered any other agreement, document and instrument, and made or caused
to be made any other filing and recording (other than as set forth herein)
reasonably required by Administrative Agent.
(h) Financial Statements; Projections. Lenders shall have received from
Holdings the Historical Financial Statements and the Projections.
(i) Evidence of Insurance. Administrative Agent shall have received a
certificate from Borrower's insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to Section 5.5 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under Section 5.5.
(j) Opinions of Counsel to Credit Parties. Lenders and their respective
counsel shall have received originally executed copies of the favorable written
opinions of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for Credit Parties, in the form
of Exhibit D and as to such other matters as Administrative Agent may reasonably
request, and otherwise in form and substance reasonably satisfactory to
Administrative Agent and its counsel, dated as of the Closing Date.
(k) Opinions of Counsel to Administrative Agent. Lenders shall have
received originally executed copies of one or more favorable written opinions of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to Administrative Agent, dated
as of the Closing Date, in form and substance reasonably satisfactory to
Administrative Agent.
(l) Fees. Borrowers shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in Section 2.8.
(m) Completion of Proceedings. All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent, acting on behalf of Lenders, or counsel to
Administrative Agent, shall be satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such
37
counterpart originals or certified copies of such documents as Administrative
Agent may reasonably request.
(n) Closing Date Certificate. Holdings and Borrowers shall have delivered
to Administrative Agent an originally executed Closing Date Certificate,
together with all attachments thereto.
3.2. Conditions to Each Credit Extension. (a) The obligation of each
Lender to make any Loan on any Credit Date, including the initial Credit
Extension, are subject to the satisfaction or waiver in accordance with Section
10.5 of the following conditions precedent:
(i) Administrative Agent shall have received a fully executed and
delivered Funding Notice;
(ii) after making the Credit Extensions requested on such Credit
Date, the Total Utilization of Loan Commitments shall not exceed the Loan
Commitments then in effect;
(iii) no injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the making any
Credit Extension;
(iv) as of such Credit Date, the representations and warranties
contained herein and in the other Credit Documents shall be true, correct
and complete in all material respects on and as of that Credit Date to the
same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date; and
(v) as of such Credit Date, no event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default.
(b) Each Funding Notice shall be executed by the chief executive officer or
the chief financial officer of each Borrower or by the executive officer thereof
designated by the chief executive officer and the chief financial officer of
each Borrower in a writing delivered to Administrative Agent. In lieu of
delivering a Funding Notice, Borrowers may give Administrative Agent telephonic
notice by the required time of any proposed borrowing; provided each such notice
shall be promptly confirmed in writing by delivery of the Funding Notice to
Administrative Agent on or before the applicable date of borrowing. Neither
Administrative Agent nor any Lender shall incur any liability to Borrowers in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized on behalf of Borrowers or for otherwise acting in good faith.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make each
Credit Extension to be made thereby, each Credit Party represents and warrants
to each Lender, on the Closing Date and on each Credit Date, that the following
statements are true, correct and complete:
4.1. Organization; Powers; Qualification. Each of Holdings and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization as identified in Schedule 4.1, (b)
has all requisite power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Credit Documents to which it is a party and to carry out the
transactions contemplated thereby, and (c) is qualified to do business and in
good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had, and could
not be reasonably expected to have, a Material Adverse Effect. Schedule 4.1
correctly sets forth the ownership interest of Holdings and each of its
Subsidiaries in their respective Subsidiaries.
4.2. Authorization of Credit Documents; No Conflict. The execution,
delivery and performance of the Credit Documents have been duly authorized by
all necessary action on the part of each Credit Party that is a party thereto.
The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings or any of its Subsidiaries, any of the Organizational Documents of
Holdings or any of its Subsidiaries, or any order, judgment or decree of any
court or other agency of government binding on Holdings or any of its
Subsidiaries; (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Holdings or any of its Subsidiaries; (c) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any
of its Subsidiaries (other than any Liens created under any of the Credit
Documents in favor of Administrative Agent on behalf of Lenders); or (d) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Holdings or any of its Subsidiaries.
4.3. Governmental Consents. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority, except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Administrative Agent, as of the Closing Date.
4.4. Binding Obligation. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may
39
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.5. Historical Financial Statements; Projections. The Historical
Financial Statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position, on a consolidated basis, of
the Persons described in such financial statements as at the respective dates
thereof and the results of operations and cash flows, on a consolidated basis,
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. Neither Holdings nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole. On and as of the Closing Date, the financial projections of
Holdings and its Subsidiaries for the period commencing Fiscal Year 1999 through
and including Fiscal Year 2002 (the "Projections"), including, without
limitation, the Projections for each Fiscal Quarter through December 31, 2000,
are based on good faith estimates and assumptions made by the management of
Holdings; provided, the Projections are not to be viewed as facts and that
actual results during the period or periods covered by the Projections may
differ from such Projections and that the differences may be material; provided
further, as of the Closing Date, management of Holdings believed that the
Projections were reasonable and attainable.
4.6. No Material Adverse Change; No Restricted Junior Payments. Since
December 31, 1998, no event or change has occurred that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, and neither
Holdings nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.4.
4.7. Adverse Proceedings, Etc. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries (a) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or (b) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.8. Payment of Taxes. Except as otherwise permitted under Section 5.3,
all material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all material assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. As of the Closing Date and
each Credit Date, Holdings knows of no proposed tax assessment against Holdings
or any of its Subsidiaries which is not being actively contested by Holdings or
such Subsidiary in good faith and by appropriate proceedings; provided,
40
such reserves or other appropriate provisions, if any, as shall be required in
conformity with GAAP shall have been made or provided therefor.
4.9. Title to Properties. Holdings and its Subsidiaries have (a) good,
sufficient and legal title to (in the case of fee interests in real property),
(b) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (c) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
Historical Financial Statements and in the most recent financial statements
delivered pursuant to Section 5.1, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under Section 6.7. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
4.10. Collateral. (a) The execution and delivery of the Collateral
Documents by Credit Parties, together with the actions taken on or prior to the
date hereof pursuant to Section 3.1(g) (and filings contemplated to occur
thereafter), are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the Pledge and Security Agreement), a valid and perfected First
Priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and First Priority
status of such Liens have been duly made or taken and remain in full force and
effect, other than the filing of any UCC financing statements delivered to
Administrative Agent for filing (but not yet filed), the periodic filing of UCC
continuation statements in respect of UCC financing statements filed by or on
behalf of Administrative Agent and filings otherwise required to be made in any
state with respect to Inventory (as defined in the Pledge and Security
Agreement) the aggregate value of which does not exceed $100,000 in such state.
(b) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
either (i) the pledge or grant by any Credit Party of the Liens purported to be
created in favor of Administrative Agent pursuant to any of the Collateral
Documents or (ii) the exercise by Administrative Agent of any rights or remedies
in respect of any Collateral (whether specifically granted or created pursuant
to any of the Collateral Documents or created or provided for by applicable
law), except for filings or recordings contemplated by Section 3.1(g) and except
as may be required, in connection with the disposition of any Investment
Property, by laws generally affecting the offering and sale of securities.
(c) Except with respect to any Permitted Lien and such as may have been
filed in favor of Administrative Agent as contemplated by Section 3.1(g), no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(d) All information supplied to Administrative Agent by or on behalf of any
Credit Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
4.11. Environmental. No Credit Party nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement
41
agreement with any Person relating to any Environmental Law, any Environmental
Claim, or any Hazardous Materials Activity that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. As of
the Closing Date and each Credit Date, no Credit Party nor any of its
Subsidiaries has received any letter or written request from any Governmental
Authority for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law. There are and, to each Credit Party's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Holdings nor any
of its Subsidiaries nor, to any Credit Party's knowledge, any predecessor of
Holdings or any of its Subsidiaries has filed any notice under any Environmental
Law indicating past or present treatment of Hazardous Materials at any facility,
and none of Holdings's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous waste,
as defined under 40 C.F.R. Parts 260-270 or any state equivalent except for
ordinary business activities that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Compliance with all
current or reasonably foreseeable future requirements pursuant to or under
Environmental Laws could not be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. No event or condition has occurred or
is occurring with respect to Holdings or any of its Subsidiaries relating to any
Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity which individually or in the aggregate has had, or could
reasonably be expected to have, a Material Adverse Effect.
4.12. No Defaults. No Credit Party is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no condition exists that,
with the giving of notice or the lapse of time or both, would constitute such a
default, except where the consequences, direct or indirect, of such default or
defaults, if any, could not reasonably be expected to have a Material Adverse
Effect.
4.13. Governmental Regulation. Neither Holdings nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
4.14. Margin Stock. Neither Holdings nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. The
pledge of the Investment Property pursuant the Pledge and Security Agreement
does not violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
4.15. Employee Matters. There is no strike or work stoppage in existence
or threatened involving Holdings or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
42
4.16. Employee Benefit Plans. Holdings, each of its Subsidiaries and each
of their respective ERISA Affiliates are in compliance in all material respects
with all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Pension Plan, and have
performed all their obligations under each Employee Benefit Plan. Each Pension
Plan which is intended to qualify under Section 401(a) of the Internal Revenue
Code is so qualified. No ERISA Event with respect to any Pension Plan has
occurred or is reasonably expected to occur. As of the most recent valuation
date for any Pension Plan, the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities), does not exceed
$500,000. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Holdings,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $500,000.
