EXHIBIT 99.1
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
April 11, 2005
among
VOLT INFORMATION SCIENCES, INC.,
GATTON VOLT CONSULTING GROUP LIMITED,
The Guarantors Party Hereto,
The Lenders Party Hereto,
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
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$40,000,000 Revolving Credit Facility
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JPMORGAN CHASE BANK, N.A.., as Sole Lead Arranger and
Sole Bookrunner
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 11, 2005
among VOLT INFORMATION SCIENCES, INC. (the "Domestic Borrower"), a Delaware
corporation, GATTON VOLT CONSULTING GROUP LIMITED ("Gatton"), a corporation
organized under the laws of the United Kingdom, and any other Subsidiary
Borrower (defined below) that hereafter becomes a party hereto, DATANATIONAL OF
GEORGIA, INC., a Georgia corporation, DATANATIONAL, INC., a Delaware
corporation, VOLT DIRECTORIES S.A., LTD., a Delaware corporation, VOLT
TELECOMMUNICATIONS GROUP, INC., a Delaware corporation, VMC CONSULTING
CORPORATION, a Delaware corporation, and any other Guarantor (defined below)
that becomes a party hereto, the Lenders (defined below) party hereto, and
JPMORGAN CHASE BANK, N.A.., a national banking association (f/k/a JPMorgan Chase
Bank) as Administrative Agent (defined below).
RECITALS
WHEREAS, the Domestic Borrower, Gatton, the Guarantors, VIS Funding
(defined below), Delta (defined below) the Lenders, and the Administrative Agent
entered into an Amended and Restated Credit Agreement dated as of April 12, 2004
(the "2004 Agreement") which 2004 Agreement was amended by a First Amendment
dated as of July 29, 2004 (the "First Amendment"; and together with the 2004
Agreement, as so amended, the "Existing Agreement");
WHEREAS, pursuant the First Amendment Delta was released as a guarantor
of the Borrowers' obligations arising under the Existing Agreement (as set forth
in that certain Amended and Restated Joint and Several Guaranty of Payment made
as of April 12, 2004 by the Guarantors, VIS Funding and Delta in favor of the
Administrative Agent and the other "Secured Creditors" named therein) and as a
collateral grantor subsidiary under that certain Amended and Restated Subsidiary
Security Agreement made as of April 12, 2004 made by the Collateral Grantor
Subsidiaries, and Delta in favor of the Collateral Agent (for the benefit of the
said "Secured Creditors");
WHEREAS, on or about November 1, 2004, VIS Funding was dissolved;
WHEREAS, the Domestic Borrower, Gatton, the Guarantors, the Lenders and
the Administrative Agent have agreed to amend and restate the Existing Agreement
so as to, among other things, (a) increase the amount of the revolving credit
facility to $40,000,000, (b) extend the term thereof, (c) amend certain pricing
terms, certain covenants and various other provisions of the Existing Agreement,
(d) reflect the dissolution of VIS Funding and its release as a guarantor of the
Borrowers' obligations and (e) admit another Lender;
WHEREAS, the parties hereto intend that this Agreement and the
documents executed in connection herewith will not effect a novation of the
obligations of the Domestic Borrower, Gatton and the Guarantors under the
Existing Agreement, but merely a restatement and, when applicable, an amendment
of the terms governing such obligations; and
WHEREAS, the Domestic Borrower wishes to be able to borrow, to obtain
other extensions of credit for itself and for Gatton and other Subsidiary
Borrowers; Gatton wishes to borrow, and the Guarantors are prepared to guaranty
payment of the Borrowers' obligations to
the Lenders, the Administrative Agent, and the Issuing Bank. The Lenders are
prepared to lend and the Administrative Agent is prepared to act in such
capacity, all subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the mutual agreements herein, the
Existing Agreement is amended and restated in its entirety, and the parties
hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Defined Terms.
As used in this Agreement, the following terms have the meanings
specified below:
"2004 Agreement" - see recitals.
"2004 Field Exam" shall mean the field examination of the Collateral
Grantor Subsidiaries' Accounts Receivable (as well as Delta's accounts
receivable) dated on or about March 3, 2004, conducted at the request of the
"Administrative Agent" under the 2004 Agreement and distributed to the "Lenders"
under the 2004 Agreement prior to the effectiveness of the 2004 Agreement.
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Account Receivable" shall have the meaning assigned to the term
"Accounts" under the Subsidiary Security Agreement and, for purposes of this
Agreement, shall mean an "Account" of a Collateral Grantor Subsidiary.
"Additional Cost Rate" shall have the meaning set forth in Schedule
2.13.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing or
Eurocurrency Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
"Adjusted Quick Ratio" means the ratio of: (a) (i) all accounts
receivable that would be reflected on a consolidated balance sheet of the
Domestic Borrower and its Subsidiaries on the date in question (including,
whether or not otherwise included therein, all Securitization Receivables
(Gross)), plus (ii) all cash and cash equivalents of the Domestic Borrower and
its Subsidiaries on a consolidated basis, minus (iii) to the extent included in
clause (a)(i) or (ii), all accounts receivable and cash of ProcureStaff and any
other Paying Agency Company that is held for the benefit of any associate vendor
other than Volt or one of Volt's other Subsidiaries; over (b) Current
Liabilities (excluding all Associate Vendor Payables, to the extent included in
Current Liabilities, other than those Associate Vendor Payables owing to the
Domestic Borrower or a Subsidiary). (The calculation of accounts receivable for
purposes of foregoing clause (a)(i)
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shall include a deduction from the gross amount thereof equal to the bad debt
reserve (or equivalent) therefor also reflected on such balance sheet.)
"Administrative Agent" means JPMorgan Chase Bank, N.A., in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent, and as to any Lender, means such
Administrative Questionnaire most recently delivered by such Lender to the
Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Alternative Currency" shall mean Sterling or euro.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, with respect to any Eurodollar
Loan or Eurocurrency Loan, or with respect to the facility fees payable
hereunder, as the case may be, the applicable rate per annum set forth below
under the caption "Eurodollar/Eurocurrency Loan Spread" or "Facility Fee Rate":
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Ratio of Debt for Borrowed Money to
EBITDA Eurodollar/Eurocurrency Loan Spread Facility Fee Rate
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> 2.5 90.0 bpts 35 bpts
-
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> 2.0 but < 2.5 82.5 bpts 30 bpts
-
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> 1.5 but < 2.0 75.0 bpts 25 bpts
-
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> 1.0 but < 1.5 67.5 bpts 20 bpts
-
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< 1.0 57.5 bpts 17.5 bpts
-
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At any time when (a) Fitch shall not rate the facility established under this
Agreement and the other Credit Documents as BBB or better, and (b) neither
▇▇▇▇▇'▇ nor S&P shall rate the facility
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established under this Agreement and the other Credit Documents as their
respective equivalent of Fitch's BBB or better, the increases set forth on the
grid below will apply to the Spreads and Fees set forth above. If more than one
of Fitch, S&P and ▇▇▇▇▇'▇ shall so rate the said facility, the higher (or
highest) rating shall apply for purposes of the grid below. Notwithstanding
anything to the contrary contained in this Agreement: (i) until the third
Business Day after the Administrative Agent's receipt and acceptance of a new
ratings letter for the facility established under this Agreement and the other
Credit Documents and thereafter if a BBB- rating is indicated in such letter,
such Spreads and Fees will be determined on the basis of a BBB- rating (as set
forth below); and (ii) if the said new ratings letter indicates a change, the
effect of such change will be implemented on the third Business Day after such
receipt and acceptance.
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Eurodollar/Eurocurrency Loan Spread Facility Fee Rate
Rating Increase Increase
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BBB- 12.5 bpts 5 bpts
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BB + 25.0 bpts 10 bpts
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BB or lower 62.5 bpts 20 bpts
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For purpose of the first grid above, the Domestic Borrower represents and
warrants that its ratio of Debt for Borrowed Money to EBITDA, as of the end of
the first quarter of fiscal 2005, was greater than or equal to 1.0 but less than
1.5. Any changes in the Applicable Rate based upon the said leverage ratio will
take effect five Business Days after receipt by the Administrative Agent of the
financial statements to be provided under Section 5.01 (a) or (b) and the
compliance certificate under Section 5.01 (c)(ii) showing the new ratio;
provided, however, that if such financial statements and compliance certificate
are not delivered when due in accordance with the terms hereof, then effective
on the latest date on which they are required to be delivered hereunder, the
said leverage ratio will be deemed to be greater than 2.5.
"Approved Fund" has the meaning assigned to such term in Section 9.04.
"Approved Securitization" means that certain securitization program
established and maintained by the Domestic Borrower, the SPV and the Subsidiary
Originators pursuant to the Securitization Documents with respect to accounts
receivable generated by the staffing solutions business of the Domestic Borrower
and certain of its Subsidiaries pursuant to which (a) the Domestic Borrower may
sell, convey or otherwise transfer to the SPV any Securitization Assets and (b)
the SPV may sell, convey or otherwise transfer to the Securitization Conduit the
Securitization Assets (or an undivided percentage ownership interest therein) or
may grant to the Securitization Conduit a security interest in the
Securitization Assets (or such percentage ownership interest); provided,
however, that
(i) no portion of the Securitization Debt or any other
obligations (contingent or otherwise) of the SPV (1) is owed or
guaranteed by the Domestic Borrower or its Subsidiaries (other than the
SPV), excluding Standard Securitization Undertakings, (2) is
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recourse to or obligates the Domestic Borrower or its Subsidiaries
(other than the SPV) for payment other than Standard Securitization
Undertakings or (3) subjects any property or asset (other than the
Securitization Assets) of the Domestic Borrower or of its Subsidiaries
(other than the SPV), directly or indirectly, contingently or
otherwise, to the satisfaction of obligations incurred in such
transactions, other than pursuant to Standard Securitization
Undertakings,
(ii) the Domestic Borrower and its Subsidiaries (other than
the SPV) do not have any ongoing obligation to maintain or preserve the
financial condition of the SPV or cause the SPV to achieve certain
levels of operating results,
(iii) the aggregate principal amount of the Securitization
Debt of the SPV arising in connection with the Approved Securitization
shall not exceed $150,000,000 at any time outstanding,
(iv) any promissory note received by the Domestic Borrower as
consideration or as partial consideration for the sale of
Securitization Assets shall be pledged in favor of the Administrative
Agent, who shall have at all times a first priority security interest
in such note; and
(v) the Approved Securitization is administered in accordance
with the Securitization Documents.
"Assignment and Assumption" means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Associate Vendor Payable" means any account payable owed by
ProcureStaff or any other Paying Agency Company to any associate vendor (whether
the Domestic Borrower, one of its Subsidiaries, or any other Person) that is not
a Paying Agency Company arising from services performed or goods provided by
such associate vendor to an end-use customer under an arrangement in which
ProcureStaff or such other Paying Agency Company serves as paying agent for the
related account receivable owing by such end-use customer to such associate
vendor.
"Auction Rate Securities" shall mean auction rate securities issued
with a rate reset mechanism and maximum term of 35 days.
"Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowers" means, collectively, the Domestic Borrower, Gatton and,
from and after such time as a Subsidiary Borrower (in addition to Gatton)
becomes a party hereto (as a "Borrower") pursuant to Section 2.20, such
Subsidiary Borrower.
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"Borrowing" means (a) Revolving Loans to the same Borrower of the same
Type, made, converted or continued on the same date and, in the case of
Eurocurrency Loans and Eurodollar Loans, as to which a single Interest Period is
in effect, or (b) a Swingline Loan.
"Borrowing Request" means a request by a Borrower for a Revolving
Borrowing in accordance with Section 2.03 or a request deemed to have been made
by the Domestic Borrower for an ABR Revolving Borrowing in accordance with
Section 2.10(a).
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, (a) when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market, (b) when
used in connection with a Eurocurrency Loan to be made in Sterling, "Business
Day" shall also exclude any day on which commercial banks are not open for
foreign exchange business in London, and (c) when used in connection with a
Eurocurrency Loan to be made in euro, "Business Day" shall also exclude any day
on which commercial banks are not open for foreign exchange business in London
or Frankfurt am Main, Germany (or such other principal financial center or
centers in such participating member state or states (as defined in Section
9.14) as the Administrative Agent may from time to time nominate for this
purpose).
"Capital Expenditures" shall mean any expenditure made by the
expenditure of cash or the incurrence of Indebtedness in respect of the purchase
or acquisition of any fixed or capital assets (excluding normal replacements and
maintenance which are properly charged to current operations), including Capital
Lease Obligations.
"Capitalization" means all Debt plus Consolidated Net Worth.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
the ▇▇▇▇ Group, of shares representing more than 25% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Domestic Borrower if the ▇▇▇▇ Group shall not have direct beneficial ownership
of shares representing at least 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Domestic
Borrower; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Domestic Borrower by Persons who were neither (i)
nominated by the board of directors of the Domestic Borrower nor (ii) appointed
by directors so nominated; or (c) the acquisition of direct or indirect Control
of the Domestic Borrower by any Person or group other than the ▇▇▇▇ Group.
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"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Charges" has the meaning set forth in Section 9.13.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Swingline Loans.
"CLO" has the meaning assigned to such term in Section 9.04.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means, collectively, "Collateral" as defined in the
Subsidiary Security Agreement, and all collateral pledged under any of the other
Collateral Documents.
"Collateral Agent" means the Administrative Agent acting as "Collateral
Agent" under the Collateral Documents.
"Collateral Documents" means the Subsidiary Security Agreement and any
other instrument, document or agreement pursuant to which any Borrower or
Guarantor grants any collateral to the Administrative Agent (as Collateral Agent
or otherwise) or any of the Lenders as security for the obligations of the
Borrowers or the Guarantors, or both, arising under this Agreement or any other
Credit Document, and includes any financing statement or amendment thereof.
"Collateral Grantor Subsidiary" means any Subsidiary which is, at the
time in question, a "Grantor" under the Subsidiary Security Agreement, including
any Subsidiary which is required to join in the Subsidiary Security Agreement
pursuant to Section 5.10.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the
maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section
2.09, and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 9.04 or as contemplated under Section
9.16. The initial amount of each Lender's Commitment is set forth on Schedule
2.01, or in the Assignment and Assumption pursuant to which such Lender shall
have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders' Commitments is $40,000,000.
"Consolidated Net Income" shall mean for any accounting period net
income determined in accordance with GAAP, as reported in the consolidated
results for the Domestic Borrower reporting group.
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"Consolidated Net Worth" means at any time as of which the amount
thereof is to be determined, the sum of the following in respect of the Domestic
Borrower and its Subsidiaries (determined on a consolidated basis in accordance
with GAAP): (a) the amount of issued and outstanding share capital, plus (b) the
amount of additional paid-in capital and retained income (or, in the case of a
deficit minus the amount of such deficit), plus (c) the amount of all
accumulated other comprehensive income minus (d) the amount of any treasury
stock, all as determined in accordance with GAAP applied on a consistent basis.
"Consolidated Tangible Net Worth" means at any time as of which the
amount thereof is to be determined: (a) owner's equity (determined on a
consolidated basis in accordance with GAAP), including (without limitation)
other comprehensive income; minus (b)(i) minority interest in Subsidiaries, and
(ii) intangible assets. Clause (a) shall be determined excluding any net gains
or net losses (after taxes), from and after the Effective Date, from
non-operating sources.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Document" means each of (a) this Agreement, each Note (if any),
each application and other agreement in respect of any Letter of Credit, in each
case as supplemented, modified, or amended from time to time, (b) the Guaranty
of Payment, (c) the Collateral Documents, and (d) each instrument or agreement
supplementing (by joinder or otherwise), modifying or amending, or waiving any
provision of, any Credit Document.
"Current Liabilities" at a particular date, shall mean (without
duplication): (a) all Securitization Debt; (b) all Indebtedness under this
Agreement, any or all of the other Credit Documents and/or any Designated Swap
Agreement; and (c) all amounts which would, in conformity with GAAP, be included
under current liabilities on a consolidated balance sheet of the Domestic
Borrower, as at such date, but in any event including, without limitation, the
amounts of (i) Indebtedness payable on demand, or, at the option of the Person
to whom such Indebtedness is owed, not more than 12 months after such date, (ii)
any payments in respect of any Indebtedness (whether installment, serial
maturity, sinking fund payment or otherwise) required to be made not more than
12 months after such date, (iii) all reserves in respect of liabilities or
Indebtedness payable on demand or, at the option of the Person to whom such
Indebtedness is owed, not more than 12 months after such date, the validity of
which is not contested at such date, and (iv) all accruals for federal or other
taxes measured by income payable within a 12 month period. (The calculation of
Indebtedness under Designated Swap Agreements in clause (b) above shall be made
after giving effect to any applicable netting agreements.)
"Customer" means and includes the account debtor with respect to any
Account Receivable and/or the prospective purchaser of goods, services or both
with respect to any contract or contract right, and/or any party who enters into
or proposes to enter into any contact or other arrangement with a Collateral
Grantor Subsidiary pursuant to which to which such Collateral Grantor Subsidiary
is to deliver any personal property or perform any services.
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"Debt" means (without duplication) Debt for Borrowed Money reflected on
the consolidated balance sheet of the Domestic Borrower, plus Securitization
Debt.
"Debt for Borrowed Money" means all Indebtedness, excluding (a)
commitments and contingent obligations in respect of undrawn letters of credit
and Guarantees (except, in each case, to the extent constituting Guarantees in
respect of Debt for Borrowed Money of a Person other than a Borrower), (b)
obligations under Swap Agreements, and (c) trade payables and other liabilities
(not for borrowed money) ordinarily incurred in the normal course of business.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Delta" means Volt Delta Resources, LLC, a Nevada limited liability
company that resulted from the conversion of Volt Delta Resources, Inc., a
Nevada corporation.
"Delta Approved Intercompany Debt" shall mean: (a) up to an aggregate
principal amount at any one time outstanding, calculated without duplication, of
$5,000,000 of unsecured Intercompany Debt (other than Delta Group Intercompany
Debt); or (b) up to an aggregate principal amount at any one time outstanding,
calculated without duplication, of $10,000,000 of Intercompany Debt (other than
Delta Group Intercompany Debt) which is (i) secured only by accounts receivable
of one or more members of the Delta Group, and (ii) otherwise made on
commercially reasonable terms and conditions, with customary or market interest
rates, repayment terms, advance rates and eligibility criteria for accounts
receivable.
"Delta Group" means, collectively, (a) Delta RHI, (b) Delta and (c)
Delta's subsidiaries.
