EXHIBIT (d)(6)
REIMBURSEMENT AGREEMENT
DATED AS OF AUGUST 30, 2001
between
▇▇▇.▇▇▇, INC.
and
▇▇▇▇▇ ▇. ▇▇▇▇
TABLE OF CONTENTS
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Pages
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SECTION 1 DEFINITIONS...................................................................... 1
1.1 Certain Defined Terms.............................................................. 1
1.2 Accounting Terms................................................................... 5
1.3 Other Definitional Provisions...................................................... 5
SECTION 2 REIMBURSEMENT OBLIGATIONS........................................................ 5
2.1 Loans.............................................................................. 5
2.2 Payments........................................................................... 6
2.3 Interest on the Loans.............................................................. 6
2.4 Liens, Permitted Liens............................................................. 6
2.5 Usury Savings...................................................................... 7
2.6 Termination........................................................................ 7
SECTION 3 CONDITIONS TO LOANS.............................................................. 7
3.1 Conditions to Execute the Guaranty................................................. 7
SECTION 4 BORROWER'S REPRESENTATIONS AND WARRANTIES........................................ 8
4.1 Organization, Standing and Corporate Power......................................... 8
4.2 Loan Documents Authorized.......................................................... 8
4.3 No Conflict........................................................................ 9
4.4 Litigation......................................................................... 9
4.5 Financial Condition................................................................ 9
4.6 Deposit Accounts................................................................... 10
4.7 Disclosure......................................................................... 10
4.8 Environmental Matters.............................................................. 10
4.9 Title to Properties; Liens......................................................... 10
4.10 Payment of Taxes................................................................... 10
4.11 Regulation U....................................................................... 11
4.12 Licenses, Permits, etc............................................................. 11
SECTION 5 BORROWER'S AFFIRMATIVE COVENANTS................................................. 11
5.1 Corporate Existence, Etc........................................................... 11
5.2 Payment of Taxes and Claims........................................................ 11
5.3 Maintenance of Properties; Insurance............................................... 12
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5.4 Financial Information.............................................................. 12
5.5 Inspection......................................................................... 12
5.6 Compliance with Laws, Etc.......................................................... 12
5.7 Notice of Certain Events........................................................... 12
5.8 Delivery of Control Agreement...................................................... 13
SECTION 6 BORROWER'S NEGATIVE COVENANTS.................................................... 13
6.1 Intentionally Omitted.............................................................. 13
6.2 Intentionally Omitted.............................................................. 13
6.3 Liens.............................................................................. 13
6.4 Restricted Payments................................................................ 14
6.5 Loans, Investments, Contingent Liabilities......................................... 14
6.6 Consolidation, Merger, Acquisition................................................. 15
6.7 Asset Sales........................................................................ 15
6.8 Agreements; Billing Practices...................................................... 15
6.9 Remedies of Lender................................................................. 15
SECTION 7 EVENTS OF DEFAULT................................................................ 15
7.1 Failure to Pay..................................................................... 16
7.2 Breach of Covenant................................................................. 16
7.3 Breach of Representation or Warranty............................................... 16
7.4 Termination of Merger Agreement.................................................... 16
7.5 Bankruptcy or Insolvency........................................................... 16
7.6 Intentionally Omitted.............................................................. 17
7.7 Intentionally Omitted.............................................................. 17
7.8 Intentionally Omitted.............................................................. 17
7.9 Invalidity of Loan Documents....................................................... 17
SECTION 8 MISCELLANEOUS.................................................................... 18
8.1 Survival of Warranties............................................................. 18
8.2 Failure or Indulgence Not Waiver................................................... 18
8.3 Modification....................................................................... 18
8.4 Notices............................................................................ 18
8.5 Severability....................................................................... 19
8.6 Effectiveness; Binding Effect; Governing Law....................................... 19
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8.7 Waiver of Jury Trial............................................................... 19
8.8 Consent to Jurisdiction............................................................ 20
8.9 Assignability...................................................................... 20
8.10 Costs and Expenses................................................................. 20
8.11 Counterparts....................................................................... 21
8.12 Headings........................................................................... 21
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SCHEDULE 3.1B
DISCLOSURE SCHEDULE
EXHIBIT A - FORM OF GUARANTY
REIMBURSEMENT AGREEMENT
DATED AS OF AUGUST 30, 2001
This Reimbursement Agreement (the "Agreement") is dated as of August
30, 2001, and entered into between ▇▇▇.▇▇▇, Inc., a Delaware corporation (the
"Borrower" or the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇, an individual (the "Lender").