4.17. Certain Fees. No broker's or finder's fee or commission will be
payable by Holdings or any of its Subsidiaries with respect hereto or any of the
transactions contemplated hereby.
4.18. Solvency. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.19. Related Agreements. Holdings and Borrowers have delivered to
Administrative Agent complete and correct copies of each of the Related
Agreements.
4.20. Year 2000 Issues. Holdings and its Subsidiaries have (a) engaged in a
process of assessment of the existence of the Year 2000 Issues reasonably
appropriate to the scope and complexity of their respective Systems; (b) adopted
and are successfully implementing a plan of correction ("Plan of Correction") by
September 30, 1999, which Holdings reasonably believes will result in a
substantial elimination of Year 2000 Issues before any processing failure of a
System or of Systems due to Year 2000 Issues that could reasonably be expected
to have a Material Adverse Effect; (c) adopted and are successfully implementing
validation procedures reasonably calculated to test on an ongoing basis the
sufficiency of the Plan of Correction, its implementation, and the correction of
Year 2000 Issues in any System; (d) adopted and are successfully implementing
policies and procedures requiring regular reports to, and monitoring by, senior
management of Holdings concerning the foregoing matters; and (e) provided
Administrative Agent true and correct copies of the written Plan of Correction,
and related implementation budgets, reviewed and approved by Holdings's Board of
Directors.
4.21. Disclosure. No representation or warranty of any Credit Party
contained in any Credit Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact (known to Holdings or either Borrower, in the case of any document not
furnished by either of them) necessary in order to make the statements contained
herein or therein (when taken as a whole) not misleading
43
in light of the circumstances in which the same were made. Any projections and
pro forma financial information contained in such materials are based upon good
faith estimates and assumptions believed by Holdings to be reasonable at the
time made, it being recognized by Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected results
and that the differences may be material. There are no facts known to any Credit
Party (other than matters of a general economic nature) that, individually or in
the aggregate, could reasonably be expected to result in a Material Adverse
Effect and that have not been disclosed herein or in such other documents,
certificates and statements furnished to Lenders for use in connection with the
transactions contemplated hereby.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Loan Commitment
is in effect and until payment in full of all Obligations, each Credit Party
shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 5.
5.1. Financial Statements and Other Reports. Holdings will deliver to
Administrative Agent and Lenders:
(a) as soon as available and in any event within forty five (45) days after
the end of each of the first three Fiscal Quarters of each Fiscal Year, the
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Holdings and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the
previous Fiscal Year, all in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto;
(b) as soon as available and in any event within ninety (90) days after the
end of each Fiscal Year, (i) the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of Holdings and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year, in reasonable
detail, together with a Financial Officer Certification and a Narrative Report
with respect thereto; and (ii) in the case of such financial statements, a
report thereon of PriceWaterhouseCoopers, LLP or other independent certified
public accountants of recognized national standing selected by Holdings and in
form and substance satisfactory to Administrative Agent, which report shall be
unqualified as to the scope or breadth of audit, shall express no doubts about
the ability of Holdings to continue as a going concern, and shall state that
such consolidated financial statements fairly present, in all material respects,
the financial position of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in
44
accordance with generally accepted auditing standards; and (iii) a written
statement by such independent certified public accountants stating (1) that
their audit examination has included a review of the terms of this Agreement and
other Credit Documents to which any Credit Party is a party, (2) whether, in
connection therewith, any condition or event that constitutes a Default or an
Event of Default has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period of existence
thereof, and (3) that nothing has come to their attention that causes them to
believe that the information contained in any Compliance Certificate is not
correct or that the matters set forth in such Compliance Certificate are not
stated in accordance with the terms hereof; provided, that such accountants
shall not be liable by reason of any failure to obtain knowledge of any such
Event of Default or of Default that would not be disclosed in the course of
their audit examination conducted in accordance with generally accepted auditing
standards;
(c) (i) together with each delivery of financial statements of Holdings
and its Subsidiaries pursuant to Sections 5.1(a) and 5.1(b), a duly executed and
completed Compliance Certificate, and (ii) as long as any Loan is outstanding,
no later than the tenth Business Day of each month, a Financial Officer
Certification evidencing compliance with the Qualifying Receivables Ratio
requirements of Section 6.6(e) as of the last day of the month most recently
ended and certifying whether any condition or event that constitutes a Default
or Event of Default exists and, if any such condition or event exists,
specifying the nature and period of existence thereof;
(d) if, as a result of any change in accounting principles and
policies from those used in the preparation of the Historical Financial
Statements, the consolidated financial statements of Holdings and its
Subsidiaries delivered pursuant to Section 5.1(a) or 5.1(b) will differ in any
material respect from the consolidated financial statements that would have been
delivered pursuant to such subdivisions had no such change in accounting
principles and policies been made and such difference will affect calculations
under Section 6.6 of this Agreement, then together with the first delivery of
such financial statements after such change one or more a statements of
reconciliation for all such prior covenant calculations in form and substance
satisfactory to Administrative Agent;
(e) promptly upon their becoming available, copies of (i) all
financial statements, reports, notices and proxy statements sent or made
available generally by Holdings to its security holders acting in such capacity
or by any Subsidiary of Holdings to its security holders other than Holdings or
another Subsidiary of Holdings, (ii) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Holdings or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (iii) all press releases and
other statements made available generally by Holdings or any of its Subsidiaries
to the public concerning material developments in the business of Holdings or
any of its Subsidiaries;
(f) promptly upon any Authorized Officer of Holdings or either
Borrower obtaining knowledge (i) of any condition or event that constitutes a
Default or an Event of Default or that notice has been given to Holdings or
either Borrower with respect thereto; (ii) that any Person has given any notice
to Holdings or any of its Subsidiaries or taken any other action with respect to
any event or condition set forth in Section 8.1(b); (iii) of any condition or
event of a type required to be
45
disclosed in a current report on Form 8-K of the Securities and Exchange
Commission; or (iv) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, a
certificate of its Authorized Officers specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action either Borrower has taken,
is taking and proposes to take with respect thereto;
(g) promptly upon any Authorized Officer of Holdings or either Borrower
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Adverse Proceeding not previously disclosed in writing by either Borrower to
Lenders, or (ii any material development in any Adverse Proceeding that, in the
case of either (i) or (ii) if adversely determined, could reasonably be expected
to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Holdings or either Borrower
to enable Lenders and their counsel to evaluate such matters;
(h) (i) promptly upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and (ii with reasonable
promptness, copies of (1) each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) filed by Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates with the Internal Revenue Service with respect
to each Pension Plan; (2) all notices received by Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (3) copies of such other documents
or governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
(i) as soon as practicable and in any event no later than thirty (30)
days after the beginning of each Fiscal Year, a consolidated plan and financial
forecast (a "Financial Plan") for such Fiscal Year and each succeeding Fiscal
Year through Fiscal Year 2002 including (i) a forecasted consolidated balance
sheet and forecasted consolidated statements of income and cash flows of
Holdings and its Subsidiaries for each such Fiscal Year, together with pro forma
Compliance Certificates for each such Fiscal Year and an explanation of the
assumptions on which such forecasts are based and (ii) forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries for each
month of such immediately succeeding Fiscal Year, together with an explanation
of the assumptions on which such forecasts are based;
(j) promptly after the implementation thereof, any material change in the
property insurance coverage of any Credit Party; and
(k) with reasonable promptness, such other information and data with
respect to Holdings or any of its Subsidiaries as from time to time may be
reasonably requested by any Lender.
46
5.2. Existence. Except as otherwise permitted under Section 6.7, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises material to its business; provided, no Credit Party nor any of its
Subsidiaries shall be required to preserve any such existence, right or
franchise if such Person's Board of Directors (or similar governing body) shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of such Person, and that the loss thereof is not disadvantageous in
any material respect to such Person or Lenders.
5.3. Payment of Taxes and Claims. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided, no such charge or claim need
be paid if it is being contested in good faith by appropriate proceedings, so
long as (a) such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor, and (b) in the
case of a charge or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral to satisfy such charge or claim. Holdings will
not, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (other than
Holdings or any of its Subsidiaries).
5.4. Maintenance of Properties. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Holdings and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. Insurance. Each Credit Party will maintain or cause to be
maintained, with financially sound and reputable insurers, such commercial
general liability insurance, business interruption insurance and property
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of such Credit Party as may customarily be
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses, in each case in such amounts (giving
effect to self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for such Persons.
Without limiting the generality of the foregoing, each Credit Party will
maintain or cause to be maintained replacement value property insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance with
respect to Collateral shall (i) name Administrative Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (ii)
in the case of each property insurance policy, contain a loss payable clause or
endorsement, satisfactory in form and substance to Administrative Agent, that
names Administrative Agent for the benefit of Lenders as the loss payee
thereunder with respect to such Collateral (subject to the interests if any, of
Deutsche Financial Services contemplated by Section
47
10.5(e)) for any covered loss in excess of $100,000 and provides for at least
ten (10) days prior written notice to Administrative Agent of any modification
or cancellation of such policy.
5.6. Inspections; Audits of Inventory and Accounts; Lenders Meetings. (a)
Each Credit Party will, and will cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Holdings or of any of its Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.