"Delta Group Intercompany Debt" means loans, advances and any other
extension of credit made by any member(s) of the Delta Group to any other
member(s) of the Delta Group.
"Delta RHI" means Volt Delta Resource Holdings, Inc., a Nevada
corporation.
"Denomination Date" shall mean, in relation to any Eurocurrency
Borrowing, the date that is three Business Days before the date of such
Borrowing.
"Designated Swap Agreement" shall mean (a) any Swap Agreement permitted
under Section 6.05, entered into between the Domestic Borrower and any Lender
(as a swap counterparty) for the purpose of hedging currency exchange risk
associated with the Domestic Borrower's foreign operations; and (b) any other
Swap Agreement permitted under Section 6.05, to which the Domestic Borrower is a
party which, pursuant to a written instrument signed by the Required Lenders,
has been designated as a Designated Swap Agreement, so that (in the case of both
(a) and (b)) the Domestic Borrower's counterparty thereunder will be entitled to
share in the benefits of the Guaranty of Payment and the Collateral Documents,
to the extent the Guaranty of Payment and Collateral Documents provide a
guaranty or security for creditors of the Domestic Borrower under Designated
Swap Agreements.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
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"dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Borrower" means Volt Information Sciences, Inc., a New York
corporation.
"EBIT" means, for any period, operating profit measured on the date of
calculation with reference to the four most recently completed fiscal quarters.
"EBITDA" means, for any period, operating profit plus interest income
of the Domestic Borrower and its Subsidiaries for such period plus the sum of
(a) depreciation expense and (b) amortization expense, all as certified by a
Financial Officer on a quarterly basis for such period, and all determined on a
consolidated basis in accordance with GAAP consistently applied.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Domestic Borrower or any Subsidiary directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"Equivalent Dollar Amount" shall mean, with respect to an amount of an
Alternative Currency on any date, the amount of dollars that may be purchased
with such amount of such Alternative Currency at the Spot Exchange Rate on such
date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with a Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
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"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by a Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by a Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by a
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by a Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from a Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"euro" has the meaning set forth in Section 9.14.
"Eurocurrency", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are denominated in
an Alternative Currency and bearing interest at a rate determined by reference
to the Adjusted LIBO Rate.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are denominated in
dollars and bear interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of any Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which a Borrower is located and (c) in the case of
a Foreign Lender (other than an assignee pursuant to a request by a Borrower
under Section 2.19(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.17(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from a Borrower with respect to such withholding tax pursuant to Section
2.17(a).
"Existing Agreement" - see recitals.
11
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Domestic Borrower.
"First Amendment" - see recitals.
"Fitch" means Fitch Ratings.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Domestic Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Gatton" means Gatton Volt Consulting Group Limited, a corporation
organized under the laws of the United Kingdom.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall include the Guaranty of
Payment, but shall not include endorsements for collection or deposit in the
ordinary course of business.
12
"Guarantors" means, collectively, DataNational, Inc., a Delaware
corporation, Volt Directories S.A., Ltd., a Delaware corporation (formerly known
as Volt-Autologic Directories S.A., Ltd.), Volt Telecommunications Group, Inc.,
a Delaware corporation, DataNational of Georgia, Inc., a Georgia corporation,
VMC Consulting Corporation, a Delaware corporation, and every other domestic
Subsidiary required to become a Guarantor under Section 5.10 or Section 2.20.
"Guaranty of Payment" means the Second Amended and Restated Joint and
Several Guaranty of Payment made as of the Effective Date by the Guarantors who
are parties to this Agreement as of the Effective Date, as the same may be
joined in, supplemented, amended or otherwise modified pursuant to Section 2.20
or Section 5.10, or otherwise.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of banker's acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intercompany Debt" means loans, advances and any other extensions of
credit made by the Domestic Borrower and/or any Subsidiary to any other
Subsidiary.
"Intercompany Receivables" means Accounts Receivable that arise out of
a sale made to: (i) the Domestic Borrower or any Affiliate of the Domestic
Borrower; or (ii) a Person that is an employee, officer, agent or 10%
stockholder (or members or other holders of Equity Interest, in the case of a
Person which is not a corporation or a natural person) of the Domestic Borrower
or any Affiliate of the Domestic Borrower.
13
"Interest Election Request" means a request by a Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08.
"Interest Expense" means, for any period, the sum of interest charges
plus Securitization Expense.
"Interest Payment Date" means (a) with respect to any ABR Loan (other
than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan or Eurocurrency Loan, the last
day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a Eurodollar Borrowing or a Eurocurrency Borrowing with
an Interest Period of more than three months' duration, each day prior to the
last day of such Interest Period that occurs at intervals of three months'
duration, after the first day of such Interest Period, and (c) with respect to
any Swingline Loan, the day that such Loan is required to be repaid.
"Interest Period" means, with respect to any Eurocurrency Borrowing or
Eurodollar Borrowing, the period commencing on the date of such Borrowing and
ending (a) on a date agreed upon among the Lenders pursuant to Section 2.08(e),
or (b) on the numerically corresponding day in the calendar month that is one,
two, three or six months after the date of such Borrowing; provided, that (i) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurocurrency Borrowing or Eurodollar Borrowing only, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (ii) any Interest
Period pertaining to a Eurodollar Borrowing or Eurocurrency Borrowing that
commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period. For purposes hereof, the date of a Borrowing initially
shall be the date on which such Borrowing is made and, in the case of a
Revolving Borrowing, thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Issuing Bank" means JPMorgan Chase Bank, N.A., in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.06(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Domestic Borrower at such time. The LC Exposure of any Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time.
14
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing or
Eurocurrency Borrowing for any Interest Period, the rate appearing on the
applicable page of the Telerate Service (or any successor to or substitute for
such Service, providing rate quotations comparable to those currently provided
on such page of such Service, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable
to deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period as the
rate for dollar deposits with a maturity comparable to such Interest Period. In
the event that the rate set forth above is at any time not available for any
reason with respect to any Eurodollar Borrowing, then the "LIBO Rate" with
respect to such Eurodollar Borrowing for the applicable Interest Period, shall
be the rate (rounded upwards, if necessary, to the next 1/16th of 1%) at which
deposits of an amount for which the Equivalent Dollar Amount is $5,000,000, for
a maturity comparable to such Interest Period, in the currency in which such
Borrowing is denominated, are offered to the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, (a) two Business Days prior to
the commencement of such Interest Period with respect to a Eurodollar Borrowing
or (b) on the Quotation Date for such Interest Period with respect to a
Eurocurrency Borrowing.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" means the loans made by the Lenders to the Borrowers pursuant
to this Agreement.
"Mandatory Cost" means the additional cost (in respect of a
Eurocurrency Loan) derived from application of the Additional Cost Rate.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Domestic Borrower and the Subsidiaries taken as a whole, (b) the ability of
the Domestic Borrower to perform any of its obligations under this Agreement or
any other Credit Document or (c) the rights of or benefits available to the
Lenders under this Agreement or any other Credit Document.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Domestic Borrower and its Subsidiaries in an aggregate
principal amount exceeding $4,000,000. For
15
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Domestic Borrower or any Subsidiary in respect of any Swap
Agreement at any time shall be the maximum aggregate amount (giving effect to
any netting agreements in accordance with GAAP) that the Domestic Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.
"Material Subsidiary" means any Subsidiary Borrower and any Subsidiary
which, at any date of determination thereof, has total assets having a fair
market value (without deduction for any Liens) of $500,000 or more.
"Maturity Date" means the earlier of (i) April 11, 2008 or (ii) the
date on which the Domestic Borrower or any Subsidiary shall make any payment to
Nortel pursuant to the exercise of Nortel's rights under the Nortel Put/Call if
the Required Lenders (A) have declined to grant written consent for such payment
to be made, and (B) have notified the Domestic Borrower that they have instead
elected to shorten the Maturity Date to the first date when such a payment is
made to Nortel..
"Maximum Rate" has the meaning set forth in Section 9.13.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Nortel" means Nortel Networks, Inc., collectively with its applicable
affiliates.
"Nortel Agreement" means, collectively, the agreements entered into by
and among Delta, the Domestic Borrower, other Subsidiaries and Nortel in
connection with the Nortel Transaction.
"Nortel Effective Date" means the closing date of the Nortel
Transaction, (i.e., on or about August 2, 2004).
"Nortel Put/Call" has the meaning set forth on Schedule A hereto.
"Nortel Transaction" means, collectively, (a) the transaction which
occurred on the Nortel Effective Date in accordance with the Nortel Agreement,
and (b) the $2,000,000 payment obligations of the Domestic Borrower payable to
Nortel on the sixth and eighteenth monthly anniversaries of the Nortel Effective
Date, all as described on Schedule A hereto (the first such payment having been
made on or about February 2, 2005).
"Note" means each promissory note executed and delivered by any
Borrower to a Lender as set forth in Section 2.10(e).
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
16
"Participant" has the meaning set forth in Section 9.04.
"Paying Agency Company" means a Subsidiary whose principal business is
the same as ProcureStaff's, namely, acting as a paying agent, whether conducted
directly or subcontracted to another Paying Agency Company.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Domestic
Borrower or any Subsidiary; and
(f) Liens, to the extent part of the Securitization
Transactions, on (i) accounts receivable originated from the staffing
solutions business of the Domestic Borrower and the Subsidiary
Originators, and (ii) the Receivable Related Assets, provided however,
that the maximum Indebtedness secured by any such Liens shall not
exceed $150,000,000 in the aggregate at any one time outstanding
(exclusive of "Deferred Purchase Price", as that term is defined in
Section 5.06 of the Receivables Purchase Agreement);
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness, unless the encumbrance in question arises under a
Collateral Document or pursuant to the Securitization Documents.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency
17
thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), denominated in dollars and in
each case maturing within three years from the date of acquisition
thereof;
(b) investments in commercial paper denominated in dollars and
maturing within 270 days from the date of acquisition thereof and
having, at such date of acquisition, a credit rating of at least A-2
from S&P and at least P-2 from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within one year from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000 and which is rated
at least A-2 by S&P and P-2 by Moody's in the note or commercial paper
rating category;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above;
(e) money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, (ii) are rated AAA by S&P and AAA by
Moody's, and (iii) have portfolio assets of at least $5,000,000,000.;
and
(f) Auction Rate Securities that are rated AAA by S&P and AAA
by Moody's.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"ProcureStaff" means ProcureStaff, Ltd., a Delaware corporation.
"ProcureStaff Quick Ratio" means the ratio of (a) all accounts
receivable of (i) ProcureStaff plus (ii) each other Paying Agency Company to (b)
their aggregate Associate Vendor Payables. However, accounts receivable arising
between two Paying Agency Companies, shall be excluded from the foregoing.
18
"Quotation Date" means, with respect to a Eurocurrency Borrowing, the
day on which quotations would ordinarily be quoted by prime banks in the London
interbank market for deposits in the applicable Alternative Currency for
delivery on the first day of the applicable Interest Period, as determined by
the Administrative Agent; provided that if there is more than one such day, the
latest of such days shall be the Quotation Date.
"Receivables Purchase Agreement" has the meaning set forth in the
definition of Securitization Documents in this Section 1.01.
"Receivable Related Assets" means, in respect of any accounts
receivable transferred by the Domestic Borrower to the SPV, (i) any rights or
interests arising under the documentation governing or relating to such accounts
receivable (including rights in respect of Liens securing such accounts
receivable and other credit support in respect of such accounts receivable),
(ii) any proceeds of such accounts receivable and (iii) all books and records
related to such accounts receivable.
"Receivables Sale Agreement" has the meaning set forth in the
definition of Securitization Documents in this Section 1.01.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interests in
the Domestic Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Domestic Borrower or of any
option, warrant or other right to acquire any such Equity Interests in the
Domestic Borrower.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans denominated in dollars, plus the Equivalent Dollar Amount of the
outstanding principal amount of such Lender's Eurocurrency Loans, plus such
Lender's LC Exposure and Swingline Exposure at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Securitization Assets" means (a) all accounts receivable which are
described as being or to be transferred by the Domestic Borrower or any of its
Subsidiaries to the SPV pursuant to any
19
of the Securitization Documents, (b) all Receivables Related Assets and (c) all
collections (including recoveries) and other proceeds of the assets described in
the foregoing clauses (a) and (b).
"Securitization Conduit" means Three Rivers Funding Corporation or a
successor or replacement conduit which purchases (from the SPV) accounts
receivable (or undivided percentage ownership interests therein) under the
Approved Securitization.
"Securitization Debt" means all monetary obligations of the SPV arising
in connection with the Approved Securitization (other than any such obligation
in respect of interest, fees, indemnification or other similar obligations, and
"Deferred Purchase Price" as defined in Section 5.06 of the Receivables Purchase
Agreement).
"Securitization Documents" means, collectively, (a) that certain
Receivables Sale and Contribution Agreement, dated as of April 12, 2002 between
the Domestic Borrower and the SPV (the "Receivables Sale Agreement"), (b) that
certain Receivables Purchase Agreement, dated as of April 12, 2002, as amended
by a First Amendment to Receivables Purchase Agreement dated as of June 3, 2002,
by a Second Amendment to Receivables Purchase Agreement dated as of March 31,
2004 and by a Third Amendment to Receivables Purchase Agreement dated as of
April 8, 2005, among the Domestic Borrower, the SPV and the Securitization
Conduit (the "Receivables Purchase Agreement"), and (c) each other instrument,
agreement and other document entered into by the Domestic Borrower or its
Subsidiaries (including the SPV) under which the Approved Securitization is
established or maintained. In each case, references to any or all of the
foregoing documents shall include the same as amended, modified or supplemented
from time to time, to the extent that such amendments, modifications or
supplements are made in accordance with the terms of this Agreement.
"Securitization Expense" means the "Cost of Funds" and the "Program
Fees" under (and as each is defined in) the Receivables Purchase Agreement.
"Securitization Receivables (Gross)" means, at any time, the aggregate
amount of outstanding accounts receivable sold, contributed or otherwise
transferred by the Domestic Borrower or a Subsidiary Originator to the SPV as
part of the Approved Securitization, without deduction for any undivided
percentage ownership interest that the Securitization Conduit may have therein
pursuant to the Approved Securitization.
"Securitization Transactions" means the transactions constituting the
Approved Securitization, as contemplated by the Securitization Documents,
including (among other things): (a) the sale, conveyance or other transfer by a
Subsidiary Originator, directly or indirectly to the Domestic Borrower or the
SPV, of accounts receivable to be included in the Securitization Receivables
(Gross), whether as a true sale, dividend or distribution, or otherwise, and
including any "back-up" Lien thereon; (b) the sale, conveyance or other transfer
by the Domestic Borrower of accounts receivable originated by the Domestic
Borrower or any Subsidiary Originator to the SPV to be included in the
Securitization Receivables (Gross), whether as a true sale, capital
contribution, or otherwise, and including any "back-up" Lien thereon; (c) the
sale, conveyance or other transfer by the SPV to the Securitization Conduit of
the Securitization Receivables (Gross), or of an undivided percentage ownership
interest therein,
20
whether as a true sale or otherwise, and including any "back-up" Lien thereon;
in each case howsoever characterized, including among other things, any
Indebtedness that arises in connection with any such transfers (whether as
deferred purchase price or otherwise, and whether or not evidenced by a
promissory note) or that could exist were any such transfer to be characterized
by a court as the grant of a Lien to secure Indebtedness.
"▇▇▇▇ Group" collectively: (a) ▇▇▇▇▇▇▇ ▇▇▇▇; (b) ▇▇▇▇▇▇ ▇▇▇▇; (c) the
spouse and descendents (by blood, adoption or marriage) of any person referenced
in (a) or (b); (d) any trust established for the benefit of any one or more of
the persons referenced in (a), (b) or (c), and any trustee of any such trust;
and (e) any estate, and any heir, personal representative or executor, of any
person referenced in (a), (b) or (c).
"Spot Exchange Rate" means, on any day, with respect to an Alternative
Currency, the spot rate at which dollars are offered on such day by JPMorgan
Chase Bank, N.A., in London for such Alternative Currency at approximately 11:00
A.M. (London time).
"SPV" means Volt Funding Corp., a Delaware special purpose corporation,
or any successor or replacement special purpose entity which sells accounts
receivable (or undivided percentage ownership interests therein) that (a) is a
direct or indirect wholly-owned Subsidiary of the Domestic Borrower and (b) was
created for the sole purpose of acquiring the Securitization Assets pursuant to
the Approved Securitization.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Domestic Borrower (in
any capacity) or its Subsidiaries (other than the SPV) that are reasonably
customary in accounts receivable securitization transactions, as reasonably
determined by the Administrative Agent.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurocurrency Loans and Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Sterling" or "(pound)" shall mean the lawful money of the United
Kingdom.
"subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
21
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Domestic Borrower.
"Subsidiary Borrower" means Gatton and any other Subsidiary of the
Domestic Borrower which becomes a Borrower pursuant to Section 2.20.
"Subsidiary Originator" means a Subsidiary whose accounts receivable
are transferred, directly or indirectly, to the SPV in conjunction with the
Approved Securitization.
"Subsidiary Originator Holding Company" means a Subsidiary whose only
assets are the Equity Interests it owns in a Subsidiary Originator.
"Subsidiary Security Agreement" shall mean the Second Amended and
Restated Subsidiary Security Agreement made, as of the Effective Date, by the
Collateral Grantor Subsidiaries in favor of the Collateral Agent, as the same
may be joined in, supplemented, amended or otherwise modified pursuant to
Section 2.20 or Section 5.10, or otherwise.
"Swap Agreement" means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock, stock appreciation right (SAR), stock option or similar plan or agreement
providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Domestic Borrower or one or
more of the Subsidiaries shall be a Swap Agreement.
"Swingline Exposure" means, at any time, the aggregate principal amount
of all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.
"Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan made pursuant to Section 2.05.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by the
Borrowers and the Guarantors (as applicable) of this Agreement, each of the
other Credit Documents, the borrowing of Loans, the use of the proceeds thereof,
the issuance of Letters of Credit hereunder, the
22
guaranteeing of the Indebtedness incurred hereunder, and the granting of the
Liens on the Collateral under the Subsidiary Security Agreement.
"Type", when used in reference to any Loan or Borrowing, refers to (i)
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate; and (ii) the currency in which such Loan or the Loans comprising such
Borrowing are denominated.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Collateral Agent's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"VIS Funding" means Volt Information Sciences Funding, Inc., a Delaware
corporation (prior to its dissolution).