RECITALS
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WHEREAS, the Borrower, the Lender and SB Acquisition, Inc. and SB
Merger Sub, Inc. have entered into that certain Agreement and Plan of Merger
dated as of August 10, 2001 (the "Merger Agreement"), pursuant to which SB
Merger Sub, Inc. will be merged with the Borrower (such transaction, the
"Merger");
WHEREAS, the Lender has agreed, subject to the terms and conditions
contained herein, to execute a Guaranty, in the form attached hereto as Exhibit
A (the "Guaranty"), in favor of Chase Merchant Services, L.L.C. and The Chase
Manhattan Bank (collectively, together with their respective successors and
assigns, the "Servicers"), pursuant to which Lender will guaranty the full and
prompt payment of the "Guaranteed Obligations," as such term is defined in the
Guaranty; and
WHEREAS, the Lender is willing to execute the Guaranty in favor of the
Servicers and to make certain financial accommodations to Borrower as set forth
herein only if the Obligations of the Borrower hereunder are secured by a second
priority Lien, on those assets of the Borrower and its Subsidiaries in which the
Lender is granted a security interest under the Collateral Documents;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
SECTION 1 DEFINITIONS
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1.1 Certain Defined Terms
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The following terms used in this Agreement shall have the following
meanings:
"Agreement" means this Reimbursement Agreement dated as of August
30, 2001 and all schedules and exhibits hereto, as such may be amended
or supplemented from time to time.
"Borrower" has the meaning assigned in the introductory clause of
this Agreement.
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"Bridge Credit Agreement" means that certain Bridge Financing
Credit Agreement dated as of August 10, 2001 between Borrower and the
▇▇▇▇▇ ▇. ▇▇▇▇ Separate Property Trust u/d/t 8/2/95 (the "Trust"), as
it may be amended or supplemented from time to time.
"Business Day" means any day excluding Saturday, Sunday and any
day on which the lending institutions located in the states of
California or New York are authorized by law or other governmental
action to close.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) by the Borrower or any of its Subsidiaries as
lessee that is accounted for as a capital lease on the balance sheet
of such entity in accordance with GAAP.
"Closing Date" means the date that the conditions to the Lender
executing the Guaranty have been satisfied or waived, including
without limitation the conditions listed in subsection 3.1 herein.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported
to be granted by the Loan Documents.
"Collateral Documents" means (i) the Security Agreement, and (ii)
any other security agreements, pledge agreements, assignments,
financing statements or other agreement, document, instrument or
certificate executed or delivered by the Borrower or any of its
Subsidiaries pursuant to this Agreement.
"Company Disclosure Schedule" has the meaning given to that term
in the Merger Agreement.
"Company SEC Documents" has the meaning given to that term in
subsection 4.5 hereof.
"Dollars" or "$" means dollars in the lawful currency of the
United States of America.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, governmental authorizations, or any other requirements of
governmental authorities relating to (i) environmental matters, or
(ii) occupational safety and health, industrial hygiene, land use or
the protection of human, plant or animal health or welfare, in any
manner applicable to the Borrower or its Subsidiaries or any of its or
their facilities.
"Event of Default" means each of the events set forth in Section
7 hereof.
"Expiration Date" means the earliest of (i) December 3, 2001,
provided, however, that if the termination date of the Merger
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Agreement is extended, the
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preceding date shall be adjusted correspondingly to occur on the
Business Day immediately following such termination date, (ii) the
Business Day immediately following the Merger Agreement Closing Date,
and (iii) the date of termination in whole of the "Loan Commitment"
and the "L/C Commitment", as such terms are defined in, and pursuant
to Section 7 of the Bridge Credit Agreement.