(b) Each Borrower shall permit any authorized representatives designated
by Administrative Agent to conduct audits or reviews of its books and records
with respect to inventory and Accounts periodically after the Closing Date (and
at any time an Event of Default has occurred and is continuing) each such audit
or review to be in scope and substance reasonably satisfactory to Administrative
Agent, all upon reasonable notice and at such reasonable times during normal
business hours as may reasonably be requested.
(c) Each Credit Party will, upon the request of Administrative Agent or
Requisite Lenders, participate in a meeting of Administrative Agent and Lenders
once during each Fiscal Year to be held at Borrowers' corporate offices (or at
such other location as may be agreed to by Borrowers and Administrative Agent)
at such time as may be agreed to by Borrowers and Administrative Agent.
5.7. Compliance with Laws. Each Credit Party will comply, and shall cause
each of its Subsidiaries and all other Persons, if any, on or occupying any
Facilities to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.8. Subsidiaries. In the event that any Person becomes a Subsidiary of
Holdings after the Closing Date, Holdings shall (i) promptly cause such
Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement by executing and delivering to Administrative Agent a
Counterpart Agreement, and (ii) take all such actions and execute and deliver,
or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b) and
3.1(g). With respect to each such Subsidiary, Holdings shall promptly send to
Administrative Agent written notice setting forth with respect to such Person
(i) the date on which such Person became a Subsidiary of Holdings, and (ii) all
of the data required to be set forth in Schedule 4.1 with respect to all
Subsidiaries of Holdings; provided, such written notice shall be deemed to
supplement Schedule 4.1 for all purposes hereof.
5.9. Year 2000 Issues. Holdings shall periodically report to
Administrative Agent, at such time and in such form as Administrative Agent may
reasonably request, and Administrative Agent shall promptly forward each such
report to each Lender, on the progress of Holdings and its Subsidiaries in
implementing the Plan of Correction; the budget for, and actual financial
48
performance with respect to, implementation of the Plan of Correction; the
assessment of Holdings, of the adequacy of the Plan of Correction or the related
implementation budget; the implementation of the Plan of Correction, and the
conformity of actual performance with related implementation budgets.
5.10. Cash Management Arrangements. On and after the earlier to occur of
(y) an Event of Default and (z) the request of the Administrative Agent, such
request not to be made prior to April 1, 2000 (or such earlier date on or after
September 1, 1999, if at any time after September 1, 1999, the Qualifying
Receivables Ratio is less than 1.4:1.0), Borrowers will establish and maintain
cash management arrangements reasonably acceptable to Administrative Agent for
the purpose of monitoring and establishing security interest in favor of
Administrative Agent for the benefit of Lenders in the proceeds of Accounts.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Loan Commitment
is in effect and until payment in full of all Obligations, such Credit Party
shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1. Indebtedness. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness of any Guarantor Subsidiary to either Borrower or to any
other Guarantor Subsidiary, or of either Borrower to any Guarantor Subsidiary,
or of Holdings to either Borrower, or of either Borrower to Holdings; provided,
--------
(i) all such Indebtedness shall be evidenced by promissory notes and all such
notes shall be subject to First Priority Lien pursuant to the Pledge and
Security Agreement, (ii) all such Indebtedness owed by either Borrower to
Holdings or any of its Guarantor Subsidiaries shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes, (iii) any payment by any such Guarantor Subsidiary
under any guaranty of the Obligations shall result in a pro tanto reduction of
the amount of any Indebtedness owed by such Guarantor Subsidiary to such
Borrower or to any of its Guarantor Subsidiaries for whose benefit such payment
is made, and (iv) any Indebtedness of Holdings to either Borrower shall only be
incurred in lieu of Restricted Junior Payments otherwise permitted to be made by
a Borrower to Holdings;
(c) Indebtedness incurred by Holdings, either Borrower or any of their
respective Subsidiaries arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from guaranties or
letters of credit, surety bonds or performance bonds securing the performance of
either Borrower or any such Subsidiary pursuant to such agreements, in
connection with acquisitions or dispositions of any business, assets or any
Subsidiary of either Borrower or any of its Subsidiaries;
49
(d) Indebtedness which may be deemed to exist pursuant to any guaranties,
performance bonds, surety bonds, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(e) Guaranties by Holdings of Indebtedness permitted to be incurred
hereunder by any of its Subsidiaries;
(f) Indebtedness in respect of netting services, overdraft protections and
otherwise in connection with deposit accounts;
(g) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of either Borrower and its
Subsidiaries;
(h) Indebtedness under the Senior Notes and the other Related Agreements
and other Indebtedness outstanding on the Closing Date and described in Schedule
6.1;
(i) Indebtedness constituting the nonrecourse sales of lease receivables at
a discount where the purchaser has recourse only to the lease receivables;
(j) purchase money Indebtedness (including, without limitation,
Indebtedness incurred for the purchase of inventory pursuant to an inventory
flooring plan and Indebtedness incurred in connection with the installation and
the integration of inventory and equipment) (such Indebtedness meeting the
requirements of this Section 6.1(j) being referred to herein as "Purchase Money
Indebtedness") or Capital Leases the proceeds of which are used to acquire
equipment or other assets to be sold or leased to a Borrower's customers or
retained for the Borrower's own use, provided, any such Indebtedness (i) shall
be secured only by the assets acquired in connection with the incurrence of such
Purchase Money Indebtedness, and (ii) shall constitute not less than 80% nor
more than 100% (except, with respect to amounts in excess of 100%, Purchase
Money Indebtedness the proceeds of which are used in connection with the
installation or integration of equipment or equipment) of the aggregate
consideration paid with respect to such asset, including, without limitation,
leases of equipment or inventory that are the subject of ENS Service Agreements;
(k) Indebtedness incurred by Holdings; provided that the weighted average
life to maturity of such Indebtedness is no earlier than the Senior Notes and
the other terms and provisions of such Indebtedness (without consideration of
provisions for original issue discount or payment in kind interest) are no less
favorable (when taken as a whole) to any Credit Party or the Lenders than the
terms and provisions of the Senior Notes;
(l) Acquired Indebtedness;
(m) Indebtedness of any Credit Party to the extent it represents a
replacement, renewal, refinancing or extension of outstanding Indebtedness of
the Credit Party incurred or outstanding pursuant to clause (k) or (i); provided
that (i) the amount of such Indebtedness at the time of such replacement,
renewal, refinancing or extension is not increased, (ii) the weighted average
life to maturity of such Indebtedness is no earlier than the Indebtedness being
refinanced and (iii) the other terms and provisions of such replacement,
renewal, refinancing of extension are no less favorable
50
(when taken as a whole) to any Credit Party or the Lenders than the terms and
provisions of the Indebtedness replaced, renewed, refinanced or extended; and
(n) other Indebtedness in an aggregate amount not to exceed at any time
$5,000,000.
6.2. Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Administrative Agent for the benefit of
Administrative Agent and/or Lenders granted pursuant to any Credit Document;
(b) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required thereby or that are being
contested in good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made for such contested amounts;
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law, in each case incurred in the ordinary course of business
(i) for amounts not yet overdue or (ii for amounts that are overdue and that (in
the case of any such amounts overdue for a period in excess of five days) are
being contested in good faith by appropriate proceedings, so long as such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made for any such contested amounts;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money), so long as no foreclosure,
sale or similar proceedings have been commenced with respect to any portion of
the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
either Borrower or any of its Subsidiaries;
(f) any interest or title of a lessor or sublessor under any lease
permitted hereunder;
(g) Liens incurred in connection with the purchase or shipping of goods or
assets on the related assets and proceeds thereof in favor of the seller or
shipper of such goods or assets;
51
(h) Liens arising from filing precautionary UCC financing statements
relating solely to operating leases entered into the ordinary course of
business;
(i) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation of
goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) licenses of patents, trademarks and other intellectual property rights
granted by either Borrower or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of either Borrower or such Subsidiary;
(l) judgment liens not constituting an Event of Default pursuant to Section
8.1(h);
(m) Liens securing Indebtedness permitted pursuant to Section 6.1(h);
provided, however, that any such Lien shall encumber only the lease receivable
and the equipment subject to the underlying lease;
(n) Liens securing Indebtedness permitted pursuant to 6.1(i) and permitted
refinancings thereof; provided, any such Lien shall encumber only the asset
acquired with the proceeds of such Indebtedness;
(o) Liens created pursuant to the Senior Note Indenture and in effect on
the Closing Date;
(p) Liens securing Indebtedness outstanding under the Related Agreements;
provided that such Liens shall only extend to assets described in and shall be
--------
subject to the terms of, the Related Agreements as in effect on the Closing
Date; and
(q) Liens securing Acquired Indebtedness as described in the definition of
Acquired Indebtedness;
(r) Liens existing on the date hereof described on Schedule 6.2;
(s) Liens on any property or assets of a Subsidiary in favor of a Borrower
or any Subsidiary Guarantor; and
(t) other Liens securing Indebtedness (other than Indebtedness for borrowed
money) in an aggregate amount not to exceed $500,000 at any time outstanding.