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 Classification of Loans and Borrowings.
For purposes of this Agreement, Loans may be classified and referred to
by Class (e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by
Class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03 Terms Generally.
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have
23
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.04 Accounting Terms; GAAP.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrowers notify the
Administrative Agent that the Borrowers request an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrowers that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith. Whether or not indicated in the defined terms employed
therein, all calculations of financial covenants under Section 6.10 (except for
clause (d) thereof) will be made with reference to the consolidated results for
the Domestic Borrower and the Subsidiaries as of the date or for the period in
question.
ARTICLE II
The Credits
SECTION 2.01 Commitments.
Subject to the terms and conditions set forth herein, each Lender
agrees to make Revolving Loans to the Borrowers from time to time during the
Availability Period in an aggregate principal amount that will not result in:
(a) such Lender's Revolving Credit Exposure exceeding such Lender's Commitment;
(b) the sum of the total Revolving Credit Exposures exceeding $40,000,000; or
(c) the aggregate principal amount of Loans outstanding to the Subsidiary
Borrowers in the aggregate exceeding $25,000,000. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrowers may
borrow, prepay and reborrow Revolving Loans.
SECTION 2.02 Loans and Borrowings.
(a) Each Revolving Loan shall be made as part of a Borrowing consisting
of Revolving Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to
be made by it shall not relieve any other Lender of its obligations hereunder;
provided that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans, Eurodollar Loans or Eurocurrency Loans, as the
applicable Borrower may request in accordance herewith; provided that the
Equivalent Dollar Amount of the aggregate principal amount of Eurocurrency Loans
outstanding at the time of any Borrowing shall not exceed $25,000,000. Each
Swingline Loan shall be an ABR Loan. Each Lender at its option may make
24
any Eurodollar Loan or Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrowers to repay such
Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $2,000,000. At the commencement
of each Interest Period for any Eurocurrency Revolving Borrowing, such Borrowing
shall be in an aggregate amount which is an integral multiple (as applicable) of
(pound)500,000 and not less than (pound)1,000,000 or 500,000 euro and not less
than 2,000,000 euro. At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that an ABR Revolving Borrowing
may be in an aggregate amount (i) that is equal to the entire unused balance of
the total Commitments, or (ii) that is required to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.06(e); provided further that, in
the case of either (i) or (ii), the total Revolving Credit Exposures, after
giving effect to such Borrowing will not exceed the total Commitments. For
purposes of this Section, any Eurocurrency Revolving Borrowing shall be deemed
to be in an amount equal to the Equivalent Dollar Amount of such Eurocurrency
Revolving Borrowing determined as of its Denomination Date. Each Swingline Loan
shall be in an amount that is an integral multiple of $10,000 and not less than
$250,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of six
(6) Eurodollar Revolving Borrowings and Eurocurrency Revolving Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Revolving Borrowings.
To request a Revolving Borrowing, the applicable Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing, (b) in the case of a
Eurocurrency Borrowing, not later than 11:00 a.m., London time, three Business
Days before the date of the proposed Borrowing, or (c) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, on the Business Day of
the proposed Borrowing; provided that any such notice of an ABR Revolving
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.06(e) must be given not later than 10:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the applicable Borrower. Each such
telephonic and written Borrowing Request shall:
(a) Specify the following information in compliance with Section 2.02:
25
(i) [intentionally omitted];
(ii) the aggregate amount of the requested Borrowing,
which in the case of a Eurocurrency Borrowing shall
be expressed in the applicable Alternative Currency;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be an ABR Borrowing, a
Eurodollar Borrowing or a Eurocurrency Borrowing
(and, if so, whether Sterling or euro);
(v) in the case of a Eurodollar Borrowing or a
Eurocurrency Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest
Period"; and
(vi) the location and number of such Borrower's account to
which funds are to be disbursed, which shall comply
with the requirements of Section 2.07; and
(b) Be accompanied by a certificate in the form of Exhibit B
hereto, containing (among other things) a representation and warranty
by the Domestic Borrower to the Administrative Agent that immediately
after such Borrowing the aggregate amount of all Accounts Receivable
(not constituting Intercompany Receivables) that are not past due (or,
if past due, are not more than ninety (90) days past the original due
date thereof) will exceed and, to the best knowledge of the Domestic
Borrower, will at all times thereafter exceed, the total amount of
Revolving Credit Exposures.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing or
Eurocurrency Revolving Borrowing, then the applicable Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
(i) receipt of a Borrowing Request in accordance with this Section or (ii) the
time at which the Administrative Agent is deemed to have received a Borrowing
Request in accordance with Section 2.10(a), as applicable, the Administrative
Agent shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04 [Intentionally omitted]
SECTION 2.05 Swingline Loans.
(a) Subject to the terms and conditions set forth herein, the Swingline
Lender agrees to make Swingline Loans to the Domestic Borrower from time to time
during the Availability Period, in an aggregate principal amount at any time
outstanding that will not result in (i) the aggregate principal amount of
outstanding Swingline Loans exceeding $7,500,000, or (ii) the sum of the total
Revolving Credit Exposures exceeding the total Commitments. Within the
26
foregoing limits and subject to the terms and conditions set forth herein, the
Domestic Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Domestic Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 2 p.m., New York City time, on the day of a proposed Swingline Loan.
Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan, and
the maturity date thereof, which shall be a Business Day occurring subsequent to
the date of such Swingline Loan but not later than the earlier of (i) the date
that is thirty (30) days from the date of such Swingline Loan or (ii) the
Maturity Date (provided that Swingline Loans are subject to earlier mandatory
repayment as provided in the proviso of Section 2.10(a)). The Administrative
Agent will promptly advise the Swingline Lender of any such notice received from
the Domestic Borrower. The Swingline Lender shall make each Swingline Loan
available to the Domestic Borrower by means of a credit to the general deposit
account of the Domestic Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on any
Business Day require the Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans outstanding. Such notice shall
specify the aggregate amount of Swingline Loans in which Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will
give notice thereof to each Lender, specifying in such notice such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as
provided in Section 2.07 with respect to Loans made by such Lender (and Section
2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the
amounts so received by it from the Lenders. The Administrative Agent shall
notify the Domestic Borrower of any participations in any Swingline Loan
acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from the Domestic
Borrower (or other party on behalf of the Domestic Borrower) in respect of a
Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale
of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly
remitted by the Administrative Agent to the Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear; provided that any such payment so remitted shall be repaid
to the Swingline Lender
27
or to the Administrative Agent, as applicable, if and to the extent such payment
is required to be refunded to the Domestic Borrower for any reason. The purchase
of participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Domestic Borrower of any default in the payment thereof.
Notwithstanding the foregoing, a Lender shall not have any obligation to acquire
a participation in a Swingline Loan pursuant to this paragraph if an Event of
Default shall have occurred and be continuing at the time such Swingline Loan
was made and such Lender shall have notified the Swingline Lender in writing, at
least one Business Day prior to the time such Swingline Loan was made, that such
Event of Default has occurred and that such Lender will not acquire
participations in Swingline Loans made while such Event of Default is
continuing.
SECTION 2.06 Letters of Credit.
(a) General.
Subject to the terms and conditions set forth herein, the Domestic
Borrower may request the issuance of Letters of Credit for its own account, in a
form reasonably acceptable to the Administrative Agent and the Issuing Bank, at
any time and from time to time during the Availability Period (other than the
last five Business Days thereof). In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Domestic
Borrower to, or entered into by the Domestic Borrower with, the Issuing Bank
relating to any Letter of Credit, the terms and conditions of this Agreement
shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.
To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Domestic Borrower
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, the date of issuance, amendment, renewal or extension, the
date on which such Letter of Credit is to expire (which shall comply with
paragraph (c) of this Section), the amount of such Letter of Credit, the name
and address of the beneficiary thereof, whether or not such Letter of Credit is
to be a standby Letter of Credit, and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If requested
by the Issuing Bank, the Domestic Borrower also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Domestic Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the LC Exposure shall not exceed $15,000,000 (which may consist of documentary
letters of credit and/or standby letters of credit, except that not more than
$10,000,000 in standby Letters of Credit may be used to secure payment of
worker's compensation insurance premiums), and (ii) the sum of the total
Revolving Credit Exposures shall not exceed the total Commitments. The Issuing
Bank shall give the Domestic Borrower and the Administrative Agent reasonably
prompt notice of the issuance of
28
each Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit) and the Administrative Agent, in turn, shall give reasonably
prompt notice thereof to the Lenders.
(c) Expiration Date.
Subject to the portion of this paragraph (c) which follows the first
sentence hereof, each Letter of Credit shall expire at or prior to the close of
business on the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, up to one year
after such renewal or extension). Any Letter of Credit may provide for the
automatic renewal thereof for additional one year periods (or for shorter
periods) unless prior to the then currently stated expiration date of such
Letter of Credit the Issuing Bank sends the beneficiary of such Letter of Credit
notice of the Issuing Bank's election not to renew such Letter of Credit for any
additional period (which notice of nonrenewal shall not be sent without the
Domestic Borrower's consent unless a Default or Event of Default shall have
occurred and be continuing). However, if the automatic renewal of such a Letter
of Credit would occur (absent notice of nonrenewal) on the Maturity Date (as
extended, if extended) or within 60 days prior thereto, and such renewal would
cause the expiration date of such Letter of Credit to fall after the Maturity
Date (as extended, if extended), then at least 60 days prior to the (then)
Maturity Date, the Domestic Borrower shall provide the Administrative Agent with
cash collateral acceptable to the Administrative Agent, in its sole discretion,
so as to fully secure the LC Exposure represented by such Letter of Credit plus
all accrued and unpaid fees thereon. If such cash collateral has been provided
as and when required above, the Issuing Bank shall not send a notice of
nonrenewal with respect to such expiring Letter of Credit unless a Default or
Event of Default shall have occurred and be continuing (in which case the
decision as to whether or not to send such notice, with or without the timely
posting of such cash collateral, shall, subject to the penultimate sentence of
this paragraph (c), require the written approval of the Required Lenders and the
Issuing Bank). If a Letter of Credit either does not contain such an automatic
renewal provision or the automatic renewal thereof would occur more than 60 days
prior to the (then) Maturity Date, and the Letter of Credit either has an
expiration date which falls after the (then) Maturity Date (as extended, if
extended) or the automatic renewal thereof would cause it to have an expiration
date after the (then) Maturity Date, then at least 60 days prior to the (then)
Maturity Date the Domestic Borrower shall provide the Administrative Agent with
cash collateral acceptable to the Administrative Agent, in its sole discretion,
so as to fully secure the LC Exposure represented by such Letter of Credit plus
all accrued and unpaid fees thereon. If cash collateral has been provided as and
when required by the foregoing sentence, the Issuing Bank shall not send a
notice of nonrenewal with respect to any such expiring Letter of Credit which
contains an automatic renewal clause unless a Default or Event of Default shall
have occurred and be continuing (in which case the decision as to whether or not
to send such notice, with or without the timely posting of such cash collateral,
shall, subject to the penultimate sentence of this paragraph (c), require the
written approval of the Required Lenders and the Issuing Bank). The provisions
of paragraph (j) of this Section 2.06 shall apply, mutatis mutandis, to the
deposit and the maintenance of an account with respect to, and the application
of, all cash collateral contemplated by this paragraph (c). Nothing in this
paragraph (c) shall be construed to obligate the Issuing Bank or any Lender (i)
to permit any automatic renewal of a Letter of Credit to occur later than April
11, 2008, regardless of the existence of cash collateral therefor or any other
fact or circumstances, or (ii) to approve any extension of the current (April
11, 2008) Maturity Date.
29
Moreover, notwithstanding the release of any other Collateral pursuant to the
terms of any Collateral Document or by separate agreement in accordance with
Section 9.02(b), cash collateral posted pursuant to this paragraph (c) shall not
be released, prior to the indefeasible satisfaction of the obligations of the
Domestic Borrower which are secured thereby, except upon the express written
agreement of the Issuing Bank and all of the Lenders.
(d) Participations.
By the issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing the amount thereof) and without any further action on the part
of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each
Lender, and each Lender hereby acquires from the Issuing Bank, a participation
in such Letter of Credit equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender's Applicable Percentage of (A) each LC
Disbursement made by the Issuing Bank and not reimbursed (i) by the Domestic
Borrower on the date due as provided in paragraph (e) of this Section, (ii) in
the case of a Letter of Credit drawn upon after the Maturity Date (as extended,
if extended), as provided under an agreement or application therefor referred to
in paragraph (a) of this Section, or (iii) by the application of cash collateral
provided for under this Section 2.06, and (B) any reimbursement payment required
to be refunded to the Domestic Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement.
If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Domestic Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the Domestic Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Domestic Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Domestic Borrower receives such notice, if such notice is received
prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the
Business Day immediately following the day that the Domestic Borrower receives
such notice, if such notice is not received prior to such time on the day of
receipt; provided that, if such LC Disbursement is not less than $1,000,000, the
Domestic Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 or 2.05 that such payment be financed
with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and,
to the extent so financed, the Domestic Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving Loans or
Swingline Loan. If the Domestic Borrower fails to make such payment when due,
the Administrative Agent shall notify each Lender of the applicable LC
Disbursement,
30
the payment then due from the Domestic Borrower in respect thereof and such
Lender's Applicable Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Domestic Borrower, in the same
manner as provided in Section 2.07 with respect to Loans made by such Lender
(and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the Issuing
Bank the amounts so received by it from the Lenders. Promptly following receipt
by the Administrative Agent of any payment from the Domestic Borrower pursuant
to this paragraph, the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing
Bank as their interests may appear. Any payment made by a Lender pursuant to
this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than
the funding of ABR Revolving Loans or a Swingline Loan as contemplated above)
shall not constitute a Loan and shall not relieve the Domestic Borrower of its
obligation to reimburse such LC Disbursement.
(f) Obligations Absolute.
The Domestic Borrower's obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Domestic Borrower's obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Domestic Borrower to
the extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Domestic Borrower to the extent
permitted by applicable law) suffered by the Domestic Borrower that are caused
by the Issuing Bank's failure to exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. However, the parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which
31
appear on their face to be in substantial compliance with the terms of a Letter
of Credit, the Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.
(g) Disbursement Procedures.
The Issuing Bank shall, promptly following its receipt thereof, examine
all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the
Domestic Borrower by telephone (confirmed by telecopy) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice
shall not relieve the Domestic Borrower of its obligation to reimburse the
Issuing Bank and the Lenders with respect to any such LC Disbursement.
(h) Interim Interest.
If the Issuing Bank shall make any LC Disbursement, then, unless the
Domestic Borrower shall reimburse such LC Disbursement in full on the date such
LC Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Domestic Borrower reimburses such LC Disbursement, at the rate
per annum then applicable to ABR Revolving Loans; provided that, if the Domestic
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(d) shall apply. Interest accrued pursuant
to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank.
The Issuing Bank may be replaced at any time by written agreement among
the Domestic Borrower, the Administrative Agent, the replaced Issuing Bank and
the successor Issuing Bank. The Administrative Agent shall notify the Lenders of
any such replacement of the Issuing Bank. At the time any such replacement shall
become effective, the Domestic Borrower shall pay all unpaid fees accrued for
the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and
after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued thereafter and (ii)
references herein to the term "Issuing Bank" shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement with respect to Letters of Credit issued by it prior to such
replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization.
32
If any Event of Default shall occur and be continuing, on the Business
Day that the Domestic Borrower receives notice from the Administrative Agent or
the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing greater than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Domestic Borrower shall deposit in an account with the Administrative Agent, in
the name of the Administrative Agent and for the benefit of the Lenders, an
amount in cash equal to the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default described in clause (h) or (i) of Article
VII. Such deposit shall be held by the Administrative Agent as collateral for
the payment and performance of the obligations of the Borrowers under this
Agreement. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Administrative Agent and at the
Borrowers' risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in
such account shall be applied by the Administrative Agent to reimburse the
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Domestic Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with LC Exposure representing greater than 50% of the total
LC Exposure), be applied to satisfy other obligations of the Borrowers under
this Agreement. If the Domestic Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Domestic Borrower within three Business Days after all Events of Default have
been cured or waived.
SECTION 2.07 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders not later than 12:00 noon, New York City time,
or, in the case of funds in an Alternative Currency, 12:00 noon, London time;
provided that Swingline Loans shall be made as provided in Section 2.05. The
Administrative Agent will make such Loans available to the applicable Borrower
by promptly crediting the amounts so received, in like funds, to an account of
such Borrower maintained with the Administrative Agent in New York City or
London, as the case may be, and designated by such Borrower in the applicable
Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the applicable
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its
33
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the applicable Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to such Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation, or (ii) in the case of a
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.08 Interest Elections.
(a) Each Revolving Borrowing initially shall be of the Type specified
in the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing or a Eurocurrency Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the applicable
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing or a
Eurocurrency Revolving Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrowers may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section shall not apply to Swingline Borrowings, which
may not be converted or continued, but which may, in accordance with the other
terms and conditions of this Agreement, be refinanced by Revolving Borrowings.
(b) To make an election pursuant to this Section, the applicable
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if such
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
such Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing, a Eurodollar Borrowing or a Eurocurrency Borrowing (and, if so,
whether Sterling or euro); and
34
(iv) if the resulting Borrowing is a Eurodollar Borrowing or a
Eurocurrency Borrowing, the Interest Period to be applicable thereto after
giving effect to such election, which shall be a period contemplated by the
definition of the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing or a
Eurocurrency Borrowing but does not specify an Interest Period, then (if a
Eurocurrency Borrowing or a Eurodollar Borrowing, as the case may be, is
available at such time pursuant to the terms hereof) the applicable Borrower
shall be deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If a Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Revolving Borrowing or a Eurocurrency Borrowing
prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period (i)
such a Eurodollar Borrowing shall be converted to an ABR Borrowing, and (ii)
such a Eurocurrency Borrowing shall be continued for a one month Interest Period
unless such an Interest Period would extend beyond the Maturity Date, in which
case such a Eurocurrency Borrowing shall be continued for an Interest Period of
a duration of shorter than one month which is mutually agreed upon among the
Lenders, and if no such agreement can be reached, such Eurocurrency Borrowing
shall be repaid upon the close of the then expiring Interest Period.