"Funding Date" means the date of funding of a Loan.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession, that
are applicable to the circumstances as of the date of determination.
"Governmental Authority" means any federal, state or local
governmental authority, agency or court in the United States, or other
comparable or similar governmental authority, agency or court in a
jurisdiction outside of the United States, in each case applicable to
the Borrower or its Subsidiaries.
"Guaranteed Obligations" has the meaning given to that term in
the recitals.
"Guaranty" has the meaning given to that term in the recitals.
"Lender" has the meaning assigned in the introductory clause of
this Agreement.
"Lien" means any lien, mortgage, pledge, security interest,
charge, hypothecation or encumbrance of any kind, including any
conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest.
"Loan" or "Loans" means one or more of the payments made by the
Lender to the Servicers, or any of them, under the Guaranty in respect
of the Guaranteed Obligations, together with all expenses incurred by
the Servicers, or any of them, and paid by Lender under the Guaranty
(excluding, however, expenses arising from a willful, intentional and
bad faith breach by Lender of its obligations under the Guaranty).
"Loan Documents" means this Agreement and the Collateral
Documents.
"Material Contract" has the meaning given to that term in the
Merger Agreement.
"Material Adverse Effect" or "Material Adverse Change" have the
meanings given to such terms in the Merger Agreement.
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"Merger" has the meaning given to that term in the recitals.
"Merger Agreement" has the meaning given to that term in the
recitals.
"Merger Agreement Closing Date" means the "Closing Date" as such
term is defined in the Merger Agreement.
"Obligations" means all obligations of every nature of the
Borrower under this Agreement and the other Loan Documents, whether or
not such obligation is reduced to judgment, liquidated, unliquidated,
fixed or contingent, matured, disputed, undisputed, legal, equitable,
secured or unsecured, and whether or not such obligation is
discharged, stayed or otherwise affected by any bankruptcy,
insolvency, reorganization or other similar proceeding. Without
limiting the generality of the foregoing, the Obligations of the
Borrower include the obligations to pay principal, interest, charges,
expenses, fees, reasonable attorneys' fees and disbursements and other
amounts payable by the Borrower under this Agreement or any other Loan
Document to which it is a party and to reimburse any amount in respect
of any of the foregoing that the Lender, in its sole discretion, may
elect to pay or advance on behalf of the Borrower in accordance with
the Security Agreement.
"Parent" has the meaning given to that term in the Merger
Agreement.
"Permitted Liens" means each of the encumbrances set forth in
subsection 6.3 hereof.
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental authority or
other entity of whatever nature.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, in respect of or on account of any
shares of any class of stock of the Borrower now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of the Borrower now or hereafter
outstanding (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of the Borrower now or hereafter
outstanding; and (iv) any payment, discharge or satisfaction of any
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than (A) the payment,
discharge, settlement or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or
the notes thereto) of the Borrower included in the Company SEC
Documents or listed or referred to in the Company Disclosure
Schedules, (B) the payment of
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any indebtedness, claims, liabilities or obligations incurred in the
ordinary course of the Borrower's business consistent with past
practice, (C) payments made with respect to the acquisition of assets
under subsection 6.6 hereof; or (D) payments otherwise permitted or
required by the terms of the Merger Agreement.
"Security Agreement" means each Security Agreement executed and
delivered by the Borrower in favor of the Lender, as such Security
Agreement may be amended or supplemented or otherwise modified from
time to time, including without limitation the Security Agreement
entered into by and between the Lender and the Borrower dated of even
date herewith.
"Servicers" has the meaning given to such term in the recitals.
"Subsidiary" means a corporation, partnership, trust, limited
liability company or other business entity of which more than 50% of
the shares of stock or other ownership interests having ordinary
voting power (without regard to the occurrence of any contingency) to
elect a majority of the board of directors or other managers of such
entity are at the time owned, directly, or indirectly through one or
more Subsidiaries, or both, by the Borrower.
"Termination Date" has the meaning given to that term in
subsection 2.6 hereof.