6.3. Equitable Lien; No Further Negative Pledges. If any Credit Party or
any of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than
Permitted Liens, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
52
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not otherwise permitted hereby. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, (b) any
prohibition applicable to a Subsidiary at the time that it becomes a Subsidiary
that is not created in contemplation hereof, (c) any prohibition contained in
the Senior Note Indenture or any agreement or indenture evidencing Indebtedness
described in Section 6.1(j), (d) any other prohibition existing on the date
hereof described in Schedule 6.3 and (e) any prohibition existing under any
agreement or indenture that refinances or replaces an agreement or indenture
permitted by clause (b), (c) or (d) above; provided that the terms and
conditions of such prohibitions are not materially less favorable to the Lenders
than those under or pursuant to the agreement or indenture being replaced or the
agreement or indenture evidencing the Indebtedness refinanced no Credit Party
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
6.4. Restricted Payments; Restrictions on Subsidiary Distributions. (a) No
Credit Party shall nor shall it permit any of its Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment except the following:
(i) Holdings may make required (but not optional) payments of
principal and interest in respect of, and required repurchases of, any
Senior Notes and other Indebtedness incurred by Holdings pursuant to
Section 6.1(j) in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions, if any, contained
in, the indenture or other agreement pursuant to which such Indebtedness
was issued;
(ii) so long as no Default or Event of Default shall have occurred
and be continuing or shall be caused thereby, Borrowers may make Restricted
Junior Payments to Holdings (1) in an aggregate amount not to exceed
$2,000,000 in any Fiscal Year, to the extent necessary to permit Holdings
to pay general administrative costs and expenses, (2) to the extent
necessary to permit Holdings to discharge the consolidated tax liabilities
of Holdings and its Subsidiaries, and (3) to the extent necessary to permit
Holdings to discharge the obligations under clause (i) above, in each case
so long as Holdings applies the amount of any such Restricted Junior
Payment for such purpose.
(b) Notwithstanding paragraph (a) above, the Holdings and Borrowers may
take the following actions so long as no Default or Event of Default shall have
occurred and be continuing and to the extent otherwise permitted under the term
of the Senior Notes Indenture:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such dividend would
have complied with the provisions of paragraph (a) above and such payment
will be deemed to have been paid on such date of declaration for purposes
of the calculation required by paragraph (a) above;
53
(ii) the purchase, redemption or other acquisition or retirement for
value of any shares of capital stock of Holdings, in exchange for, or out
of the Net Cash Proceeds of a substantially concurrent issuance and sale
(other than to a Subsidiary) of, shares of capital stock of Holdings;
provided, however, that such capital stock of Holdings may not be
-------- -------
redeemable at the option of the holder or be required to be redeemed prior
to the Loan Maturity Date;
(iii) the payment of cash in lieu of fractional shares of common
stock pursuant to the terms of any options, warrants or other rights to
acquire shares of any class of stock of Holdings;
(iv) payments of amounts required for any repurchase, redemption or
other acquisition or retirement for value of any capital stock of Holdings
or any options or rights to acquire such capital stock of Holdings owned by
any director, officer or employee of Holdings pursuant to any management
equity subscription agreement or similar agreement, or otherwise upon the
death, disability, retirement or termination of employment or departure
from the board, provided that the aggregate price paid for all such
--------
repurchased, redeemed, acquired or retired capital stock of Holdings or
options shall not exceed in the aggregate $500,000 in any calendar year;
(v) repurchases of capital stock of Holdings or solely in connection
with cashless exercises of options, warrants and other convertible
securities.
(c) Except as provided herein or in the Senior Notes Indenture, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Credit Party to (i) pay dividends
or make any other distributions on any of such Credit Party's capital stock (ii
repay or prepay any Indebtedness owed by any Credit Party, (ii make loans or
advances to any Credit Party, or (iv transfer any of its property or assets to
any Credit Party except for (A) encumbrances and restrictions with respect to
specific property to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to any Asset Sale, (B) any
prohibition applicable to a Subsidiary at the time that it becomes a Subsidiary
that is not created in contemplation hereof, (C) any prohibition contained in
the Senior Note Indenture or any agreement or indenture evidencing Indebtedness
described in Section 6.1(j), (D) any other prohibition existing on the date
hereof described in Schedule 6.4, (E) any prohibition existing under any
agreement or indenture that refinances or replaces an agreement or indenture
permitted by clause (B), (C) or (D) above, provided that the terms and
conditions of such prohibition are not materially less favorable to the Lenders
than those under or pursuant to the agreement or indenture being replaced or the
agreement or indenture evidencing the Indebtedness refinanced, and (F) customary
non-assignment provisions entered into in the ordinary course of business.
6.5. Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
54
(a) Cash Equivalents;
(b) Investments owned as of the Closing Date in any Subsidiary;
(c) Investments (i) in accounts receivable arising and trade credit
granted in the ordinary course of business and in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors and (ii) prepayments and other credits to suppliers made in the ordinary
course of business consistent with the past practices of Holdings and its
Subsidiaries;
(d) intercompany loans to the extent permitted under Section 6.1(b);
(e) Consolidated Capital Expenditures permitted by Section 6.6;
(f) loans to employees of Holdings and its Subsidiaries in an aggregate
principal amount not to exceed $1,000,000 in the aggregate;
(g) Investments made in connection with Permitted Acquisitions;
(h) Investments owned as of the Closing Date and described in
Schedule 6.5;
(i) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility and workers' compensation, performance and other
similar deposits;
(j) loans or advances to actual or potential customers or suppliers of
Holdings or any of its Subsidiaries that are made in connection with the
purchase of goods and services from Holdings or any of its Subsidiaries in the
ordinary course of business and consistent with practices in the industry of
Holdings;
(k) obligations owed by third parties which were acquired in connection
with a sale of assets sold by Holdings or any of its Subsidiaries permitted by
Section 6.7; provided such obligations in the form of promissory notes or
--------
similar obligations shall not exceed 25% of the aggregate consideration received
by Holdings or any of its Subsidiaries in connection with any such sale of
assets;
(l) Investments received as part of the settlement of litigation or in
satisfaction of extensions of credit to any Person otherwise permitted under
this Agreement pursuant to the reorganization, bankruptcy or liquidation of such
Person or a good faith settlement of debts with such Person;
(m) any Investment not permitted by the foregoing clauses of this Section
6.5 by a Credit Party in a Person in which the Credit Parties own, or
immediately after giving effect to such Investment will own, more than 20% of
such Person's outstanding voting stock (but which Person is not, and will not
be, after giving effect to such investment, a Subsidiary) in an aggregate
principal amount at any one time not to exceed $3,000,000; and
55
(n) other Investments in an aggregate amount not to exceed at any time
$250,000.
6.6. Financial Covenants.
(a) Minimum Quarterly Revenue. Holdings shall not permit gross revenues of
-------------------------
Holdings and its Subsidiaries determined for any Fiscal Quarter on a
consolidated basis in accordance with GAAP to be less than the correlative
amount indicated below for such Fiscal Quarter:
Fiscal Quarter Ending Minimum Gross Revenues
-----------------------------------------------
6/30/99 $33,000,000
-----------------------------------------------
9/30/99 $43,000,000
-----------------------------------------------
12/31/99 $57,000,000
-----------------------------------------------
3/31/00 $66,000,000
-----------------------------------------------
6/30/00 $75,000,000
-----------------------------------------------
9/30/00 $85,000,000
-----------------------------------------------
12/31/00 $99,000,000
-----------------------------------------------
(b) EBITDA.
-------
(i) As of the last day of each Fiscal Quarter listed below,
Holdings and its Subsidiaries shall not permit the ratio of (y)
Consolidated Adjusted EBITDA losses to (z) gross revenues determined on a
consolidated basis for Holdings and its Subsidiaries and in accordance with
GAAP for such Fiscal Quarter to exceed the correlative amount indicated:
Fiscal Quarter Ending EBITDA Losses/
Gross Revenue
---------------------------------------
6/30/99 41.0%
---------------------------------------
9/30/99 28.0%
---------------------------------------
12/31/99 18.0%
---------------------------------------
3/31/00 12.0%
---------------------------------------
6/30/00 7.5%
---------------------------------------
9/30/00 5.0%
---------------------------------------
(ii) As of the last day of the Fiscal Quarter listed below,
Holdings and its Subsidiaries shall not permit the ratio (y) Consolidated
Adjusted EBITDA to (z) gross revenues determined on a consolidated basis
and in accordance with GAAP for Holdings and its Subsidiaries for such
Fiscal Quarter to be less than the correlative amount indicated:
56
---------------------------------------
Fiscal Quarter Ending EBITDA/
Gross Revenues
---------------------------------------
12/31/00 2.5%
---------------------------------------
(c) Senior Debt Ratio.