Notwithstanding any contrary provision hereof, if the Administrative Agent has
received notice from a Borrower or any Lender that an Event of Default has
occurred and is continuing, then, so long as an Event of Default is continuing
(i) no outstanding Revolving Borrowing may be converted to or continued as a
Eurodollar Borrowing or a Eurocurrency Borrowing, and (ii) unless repaid, each
Eurodollar Revolving Borrowing and each Eurocurrency Revolving Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.09 Termination and Reduction of Commitments.
(a) Unless previously terminated, the Commitments shall terminate on
the Maturity Date.
(b) The Borrowers may at any time voluntarily terminate, or from time
to time voluntarily reduce, the Commitments; provided that (i) each voluntary
reduction of the Commitments shall be in an amount that is an integral multiple
of $500,000 (and not less than $500,000) and (ii) the Borrowers shall not
voluntarily terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.11, the sum of
the Revolving Credit Exposures would exceed the total Commitments.
(c) The Borrowers shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
35
Lenders of the contents thereof. Each notice delivered by the Borrowers pursuant
to this Section shall be irrevocable.
(d) Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
SECTION 2.10 Repayment (or Prepayments) of Loans; Evidence of Debt.
(a) The Domestic Borrower and each respective Subsidiary Borrower
(including Gatton) hereby jointly and severally and unconditionally promise to
pay to the Administrative Agent for the account of each Lender on the Maturity
Date, or sooner to the extent required under paragraph (f) of this Section 2.10,
the then unpaid principal amount of each Revolving Loan made to such respective
Subsidiary Borrower. The Domestic Borrower hereby unconditionally promises to
pay (i) to the Administrative Agent for the account of each Lender, on the
Maturity Date, or sooner to the extent required under paragraph (f) of this
Section 2.10, the then unpaid principal amount of each Revolving Loan made to
the Domestic Borrower, and (ii) to the Swingline Lender, the then unpaid
principal amount of each Swingline Loan on the maturity date thereof requested
in accordance with Section 2.05, or sooner to the extent required paragraph (f)
of this Section 2.10; provided that on each date that a Revolving Borrowing is
made, the Domestic Borrower shall repay all Swingline Loans then outstanding.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrowers to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof,
the Borrower thereof and the Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrowers to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrowers shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
36
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
(f) If, following any reduction in the Commitments or at any other time
when the aggregate amount of the Revolving Credit Exposures shall exceed the
total Commitments, the Domestic Borrower shall be required to immediately pay to
the Administrative Agent the amount of such excess. Such payment shall be
applied as set forth in Section 2.11(c).
SECTION 2.11 Voluntary and Mandatory Prepayment of Loans.
(a) The Borrowers shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.
(b) The applicable Borrower shall notify the Administrative Agent (and,
in the case of prepayment of a Swingline Loan, the Swingline Lender) by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of a Eurocurrency Revolving Borrowing, not later than 11:00
a.m., London time, three Business Days before the date of prepayment, (iii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment or (iv) in
the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York
City time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each voluntary partial prepayment of any
Revolving Borrowing shall be in an amount that would be permitted in the case of
an advance of a Revolving Borrowing of the same Type as provided in Section
2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the
Loans included in the prepaid Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13.
(c) Mandatory prepayments made pursuant to Section 2.10(f) shall be
paid to the Administrative Agent for the account of the Lenders and, if
applicable, the Issuing Bank as hereinafter provided. The Domestic Borrower
shall be entitled to designate the order (of Borrowings) in which any mandatory
prepayment required pursuant to Section 2.10(f) shall be applied. If the
application of such mandatory prepayments results in the satisfaction of all
Loans, the Administrative Agent shall pay any remaining mandatory prepayments to
the Administrative Agent to hold as cash collateral (in an interest bearing
account) against the Domestic Borrower's reimbursement obligations with respect
to the Letters of Credit.
SECTION 2.12 Fees.
(a) The Domestic Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee, which shall accrue at the Applicable
Rate on the daily amount of the Commitment of such Lender (whether used or
unused) during the period from and including the Effective Date to but excluding
the date on which such Commitment terminates; provided
37
that, if such Lender continues to have any Revolving Credit Exposure after its
Commitment terminates, then such facility fee shall continue to accrue on the
daily amount of such Lender's Revolving Credit Exposure from and including the
date on which its Commitment terminates to but excluding the date on which such
Lender ceases to have any Revolving Credit Exposure. Accrued facility fees shall
be payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Commitments terminate, commencing on the
first such date to occur after the date hereof; provided that any facility fees
accruing after the date on which the Commitments terminate shall be payable on
demand. All facility fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) The Domestic Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, (A) which shall accrue in the case of a
standby Letter of Credit, at the same Applicable Rate used to determine the
interest rate applicable to Eurodollar Revolving Loans on the average daily
amount of such Lender's LC Exposure with respect to such standby Letter of
Credit (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender ceases to have any LC Exposure with respect to
such standby Letter of Credit, and (B) which shall be, in the case of a
documentary Letter of Credit, calculated at the rate of .25% of the face amount
of the Letter of Credit in question; and (ii) to the Issuing Bank a fronting
fee, which shall accrue at the rate of 0.25% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Commitments and the date on which there ceases to be any LC Exposure, as well as
the Issuing Bank's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Participation fees and fronting fees accrued through and including
the last day of March, June, September and December of each year, shall be
payable on each such last day, commencing on the first such date to occur after
the Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) [Intentionally omitted].
(d) The Borrowers agree to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
among the Borrowers and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
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SECTION 2.13 Interest.
(a) The Loans comprising each ABR Borrowing (including each Swingline
Loan) shall bear interest at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing and Eurocurrency
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing plus the Applicable Rate plus, in the case of a
Eurocurrency Loan funded (as applicable) in the United Kingdom or a
"participating member state" (as defined in Section 9.14(a)), the Additional
Cost Rate.
(c) [Intentionally omitted].
(d) Notwithstanding the foregoing, upon the occurrence and during the
continuance of an Event of Default, (i) interest on Loans shall accrue at a rate
equal to (after as well as before judgment) 2% per annum plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount not paid when due, such amount shall
bear interest at a rate equal to 2% per annum plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Commitments; provided that (i) interest accrued pursuant to
paragraph (d) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Revolving Loan or Eurocurrency Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(f) All interest hereunder shall be computed on the basis of a year of
360 days (or 365 days in the case of either an ABR Loan where interest is
calculated with reference to the Prime Rate or a Eurocurrency Loan funded in
Sterling), and in each case shall be payable for the actual number of days
elapsed (including the first day but excluding the last day). The applicable
Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.14 Alternate Rate of Interest
If prior to the commencement of any Interest Period for a Eurodollar
Borrowing or a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period;
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and
39
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
or
(c) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that it would be illegal to conduct a
Eurodollar Borrowing or Eurocurrency Borrowing at the time in question;
then the Administrative Agent shall give notice thereof to the Borrowers and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrowers and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing or a
Eurocurrency Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Revolving Borrowing or a Eurocurrency Revolving Borrowing,
such Borrowing shall be made as an ABR Borrowing; provided that if the
circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.
SECTION 2.15 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate, or any Mandatory Cost, where
applicable under Section 2.13 and Schedule 2.13) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or Eurocurrency
Loans or Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Eurocurrency Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank hereunder (whether of principal, interest or
otherwise), then the Borrowers will pay to such Lender or the Issuing Bank, as
the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrowers
40
will pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrowers and shall be conclusive absent
manifest error. The Borrowers shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrowers shall not be required to compensate a Lender pursuant to this
Section for any increased costs or reductions incurred more than 90 days prior
to the date that such Lender notifies the Borrowers of the Change in Law giving
rise to such increased costs or reductions and of such Lender's intention to
claim compensation therefor; provided further that, if the Change in Law giving
rise to such increased costs or reductions is retroactive, then the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof.
SECTION 2.16 Break Funding Payments.
In the event of (a) the payment of any principal of any Eurodollar Loan
or Eurocurrency Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan or Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue
or prepay any Eurodollar Loan or Eurocurrency Loan on the date specified in any
notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan
or Eurocurrency Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrowers pursuant to Section
2.19, then, in any such event, the Borrowers shall compensate each Lender for
the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan or a Eurocurrency Loan, such loss, cost or expense to any Lender
shall be deemed to include an amount determined by such Lender to be the excess,
if any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for
deposits in the applicable currency of a comparable amount and period from other
banks in the eurodollar or eurocurrency market, as applicable. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrowers and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
41
SECTION 2.17 Taxes.
(a) Any and all payments by or on account of any obligation of any
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if a Borrower shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Bank (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Borrower shall make such deductions and (iii)
such Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of any Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrowers by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers to a Governmental Authority, the Borrowers shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to such Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by such Borrower as will permit such payments to be
made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by a Borrower, or with respect to which a Borrower
has paid additional amounts pursuant to this Section 2.17, it shall pay over
such refund to such Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by such Borrower under this Section 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses
42
of the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant governmental Authority with respect to such
refund); provided, that such Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to such Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to any
Borrower or any other Person.
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Each Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or
otherwise) prior to 12:00 noon, local time, at the place of payment, on the date
when due, in the currency in which such Loan was made and in federal funds or
such other immediately available funds as may be customary for the settlement of
international transactions in the relevant currency at such place, without
set-off or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent to such
account as the Administrative Agent shall have specified and, unless and until
otherwise specified, all such payments payable in dollars shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
except payments to be made directly to the Issuing Bank or Swingline Lender as
expressly provided herein and except that payments pursuant to Sections 2.15,
2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall
43
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrowers pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to the Borrowers
or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrowers rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrowers
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
applicable Borrower will not make such payment, the Administrative Agent may
assume that the applicable Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if in fact such payment has not been made, then each of the Lenders or the
Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by
it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b) or 2.18(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.15, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be,
in the future and (ii) would not
44
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if one
or more Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrowers
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.15 or payments required to be made pursuant to Section 2.17, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrowers to require such assignment and delegation cease to apply.
SECTION 2.20 Subsidiary Borrowers.
With the written consent of the Administrative Agent, which may be
granted or withheld in its sole discretion, in addition to Gatton, one or more
Subsidiaries in which the Domestic Borrower directly or indirectly owns Equity
Interests representing more than 75% of all Equity Interests and more than 75%
of the ordinary voting power may become a borrower (each, a "Subsidiary
Borrower") under this Agreement, and shall thereafter be, subject to the terms
and conditions set forth herein, entitled to borrow Revolving Loans. As a
condition to becoming a Subsidiary Borrower, such Subsidiary (i) shall execute
and deliver to the Administrative Agent an instrument substantially in the form
of Exhibit 2.20 hereto, and (ii) shall execute and/or deliver such other
certificates, instruments, resolutions, documents and opinions in respect of
such Subsidiary as were required to be delivered pursuant to Article IV hereof
by the Domestic Borrower as a condition to effectiveness of this Agreement, or
as the Administrative Agent may otherwise require in its sole discretion. In
addition, it shall be a further condition to becoming a Subsidiary Borrower that
each such Subsidiary which is organized under the laws of the United States or
any State or other political subdivision thereof, shall simultaneously with
becoming a Subsidiary Borrower also become a Guarantor with respect to the
Indebtedness of all other Borrowers by joining in the Guaranty of Payment, and
providing all other documents in connection with such joinder, as would be
required of a new Guarantor pursuant to Section 5.10, including a joinder in the
Subsidiary Security Agreement where such Subsidiary would be required to do so
under the last sentence of Section 5.10. In the event of such joinder in the
45
Subsidiary Security Agreement, the Subsidiary Borrower's obligations as a
co-borrower hereunder shall also be secured by the Subsidiary Security
Agreement.
SECTION 2.21 Loans under Existing Agreement, etc.
All outstanding "Loans" and "Letters of Credit" (as those terms are
defined in the Existing Agreement), if any, are, as of the Effective Date,
deemed to be the initial Loans and Letters of Credit under this Agreement. All
assignments necessary for each Lender's, the Swingline Lender's and the Issuing
Bank's interests in such Loans and Letters of Credit to be held, pro rata, in
accordance with their Commitments (under this Agreement), are hereby deemed to
have been made as of the Effective Date.
ARTICLE III
Representations and Warranties
Subject to Section 9.17, each of the Domestic Borrower, Gatton and each
Guarantor (and, from and after such time as (i) any other Subsidiary Borrower
becomes a party hereto pursuant to Section 2.20, such other Subsidiary Borrower,
and (ii) any other Subsidiary becomes a Guarantor pursuant to Section 5.10, such
other Subsidiary) represents and warrants to (and where applicable covenants
with) the Lenders, the Issuing Bank, and the Administrative Agent that:
SECTION 3.01 Organization; Powers.
Each of the Domestic Borrower and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02 Authorization; Enforceability.
The Transactions are within the Borrowers' and the Guarantors'
corporate and limited liability company (as applicable) powers and have been
duly authorized by all necessary corporate and, if required, stockholder or
member action. This Agreement has been duly executed and delivered by the
Borrowers and the Guarantors, and constitutes a legal, valid and binding
obligation of the Borrowers and the Guarantors, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03 Governmental Approvals; No Conflicts.
The Transactions: (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except (i) such as have been obtained or made and are in full force and effect,
and (ii) such as may be necessary to perfect any Lien granted under the
Subsidiary Security Agreement; (b) will not violate any applicable law or
46
regulation or the charter, by-laws or other organizational documents of the
Domestic Borrower or any of its Subsidiaries (including Gatton and the
Guarantors) or any order of any Governmental Authority; (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Domestic Borrower or any of its Subsidiaries (including the SPV, Gatton
and the Guarantors) or its assets, or give rise to a right thereunder to require
any payment to be made by the Domestic Borrower or any of its Subsidiaries
(including the SPV, Gatton and the Guarantors); and (d) will not result in the
creation or imposition of any Lien on any asset of the Domestic Borrower or any
of its Subsidiaries (including the SPV, Gatton and the Guarantors) except as
permitted under Section 6.02.
SECTION 3.04 Financial Condition.
(a) The Domestic Borrower has heretofore furnished to the Lenders its
consolidated balance sheet and statements of income, stockholders equity and
cash flows (i) as of and for the fiscal year ended October 31, 2004, reported on
by Ernst & Young LLP, independent public accountants, and (ii) as of and for the
fiscal quarter and the portion of the fiscal year ended January 30, 2005,
certified by a Financial Officer. Such financial statements present fairly, in
all material respects, the financial position and results of operations and cash
flows of the Domestic Borrower and its consolidated Subsidiaries as of such
dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above.
(b) The Domestic Borrower and its Subsidiaries have no liabilities,
contingent or otherwise, that were required under GAAP to be, but have not been,
disclosed in the financial statements referred to in paragraph (a) of this
Section.
(c) Schedule 3.04 sets forth a list of all Indebtedness described in
Section 6.01(a), (b), (e), (f) and (h) as of the Effective Date.
SECTION 3.05 Properties.
(a) Each of the Domestic Borrower and its Subsidiaries has good title
to, or valid leasehold interests in, all its real and personal property material
to its business, except for minor defects in title that do not interfere with
its ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes. All material assets of the Domestic
Borrower and of its Subsidiaries are free and clear of any Liens, except such as
are permitted by Section 6.02. Neither the Domestic Borrower nor any Subsidiary
is a party to any contract, agreement, lease or instrument (other than a Credit
Document) the performance of which, either unconditionally or upon the happening
of an event, will result in or require the creation of a Lien, on any of its
property or assets, except as permitted by Section 6.02.
(b) Each of the Domestic Borrower and its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Domestic Borrower and its Subsidiaries does not infringe upon the rights of any
other Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
47
SECTION 3.06 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrowers or the Guarantors, threatened against or affecting the Domestic
Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement, the Guaranty of Payment, any other Credit Document or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Domestic Borrower
nor any of its Subsidiaries (i) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
SECTION 3.07 Compliance with Laws and Agreements; No Default.
Each of the Domestic Borrower and its Subsidiaries (including Gatton
and the Guarantors) is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. The Domestic Borrower is
current in all required disclosure and otherwise in compliance in all material
respects with applicable federal and state securities laws and/or rules and
regulations of the Securities and Exchange Commission, and with applicable state
securities laws and/or rules and regulations of state securities authorities and
of any stock exchanges or other self regulatory organizations having
jurisdiction of the Domestic Borrower and/or its securities. No Default exists.
SECTION 3.08 Investment and Holding Company Status; Federal Reserve
Regulations.
(a) Neither the Domestic Borrower nor any of its Subsidiaries
(including Gatton and the Guarantors) is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
(b) Neither the Domestic Borrower nor any Subsidiary (including Gatton
and the Guarantors) 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 (within the meaning of Regulation U of the Board). No
part of the proceeds of any Loan or of any drawing under any Letter of Credit
will be used, directly or indirectly and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of or which is
inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X thereof.
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SECTION 3.09 Taxes.
Each of the Domestic Borrower and its Subsidiaries (including Gatton
and the Guarantors) has timely filed or caused to be filed all Tax returns and
reports required to have been filed and has paid or caused to be paid all Taxes
required to have been paid by it, except Taxes that are being contested in good
faith by appropriate proceedings and for which the Domestic Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves in
accordance with GAAP.
SECTION 3.10 ERISA.
No ERISA Event has occurred or is reasonably expected to occur that,
when taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $500,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Plans. Neither any Borrower nor any ERISA
Affiliate sponsors any employee welfare benefit plan (as defined in ERISA
Section 3(1) ("Employee Welfare Benefit Plan")) which provides any post-retiree
welfare benefits directly or through the purchase of insurance.
SECTION 3.11 Subsidiaries; Joint Ventures.
Schedule 3.11 sets forth as of the Effective Date a list of all
Subsidiaries, all investments (including Intercompany Debt) in Persons in which
the Domestic Borrower or one or more of its Subsidiaries (including Gatton and
the Guarantors) own twenty percent (20%) or more of the Equity Interests in such
Persons, and all joint ventures and partnerships to which the Domestic Borrower
or any Subsidiary is a party, the respective jurisdictions of organization
thereof, and the percentages of Equity Interests of the Domestic Borrower and
any Subsidiary therein. Except as disclosed on Schedule 3.11, the Domestic
Borrower has no Subsidiaries or investments as described above in, or joint
ventures or partnerships with, any Person as of the Effective Date.
SECTION 3.12 Use of Proceeds.
The proceeds of the Loans and the Letters of Credit will be used to
refinance existing Indebtedness and for general corporate purposes of one or
more of the Borrowers and their respective subsidiaries, all in accordance with
the terms and provisions hereof. No Letter of Credit shall have as its
beneficiary any employee or be used directly to pay any compensation,
indemnification, workers' compensation claim or other direct or indirect
remuneration, or any loan or advance to, any employee, officer, or director of
the Domestic Borrower or any Subsidiary (including Gatton and the Guarantors).