"Trust" has the meaning given to such term in the definition of
Bridge Credit Agreement herein.
1.2 Accounting Terms
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For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.
1.3 Other Definitional Provisions
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References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 hereof may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference.
SECTION 2 REIMBURSEMENT OBLIGATIONS
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2.1 Loans
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A. Payments Under Guaranty. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Lender hereby agrees to execute and deliver to
the Servicers the Guaranty. Provided that no Event of Default exists hereunder,
the Lender agrees not to terminate the Guaranty prior to the Expiration Date.
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2.2 Payments
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A. Mandatory Payments. The Lender shall notify Borrower of each Loan
made by Lender on the day that such Loan was made, and the Borrower hereby
unconditionally promises and agrees that it shall pay to Lender the principal
amount of such Loan, together with accrued interest thereon, if any, (i) on the
same day as the making of such Loan if the notice from Lender to Borrower of the
making of such Loan was given on or prior to 10:00 a.m. (California time) on
such day or (ii) on the day following the making of such Loan if the notice from
Lender to Borrower of the making of such Loan was given after 10:00 a.m.
(California time) on such day. All repayments of any Loan shall include payment
of accrued interest on the principal amount so repaid, and amounts so received
by the Lender shall be applied first to the payment of interest before
application to principal. Any payments of any Obligations hereunder received by
the Lender on or after the Expiration Date shall be applied first to the
payments of amounts due under subsection 8.10 hereof, then to the payment of
interest accrued on such Obligations, and finally to the principal amounts of
any such Obligations.
B. Manner and Time of Payment. All payments of principal, interest
and fees hereunder shall be made without defense, set off and counterclaim and
in same day funds and delivered to the Lender not later than 3:00 p.m.
(California time) on the date due at its office located at ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such other address as the Lender may inform the Borrower
by written notice; funds received by the Lender after that time shall be deemed
to have been paid by the Borrower on the next succeeding Business Day.
C. Payments on Non-Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder.
2.3 Interest on the Loans
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A. Rate of Interest. The Loans shall bear interest on the unpaid
principal amount thereof from the respective Funding Date through the date when
such loan is due and payable at a rate equal to 10.5%.
B. Default Interest. Upon and during the occurrence of an Event of
Default hereunder, the Loans shall bear interest payable upon demand at a rate
that is equal to 2.5% per annum in excess of the rate of interest otherwise
payable under this Agreement.
C. Computation of Interest. Interest on the Loans shall be computed
on the basis of a 360-day year and the actual number of days elapsed in the
period during which it accrues.
2.4 Liens, Permitted Liens
----------------------
All Obligations shall be secured by second priority and other Liens in
and security interests in and to all Collateral as contemplated by this
Agreement and the other Loan Documents, subject only to Permitted Liens.
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2.5 Usury Savings
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Notwithstanding any provision of any Loan Document, the Borrower is
not and shall not be required to pay interest at a rate or any fee or charge in
an amount prohibited by applicable law. If interest or any fee or charge
payable on any date would be in a prohibited amount, then such interest, fee or
----
charge will be automatically reduced to the maximum amount that is not
prohibited, and any interest, fee or charge for subsequent periods (to the
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extent not prohibited by applicable law) will be increased accordingly until the
Lender receives payment of the full amount of each such reduction. To the
extent that any prohibited amount is actually received by the Lender, then such
----
amount will be automatically deemed to constitute a repayment of principal
indebtedness hereunder.
2.6 Termination
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On and as of the date (the "Termination Date") that (i) the
obligations of Lender under the Guaranty have been cancelled or terminated in
whole, (ii) all the Loans have been repaid in full, and (iii) all other
Obligations under this Agreement and the other Loan Documents, including without
limitation those arising under subsection 8.10 herein, have been paid in full;
then this Agreement shall terminate and be of no further force or effect, and
----
neither the Lender nor the Borrower shall have any further rights, duties or
obligations hereunder.