-----------------
(i) As of the last day of each Fiscal Quarter listed below,
Holdings and its Subsidiaries shall not permit the Senior Ratio A for
such Fiscal Quarter to be greater than the correlative amount
indicated:
--------------------------------
Fiscal Quarter Senior Debt/
Ending Capitalization
--------------------------------
6/30/99 15.0%
--------------------------------
9/30/99 20.0%
--------------------------------
12/31/99 22.5%
--------------------------------
3/31/00 25.0%
--------------------------------
6/30/00 27.0%
--------------------------------
9/30/00 28.5%
--------------------------------
12/31/00 30.0%
--------------------------------
(ii) As of the last day of the Fiscal Quarter listed below,
Holdings and its Subsidiaries shall not permit the Senior Ratio B for
such Fiscal Quarter to be greater than the correlative amount
indicated:
-------------------------------------
Fiscal Quarter Ending Senior
Debt/
EBITDA
-------------------------------------
3/31/01 5.0:1.0
-------------------------------------
6/30/01 4.0:1.0
-------------------------------------
9/30/01 4.0:1.0
-------------------------------------
12/31/01 3.0:1.0
-------------------------------------
3/31/02 3.0:1.0
-------------------------------------
(d) Maximum Consolidated Capital Expenditures. Holdings shall not,
-----------------------------------------
and shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures in any Fiscal Quarter in an aggregate amount for Holdings and its
Subsidiaries in excess of $2,000,000 during such Fiscal Quarter provided, such
amount for any Fiscal Quarter shall be increased by an amount equal to the
excess, if any, of such amount for the previous Fiscal Quarter (as adjusted in
accordance with this proviso) over the actual amount of Consolidated Capital
Expenditures for such previous Fiscal Quarter; provided further that, after
consummation of an IPO, Holding and its Subsidiaries may make additional
Consolidated Capital Expenditures not in excess of $15,000,000 in the aggregate.
57
(e) Qualifying Receivables Ratio. Holdings shall not permit the
----------------------------
Qualifying Receivables Ratio to be less than 1.20:1.00 at any time.
6.7. Fundamental Changes; Disposition of Assets; Acquisitions. No Credit
Party shall, nor shall it permit, any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, property or
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases or other acquisitions of inventory, materials,
equipment and other property in the ordinary course of business) the business,
property or fixed assets of, or equity securities or other evidence of
beneficial ownership of, any Person or any division or line of business of any
Person, except:
(a) any Subsidiary of either Borrower may be merged with or into such
Borrower or any Guarantor Subsidiary, or be liquidated, wound up or dissolved,
or all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to either Borrower or any Guarantor Subsidiary; provided, in the
case of such a merger, the applicable Borrower or such Guarantor Subsidiary
shall be the continuing or surviving Person;
(b) Investments made in accordance with Section 6.5.
(c) sales of assets which do not constitute Asset Sales;
(d) leases or subleases to other Persons of assets by either Borrower or
any of it Subsidiaries in the ordinary course of business;
(e) licenses to other Persons of Intellectual Property by either Borrower
or any of its Subsidiaries in the ordinary course of business;
(f) Asset Sales, the proceeds of which constitute less than $10,000,000
in the aggregate in any Fiscal Year; and
(g) Permitted Acquisitions.
6.8. Disposal of Subsidiary Interests. Except as required under the
Collateral Documents and except for any sale of 100% of the equity Securities of
any of its Subsidiaries in compliance with the provisions of Section 6.7, no
Credit Party shall or (a) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any equity Securities of any of its
Subsidiaries, except to qualify directors if required by applicable law; or (b)
permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or
otherwise encumber or dispose of any equity Securities of any of its
Subsidiaries (including such Subsidiary), except to another Credit Party
(subject to the restrictions on such disposition otherwise imposed herein
under), or to qualify directors if required by applicable law.
58
6.9. Transactions with Shareholders and Affiliates. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder of 5%
or more of any class of equity Securities of Holdings or any of its Subsidiaries
or with any Affiliate of Holdings or of any such holder, on terms that are less
favorable to Holdings or that Subsidiary, as the case may be, than those that
might be obtained at the time from Persons who are not such a holder or
Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between Holdings and any Guarantor Subsidiary or between any of the
Guarantors and any of the Borrowers; (b) reasonable and customary fees and
indemnifications paid to members of the Boards of Directors of Holdings and its
Subsidiaries; or (c) officer and other employee of Holdings and its Subsidiaries
compensation and other customary arrangements entered into in the ordinary
course of business (d) transactions pursuant to agreements and arrangements
existing on the date hereof described in Schedule 6.9, (e) Restricted Junior
Payments paid by a Borrower or Holdings pursuant to Section 6.4 and (f) loans or
advances to officers or employees of any Credit Party for moving, entertainment
and travel expenses, drawing accounts and similar expenditures made in the
ordinary course of business.
6.10. Conduct of Business. From and after the Closing Date, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, engage in any business
other than (a) the businesses engaged in by such Credit Party on the Closing
Date and similar or related businesses and (b) such other lines of business as
may be consented to by Requisite Lenders. Holdings shall own and control,
directly or indirectly, 100% of the capital stock of each of its Subsidiaries.
6.11. Amendments or Waivers of Related Agreements. No Credit Party shall,
nor shall it permit any of its Subsidiaries to, amend or otherwise change the
terms of any Related Agreement, or make any payment not required to be made
under the terms of any Related Agreement, if the effect of such amendment or
payment results in, or could reasonably be expected to result in, a Material
Adverse Effect.
6.12. Fiscal Year. No Credit Party shall, nor shall it permit any of its
subsidiaries to change its Fiscal Year-end from December 31.
SECTION 7. GUARANTY
7.1. Guaranty of the Obligations. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty the due and punctual payment in full of all Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. (S) 362(a)).
7.2. Contribution by Guarantors. Each Guarantor (other than Holdings)
desires to allocate among themselves (collectively, the "Contributing
Guarantors"), in a fair and equitable manner, their obligations arising under
this Guaranty. Accordingly, in the event any payment or distribution
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is made on any date by a Guarantor (other than Holdings) under this Guaranty (a
"Funding Guarantor") that exceeds its Fair Share as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations guarantied. "Fair
Share Shortfall" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "Fair
Share Contribution Amount" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "Aggregate Payments" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Subsidiary Guarantor is a third party beneficiary to the contribution agreement
set forth in this Section 7.2.
7.3. Payment by Guarantors. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of either Borrower
to pay any of the Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S)
362(a)), Guarantors will upon demand pay, or cause to be paid, in cash, to
Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Obligations then due as
aforesaid, accrued and unpaid interest on such Obligations (including interest
which, but for the filing of a petition in bankruptcy with respect to either
Borrower, would have accrued on such Obligations, whether or not a claim is
60
allowed against either Borrower for such interest in the related bankruptcy
proceeding) and all other Obligations then owed to Beneficiaries as aforesaid.
7.4. Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility;
(b) Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between either
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of either Borrower and the obligations of any other guarantor
(including any other Guarantor) of the obligations of either Borrower, and a
separate action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against either Borrower or any of such
other guarantors and whether or not either Borrower is joined in any such action
or actions;
(d) payment by any Guarantor of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge any Guarantor's liability for
any portion of the Obligations which has not been paid. Without limiting the
generality of the foregoing, if Administrative Agent is awarded a judgment in
any suit brought to enforce any Guarantor's covenant to pay a portion of the
Obligations, such judgment shall not be deemed to release such Guarantor from
its covenant to pay the portion of the Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent satisfied by such
Guarantor, limit, affect, modify or abridge any other Guarantor's liability
hereunder in respect of the Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its
61
discretion may determine consistent herewith or the applicable Hedge Agreement
and any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against either Borrower or
any security for the Obligations; and (vi) exercise any other rights available
to it under the Credit Documents or the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Credit Documents or the Hedge
Agreements, at law, in equity or otherwise) with respect to the Obligations or
any agreement relating thereto, or with respect to any other guaranty of or
security for the payment of the Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the terms
or provisions (including provisions relating to events of default) hereof, any
of the other Credit Documents, any of the Hedge Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Obligations, in each case whether or not in accordance with the terms hereof
or such Credit Document, such Hedge Agreement or any agreement relating to such
other guaranty or security; (iii) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than
payments received pursuant to the other Credit Documents or any of the Hedge
Agreements or from the proceeds of any security for the Obligations, except to
the extent such security also serves as collateral for indebtedness other than
the Obligations) to the payment of indebtedness other than the Obligations, even
though any Beneficiary might have elected to apply such payment to any part or
all of the Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of either
Borrower or any of its Subsidiaries and to any corresponding restructuring of
the Obligations; (vi) any failure to perfect or continue perfection of a
security interest in any collateral which secures any of the Obligations; (vii)
any defenses, set-offs or counterclaims which either Borrower may allege or
assert against any Beneficiary in respect of the Obligations, including failure
of consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any other act or
thing or omission, or delay to do any other act or thing, which may or might in
any manner or to any extent vary the risk of any Guarantor as an obligor in
respect of the Obligations.