49
SECTION 3.13 Labor Matters.
There are no material strikes or other material labor disputes or
grievances pending or, to the knowledge of the Borrowers, threatened, against
the Domestic Borrower or any Subsidiary (including Gatton and the Guarantors).
SECTION 3.14 Solvency.
After giving effect to the Loans and the Letters of Credit (a) the fair
salable value of the assets of the Domestic Borrower and its Subsidiaries, on a
consolidated basis, will exceed the amount that will be required to be paid on
or in respect of the existing debts and other liabilities (including contingent
liabilities and, to the extent not otherwise included, Securitization Debt) of
the Domestic Borrower and its Subsidiaries, on a consolidated basis, as they
mature, (b) the assets of the Domestic Borrower and its Subsidiaries, on a
consolidated basis, will not constitute unreasonably small capital to carry out
their businesses as conducted or as proposed to be conducted, including the
capital needs of the Domestic Borrower and its Subsidiaries, on a consolidated
basis (taking into account the particular capital requirements of the businesses
conducted by such entities and the projected capital requirements and capital
availability of such businesses) and (c) the Borrowers and the Guarantors do not
intend to, and do not believe that they will, incur debts beyond their ability
to pay such debts as they mature (taking into account the timing and amounts of
cash to be received by it and the amounts to be payable on or in respect of its
obligations).
SECTION 3.15 Disclosure.
The Domestic Borrower has disclosed to the Lenders and the Issuing Bank
all agreements, instruments and corporate or other restrictions to which it or
any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrowers or the
Guarantors to the Administrative Agent and the Issuing Bank or any Lender in
connection with the negotiation of this Agreement, the Guaranty of Payment or
any of the Collateral Documents, or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrowers and the Guarantors represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 3.16 Offices.
The principal offices maintained by the Domestic Borrower and each of
the Guarantors in the United States are located as set forth on Schedule 3.16.
SECTION 3.17 Paying Agency Company.
As of the Effective Date, there exists no Paying Agency Company other
than ProcureStaff and Information Management Associates, Inc.
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SECTION 3.18 VIS Funding.
Prior to its dissolution on or about November 1, 2004, VIS Funding was
a corporation which originally had been formed in connection with a
securitization transaction entered into prior to the Approved Securitization,
and which is no longer in effect. Upon its dissolution, any remaining assets of
VIS Funding were distributed to the Domestic Borrower.
SECTION 3.19 No Changes to Approved Securitization or SPV.
As of the Effective Date, there has been no amendment to the
Securitization Documents or to any organizational document of the SPV or any
Subsidiary Originator, since April 8, 2005.
SECTION 3.20 2004 Field Exam.
There has been no material change in the Collateral (other than the
ordinary turnover of Accounts Receivable) since the date of the 2004 Field Exam,
i.e. on or about March 3, 2004.
SECTION 3.21 Nortel.
Unless the prior written consent of Required Lenders is obtained for
payment to Nortel under the Nortel Put/Call, such a payment may result in a
shorting of maturity as set forth in the definition of the term "Maturity Date"
under Section 1.01. Other than the foregoing, the Credit Documents do not
conflict with the Nortel Agreement in any way that is reasonably likely to have
a Material Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01 Effective Date.
This Agreement shall become effective on the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received: (i)
from each party hereto either (A) a counterpart of this Agreement signed on
behalf of such party, or (B) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement; and
(ii) from each party thereto either (A) a counterpart of the Guaranty of Payment
and the Subsidiary Security Agreement signed on behalf of each such party, or
(B) written evidence satisfactory to the Administrative Agent (which may include
telecopy transmission of one or more signed signature pages) that each such
party has signed a counterpart of each such document.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to, and reasonably acceptable to, the Administrative Agent,
the Issuing Bank and the Lenders and dated the Effective Date) of (i) in-house
counsel to the Domestic Borrower and the Guarantors covering certain corporate
matters, (ii) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, outside counsel to the
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Domestic Borrower and the Guarantors, covering such matters relating to the
Domestic Borrower and the Guarantors, this Agreement, the Guaranty of Payment,
the Collateral Documents and the Transactions as the Lenders and the Issuing
Bank shall reasonably request, and (iii) in-house counsel to Gatton covering due
authorization, valid execution, enforceability and such other matters relating
to Gatton, this Agreement or the Transactions as the Lenders and the Issuing
Bank shall reasonably request. The Domestic Borrower, the Guarantors and Gatton
(as applicable) hereby request such counsel to deliver such opinions.
(c) The Administrative Agent shall have received (i) a certificate of
the Secretary or an Assistant Secretary of each of the Domestic Borrower, each
of the Guarantors and Gatton (as indicated below) certifying that the copies of
the Domestic Borrower's, Gatton's and each Guarantor's organizational documents
attached to their respective certificates (of the Secretary or Assistant
Secretary of each of them) are true, complete and unamended; (ii) (A) a good
standing certificate in respect of the Domestic Borrower and each Guarantor from
the Secretary of State of their respective jurisdictions of organization
(long-form, listing all charter papers on file in his or her office), dated as
of a recent date prior to the Effective Date and (B) an equivalent "good
standing" confirmation for Gatton; (iii) a certificate as to tax status of the
Domestic Borrower from appropriate taxing authorities in its jurisdiction of
organization, as of a recent date prior to the Effective Date; (iv) a true copy,
certified as of the Effective Date by the Secretary or an Assistant Secretary of
each of the Domestic Borrower, each Guarantor and Gatton, of the resolutions of
their respective Boards of Directors authorizing the execution, delivery and
performance of this Agreement and the other Credit Documents to which it is a
party, which shall be satisfactory to the Administrative Agent in form, scope
and substance; and (v) certificates signed by the Secretary or an Assistant
Secretary of each of the Domestic Borrower, each Guarantor and Gatton, dated as
of the Effective Date, as to the incumbency and specimen signatures of the
officers of the Domestic Borrower, each Guarantor and Gatton (as applicable)
authorized to sign this Agreement and the other Credit Documents and each
certificate or other document or instrument to be delivered by the Domestic
Borrower, each Guarantor and Gatton pursuant hereto or thereto, and
certification by one of such officers of the Domestic Borrower, each Guarantor
and Gatton as to the incumbency and specimen signature of such respective
Secretary or Assistant Secretary. The Administrative Agent shall also have
received (i) lien searches satisfactory to the Lenders, run against the Domestic
Borrower in New York County, New York, Orange County, California, the Secretary
of State's Office in New York and the Secretary of State's Office in California,
and run against the Collateral Grantor Subsidiaries in the jurisdictions
specified by the Administrative Agent, and (ii) such other good standing
certificates, tax status certificates, search reports, shareholders' consents,
other documents and other certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Domestic Borrower, the Guarantors and/or Gatton, the
authorization of the Transactions and any other legal matters relating to the
Domestic Borrower and/or Gatton, this Agreement or the Transactions, all in form
and substance satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received and approved (i) the
financial statements described in Section 3.04, (ii) a certificate dated March
27, 2005 substantially in the form of Exhibit B, and (iii) a certificate dated
March 27, 2005 (substantially in the form of Exhibit D) showing the ProcureStaff
Quick Ratio as of such date.
52
(e) The Administrative Agent (and each Lender requesting the same)
shall have received and approved copies (which may be a conformed copies),
certified to their satisfaction, of all organizational documents pertaining to
the SPV and all material documents concerning the Approved Securitization
(including any amendment to any of them and any rating letter from Fitch,
▇▇▇▇▇'▇ or S&P).
(f) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the President, a Vice President or a Financial
Officer of the Domestic Borrower, confirming compliance with the conditions set
forth in paragraphs (a) and (b) of Section 4.02.
(g) The Administrative Agent and each Lender shall have received all
fees and other amounts due and payable to them on or prior to the Effective
Date, including, all out-of-pocket expenses of the Administrative Agent required
to be reimbursed or paid by the Borrowers hereunder.
(h) The Administrative Agent and the Lenders shall have received a
letter satisfactory to them, confirming the Borrower's obligations to pay
certain fees to the Administrative Agent and the Lenders.
(i) The Administrative Agent shall have received for the account of
each Lender, an "up front" fee equal to the amount of such Lender's Commitment
multiplied by 10 basis points.
(j) The Administrative Agent shall have received a certificate of the
Domestic Borrower making the representation and warranty required under Section
2.03(b), in form and substance satisfactory to the Administrative Agent.
The Administrative Agent shall notify the Domestic Borrower, the Issuing Bank,
and the Lenders of the Effective Date, and such notice shall be conclusive and
binding. However, if this Agreement has not become effective by 6pm (EDT) on
April 18, 2005, it shall be null and void, unless such deadline is extended in a
writing signed by all parties hereto.
SECTION 4.02 Each Credit Event.
In addition to the other conditions set forth in Article II (including
compliance with Section 2.06 (c) as to Letter of Credit renewals and
extensions), the obligation of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter
of Credit, is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrowers and the
Guarantors set forth in this Agreement, in any amendment to this Agreement and
in any other Credit Document shall be true and correct on and as of the date of
such Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
53
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by each
Borrower and each Guarantor on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, subject to Section 9.17, each of the
Domestic Borrower, Gatton and each Guarantor (and, from and after such time as
(i) any other Subsidiary Borrower becomes a party hereto pursuant to Section
2.20, such other Subsidiary Borrower, and (ii) any other Subsidiary becoming a
Guarantor pursuant to Section 5.10, such other Subsidiary) covenants and agrees
with the Lenders, the Issuing Bank, and the Administrative Agent that:
SECTION 5.01 Financial Statements and Other Information.
The Borrowers and the Guarantors will furnish to the Administrative
Agent, the Issuing Bank, and each Lender:
(a) within 100 days after the end of each fiscal year of the Domestic
Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by Ernst & Young LLP or other independent
public accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Domestic Borrower and its consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Domestic Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Domestic Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements under clause
(a) or (b) above, a certificate of a Financial Officer of the Domestic Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.10 and (iii) stating whether any
54
change in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 3.04 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(e) within 14 calendar days after the end of any calendar month: (i) in
a case where no Borrowing has been made during such a calendar month or either
of the two immediately preceding calendar months, a certificate in the form of
Exhibit B hereto made as of the last day of such calendar month by a Financial
Officer containing, among other things, a representation and warranty to the
Administrative Agent that the aggregate amount of all Accounts Receivable (other
than Intercompany Receivables) that are not past due (or, if past due, are not
more than ninety (90) days past the original due date thereof) exceeds the total
Revolving Credit Exposures, and (to the best knowledge of such Financial
Officer) will continue to do so as all times thereafter; (ii) an aging report
with respect to all Accounts Receivable, in the form of Exhibit C hereto,
providing an aging summary for each division or business segment in which a
Collateral Grantor Subsidiary is situated; and (iii) a statement (in
substantially the form of Exhibit D hereto) signed by a Financial Officer
setting forth the calculation of the ProcureStaff Quick Ratio as of the end of
such fiscal (rather than calendar) month;
(f) if and when obtained pursuant to Section 5.13, any new ratings
letter from each of Fitch, ▇▇▇▇▇'▇ and S&P, as applicable;
(g) in addition to any letters obtained pursuant to Section 5.13,
promptly after Fitch, ▇▇▇▇▇'▇ or S&P shall have announced a change in the rating
of the facility established hereunder, written notice of such rating change;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Domestic Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Domestic Borrower to its shareholders generally, as the case may be;
(i) concurrently with the information furnished under clause (a) and
clause (b) above, a list of all Subsidiaries and the aggregate principal amount
of any Intercompany Debt owed by each of them;
(j) not later than 60 days after the end of each fiscal quarter, a
summary aging report (in the form of Exhibit C), together with a specific
listing and aging of each Account Receivable of $10,000 or more;
55
(k) as soon as practicable after a good faith request therefor from the
Administrative Agent, Accounts Receivable agings and related information whether
or not of the type set forth in foregoing clauses (e)(ii) and (j); and
(l) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Domestic Borrower, Gatton, any Guarantor or any other Subsidiary (including the
SPV), or any matter pertaining to the Approved Securitization or any Subsidiary
Originator, or compliance with the terms of this Agreement or any other Credit
Document, as the Administrative Agent or any Lender may reasonably request;
provided, however, that the obligations of the Borrowers and the Guarantors
under this subsection (l) as to information regarding any member of the Delta
Group shall be subject to the confidentiality provisions set forth in the Nortel
Agreement (and the agreements contemplated thereby entered into as of the Nortel
Effective Date); provided, further, that the Borrowers and the Guarantors shall
use all reasonable efforts to obtain Nortel's approval to permit disclosure of
anything that would be required under this subsection but for the foregoing
proviso clause.
SECTION 5.02 Notices of Certain Events.
The Borrowers and the Guarantors will furnish to the Administrative
Agent, the Issuing Bank, and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Domestic Borrower, Gatton, any Guarantor or any Affiliate of a Borrower
(including the SPV or any Subsidiary Originator) that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Domestic Borrower and its Subsidiaries in an aggregate amount
exceeding $1,000,000;
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;
(e) the formation or acquisition of any Material Subsidiary or any
Paying Agency Company, or the acquisition of any material assets or business;
(f) the incurrence by any Subsidiary which is not a Guarantor of
Intercompany Debt totaling $5,000,000 or more in the aggregate, excluding the
Securitization Transactions;
(g) a Subsidiary, acquired or organized after the Effective Date under
the laws of the United States or any State or other political subdivision
thereof, achieving total assets with a fair market value (without deduction for
any Liens) of $5,000,000 or more;
(h) the occurrence of any "Potential Termination Event" or "Termination
Event" under (and as defined in) any Securitization Document, whether or not
resulting in a servicing transfer or the cessation of reinvestments by the
Securitization Conduit;
56
(i) receipt by the Domestic Borrower, the SPV or any other Subsidiary
of any notice pursuant to Section 10.02 (a) of the Receivables Purchase
Agreement, or any notice pertaining to any expiration or termination of any
"Liquidity Agreement" or "Program Support Agreement", as those terms are defined
in the Receivables Purchase Agreement; or
(j) the giving of any notice under Section 8.1 of the Receivables Sale
Agreement.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Domestic Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto. The obligations of
the Borrowers and the Guarantors under this Section 5.02 to provide notices
shall be subject, in the case of notices relating to the Delta Group, to the
confidentiality provisions set forth in the Nortel Agreement (and the agreements
contemplated thereby and entered into as of the Nortel Effective Date). However,
the Borrowers and the Guarantors shall use all reasonable efforts to obtain
Nortel's approval to permit disclosure of anything that would be required under
this Section but for the foregoing sentence.
SECTION 5.03 Existence; Conduct of Business.
Each Borrower and each Guarantor will, and will cause each of its
subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses,
permits, privileges and franchises material to the conduct of its business;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03.
SECTION 5.04 Payment of Obligations.
Each Borrower and each Guarantor will, and will cause each of its
subsidiaries to, pay its obligations, including Tax liabilities, that, if not
paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) such Borrower,
such Guarantor or such subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect, and (d) the same shall be paid or discharged or fully and
adequately bonded before it might become a lien or charge upon any material
property or asset of any Borrower, any Guarantor or any such subsidiary.
SECTION 5.05 Maintenance of Properties; Insurance.
Each Borrower and each Guarantor will, and will cause each of its
subsidiaries to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted.
Each Borrower and each Guarantor shall, and shall cause each of its subsidiaries
to, keep its properties (including, without limitation, fixed assets) adequately
insured at all times in the same manner and to the same extent, and carry such
other insurance (with insurance companies rated no lower than "A" by A.M. Best &
Co., Inc., or otherwise approved by the Administrative Agent) including, without
limitation, business interruption insurance, insurance against fire, public
liability insurance, and insurance against lack of fidelity by employees,
against such risks and in such amounts, and having such
57
deductible amounts as are customary, with companies in the same or similar
businesses operating in the same or similar locations, and which is no less than
is required by law.
SECTION 5.06 Books and Records; Inspection Rights.
Each Borrower and each Guarantor will, and will cause each of its
subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities. Each Borrower and each Guarantor will, and will cause
each of its subsidiaries to, permit any representatives designated by the
Administrative Agent, the Issuing Bank, or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, to discuss its affairs, finances and condition with its
officers and independent accountants, and to conduct a field exam with respect
to the Accounts Receivable included in the Collateral at the Domestics
Borrower's expense, all at such reasonable times and as often as reasonably
requested (provided that field exams only are permitted if requested by the
Required Lenders and, absent the occurrence and continuation of an Event of
Default, may not be conducted more frequently than annually). The obligations of
the Borrowers and the Guarantors under this Section 5.06, as they relate to
access, inspection and discussion rights pertaining to any member of the Delta
Group shall subject to the confidentiality provisions set forth in the Nortel
Agreement (and the agreements contemplated thereby entered into as of the Nortel
Effective Date). However, the Borrowers and the Guarantors shall use all
reasonable efforts to obtain Nortel's approval to permit any such access,
inspection and discussions that would be required under this Section but for the
foregoing sentence. (For avoidance of doubt, no field exam would involve any
member of the Delta Group, inasmuch as no such member is a Collateral Grantor
Subsidiary whose Accounts Receivable are included in the Collateral.)
SECTION 5.07 Compliance with Laws.
Each Borrower and each Guarantor will, and will cause each of its
subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit.
The proceeds of the Loans, and the Letters of Credit, will be used only
for the purposes set forth in Section 3.12. No part of the proceeds of any Loan
or of any drawing under any Letter of Credit will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X.
SECTION 5.09 Further Assurances.
Each Borrower and each Guarantor shall, and shall cause each of its
subsidiaries to, execute any and all further documents, agreements, and
instruments, and take all further actions, that the Administrative Agent, the
Issuing Bank, or any Lender shall reasonably request in order to effectuate the
transactions contemplated by this Agreement and the other Credit Documents,
including such further documents, agreements, instruments and actions to grant,
preserve, protect and perfect the rights of the Lenders, the Issuing Bank and
the Administrative Agent purported to
58
be created hereunder (including Liens in any cash collateral deposited
hereunder), and under the other Credit Documents. Notwithstanding the foregoing,
nothing in this Section 5.09 shall be deemed to require any Borrower or
Guarantor to cause any member of the Delta Group to be or become a party to, or
otherwise to become obligated under, this Agreement or any other Credit
Document.
SECTION 5.10 Additional Guarantors.