SECTION 3 CONDITIONS TO LOANS
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The obligation of the Lender to execute the Guaranty and to arrange
for the financial accommodations to Borrower hereunder is subject to the
satisfaction of all of the following conditions:
3.1 Conditions to Execute the Guaranty
----------------------------------
The obligation of the Lender to execute the Guaranty and to arrange
for the financial accommodations to Borrower hereunder is subject to prior or
concurrent satisfaction of the following conditions:
A. The Lender shall have received on or before the Closing Date
executed and acknowledged (where applicable) originals of this Agreement and the
other Loan Documents to which the Borrower is a party.
B. The Lender shall have received properly authorized and executed
copies of the following: (i) the Security Agreement, (ii) the UCC-1 financing
statement(s) executed in connection with the Security Agreement, (iii) the Grant
of Patent Security Interest substantially in the form attached to the Security
Agreement, and (iv) the Grant of Trademark Interest substantially in the form
attached to the Security Agreement. The Lender shall also have received the
stock certificates listed with more specificity on Schedule 3.1B hereto,
accompanied by stock powers duly endorsed in blank. For purposes of the
immediately preceding sentence, the delivery of such stock certificates to the
Trust in connection with the Bridge Credit Agreement shall also be deemed
delivery of such items to Lender.
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C. Representations and Warranties; Performance of Agreements. The
Borrower shall have delivered to the Lender an Officer's Certificate, in form
and substance satisfactory to Lender, to the effect that the representations and
warranties in Section 4 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that the Borrower shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by the Lender.
SECTION 4 BORROWER'S REPRESENTATIONS AND WARRANTIES
-----------------------------------------
In order to induce the Lender to enter into this Agreement, to execute
the Guaranty and to make the financial accommodations to Borrower hereunder, the
Borrower represents and warrants to the Lender that the following statements are
true, correct and complete, except as specifically disclosed on the attached
Disclosure Schedule:
4.1 Organization, Standing and Corporate Power
------------------------------------------
The Borrower is and each of its Subsidiaries is a corporation or
limited liability company duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and has the
requisite corporate or limited liability company power and authority to carry on
its business as now being conducted. The Borrower and each of its Subsidiaries
is duly qualified or licensed to do business as a foreign corporation or limited
liability company and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where the
failure to be so qualified or licensed would not have a Material Adverse Effect
on the Borrower. The Borrower has made available to the Lender or its
affiliates complete and correct copies of its certificate of incorporation and
bylaws and the certificate of incorporation and bylaws or other organizational
documents of its Subsidiaries, in each case as amended to the date of this
Agreement.
4.2 Loan Documents Authorized
-------------------------
As of the date hereof, or within two (2) days of the date hereof, and
at all times during the effectiveness of this Agreement, the execution, delivery
and performance of the Loan Documents (i) have been, or will be, duly authorized
by all necessary corporate action on the part of the Borrower and (ii) do not
require the consent or approval of any Governmental Authority or other
regulatory authority; are not in contravention of or conflict with any law or
regulation or any term or provision of any Material Contract, in each case that
would result in a Material Adverse Change; and this Agreement has been duly
executed and delivered by the Borrower and constitute legally valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally.
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4.3 No Conflict
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As of the date hereof and at all times during the effectiveness of
this Agreement, the execution, delivery and performance of this Agreement and
the other Loan Documents will not breach or constitute a default under any
Material Contract; and such execution, delivery and performance will not result
in the creation or imposition of any lien, charge or encumbrance on, or security
interest in, any of its or any of its Subsidiaries' property pursuant to the
provisions of any of the foregoing, in each case that would result in a Material
Adverse Effect.
4.4 Litigation
----------
Except as disclosed in the Company SEC Documents filed prior to the
date of this Agreement and publicly available or as disclosed in Section 3.1(h)
of the Company Disclosure Schedule, there is no suit, action, investigation,
audit or proceeding pending or, to the knowledge of the Borrower, overtly
threatened against the Borrower or any of its Subsidiaries. There is no decree,
injunction, judgment, order, ruling, assessment or writ of any Governmental
Entity applicable to the Borrower or any of its Subsidiaries or to which any of
its or their respective assets may be bound, and there is no other decree,
injunction, judgment, order, ruling, assessment or writ applicable to the
Borrower or any of its Subsidiaries or to which any of its or their respective
assets may be bound that would create a Material Adverse Effect.