7.5. Waivers by Guarantors. Each Guarantor hereby waives, for the benefit
of Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against either
Borrower, any other guarantor (including any other Guarantor) of the Obligations
or any other Person, (ii) proceed against or exhaust any security held from
either Borrower, any such other guarantor or any other Person, (iii) proceed
against or have resort to any balance of any deposit account or credit on the
books of any Beneficiary in favor of
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either Borrower or any other Person, or (1) pursue any other remedy in the power
of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of either
Borrower including any defense based on or arising out of the lack of validity
or the unenforceability of the Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of either
Borrower from any cause other than payment in full of the Obligations; (c) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) any defense based upon any
Beneficiary's errors or omissions in the administration of the Obligations,
except behavior which amounts to bad faith; (e) (i) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the terms
hereof and any legal or equitable discharge of such Guarantor's obligations
hereunder, (ii) the benefit of any statute of limitations affecting such
Guarantor's liability hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that any Beneficiary protect, secure, perfect or insure any security
interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to either Borrower
and notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6. Guarantors' Rights of Subrogation, Contribution, Etc. Until the
Obligations shall have been indefeasibly paid in full and the Loan Commitments
shall have terminated, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
either Borrower or any of its assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case whether
such claim, right or remedy arises in equity, under contract, by statute, under
common law or otherwise and including without limitation (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against either Borrower with respect to its Obligations, (b) any
right to enforce, or to participate in, any claim, right or remedy that any
Beneficiary now has or may hereafter have against either Borrower, and (c) any
benefit of, and any right to participate in, any collateral or security now or
hereafter held by any Beneficiary. In addition, until the Obligations shall
have been indefeasibly paid in full and the Loan Commitments shall have
terminated, each Guarantor shall withhold exercise of any right of contribution
such Guarantor may have against any other guarantor (including any other
Guarantor) of the Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against either Borrower or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against either Borrower, to all right, title and
interest any Beneficiary may have in any such collateral or security,
63
and to any right any Beneficiary may have against such other guarantor. If any
amount shall be paid to any Guarantor on account of any such subrogation,
reimbursement, indemnification or contribution rights at any time when all
Obligations shall not have been paid in full, such amount shall be held in trust
for thereby on behalf of Beneficiaries and shall forthwith be paid over thereto
for the benefit of Beneficiaries to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. Subordination of Other Obligations. Any Indebtedness of either
Borrower or any Guarantor now or hereafter held by any Guarantor (the "Obligee
Guarantor") is hereby subordinated in right of payment to the Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of the Obligee Guarantor under any other provision
hereof.
7.8. Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Obligations shall have been paid in full and
the Loan Commitments shall have terminated. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Obligations.
7.9. Authority of Guarantors or either Borrower. It is not necessary for
any Beneficiary to inquire into the capacity or powers of any Guarantor or
either Borrower or the officers, directors or any agents acting or purporting to
act on behalf of any of them.
7.10. Financial Condition of either Borrower. Any Credit Extension may be
granted to either Borrower or continued from time to time, and any Hedge
Agreements may be entered into from time to time, in each case without notice to
or authorization from any Guarantor regardless of the financial or other
condition of either Borrower at the time of any such grant or continuation or at
the time such Hedge Agreement is entered into, as the case may be. No
Beneficiary shall have any obligation to disclose or discuss with any Guarantor
its assessment, or any Guarantor's assessment, of the financial condition of
either Borrower. Each Guarantor has adequate means to obtain information from
either Borrower on a continuing basis concerning the financial condition of
either Borrower and its ability to perform its obligations under the Credit
Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
either Borrower and of all circumstances bearing upon the risk of nonpayment of
the Obligations. Each Guarantor hereby waives and relinquishes any duty on the
part of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of either Borrower now known or hereafter
known by any Beneficiary.
7.11. Bankruptcy, Etc. (a) The obligations of Guarantors hereunder shall
not be reduced, limited, impaired, discharged, deferred, suspended or terminated
by any proceeding, voluntary or involuntary, involving the bankruptcy,
insolvency, receivership, reorganization, liquidation or arrangement of either
Borrower or by any defense which either Borrower may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.
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(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of Guarantors and
Beneficiaries that the Obligations which are guarantied by Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve either Borrower of any portion of such Obligations. Guarantors will
permit any trustee in bankruptcy, receiver, debtor in possession, assignee for
the benefit of creditors or similar person to pay Administrative Agent, or allow
the claim of Administrative Agent in respect of, any such interest accruing
after the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Obligations are paid by
either Borrower, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Obligations for all purposes hereunder.
7.12. Notice of Events. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or event which has resulted in (i) a material adverse change in the
financial condition of any Guarantor or either Borrower or (ii) a breach of or
noncompliance with any term, condition or covenant contained herein, any other
Credit Document, any Hedge Agreement or any other document delivered pursuant
hereto or thereto.
7.13. Discharge of Guaranty Upon Sale of Guarantor. If all of the equity
Securities of any Guarantor or any of its successors in interest hereunder shall
be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale; provided, as a
condition precedent to such discharge and release, Administrative Agent shall
have received evidence satisfactory to it that arrangements satisfactory to it
have been made for compliance with Section 2.10.
SECTION 8. EVENTS OF DEFAULT
8.1. Events of Default. If any one or more of the following conditions or
events shall occur:
(a) failure by either Borrower to pay (i) when due any installment of
principal of any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise (other than
an inadvertent failure outside of such Borrower's control that can be and is
fully remedied within twenty-four hours of the occurrence thereof); or (ii)
65
any interest on any Loan or any fee or any other amount due hereunder within
five (5) days after the date due; or
(b) (i) failure of any Credit Party to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual principal amount of $1,000,000 or more or with an aggregate principal
amount of $2,000,000 or more, in each case beyond the end of any grace period
provided therefor; or (ii) breach or default by any Credit Party with respect to
any other material term of (1) one or more items of Indebtedness in the
individual or aggregate principal amounts referred to in clause (i) above or (2)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness, if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness (or a trustee on behalf of
such holder or holders) to cause, that Indebtedness to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be.
(c) failure of any Credit Party to perform or comply with any term or
condition contained in Section 2.3, 5.2 (as to existence) or Section 6 hereof;
or
(d) any representation, warranty, certification made or deemed made by
any Credit Party in any Credit Document or in any statement or certificate at
any time given by Holdings or any of its Subsidiaries in writing pursuant hereto
or thereto or in connection herewith or therewith shall be false in any material
respect as the date made or deemed made; or
(e) any Credit Party shall default in the performance of or compliance
with any term contained herein or any of the other Credit Documents, other than
any such term referred to in any other Section of this Section 8.1, and such
default shall not have been remedied or waived within thirty (30) days after the
earlier of (i) an Authorized Officer of such Credit Party becoming aware of such
default or (ii) receipt by either Borrower of notice from Administrative Agent
or any Lender of such default; or
(f) (i) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Holdings or any of its Subsidiaries (other an
Immaterial Subsidiary) an in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or any of its Subsidiaries (other an Immaterial
Subsidiary), or over all or a substantial part of its property, shall have been
entered; or there shall have occurred the involuntary appointment of an interim
receiver, trustee or other custodian of Holdings or any of its Subsidiaries for
all or a substantial part of its property; or a warrant of attachment, execution
or similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries (other an Immaterial
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Subsidiary), and any such event described in this clause (ii) shall continue for
sixty (60) days unless dismissed, bonded or discharged; or
(g) (i) Holdings or any of its Subsidiaries (other an Immaterial
Subsidiary) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Holdings or any of its Subsidiaries (other an Immaterial Subsidiary) shall make
any assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other an immaterial Subsidiary) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (other an Immaterial Subsidiary) (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to herein or in Section 8.1(f); or
(h) any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $500,000 or (ii) in
the aggregate at any time an amount in excess of $1,000,000 (in either case not
adequately covered by insurance as to which a solvent and unaffiliated insurance
company has acknowledged coverage) shall be entered or filed against Holdings or
any of its Subsidiaries or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or
(i) any order, judgment or decree shall be entered against any Credit
Party decreeing the dissolution or split up of Holdings or that Subsidiary
(other than an Immaterial Subsidiary) and such order shall remain undischarged
or unstayed for a period in excess of thirty (30) days; or
(j) there shall occur one or more ERISA Events with respect to Pension
Plans which individually or in the aggregate results in or might reasonably be
expected to result in liability of Holdings, any of its Subsidiaries or any of
their respective ERISA Affiliates in excess of $500,000 during the term hereof;
or there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans with respect
to which assets exceed benefit liabilities), which exceeds $1,000,000; or
(k) a Change of Control shall occur; or
(l) at any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall repudiate
its obligations thereunder, (ii) this Agreement or any Collateral Document
ceases to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms hereof or thereof or the satisfaction in
full of the Obligations in accordance with the terms hereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a
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valid and perfected Lien in any Collateral purported to be covered thereby, in
each case for any reason other than the failure of Administrative Agent or any
Lender to take any action within its control, or (iii) any Credit Party shall
contest the validity or enforceability of any Credit Document in writing or deny
in writing that it has any further liability, including with respect to future
advances by Lenders, under any Credit Document to which it is a party; or
(m) Holdings shall (i) engage in any business other than entering into and
performing its obligations under and in accordance with the Credit Documents and
Related Agreements to which it is a party and the incurrence of indebtedness
permitted to be incurred by Holdings hereunder or (ii) own any assets other than
(1) the capital stock of each Borrower and (2) Cash and Cash Equivalents in an
amount not in excess of that necessary for the payment of general operating
expenses of Holdings; provided that no circumstance or event that would
--------
otherwise give rise to an Event of Default under this subdivision (m) shall be
deemed to exist so long as a Borrower or Holdings shall have made arrangements,
reasonably satisfactory to Administrative Agent, to cash collateralize the
Obligations;
THEN, (A) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (B) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Holdings or either Borrower by Administrative Agent, the Loan
Commitments shall immediately terminate and the unpaid principal amount of and
accrued interest on the Loans and all other Obligations each of the following
shall immediately become due and payable, in each case without presentment,
demand, protest or other requirements of any kind, all of which are hereby
expressly waived by each Credit Party.