(a) If, after the Effective Date, (i) any additional Subsidiary
organized under the laws of the United States or any State or other political
subdivision thereof is formed or acquired, which new domestic Subsidiary shall
at any time either (x) have total assets with a fair market value of $5,000,000
or more, or (y) be required to become a Collateral Grantor Subsidiary as set
forth below in this paragraph (a), or (ii) any Subsidiary (now existing or
hereafter formed or acquired, and irrespective of the amount of its total
assets) shall become indebted in an aggregate principal amount of $5,000,000 or
more on account of Intercompany Debt, the Domestic Borrower will (A) so notify
the Administrative Agent, and (B) cause each such Subsidiary to become a
"Guarantor" under the Guaranty of Payment, jointly and severally with all the
other Guarantors, by joining in this Agreement and the Guaranty of Payment
pursuant to documentation reasonably satisfactory to the Administrative Agent,
within 10 Business Days (1) in the case of clause (i), after such Subsidiary
first achieves such $5,000,000 total asset value or shall first be required to
become a Collateral Grantor Subsidiary as applicable; or (2) in the case of
clause (ii), after such Intercompany Debt has reached the said $5,000,000
threshold or such requirement to become a guarantor has taken effect, as
applicable; provided, however, that the Uruguayan Subsidiary known as Tainol,
S.A. shall not be required to become a Guarantor pursuant to foregoing clause
(ii) unless the aggregate principal amount of its Intercompany Debt shall exceed
$12,500,000. In addition, if any Subsidiary of the type described in clause (i)
above (including subclause (x) thereof) shall be (or would, in the good faith
judgment of the Administrative Agent, ordinarily be) included within the
Domestic Borrower's telephone directory segment, computer systems segment or
telecommunications services segment, but is not then a Collateral Grantor
Subsidiary, the Domestic Borrower shall simultaneously with such Subsidiary's
becoming a "Guarantor" hereunder, cause such Subsidiary to become a Collateral
Grantor Subsidiary by joining in the Subsidiary Security Agreement pursuant to
documentation satisfactory to the Administrative Agent in its reasonable
discretion.
(b) Foregoing paragraph (a) shall not apply in the case of the SPV, any
Subsidiary Originator or any Subsidiary Originator Holding Company; provided
however, in the event that (i) the Approved Securitization shall expire,
terminate or otherwise cease to be in effect, or (ii) accounts receivable from
(x) such Subsidiary Originator or (y) any other Subsidiary in the staffing
solutions business shall cease to be sold, contributed or otherwise transferred
into the SPV (pursuant to Section 5.11, or otherwise), then the Domestic
Borrower shall (within 10 Business Days after the date that the events in items
(i) or (ii) above first occur) cause each Subsidiary Originator and each
Subsidiary Originator Holding Company that the Administrative Agent may specify
to become a "Guarantor" hereunder and under the Guaranty of Payment pursuant to
documentation reasonably satisfactory to the Administrative Agent.
(c) Notwithstanding anything in this Section 5.10 to the contrary, no
member of the Delta Group shall be required to become or continue as a Guarantor
or a Collateral Grantor
59
Subsidiary. However, the Domestic Borrower shall not permit any member of the
Delta Group to incur Intercompany Debt other than (i) Delta Approved
Intercompany Debt and (ii) Delta Group Intercompany Debt. If any member of the
Delta Group shall become indebted in an aggregate principal amount, calculated
without duplication, of $5,000,000 or more on account of Intercompany Debt
(whether secured or unsecured), other than Delta Group Intercompany Debt, the
Domestic Borrower will so notify the Administrative Agent and inform the
Administrative Agent of the details with respect thereto. In addition, in the
case of Delta RHI, it shall be a condition to the applicability of the first
sentence of this subsection (c) that the only assets of such corporation be its
Equity Interest in Delta, cash, Permitted Investments and receivables on account
of Intercompany Debt owing to it.
SECTION 5.11 The Approved Securitization.
The Domestic Borrower, in its sole discretion, shall be entitled to
continue or discontinue the Approved Securitization except to the extent that it
is required to discontinue the same pursuant to this Section 5.11. The Domestic
Borrower shall be required to cause the discontinuation of the Approved
Securitization immediately upon the first to occur of: (x) the termination of
the Securitization Conduit's obligation under the Securitization Documents to
continue to make reinvestments in the Approved Securitization; or (y) notice
from the Administrative Agent, following the occurrence of an Event of Default
(which has not been cured or waived as of the date of such notice), to cause
such discontinuation (but only to the extent discontinuation is then permitted
under the Securitization Documents; otherwise, discontinuation shall occur as
promptly thereafter as is permitted thereunder). Prior to the discontinuation of
the Approved Securitization, the Domestic Borrower shall cause all or
substantially all of the accounts receivable originated from the staffing
solutions business of the Domestic Borrower and its Subsidiaries to be sold,
conveyed or otherwise transferred (directly, or indirectly through the Domestic
Borrower) to the SPV as part of the Approved Securitization. It is understood
and agreed that "discontinuation" of the Approved Securitization, as referenced
in this Agreement, shall include within its meaning the termination of the
obligation of the Securitization Conduit to purchase the "Participation
Interest" or make "Reinvestments" (as those terms are defined in the Receivables
Purchase Agreement), but shall not preclude the liquidation contemplated
therein.
SECTION 5.12 Collateral Grantor Subsidiaries.
The Domestic Borrower shall maintain (or cause each Collateral Grantor
Subsidiary to maintain) either (i) a separate bank account wherein the proceeds
of such Collateral Grantor Subsidiary's Accounts Receivable are deposited, or
(ii) records pertaining to a commingled account of the Domestic Borrower plainly
identifying all monies belonging to each Collateral Grantor Subsidiary.
SECTION 5.13 New Ratings Letter.
The Domestic Borrower shall obtain from Fitch, ▇▇▇▇▇'▇ and/or S&P any
new ratings letter required by any of them, in accordance with their respective
policies, in order to maintain a rating for the facility established under this
Agreement and the other Credit Documents.
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ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, subject to Section 9.17, the Domestic Borrower,
Gatton and each of the Guarantors (and, from and after such time as (i) another
Subsidiary Borrower becomes a party hereto pursuant to Section 2.20, such other
Subsidiary Borrower, and (ii) any other Subsidiary becomes a Guarantor pursuant
to Section 5.10, such other Subsidiary) covenants and agrees with the Lenders,
the Issuing Bank, and the Administrative Agent that:
SECTION 6.01 Indebtedness.
The Domestic Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder, under the Guaranty of Payment or
under any other Credit Document;
(b) Securitization Debt and other Securitization Transactions (to the
extent the same constitutes Indebtedness); provided however, the maximum amount
of Securitization Debt permitted under this clause (b) shall not exceed
$150,000,000 in the aggregate at any one time outstanding;
(c) advances from customers received in the ordinary course of
business;
(d) performance guaranties, trade guaranties, and bid guaranties of the
performance of contractual obligations of wholly owned Subsidiaries of the
Domestic Borrower; provided that such guaranties and contractual obligations
arise in the ordinary course of business and that such contractual obligations
are not on account of Debt for Borrowed Money;
(e) other Indebtedness of the Domestic Borrower and the Subsidiaries
constituting Intercompany Debt, in any amount subject to compliance with Section
5.10;
(f) other Indebtedness existing on the Effective Date (and set forth in
Schedule 6.01(f)), of the Domestic Borrower and of the Subsidiaries to one or
more other Persons (and including unused amounts under such credit facilities),
and any and all extensions, renewals or replacements of any such Indebtedness,
provided that the aggregate principal amount thereof (whether used or unused) is
not increased;
(g) Guarantees by the Domestic Borrower of Indebtedness of
Subsidiaries, except that Guarantees otherwise permitted by the foregoing shall
be prohibited to the extent such (Subsidiary) Indebtedness would otherwise be
prohibited under this Agreement; provided, however, that no such (otherwise
permitted) Guarantee may be a Guarantee of any obligations on account of Debt
for Borrowed Money owing by any member of the Delta
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Group; and provided, further, that, after treating any such (otherwise
permitted) Guarantee for a member of the Delta Group as Delta Approved
Intercompany Debt, the aggregate principal amount at any one time outstanding
under that Guarantee and other Delta Approved Intercompany Debt, calculated
without duplication, shall not exceed either of the quantitative limits set
forth in the definition of "Delta Approved Intercompany Debt";
(h) other Indebtedness of the Domestic Borrower not constituting: (A)
Debt for Borrowed Money; (B) a Guarantee on behalf of a member of the Delta
Group (effectively) prohibited under Section 6.01(g); or (C) a performance,
trade, bid or other kind of guaranty of any kind on behalf of any member(s) of
the Delta Group if after treating such guaranty as Delta Approved Intercompany
Debt (having a value determined by the Administrative Agent, in its reasonable
discretion), the aggregate principal amount at any one time outstanding under
such guaranty and other Delta Approved Intercompany Debt, calculated without
duplication, would exceed either of the quantitative limits set forth in the
definition of "Delta Approved Intercompany Debt";
(i) other Indebtedness of the Domestic Borrower and its Subsidiaries
(other than any member of the Delta Group) not exceeding an aggregate principal
amount of $5,000,000 at any time;
(j) other Indebtedness (including any Guarantees) of members of the
Delta Group other than Delta RHI (and not of any of the Borrowers or the other
Subsidiaries, unless otherwise permitted under this Section 6.01 or under
Section 6.04) obtained on either a secured or an unsecured basis; provided,
however, that any such Indebtedness which is Intercompany Debt must constitute
either (i) Delta Approved Intercompany Debt or (ii) Delta Group Intercompany
Debt; and
(k) the second of the two $2,000,000 payment obligations of the
Domestic Borrower as described in clause (b) of the definition of "Nortel
Transaction" in Section 1.01, insofar as such payments may constitute "deferred
purchase price", under the definition of Indebtedness.
SECTION 6.02 Liens; Certain Asset Sales.
The Domestic Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now
owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) any Lien securing the Indebtedness permitted under clause (a) of
Section 6.01;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Domestic Borrower or any
Subsidiary existing on the Effective Date and set forth in Schedule 6.02;
provided that (i) such Lien shall not encumber or apply to any other property or
asset of the Domestic Borrower or any Subsidiary and (ii) such Lien shall secure
only those obligations which it secures on said date;
(d) Liens securing Subsidiary Indebtedness permitted under clause (f)
of Section 6.01;
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(e) (i) subject to Section 5.11, sales, conveyances and other transfers
of accounts receivable and Receivable Related Assets (or of undivided percentage
ownership interests therein) originated from the staffing solutions business of
the Domestic Borrower and the Subsidiary Originators to the extent constituting
Securitization Transactions; and (ii) sales, conveyances and other transfers of
accounts receivables from the Domestic Borrower to a Guarantor that is not then
a Subsidiary Originator, from any Guarantor that is not a Collateral Grantor
Subsidiary to the Domestic Borrower, from a Subsidiary Originator to the
Domestic Borrower or a Guarantor or another Subsidiary Originator, or from a
Collateral Grantor Subsidiary to another Collateral Grantor Subsidiary, or as
otherwise permitted in the following proviso; provided that Accounts Receivable
may only be sold, conveyed or transferred into or among Collateral Grantor
Subsidiaries or to another Subsidiary of the Domestic Borrower in connection
with such Subsidiary becoming a Collateral Grantor Subsidiary;
(f) Liens arising by operation of law or contract, securing Associate
Vendor Payables; and
(g) Liens on assets of any member of the Delta Group other than Delta
RHI (and not on any assets of any Borrower or any other Subsidiary), provided
that the Indebtedness or other obligations of any member of the Delta Group
secured thereby itself is not prohibited under this Agreement.
SECTION 6.03 Fundamental Changes.
(a) The Domestic Borrower will not, and will not permit any Subsidiary
to, merge into or consolidate with any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve, except that, if
at the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (i) any Subsidiary may merge into the Domestic
Borrower in a transaction in which the Domestic Borrower is the surviving
corporation, (ii) any Subsidiary (other than a Subsidiary Borrower) may merge
into any Subsidiary in a transaction in which the surviving entity is a
Subsidiary (provided that the Domestic Borrower's proportionate interest in the
assets and business of the merged Subsidiary has not diminished), (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the
Domestic Borrower or to another Subsidiary (provided that the Domestic
Borrower's proportionate interest in the assets sold, transferred, leased, or
disposed of has not diminished), and (iv) any Subsidiary (other than a
Subsidiary Borrower) may liquidate or dissolve if the Domestic Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Domestic Borrower and is not materially disadvantageous to the
Lenders; provided, however, that if any assets (constituting Collateral) of any
of the Collateral Grantor Subsidiaries will be sold, assigned, transferred or
otherwise disposed of in any way by virtue of any of the actions otherwise
permitted under any of the foregoing clauses (i) through (iv), the parties to
such merger or other such action shall notify the Administrative Agent and shall
take all steps reasonably required by the Administrative Agent to preserve the
Collateral Agent's first priority perfected security interest in all such
Collateral, prior to consummation of such action. Notwithstanding the foregoing,
foregoing clauses (ii) and (iii) of this subsection shall not apply where (A)
the surviving Subsidiary would be a member of the Delta Group (unless only
involving members of the Delta Group), or (B) the recipient of sold, leased,
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transferred or otherwise disposed of assets would be a member of the Delta Group
(unless the transferor was a member of the Delta Group).
(b) The Domestic Borrower will not, and will not permit any Subsidiary
to, sell, transfer, lease (as lessor) or otherwise dispose of (in one
transaction or in any series of transactions) Equity Interests in any Subsidiary
(whether owned on the Effective Date or thereafter acquired), or other assets of
any kind, except for the following:
(i) sales of inventory in the ordinary course of
business;
(ii) sales, conveyances and other transfers of accounts
receivable (A) permitted under Section 6.02(e) or (B)
made by a member of the Delta Group;
(iii) transactions permitted under subsection (a) of this
Section;
(iv) sales of obsolete equipment and other fixed assets
sold in the normal course of business, provided that
the net proceeds thereof are applied to the
acquisition by the Domestic Borrower or a Subsidiary
of operating assets used in the normal course of
their business within 180 days from the date thereof
(or, if such proceeds are received less than 180 days
before the Maturity Date, provided that the Domestic
Borrower can demonstrate to the reasonable
satisfaction of the Administrative Agent that same
will be so applied within such 180 day period);
(v) [intentionally omitted]; and
(vi) other sales, conveyances and other transfers of
Equity Interests and assets of any kind, subject to
an aggregate limit on the value of all such sales,
conveyances and other transfers under this clause
(vi) of $25,000,000 during the 12-month period
beginning on the Effective Date or on any anniversary
thereof.
Without limiting the foregoing, except as set forth above, neither the Domestic
Borrower nor any Subsidiary (other than any member of the Delta Group) shall
sell, assign, discount or otherwise dispose of notes, accounts receivable or
other rights to receive payment, with or without recourse, except for
collections and credits in the ordinary course of business.
(c) The Domestic Borrower will not, and will not permit any of its
Subsidiaries to, engage in any business other than businesses of the type
conducted by the Domestic Borrower and its Subsidiaries on the date of execution
of this Agreement and businesses reasonably related thereto except to an extent
not material to the Domestic Borrower and its Subsidiaries taken as a whole.
(d) The preceding paragraphs of this Section 6.03 shall not limit the
Securitization Transactions.
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SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions.
The Domestic Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Domestic Borrower and the Subsidiaries existing
on the Effective Date in Equity Interests in their respective subsidiaries;
(c) loans or advances to employees not exceeding $1,000,000 in the
aggregate at any one time outstanding;
(d) Guarantees constituting Indebtedness permitted by Section 6.01;
(e) a transaction permitted under Section 6.03(a), and the
Securitization Transactions;
(f) other acquisitions and investments in joint ventures not exceeding,
in the aggregate (for all such acquisitions and investments by the Domestic
Borrower and all Subsidiaries) $20,000,000 in any fiscal year;
(g) Intercompany Debt, subject to compliance with Section 5.10; and
(h) loans or advances by a Subsidiary to the Domestic Borrower ,
provided the resulting Indebtedness has no priority in right of payment over any
Indebtedness hereunder or under any Designated Swap Agreement.
Notwithstanding the foregoing exceptions, the Domestic Borrower will not permit
Delta RHI to have or hold any asset of any kind other than as is permitted under
Section 5.10(c).
SECTION 6.05 Swap Agreements.
The Domestic Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Swap Agreement, other than (a) Swap Agreements
entered into to hedge or mitigate risks to which the Domestic Borrower or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Domestic Borrower or any of the Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates
(from fixed to floating rates, from one floating rate to another floating rate
or otherwise) with respect to any interest-bearing liability or investment of
the Domestic Borrower or any Subsidiary; provided, however, that the maximum
aggregate exposure of the Domestic Borrower and the Subsidiaries under any and
all Swap Agreements (giving effect to any netting agreements) may not exceed
$5,000,000 at any one time outstanding. Notwithstanding the foregoing, if the
"put/call option"
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described on Schedule A hereto constitutes a Swap Agreement, the same shall be
deemed permitted hereunder.
SECTION 6.06 Restricted Payments.
The Domestic Borrower will not, and will not permit any of the
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except that: (a) Subsidiaries may declare
and pay dividends and make distributions ratably with respect to their Equity
Interests; (b) if at the time thereof and after giving effect thereto no Default
shall have occurred and be continuing, (i) the Domestic Borrower may declare and
pay dividends with respect to its capital stock (subject to the limitation
below), (ii) the Domestic Borrower may purchase, redeem, retire, acquire, cancel
or terminate any shares of its capital stock or any option, warrant or other
right to acquire any such shares, and (iii) the Domestic Borrower may make
Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Domestic Borrower and the
Subsidiaries; and (c) the Securitization Transactions shall be permitted.
Notwithstanding anything in the foregoing sentence to the contrary, the Domestic
Borrower shall not in any fiscal year make payment of any dividend (other than a
stock dividend) or any other payment in respect of its capital stock which would
cause the total of all such payments in such fiscal year to exceed 50% of its
Consolidated Net Income for the prior fiscal year.
SECTION 6.07 Transactions with Affiliates.