SECTION 9. ADMINISTRATIVE AGENTS
9.1. Appointment of Administrative Agent. GSCP is hereby appointed
Administrative Agent hereunder and under the other Credit Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms hereof and the other Credit Documents. Administrative Agent
hereby agrees to act upon the express conditions contained herein and the other
Credit Documents, as applicable. The provisions of this Section 9 are solely
for the benefit of Administrative Agent and Lenders and no Credit Party shall
have any rights as a third party beneficiary of any of the provisions thereof.
In performing its functions and duties hereunder, Administrative Agent shall act
solely as an agent of Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or
for Holdings or any of its Subsidiaries. Administrative Agent, without consent
of or notice to any party hereto, may assign any and all of its rights or
obligations hereunder to any of its Affiliates. As of the Closing Date, all the
respective obligations of GSCP, in its capacity as Lead Arranger, shall
terminate.
9.2. Powers and Duties. Each Lender irrevocably authorizes Administrative
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Credit Documents as are
specifically delegated or granted to Administrative Agent by the terms hereof
and thereof, together with such powers, rights and remedies as are reasonably
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incidental thereto. Administrative Agent shall have only those duties and
responsibilities that are expressly specified herein and the other Credit
Documents. Administrative Agent may exercise such powers, rights and remedies
and perform such duties by or through its agents or employees. Administrative
Agent shall not have, by reason hereof or any of the other Credit Documents, a
fiduciary relationship in respect of any Lender; and nothing herein or any of
the other Credit Documents, expressed or implied, is intended to or shall be so
construed as to impose upon Administrative Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. General Immunity. (a) The Administrative Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by Administrative Agent to Lenders or by or on
behalf of either Borrower to Administrative Agent or any Lender in connection
with the Credit Documents and the transactions contemplated thereby or for the
financial condition or business affairs of any Credit Party or any other Person
liable for the payment of any Obligations, nor shall Administrative Agent be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Credit Documents or as to the use of the proceeds of the Loans or as to the
existence or possible existence of any Event of Default or Default. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding
Loans.
(b) Neither Administrative Agent nor any of its officers, partners,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by Administrative Agent under or in connection with any of the Credit
Documents except to the extent caused by Administrative Agent's gross negligence
or willful misconduct. Administrative Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection herewith or any of the other Credit Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until Administrative Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give
such instructions under Section 10.5) and, upon receipt of such instructions
from Requisite Lenders (or such other Lenders, as the case may be),
Administrative Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of the foregoing,
(i) Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for
Holdings and its Subsidiaries), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against Administrative Agent as a result of Administrative Agent
acting or (where so instructed) refraining from acting hereunder or any of the
other Credit Documents in accordance with the instructions of Requisite Lenders
(or such other Lenders as may be required to give such instructions under
Section 10.5).
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9.4. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans,
Administrative Agent shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not performing the
duties and functions delegated to it hereunder, and the term "Lender" shall,
unless the context clearly otherwise indicates, include Administrative Agent in
its individual capacity. Administrative Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings or any of its Affiliates as
if it were not performing the duties specified herein, and may accept fees and
other consideration from either Borrower for services in connection herewith and
otherwise without having to account for the same to Lenders.
9.5. Lenders' Representations and Warranties. Each Lender represents and
warrants that it has made its own independent investigation of the financial
condition and affairs of Holdings and its Subsidiaries in connection with Credit
Extensions hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of Holdings and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and Administrative Agent
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
9.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Administrative Agent, to the extent that
Administrative Agent shall not have been reimbursed by either Borrower, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Administrative Agent in exercising
its powers, rights and remedies or performing its duties hereunder or under the
other Credit Documents or otherwise in its capacity as Administrative Agent in
any way relating to or arising out hereof or the other Credit Documents;
provided, no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Administrative Agent's gross negligence
or willful misconduct. If any indemnity furnished to Administrative Agent for
any purpose shall, in the opinion of Administrative Agent, be insufficient or
become impaired, Administrative Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished; provided, in no event shall this sentence require any
Lender to indemnify Administrative Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in
excess of such Lender's Pro Rata Share thereof; and provided further, this
sentence shall not be deemed to require any Lender to indemnify Administrative
Agent against any liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement described in the proviso in the
immediately preceding sentence.
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9.7. Successor Administrative Agent. Administrative Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to Lenders and
each Borrower, and Administrative Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered to
each Borrower and Administrative Agent and signed by Requisite Lenders. Upon
any such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days' notice to each Borrower, to appoint a
successor Administrative Agent. Alternatively, if Administrative Agent sells,
assigns or transfers all or any part of its Loans pursuant to Section 10.6
hereof, Administrative Agent may appoint the subsequent holder, assignee or
transferee of such loans as Administrative Agent. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring or removed Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.
9.8. Collateral Documents and Guaranties. (a) Each Lender hereby further
authorizes Administrative Agent, on behalf of and for the benefit of Lenders, to
be the agent for and representative of Lenders with respect to the Guaranty, the
Collateral and the Collateral Document. Subject to Section 10.5, without further
written consent or authorization from Lenders, Administrative Agent may execute
any documents or instruments necessary to (i) release any Lien encumbering any
item of Collateral that is the subject of a sale or other disposition of assets
permitted hereby or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 10.5) have otherwise consented or
(ii) release any Guarantor from the Guaranty pursuant to Section 7.13 or with
respect to which Requisite Lenders (or such other Lenders as may be required to
give such consent under Section 10.5) have otherwise consented.
(b) Anything contained in any of the Credit Documents to the contrary
notwithstanding, each Borrower, Administrative Agent and each Lender hereby
agree that (i) no Lender shall have any right individually to realize upon any
of the Collateral or to enforce the Guaranty, it being understood and agreed
that all powers, rights and remedies hereunder may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
hereof, and (ii) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
(c) It is the purpose hereof and the other Credit Documents that there
shall be no violation of any law of any jurisdiction denying or restricting the
right of banking corporations or associations to transact business as agent or
trustee in such jurisdiction. It is recognized that in case
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of litigation hereunder or any of the other Credit Documents, and in particular
in case of the enforcement of any of the Credit Documents, or in case
Administrative Agent deems that by reason of any present or future law of any
jurisdiction it may not exercise any of the rights, powers or remedies granted
herein or in any of the other Credit Documents or take any other action which
may be desirable or necessary in connection therewith, it may be necessary that
Administrative Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (a
"Supplemental Collateral Agent"). In the event that Administrative Agent
appoints a Supplemental Collateral Agent with respect to any Collateral, (i)
each and every right, power, privilege or duty expressed or intended hereby or
any of the other Credit Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Credit Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either agent or such Supplemental Collateral Agent, and (ii) the provisions of
this Section 9 and of Sections 10.2 and 10.3 that refer to Administrative Agent
shall inure to the benefit of such Supplemental Collateral Agent and all
references therein to Administrative Agent shall be deemed to be references to
Administrative Agent and/or such Supplemental Collateral Agent, as the context
may require. Should any instrument in writing from either Borrower or any other
Credit Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, each Borrower shall, or
shall cause such Credit Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
SECTION 10. MISCELLANEOUS
10.1. Notices. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given to a Credit Party
or Administrative Agent shall be sent to such Person's address as set forth on
Appendix B or in the other relevant Credit Document, and in the case of any
Lender, the address as indicated on Schedule B or otherwise indicated to
Administrative Agent in writing. Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail, certified or registered with postage prepaid and
properly addressed.
10.2. Expenses. Whether or not the transactions contemplated hereby shall
be consummated, Borrowers agree to pay (subject to any separate agreement in
writing entered into by Borrower, Holdings, and GSCP prior for the Closing Date)
promptly (a) all the actual and reasonable
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costs and expenses of preparation of the Credit Documents and any consents,
amendments, waivers or other modifications thereto; (b) all the costs of
furnishing all opinions by counsel for Borrowers and the other Credit Parties
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Borrowers' and each other Credit Party's performance of and
compliance with all agreements and conditions on its part to be performed or
complied with hereunder and the other Credit Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(c) the reasonable fees, expenses and disbursements of counsel to Administrative
Agent (in each case including without duplication allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
either Borrower; (d) all the actual costs and reasonable expenses of creating
and perfecting Liens in favor of Administrative Agent on behalf of Lenders
pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, and reasonable fees, expenses and
disbursements of counsel to Administrative Agent and of counsel providing any
opinions that Administrative Agent or Requisite Lenders may request in respect
of the Collateral or the Liens created pursuant the Collateral Documents; (e)
all the actual costs and reasonable fees, expenses and disbursements of any
auditors, accountants, consultants or appraisers and for any audit or report
provided for hereunder with respect to Accounts or Inventory; (f) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any appraisers, consultants, advisors and agents employed or
retained by Administrative Agent and its counsel) in connection with the custody
or preservation of any of the Collateral; and (g) after the occurrence or an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Credit Documents by reason of such Event of Default (including in connection
with the sale of, collection from, or other realization upon any of the
Collateral or the enforcement of the Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or pursuant to any insolvency or bankruptcy
proceedings.
10.3. Indemnity. In addition to the payment of expenses pursuant to
Section 10.2, whether or not the transactions contemplated hereby shall be
consummated, each Credit Party agrees to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless, Administrative Agent
and Lender and the officers, partners, directors, trustees, employees, agents
and Affiliates of each Agent and each Lender (each, an "Indemnitee"), from and
against any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
non-appealable judgment of a court of competent jurisdiction. To the extent that
the undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they violate any
law or public policy, the applicable Credit Party shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees
or any of them.