The Domestic Borrower will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Domestic Borrower or such Subsidiary than could be obtained on
an arm's-length basis from unrelated third parties, (b) transactions between or
among the Domestic Borrower and its wholly owned Subsidiaries (including
Securitization Transactions) not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.06, and (d) existing employment
agreements with ▇▇▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇ (or replacement of employment
agreements with such individuals on terms not materially less favorable to the
Domestic Borrower or its Subsidiaries); provided, however, that none of the
exceptions contemplated by clauses (a) through (d) will apply to any conveyance,
sale or transfer of accounts receivable or other assets prohibited under any
other provision of this Agreement, including any other Section of this Article
VI. Notwithstanding any of the foregoing, the following transactions will be
permitted: (i) any remaining uncompleted aspects of the Nortel Transaction; (ii)
transactions between or among members of the Delta Group; and (iii) transactions
between any member of the Delta Group and the Domestic Borrower and any other
Subsidiary as long as such transaction is (A) consistent with past practices or
(B) at such prices and on terms and conditions not less favorable to the
Domestic Borrower or such other Subsidiary than could be obtained on an arm's
length basis from unrelated third parties.
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SECTION 6.08 Restrictive Agreements.
The Domestic Borrower will not, and will not permit any of its
Subsidiaries (other than the SPV) to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon the ability of any Subsidiary (other than SPV) to
pay dividends or other distributions with respect to any Equity Interests, or to
make or repay loans or advances to the Domestic Borrower or any other Subsidiary
or to Guarantee Indebtedness of the Domestic Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to prohibitions, restrictions
and conditions imposed by law or by this Agreement or any other Credit Document
or as contemplated by the Securitization Documents (with respect to the loans or
advances and the Guaranteeing of Indebtedness, as aforesaid), (ii) the foregoing
shall not apply to prohibitions, restrictions and conditions existing on the
date hereof identified on Schedule 6.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
prohibitions, restrictions and conditions contained in agreements relating to
the sale of a Subsidiary pending such sale, provided such restrictions,
prohibitions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, and (iv) the foregoing shall not apply in the
case of any prohibition, restriction or condition imposed under (A) any
agreement or instrument pertaining to Indebtedness of any member of the Delta
Group or (B) the Members Agreement (as referenced on Schedule A hereto).
SECTION 6.09 Priority of Obligations.
The Borrowers and the Guarantors will not permit or suffer any present
or future unsecured Indebtedness of any of the Borrowers or any of the
Guarantors to have any priority in right of payment that is superior in any
respect to the Indebtedness of the Borrowers hereunder or the Guarantors under
the Guaranty of Payment.
SECTION 6.10 Certain Financial Covenants.
(a) The Domestic Borrower will not permit or suffer Consolidated
Tangible Net Worth to be less than $181,308,000 at any time.
(b) The Domestic Borrower will not permit or suffer the ratio of (i)
EBIT for the period of four consecutive fiscal quarters of the Domestic Borrower
ending on such date, to (ii) Interest Expense, to be less than or equal to 1.25
to 1.0 as of the last day of any fiscal quarter; provided, however, that EBIT
attributable to Delta or to any other Subsidiary which is not (directly or
indirectly) wholly-owned by the Domestic Borrower (a "Non-Wholly Owned
Subsidiary") shall be included in the foregoing calculation only to the extent
of cash actually received by the Domestic Borrower or a (directly or indirectly)
wholly-owned Subsidiary from Delta or such other Non-Wholly Owned Subsidiary in
the form of a dividend or similar distribution; and provided, further, that, for
the purposes of calculating this ratio, only 76% of Delta's (or the equivalent
percentage of Equity Interests owned directly or indirectly by the Domestic
Borrower in any other Non-Wholly Owned Subsidiary) Interest Expense shall be
included therein.
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(c) The Domestic Borrower will not permit or suffer the Adjusted Quick
Ratio, as of the last day of any fiscal quarter of the Domestic Borrower, to be
less than 1.10 to 1.0.
(d) The Domestic Borrower will not permit or suffer the ProcureStaff
Quick Ratio to be more than 1.0 to 1.0 at any time.
(e) The Domestic Borrower will not permit or suffer the ratio of Debt
to Capitalization to exceed .40 to 1.0 at any time.
Notwithstanding anything in the definition of the term Securitization Debt to
the contrary, the Domestic Borrower may, for purposes of calculation of and
compliance with the foregoing, treat Securitization Debt as having the same
meaning as the term "Net Investment" under the Receivables Purchase Agreement.
SECTION 6.11 Accounting, Fiscal Year.
The Domestic Borrower will not change the accounting policies of the
Domestic Borrower or any Subsidiary in any way that could have a material effect
on the presentation of financial reports, or change the fiscal year of the
Domestic Borrower or any Subsidiary from that in effect on the Effective Date
except that the Domestic Borrower may change its fiscal year once if (i) in
connection with such change the Domestic Borrower provides the Administrative
Agent, each Lender, and the Issuing Bank with restated financial statements and
compliance certificates (including reasonably detailed computations showing
compliance with the financial covenants contained in Section 6.10) all in form,
scope and substance acceptable to the Administrative Agent, in its sole
discretion, which restated financial statements shall present information as if
such change in fiscal year had been made one calendar year earlier, and (ii) no
Default exists or would exist after giving effect to such change and
restatement. By way of illustration, if commencing January 1, 2006 there is no
Default and the Domestic Borrower changes its fiscal year to the calendar year,
then the Domestic Borrower must provide restated financial statements and
compliance certificates for calendar year 2005 as if such calendar year had been
the Domestic Borrower's fiscal year, and there shall not result any Default
under such restated 2005 calendar year financial statements or under the current
calendar year financial statements. Notwithstanding the foregoing, accounting
policies may change to accord with a change in GAAP; provided further, that in
the event of any such change, all financial reports required hereunder that are
thereby affected shall thereafter be presented in two formats, one of which
shall reflect such change and the other of which shall reflect the original
accounting policy, the covenants contained in Sections 6.10 continuing to be
calculated on the basis of such original accounting policy.
SECTION 6.12 Capital Expenditures.
The Domestic Borrower will not permit the Domestic Borrower and the
Subsidiaries to incur an aggregate of more than $35,000,000 in Capital
Expenditures in any fiscal year.
SECTION 6.13 Approved Securitization.
The Domestic Borrower will not, and will not permit the SPV or any
other Subsidiary to: (a) provide any credit enhancement to the Approved
Securitization (other than the Standard
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Securitization Undertakings as contemplated by the Securitization Documents as
in effect on the Effective Date); or (b) make or effect any amendment to the
Approved Securitization, without the express written consent of the Required
Lenders, that would or could reasonably be expected to (i) amend any credit
enhancement provisions expressly described in the Securitization Documents as in
effect on the Effective Date (including, without limitation, any provisions
regarding overcollaterization through accounts receivable and any changes to the
term "Credit Enhancement Floor"), (ii) entail any increase (above the
$150,000,000 maximum principal amount) in the maximum aggregate amount of
Securitization Debt owed by the SPV pursuant to the Approved Securitization,
(iii) amend the purchase price to be paid by the SPV to the Domestic Borrower
for any Securitization Assets, (iv) include within the Approved Securitization
any accounts receivable (whether or not pledged pursuant to the Credit
Documents) other than those arising under the staffing solutions business of the
Domestic Borrower and its Subsidiaries, (v) in any way materially adversely
impact (x) any of the rights or remedies of the Lenders, the Administrative
Agent or the Collateral Agent under this Agreement or any other Credit Documents
or any Designated Swap Agreement or (y) the value of the Collateral, or (vi)
otherwise result in a Default or Event of Default. In addition, the Domestic
Borrower will not and will not permit the SPV to make or enter into any writing
or agreement of any kind (i) of the type contemplated by the first sentence of
Section 8.2 of the Receivables Sale Agreement, or (ii) which amends or has the
effect of varying the terms of Section 1.2, or Section 8.2 of the Receivables
Sale Agreement, or Section 10.02(a) of the Receivables Purchase Agreement, as
such Sections read on the Effective Date, or the definition of "Expiration Date"
in the Receivables Purchase Agreement (as the same reads on the Effective Date).
Notwithstanding the preceding two sentences, unless a Default shall have
occurred and be continuing, extensions or renewals of the term of the Approved
Securitization, on the same terms and conditions, shall be permitted without the
consent of the Administrative Agent or any Lender.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) (i) a Borrower shall fail to pay any principal of any Loan, pay any
reimbursement obligation in respect of any LC Disbursement, or provide any cash
collateral required under Section 2.06(c), or (ii) a Guarantor shall fail to
make any payment under the Guaranty of Payment, in any such case when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise; or
(b) a Borrower shall fail to pay any interest on any Loan or fail to
pay any fee or any other amount (other than an amount referred to in clause (a)
of this Article) payable under this Agreement, in any such case within two
Business Days after the same shall become due and payable; or
(c) any representation or warranty made or deemed made by or on behalf
of a Borrower or any Subsidiary (whether or not a Guarantor) in or in connection
with this Agreement, or any other Credit Document, or any amendment or
modification hereof or thereof, or waiver hereunder or thereunder, or in any
report, certificate, financial statement or other
69
document furnished pursuant to or in connection with this Agreement, or any
other Credit Document, or any amendment or modification hereof or thereof or
waiver hereunder or thereunder, shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) a Borrower or a Guarantor shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03 (with respect
to the Borrowers' and the Guarantors' existence), 5.08, 5.10, 5.11 or 5.12, or
in Article VI; or
(e) a Borrower or a Guarantor shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in clause (a), (b) or (d) of this Article), and such failure, if
capable of being remedied, shall continue unremedied for a period of 30 days
after notice thereof from the Administrative Agent to the Domestic Borrower
(which notice will be given at the request of any Lender or the Issuing Bank);
or
(f) (i) a default shall occur with respect to any Indebtedness of a
Borrower or any Subsidiary (whether or not a Guarantor) of $1,000,000 or more in
principal amount and such Indebtedness shall actually be accelerated by reason
thereof, or (ii) a Borrower or any Subsidiary (whether or not a Guarantor) shall
fail to make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable; or
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; or
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of a Borrower, a Guarantor or any Material Subsidiary or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for a Borrower, a Guarantor or any Material
Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or
decree approving or ordering any of the foregoing shall be entered; or
(i) a Borrower, a Guarantor or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (h) of this Article, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for a Borrower, a Guarantor or any
Material Subsidiary or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any
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such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing; or
(j) a Borrower, a Guarantor or any Material Subsidiary shall become
unable, admit in writing or fail generally to pay its debts as they become due;
or
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against a Borrower, a
Guarantor, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of a Borrower, a Guarantor or any
Subsidiary to enforce any such judgment(s) for the payment of money in an
aggregate amount in excess of $1,000,000; or
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, alone or when taken together with all other ERISA Events that
have occurred, could reasonably be expected to result in liability of the
Domestic Borrower and its Subsidiaries in an aggregate amount exceeding (i)
$500,000 in any year or (ii) $1,000,000 for all periods; or
(m) a Change in Control shall occur; or
(n) any Credit Document shall cease to be, or it shall be asserted by
or on behalf of a Borrower, a Guarantor or any successor to any of them that any
Credit Document is not, in full force and effect and enforceable in accordance
with its terms; or
(o) (i) an event of default shall occur under paragraph 8 of the
Guaranty of Payment; or (ii) a Collateral Grantor Subsidiary (A) shall default
under any provision of Section 8, 9 or 12 of the Subsidiary Security Agreement,
or (B) shall be in default for a period of ten (10) days or more under any
provision of any other Section of the Subsidiary Security Agreement other than a
default under such another Section as to which clause (c) of this Article VII
applies; or
(p) (i) the occurrence and continuation of any "Termination Event" set
forth in any of clauses (a), (b), (c), (e), (f) or (j) of Section 10.01 of the
Receivables Purchase Agreement, or (ii) the termination of the Receivables
Purchase Agreement or of the Securitization Conduit's obligation to purchase the
"Participation Interest" and to make "Reinvestments" (as those terms are defined
in the Receivables Purchase Agreement), in either case on the "Expiration Date"
as defined therein (or an extended "Expiration Date" permitted under the last
sentence of Section 6.13);
then, and in every such event (other than an event with respect to a Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrowers and the
Guarantors, take one or more of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrowers and
the
71
Guarantors accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers and the Guarantors, (iii) require cash collateral
as contemplated by Section 2.06(j), and (iv) enforce any or all of the Lenders'
and/or the Administrative Agent's rights under the Guaranty of Payment and/or
the Collateral Agent's rights under any or all of the Collateral Documents
and/or the UCC; and in case of any event with respect to a Borrower described in
clause (h) or (i) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrowers and the Guarantors
accrued hereunder, shall automatically become due and payable and the obligation
to provide cash collateral as aforesaid shall automatically arise, in each case,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrowers and the Guarantors.
ARTICLE VIII
The Administrative Agent
(a) Each of the Lenders and the Issuing Bank hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof, together with such
actions and powers as are reasonably incidental thereto.
(b) Any bank serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender or Issuing Bank as any
other Lender or Issuing Bank and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Borrowers or
any Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent hereunder.
(c) The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Issuing Bank or by the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except
as expressly set forth herein, the Administrative Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrowers, the Guarantors or any of the Subsidiaries
that is communicated to or obtained by any bank serving as Administrative Agent
or any of its respective Affiliates in any capacity. The Administrative Agent
shall not be liable for any action taken or not taken by it with the consent or
at the request of the Required Lenders (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by a
Borrower, a Guarantor or a
72
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement, the Guaranty of Payment or any
other Credit Document, (ii) the contents of any consent, certificate, report or
other document delivered hereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth herein or therein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, the Guaranty of Payment or any
other Credit Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
(d) The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrowers and/or the Guarantors),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Credit Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
the Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action (it
being understood that this provision shall not release the Administrative Agent
from performing any action with respect to the Borrowers and/or the Guarantors
expressly required to be performed by it pursuant to the terms hereof) under
this Agreement. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all the Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
(e) The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
(f) Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank, the Borrowers and
the Guarantors. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrowers, to appoint a successor to the
Administrative Agent. If no successor shall have been so appointed by the
Required
73
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrowers to a successor Administrative Agent shall be the same
as those payable to its predecessor unless otherwise agreed among the Borrowers
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
(g) Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or the Issuing Bank
and based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or the Issuing Bank and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices.
(a) Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to paragraph (b) below), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(i) if to a Borrower or a Guarantor, to such Borrower or
Guarantor c/o Volt Information Sciences, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
and Chief Financial Officer (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇ with a copy to Volt
Information Sciences, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, General Counsel (Telecopy No. (212)
704-2417);
(ii) if to the Administrative Agent, to JPMorgan Chase Bank,
N.A., Loan and Agency Services, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to JPMorgan
Chase Bank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇)▇▇▇-▇▇▇▇);
74
(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank,
N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank,
N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(v) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
(b) Notices and communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent, each
Borrower, and each Guarantor may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 9.02 Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing Bank
or any Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by a Borrower or a
Guarantor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof, nor any other
Credit Document or any provision thereof, may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the
applicable Borrowers and the Guarantors that are party hereto or thereto, as the
case may be, and the Required Lenders, or by such applicable Borrowers and
Guarantors and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall (i) increase the Commitment of
any Lender
75
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement (including any mandatory prepayment under Section
2.10(f)), or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) effect any release or discharge of a Guarantor or
Collateral Grantor Subsidiary or any of the Collateral provided by any
Collateral Grantor Subsidiary, without the written consent of each of the
Lenders, (vi) permit the automatic renewal of a Letter of Credit to occur after
April 11, 2008 without the written consent of each Lender and the Issuing Bank,
or (vii) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision of this Agreement specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Collateral
Agent, the Issuing Bank or the Swingline Lender, as the case may be.
Notwithstanding the foregoing, the requirements of Section 9.16 (and any
provision of this Agreement or any other Credit Document which expressly governs
waivers, amendments or modifications of such provisions) shall control with
respect to any matter expressly covered thereby.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(a) The Borrowers and the Guarantors shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Bank in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder (iii) all out-of-pocket
expenses incurred by the Administrative Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement or any
other Credit Document, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit, and (iv) all costs,
expenses, taxes, assessments and other charges incurred on connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Collateral Document or any other document referred to
therein.
(b) The Borrowers and the Guarantors shall indemnify the Administrative
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each
76
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties thereto or hereto of their respective obligations thereunder or
hereunder or the consummation of the Transactions or any other transactions
contemplated thereby or hereby, (ii) any Loan or Letter of Credit or the use of
the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by a Borrower, a Guarantor
or any Subsidiary, or any Environmental Liability related in any way to a
Borrower, a Guarantor or any Subsidiary, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) To the extent that a Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender severally agrees
to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as
the case may be, such Lender's Applicable Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.
(d) To the extent permitted by applicable law, no party hereto shall
assert against any other party hereto, and each party hereto hereby waives, any
claim against any other party hereto, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than
ten days after written demand therefor.
SECTION 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) no Borrower or Guarantor may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by a
Borrower or
77
Guarantor without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section. Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Domestic Borrower, provided that no consent of the
Domestic Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Lender immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment, the amount of the Commitment of
the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment
is delivered to the Administrative Agent) shall not be less than
$5,000,000 unless each of the Domestic Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Domestic
Borrower shall be required if an Event of Default has occurred and is
continuing;
(B) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, provided that this clause shall not
be construed to prohibit the assignment of a proportionate part of all
the assigning Lender's rights and obligations in respect of one Class
of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500;
(D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire; and
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(E) in the case of an assignment to a CLO, the assigning
Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided
that the Assignment and Assumption between such Lender and such CLO may
provide that such Lender will not, without the consent of such CLO,
agree to any amendment, modification or waiver described in the first
proviso to Section 9.02(b) that affects such CLO.
For the purposes of this Section 9.04(b), the terms "Approved
Fund" and "CLO" have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any
Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in
the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrowers, the Guarantors, the Administrative Agent, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the Guarantors, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative
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Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of any Borrower, or
Guarantor, the Administrative Agent, the Issuing Bank or the Swingline Lender,
sell participations to one or more banks or other entities (a "Participant") in
all or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrowers, the
Guarantors, the Administrative Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrowers and the Guarantors agree that each Participant shall be entitled to
the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.18(c) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.15 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Domestic Borrower's prior written consent. A Participant that would be
a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.17 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.17(e) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05 Survival.
All covenants, agreements, representations and warranties made by the
Borrowers and the Guarantors herein and in the certificates or other instruments
delivered in connection with or
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pursuant to this Agreement shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of this
Agreement and the Guaranty of Payment, and the making of any Loans and issuance
of any Letters of Credit, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent, the
Issuing Bank or any Lender may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and any separate letter agreements with respect to fees
payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 9.07 Severability.
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08 Right of Setoff.