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10.4. Set-Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder and the other Credit Documents, including
all claims of any nature or description arising out of or connected herewith or
any other Credit Document, irrespective of whether or not (a) such Lender shall
have made any demand hereunder or (b) the principal of or the interest on the
Loans or any other amounts due hereunder shall have become due and payable
pursuant to Section 2 and although said obligations and liabilities, or any of
them, may be contingent or unmatured. Each Credit Party hereby further grants to
Administrative Agent and each Lender a security interest in all Deposit Accounts
maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5. Amendments and Waivers. (a) Subject to Section 10.5(b) and 10.5(c),
no amendment, modification, termination or waiver of any provision of the Credit
Documents, or consent to any departure by any Credit Party therefrom, shall in
any event be effective without the written concurrence of the Requisite Lenders.
(b) Without the written consent of each Lender that would be affected
thereby, no amendment, modification, termination, or consent shall be effective
if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled principal repayment
(but not prepayment);
(iii) reduce the rate of interest on any Loan (other than any waiver
of any increase in the interest rate applicable to any Loan pursuant to
Section 2.6) or any fee payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this
Section 10.5(b);
(vii) amend the definition of "Requisite Lenders" or "Pro Rata
Share" provided, with the consent of Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination
of "Requisite Lenders" and "Pro Rata Share" on
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substantially the same basis as the Loan Commitments and the Loans are
included on the Closing Date;
(viii) release or otherwise subordinate all or substantially all of
the Collateral or all or substantially all of the Guarantors from the
Guaranty except as expressly provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document (except
pursuant to transactions permitted under Section 6.7(a)).
(c) No amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall:
(i) increase any Loan Commitment of any Lender over the amount thereof
then in effect without the consent of such Lender; provided, no amendment,
modification or waiver of any condition precedent, covenant, Default or
Event of Default shall constitute an increase in any Loan Commitment of any
Lender; or
(ii) amend, modify, terminate or waive any provision of Section 9 as
the same applies to any Agent, or any other provision hereof as the same
applies to the rights or obligations of any Agent, in each case without the
consent of such Agent.
(d) Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.5 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by a Credit Party, on
such Credit Party.
(e) Notwithstanding the foregoing provisions of this Section 10.5, the
parties hereto agree that, in the event the Borrowers incur Purchase Money
Indebtedness under a flooring agreement facility from Deutsche Financial
Services Corporation ("Deutsche") under terms substantially similar to those
previously described to the Administrative Agent, Administrative Agent shall
enter into such amendments to the Pledge and Security Agreement and related UCC
financing statements as may be in form and substance reasonably acceptable to
Administrative Agent for the purpose of (y) granting to Deutsche a first
priority Lien on the inventory included in the Collateral of the Credit Parties
and providing for a second priority Lien on such inventory in favor of the
Administrative Agent for the benefit of the Lenders and (z) granting to Deutsche
a second priority security interest in the Accounts of the Credit Parties to
secure up to $5,000,000 of Indebtedness owed by the Borrowers to Deutsche (which
in any event shall not provide for rights of a second priority lien holder with
respect to the Collateral other than to receive proceeds therefrom after payment
in full of the obligations secured by the first priority liens).
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10.6. Successors and Assigns; Participations. (a) This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and assigns
of Lenders. Except pursuant to transaction permitted by Section 6.7(a), no
Credit Party's rights or obligations hereunder nor any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders.
(b) Borrowers, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Loan Commitments and Loans listed therein for all purposes hereof,
and no assignment or transfer of any such Loan Commitment or Loan shall be
effective unless and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been delivered to Administrative Agent and recorded
in the Register. Prior to such recordation, all amounts owed with respect to
the applicable Loan Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding Loan
Commitments or Loans.
(c) Each Lender shall have the right at any time to sell, assign or
transfer any Loan Commitment, any Loan or any other Obligation:
(i) to any Person meeting the criteria of clause (i) of the definition
of the term of "Eligible Assignee" upon the giving of notice to Holdings
and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" upon the consent of each of
Holdings and Administrative Agent (neither of which shall be unreasonably
withheld or delayed or shall be required at any time an Event of Default
shall have occurred and then be continuing); provided, each such assignment
pursuant to this Section 10.6(c)(ii) shall be in an aggregate amount of not
less than $2,000,000 (or such lesser amount as may be agreed to by Holdings
and Administrative Agent or as shall constitute the aggregate amount of the
Loan Commitments, Loans and other Obligations of the assigning Lender).
(d) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of $500 in the case of assignments pursuant to
Section 10.6(c)(i), and $1,500 in the case of all other assignments, and (ii)
such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such
Assignment Agreement may be required to deliver to Administrative Agent pursuant
to Section 2.20(c).
(e) Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 10.6(d) (and any forms, certificates or other evidence required by this
Agreement in connection therewith), Administrative Agent shall record the
information contained in such Assignment Agreement in the Register, shall give
prompt notice thereof to Holdings, Borrowers and shall maintain a copy of such
Assignment Agreement.
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(f) Each Lender, upon execution and delivery hereof or upon executing and
delivering an Assignment Agreement, as the case may be, represents and warrants
as of the Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the Loan Commitments or Loans, as the case may be; and (iii) it
will make or invest in, as the case may be, its Loan Commitments or Loans for
its own account in the ordinary course of its business and without a view to
distribution of such Loan Commitments or Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 10.6, the disposition
of such Loan Commitments Loans or any interests therein shall at all times
remain within its exclusive control).
(g) Subject to the terms and conditions of this Section 10.6, as of the
"Effective Date" specified in such Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
"Lender" for all purposes hereof; (ii) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 10.8) and be released
from its obligations hereunder (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto); (iii) the
Loan Commitments shall be modified to reflect the Loan Commitment of such
assignee and any remaining Loan Commitment of such assigning Lender, if any; and
(iv) if any such assignment occurs after the issuance of any Note hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to Administrative
Agent for cancellation, and thereupon the applicable Borrower shall issue and
deliver new Notes, if so requested by the assignee and/or assigning Lender, to
such assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Loan Commitments and/or outstanding Loans of the assignee and/or
the assigning Lender.
(h) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Loan Commitments, Loans
or in any other Obligation. The holder of any such participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except with
respect to any amendment modification or waiver described in Section 10.5(b) or
10.5(c) to the extent directly effect the Loan or Loan Commitment relating to
the participation. All amounts payable by any Credit Party hereunder, including
amounts payable to such Lender pursuant to Section 2.14 or 2.15, shall be
determined as if such Lender had not sold such participation. Each Credit Party
and each Lender hereby acknowledge and agree that, solely for purposes of
Sections 2.12 and 10.4, (1) any participation will give rise to a direct
obligation of each Credit Party to the participant and (2) the participant shall
be considered to be a "Lender".
(i) In addition to any other assignment permitted pursuant to this Section
10.6, (i) any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such
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Federal Reserve Bank, and (ii) with the consent of Holdings and Administrative
Agent any Lender which is an investment fund may pledge all or any portion of
its Notes or Loans to its trustee in support of its obligations to such trustee;
provided, no Lender, as between Borrowers and such Lender, shall be relieved of
any of its obligations hereunder as a result of any such assignment and pledge,
and provided further, in no event shall the applicable Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
10.7. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.14, 2.15, 10.2, 10.3 and
10.4 and the agreements of Lenders set forth in Sections 2.12 and 9.6 shall
survive the payment of the Loans.
10.9. No Waiver; Remedies Cumulative. No failure or delay on the part of
Administrative Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. The rights, powers and remedies given to each Agent and
each Lender hereby are cumulative and shall be in addition to and independent of
all rights, powers and remedies existing by virtue of any statute or rule of law
or in any of the other Credit Documents, any of the Hedge Agreements. Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
10.10. Marshalling; Payments Set Aide. Neither Administrative Agent nor any
Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
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10.11. Severability. In case any provision in or obligation hereunder or
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. Obligations Several; Independent Nature of Lenders' Rights. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Loan Commitments of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13. Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES SUCH LENDERS
RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
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10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT HEREOF OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. Confidentiality. Each Lender shall hold all non-public information
obtained pursuant to the requirements hereof which has been identified as
confidential by Holdings or Borrowers in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Holdings and Borrowers that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations `therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in swap agreements
(provided, such swap counterparties and advisors are advised of and agree to be
bound by the provisions of this Section 10.17) or disclosures required or
requested by any governmental agency or representative thereof or by the
National Association of Insurance Commissioners or pursuant to legal process;
provided, unless specifically prohibited by applicable law or court order, each
Lender shall notify Holdings and Borrowers of any request by any governmental
agency or representative thereof (other than any such request in connection with
any examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
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of such information; and provided further, in no event shall any Lender be
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
10.18. Usury Savings Clause. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, Borrowers shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Borrowers to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration
which constitutes interest in excess of the Highest Lawful Rate, then any such
excess shall be cancelled automatically and, if previously paid, shall at such
Lender's option be applied to the outstanding amount of the Loans made hereunder
or be refunded to Borrowers.
10.19. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrowers and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.
CONVERGENT COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
CONVERGENT COMMUNICATIONS
SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
CONVERGENT CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
S-1
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Administrative Agent and a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Authorized Signatory
S-2