If an Event of Default shall have occurred and be continuing, each
Lender, the Issuing Bank, and each of its respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender, the Issuing Bank, or Affiliate to or for the credit or the
account of any Borrower or any Guarantor against any of and all the obligations
of such Borrower or Guarantor now or hereafter existing under this Agreement or
the Guaranty of Payment held by such Lender,
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or by the Issuing Bank, irrespective of whether or not such Lender or the
Issuing Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender and of the Issuing Bank
under this Section are in addition to other rights and remedies (including other
rights of setoff) which such Lender or the Issuing Bank may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of
Process; Judgment Currency .
(a) This Agreement is, and shall be deemed to be, a contract entered
into under and pursuant to the laws of the State of New York, and shall be in
all respects governed, construed, applied and enforced in accordance with the
laws of the State of New York without regard to conflicts of laws principles of
New York State law other than ss. 5-1401 of the New York General Obligations
Law.
(b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each party hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any party hereto may otherwise have to
bring any action or proceeding relating to this Agreement against any other
party hereto or its properties in the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each party hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law. Gatton and the Guarantors hereby
irrevocably and unconditionally designate the Domestic Borrower located at its
address set forth in Section 9.01, as agent of Gatton and each Guarantor to
receive for and on behalf of Gatton and each Guarantor, service of process in
any legal action or proceeding arising out of or relating to this Agreement. It
is understood that a copy of such process served on such agent will be promptly
forwarded by mail to Gatton or any such Guarantor as applicable at its address
set forth in Section 9.01, but the failure of Gatton or such Guarantor to
receive such copy shall not affect in any way the service of such process.
(e) If for the purpose of obtaining judgment in any court it is
necessary to convert a sum due hereunder in one currency into another currency,
the parties hereto agree, to the fullest
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extent that they may effectively do so under applicable law, that the rate of
exchange used shall be the spot rate at which in accordance with normal banking
procedures the first currency could be purchased in New York City with such
other currency by the Person obtaining such judgment on the Business Day
preceding that on which final judgment is given. The parties agree, to the
fullest extent that they may effectively do so under applicable law, that the
obligations of each Borrower to make payments in any currency of the principal
of and interest on the Loans and any other amounts due from such Borrower
hereunder to the Administrative Agent as provided in Section 2.18: (i) shall not
be discharged or satisfied by any tender, or any recovery pursuant to any
judgment (whether or not entered in accordance with Section 9.09(e)), in any
currency other than the relevant currency, except to the extent that such tender
or recovery shall result in the actual receipt by the Administrative Agent at
its relevant office as provided in Section 2.18 on behalf of the Lenders of the
full amount of the relevant currency expressed to be payable in respect of the
principal of and interest on the Loans and all other amounts due hereunder (it
being assumed for purposes of this clause (i) that the Administrative Agent will
convert any amount tendered or recovered); (ii) shall be enforceable as an
alternative or additional cause of action for the purpose of recovering in the
relevant currency the amount, if any, by which such actual receipt shall fall
short of the full amount of the relevant currency so expressed to be payable;
and (iii) shall not be affected by an unrelated judgment being obtained for any
other sum due under this Agreement.
SECTION 9.10 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings.
Article and Section (and subsection) headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality.
Each of the Administrative Agent, the Issuing Bank and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
83
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, (i) to any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Domestic Borrower and its obligations, (g) with the consent of
any Borrower or Subsidiary or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis from a source other than a Borrower or Subsidiary. For
the purposes of this Section, "Information" means all information received from
any Borrower or any Subsidiary relating to any Borrower or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by a Borrower or a Subsidiary;
provided that, in the case of information received from a Borrower or a
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 9.13 Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to any Loan or other amount due hereunder, together
with all fees, charges and other amounts which are treated as interest on such
Loan or other amount under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the party holding such Loan or other
amount in accordance with applicable law, the rate of interest payable in
respect of such Loan or other amount hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or other amount but were not payable as a result of the operation
of this Section shall be cumulated and the interest and Charges payable to such
party in respect of other Loans or amounts or periods shall be increased (but
not above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such party.
SECTION 914 European Economic and Monetary Union; Possible Transition
from Sterling to euro.
(a) Definitions. In this Section 9.14 and in each other provision of
this Agreement to which reference is made in this Section 9.14 expressly or
impliedly, the following terms have the meanings given to them in this Section
9.14:
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"commencement of the third stage of EMU" means January 1, 1999 or the
date on which circumstances arise which (in the opinion of the Administrative
Agent) have substantially the same effect and result in substantially the same
consequences as commencement of the third stage of EMU as contemplated by the
Treaty on European Union.
"EMU" means economic and monetary union as contemplated in the Treaty
on European Union.
"EMU legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part the
implementation of the third stage of EMU;
"euro" means the single currency of participating member states of the
EMU;
"euro unit" means the currency unit of the euro;
"national currency unit" means the unit of currency (other than a euro
unit) of a participating member state;
"participating member state" means each state so described in any EMU
legislation; and
"Treaty on European Union" means the Treaty of Rome of March 25, 1957,
as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (which was
signed at Maastricht on February 7, 1992, and came into force on November 1,
1993), as amended from time to time.
(b) Effectiveness of Provisions. If and to the extent that any of the
provisions of subsections (c) to (j) below (inclusive) relate to the United
Kingdom or any other state (or Sterling or the currency of any such other state)
that is not a participating member state on the commencement of the third stage
of EMU, such provision shall become effective in relation to the United Kingdom
or such other state (and Sterling or the currency of such other state) at and
from the date on which the United Kingdom or such other state becomes a
participating member state.
(c) Redenomination and Alternative Currencies. Each obligation under
this Agreement of a party to this Agreement which has been denominated in the
national currency unit of a participating member state shall be redenominated
into the euro unit in accordance with EMU legislation, provided, that if and to
the extent that any EMU legislation provides that following the commencement of
the third stage of EMU an amount denominated either in the euro or in the
national currency unit of a participating member state and payable within that
participating member state by crediting an account of the creditor can be paid
by the debtor either in the euro unit or in the national currency unit, each
party to this Agreement shall be entitled to pay or repay any such amount either
in the euro unit or in such national currency unit.
(d) Loans. Any Loan in the currency of a participating member state
shall be made in the euro unit.
(e) Business Days. With respect to any amount denominated or to be
denominated in the euro or a national currency unit, any reference to a
"Business Day" shall be construed as a
85
reference to a day (other than a Saturday or Sunday) on which banks are
generally open for business in
(i) London and New York City and
(ii) Frankfurt am Main, Germany (or such principal financial
center or centers in such participating member state or states as the
Administrative Agent may from time to time nominate for this purpose).
(f) Payments to the Administrative Agent. Sections 2.10 and 2.18 shall
be construed so that, in relation to the payment of any amount of euro units or
national currency units, such amount shall be made available to the
Administrative Agent in immediately available, freely transferable, cleared
funds to such account with such bank in Frankfurt am Main, Germany (or such
other principal financial center in such participating member state as the
Administrative Agent may from time to time nominate for this purpose) as the
Administrative Agent shall from time to time nominate for this purpose.
(g) Payments by the Administrative Agent to the Lenders. Any amount
payable by the Administrative Agent to the Lenders under this Agreement in the
currency of a participating member state shall be paid in the euro unit.
(h) Payments by the Administrative Agent Generally. With respect to the
payment of any amount denominated in the euro or in a national currency unit,
the Administrative Agent shall not be liable to the Borrowers, the Guarantors or
any of the Lenders in any way whatsoever for any delay, or the consequences of
any delay, in the crediting to any account of any amount required by this
Agreement to be paid by the Administrative Agent if the Administrative Agent
shall have taken all relevant steps to achieve, on the date required by this
Agreement, the payment of such amount in immediately available, freely
transferable, cleared funds (in the euro unit or, as the case may be, in a
national currency unit) to the account with the bank in the principal financial
center in the participating member state which the Borrowers or, as the case may
be, any Lender shall have specified for such purpose. In this subsection (h),
"all relevant steps" means all such steps as may be prescribed from time to time
by the regulations or operating procedures or such clearing or settlement system
as the Administrative Agent may from time to time determine for the purpose of
clearing or settling payments of the euro.
(i) Basis of Accrual. If the basis of accrual of interest or fees
expressed in this Agreement with respect to the currency of any state that
becomes a participating state shall be inconsistent with any convention or
practice in the London interbank market or, as the case may be, the Paris
interbank market for the basis of accrual of interest or fees in respect of the
euro, such convention or practice shall replace such expressed basis effective
as of and from the date on which such state becomes a participating member
state; provided, that if any Loan in the currency of such state is outstanding
immediately prior to such date, such replacement shall take effect, with respect
to such Loan, at the end of the then current Interest Period.
(j) Rounding and Other Consequential Changes. Without prejudice and in
addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice
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to the respective liabilities for Indebtedness of each Borrower and each
Guarantor to the Lenders, and the Lenders to the Borrowers under or pursuant to
this Agreement:
(i) each reference in this Agreement to a minimum amount (or
an integral multiple thereof) in a national currency unit to be paid to or by
the Administrative Agent shall be replaced by a reference to such reasonably
comparable and convenient amount (or an integral multiple thereof) in the euro
unit as the Administrative Agent may from time to time specify; and
(ii) except as expressly provided in this subsection 9.14,
each provision of this Agreement shall be subject to such reasonable changes of
construction as the Administrative Agent may from time to time specify to be
necessary or appropriate to reflect the introduction of or changeover to the
euro in participating member states.
(k) Increased Costs. The Borrowers shall from time to time, at the
request of the Administrative Agent, pay to the Administrative Agent for the
account of each Lender the amount of any cost or increased cost incurred by, or
of any reduction in any amount payable to or in the effective return on its
capital to, or of interest or other return foregone by, such Lender or any
holding company of such Lender as a result of the introduction of, changeover to
or operation of the euro in any participating member state to the extent such
introduction, changeover or operation relates to such Lender's obligations
hereunder; provided that the Borrowers shall not be required to pay to any
Lender any amounts under this paragraph for any period prior to the date on
which such Lender gives notice to the Borrowers that such amounts are payable
unless such Lender gives notice within 180 days after it becomes aware or should
have been aware of the event giving rise to such payment obligation.
SECTION 9.15 Multiple Borrowers.
(a) As set forth in Section 2.10, the Domestic Borrower shall be
jointly and severally liable with each respective Subsidiary Borrower in respect
of the principal of, and interest on, all Loans made to such respective
Subsidiary Borrower hereunder. No Subsidiary Borrower (including Gatton) shall
be liable for the repayment of the principal of, and interest on, Loans made to
the Domestic Borrower or to another Subsidiary Borrower, or for reimbursement of
an LC Disbursement for the account of the Domestic Borrower; provided, however,
that nothing contained herein shall been deemed to affect the liability under
the Guaranty of Payment of any Subsidiary Borrower that is also a Guarantor
thereunder. Except as expressly set forth above in this Section 9.15(a) with
respect to the liability of a Subsidiary Borrower with regard to principal and
interest on Loans to the Domestic Borrower or to any other Subsidiary Borrower
or on account of LC Disbursements, and subject to Section 9.17, each Borrower
and each Guarantor agrees that the representations and warranties made by, and
the liabilities, obligations, and covenants of and applicable to, any or all of
the Borrowers and the Guarantors under this Agreement, shall be in every case
(whether or not specifically so stated in each such case herein) joint and
several in all circumstances. Except if otherwise expressly stated, every notice
by or to any Borrower or Guarantor shall be deemed also to constitute
simultaneous notice by or to each other Borrower and each other Guarantor (as
applicable), every act or omission by any Borrower or Guarantor shall be binding
upon each Borrower and Guarantor, and (subject to Section 9.17) the
Administrative Agent, the Issuing Bank and the Lenders are fully authorized by
each Borrower and each Guarantor to act and rely also upon the representations
and warranties,
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covenants, notices, acts, and omissions of each other Borrower and each other
Guarantor. Without limiting the generality of the foregoing, each Borrower and
each Guarantor agrees that the obligations of each of them hereunder and under
the other Credit Documents shall be enforceable against each of them
notwithstanding that this Agreement, the Guaranty of Payment or any other Credit
Document may be unenforceable in any respect against any other Borrower or
Guarantor.
(b) The Domestic Borrower is accepting joint and several liability for
all obligations of the Subsidiary Borrowers with respect to the Loans made to a
Subsidiary Borrower hereunder in consideration of the financial accommodations
to be provided by the Lenders under this Agreement, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of the
undertakings of each Subsidiary Borrower to accept its own liability for such
obligations.
(c) The Domestic Borrower and each respective Subsidiary Borrower,
jointly and severally, hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability with
each other as set forth herein, with respect to the payment and performance of
all of such obligations with respect to the Loans made to such respective
Subsidiary Borrower, it being the intention of the parties hereto that all such
obligations shall be joint and several as aforesaid, without preference or
distinction among them. If and to the extent that either of the Domestic
Borrower or such respective Subsidiary Borrower shall fail to make any payment
with respect to any of such obligations as and when due or to perform any of
such obligations in accordance with the terms hereof, then in each such event
the other such Borrower, subject to paragraph (a) of this Section 9.15, will
make such payment with respect to, or perform, such obligation.
(d) The obligations with respect to the Loans made to a Subsidiary
Borrower under the provisions of Section 2.10 and this Section 9.15 constitute
full recourse obligations of each of the Domestic Borrower and such Subsidiary
Borrower (as applicable) enforceable against each such Person to the full extent
of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Credit Documents or any other
circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, the
Domestic Borrower and each Subsidiary Borrower (as applicable) hereby waives
notice of acceptance of its joint and several liability, notice of any Loans
made under this Agreement, notice of any action at any time taken or omitted by
the Lenders or the Administrative Agent under or in respect of any of such
obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement. The Domestic Borrower and each Subsidiary Borrower (as applicable)
hereby assents to, and waives notice of, any extension or postponement of the
time for the payment of any of such obligations, the acceptance of any payment
of any of such obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Lenders or the
Administrative Agent at any time or times in respect of any default by either
the Domestic Borrower or any Subsidiary Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Lenders or the Administrative
Agent in respect of any of such obligations, and the taking,
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addition, substitution or release, in whole or in part, at any time or times, of
any security for any of such obligations or the addition, substitution or
release, in whole or in part, of the Domestic Borrower or any Subsidiary
Borrower. Without limiting the generality of the foregoing, all Borrowers assent
to any other action or delay in acting or failure to act on the part of the
Lenders or the Administrative Agent with respect to the failure by any other
Borrower or any Guarantor to comply with any of its respective obligations,
including any failure to strictly or diligently assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations thereunder,
which might, but for the provisions of this Section 9.15, afford grounds for
terminating, discharging or relieving any of the Borrowers, in whole or in part,
from any of its obligations under this Section 9.15 or Section 2.10, it being
the intention of each of the Borrowers that, so long as any of such obligations
hereunder remains unsatisfied, the obligations of the Borrowers under this
Section 9.15 and Section 2.10 shall not be discharged except by performance and
then only to the extent of such performance. Such obligations of each of the
Borrowers under this Section 9.15 or Section 2.10 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, re-construction or similar proceeding with respect to any of the
Borrowers, any Guarantor, any of the Lenders or the Administrative Agent. The
joint and several liability of the Domestic Borrower and each Subsidiary
Borrower to the extent provided for hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any of
the Borrowers, any Guarantor, any of the Lenders or the Administrative Agent.
(f) The provisions of this Section 9.15 are made for the benefit of the
Lenders and the Administrative Agent and their successors and assigns, and may
be enforced in good faith from time to time against the Borrowers as often as
occasion therefor may arise and without any requirement on the part of the
Lenders or the Administrative Agent first to marshal any of their claims or to
exercise any of their rights against any other Borrower or any Guarantor, or to
exhaust any remedies available to them against any other Borrower or any
Guarantor, or to resort to any other source or means of obtaining payment of any
of the obligations with respect to the Loans to Subsidiary Borrowers hereunder
or to elect any other remedy. The provisions of this Section 9.15 shall remain
in effect until all of such obligations shall have been paid in full or
otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of such obligations, is rescinded or must otherwise be
restored or returned by the Lenders upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this Section
9.15 and Section 2.10 (if applicable) will forthwith be reinstated in effect, as
though such payment had not been made.
SECTION 9.16 Nortel Put/Call.
Notwithstanding the fact that the failure of the Domestic Borrower or a
Subsidiary to perform its obligations under the Nortel Put/Call may cause an
Event of Default, if such performance would require the written consent of the
Required Lenders in order to be permissible under one or more other provisions
of this Agreement, such consent shall nonetheless be required hereunder.
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SECTION 9.17 Responsibility for Representations and Warranties,
Affirmative Covenants and Negative Covenants.
Notwithstanding the literal language of the preambles to Articles III,
V and VI, it is agreed that each of the Domestic Borrower, Gatton, any other
Subsidiary Borrower and each Guarantor is and will be responsible thereunder
only for itself and for its own subsidiaries. However, such responsibility of
the Subsidiary Borrowers (including Gatton) and the Guarantors with respect to
the matters covered in Article VI (other than in Section 6.10) will extend to
the Subsidiary Borrowers and the Guarantors acting and refraining from acting
consistently with the Domestic Borrower's obligations as to Subsidiaries which
are Subsidiary Borrowers or Guarantors as are set forth in Article VI (except
for Section 6.10).
SECTION 9.18 Old Notes.
The Administrative Agent shall, as promptly as is practicable, obtain
from the applicable "Lenders" under the Existing Agreement the promissory notes
made in connection with the Existing Agreement, and return them to the Domestic
Borrower.
[Signatures Appear on Next Page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
JPMORGAN CHASE BANK, N.A., as a GATTON VOLT CONSULTING GROUP LIMITED
Lender, Issuing Bank and Administrative
Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Director
MELLON BANK, N.A.., as a Lender VOLT TELECOMMUNICATIONS GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: First Vice President Title: Treasurer
▇▇▇▇▇ FARGO BANK, N.A.., as a Lender VOLT DIRECTORIES S.A., LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Treasurer
▇▇▇▇▇ TSB BANK PLC, as a Lender DATANATIONAL OF GEORGIA, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Title: Treasurer
Global Corporate, New York
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VMC CONSULTING CORPORATION
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President and Manager, By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Business Development ---------------------------------
Global Corporate, New York Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
FLEET NATIONAL BANK, a Bank DATANATIONAL, INC.
of America Company,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President Title: Treasurer
VOLT INFORMATION SCIENCES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: President