4.5 Financial Condition
-------------------
Since February 8, 2000, the Borrower has timely filed with the SEC all
required reports and forms and other documents (the "Company SEC Documents").
As of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Company SEC Documents and none of the Company SEC Documents,
when filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Borrower included in the
Company SEC Documents complied as to form, when filed, in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present, in all material respects, the financial position of the Borrower as of
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of the unaudited statements to normal
year-end audit adjustments). Except as set forth in the Company SEC Documents
filed prior to the date of this Agreement and publicly available and except for
liabilities and obligations incurred in the ordinary course of business
consistent with past practice since the date of the most recent balance sheet
included in the Company SEC Documents, neither the Borrower nor any of its
Subsidiaries has any material liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on a balance sheet of the Borrower and its
consolidated Subsidiaries or in the notes thereto.
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4.6 Deposit Accounts
----------------
The Grantor shall maintain the accounts with the depository
institutions listed with particularity on Schedule 3.1B hereto as its primary
cash accounts.
4.7 Disclosure
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No information, exhibit or report furnished to the Lender by or on
behalf of the Borrower or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement contains any untrue statement of a
material fact or omits to state a material fact (known to the Borrower, in the
case of any document not furnished by it) necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made.
4.8 Environmental Matters
---------------------
The Borrower has reasonably concluded that no event or condition has
occurred or is occurring with respect to the Borrower or any of its Subsidiaries
relating to any Environmental Law, except as disclosed on Disclosure Schedule
hereto, which individually or in the aggregate has had or could reasonably be
expected to have a Material Adverse Effect.
4.9 Title to Properties; Liens
--------------------------
Section 3.1(k) of the Company Disclosure Schedule sets forth a list of
each real property lease to which the Borrower or any of its Subsidiaries is a
party. True and correct copies of each such real property lease, including all
amendments thereto, have been made available to the Lender. Neither the
Borrower nor any of its Subsidiaries owns any real property. The Borrower and
its Subsidiaries have good and marketable title to, or valid leasehold interests
in, all their properties and assets except where such failure would not have a
Material Adverse Effect on the Borrower. The tangible assets of the Borrower
and each of its Subsidiaries are in a good state of maintenance and repair and
are not materially defective except for ordinary wear and tear and are adequate
for their current uses.
4.10 Payment of Taxes
----------------
Each of the Borrower and its Subsidiaries has timely filed all
material federal, state, local and foreign tax returns, declarations, estimates,
information returns, statements and reports ("Returns") required to be filed by
it through the date hereof and shall timely file all such Returns required to be
filed on or before the Expiration Date. All such Returns are and will be true,
complete and correct in all material respects. The Borrower and each of its
Subsidiaries has paid and discharged (or the Borrower has paid and discharged on
such Subsidiary's behalf) all material taxes due from them, other than such
taxes as are adequately reserved for on the most recent financial statements
contained in the SEC Documents filed prior to the date of this Agreement and
publicly available.
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4.11 Regulation U
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The Borrower and each of its Subsidiaries is not 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" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System).
4.12 Licenses, Permits, etc.
-----------------------
Except as disclosed on the Company Disclosure Schedule, (a) to the
best knowledge of the Borrower, the Borrower owns and possesses all material
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, necessary for the
operation of its business, without known conflict with the rights of others, in
each case the failure of which would result in a Material Adverse Effect; and
(b) to the best knowledge of the Borrower, there is no material violation by any
person of any right of the Borrower with respect to any patent, copyright,
service ▇▇▇▇, trademark, trade name or other right owned or used by the
Borrower, in each case the failure of which would result in a Material Adverse
Effect.
SECTION 5 BORROWER'S AFFIRMATIVE COVENANTS
--------------------------------
The Borrower covenants and agrees that so long as the Lender has any
obligations under the Guaranty in favor of the Servicers, or any of them, or any
amounts or Obligations are owing or remain outstanding hereunder and unless this
Agreement has been terminated pursuant to subsection 2.6 hereof, the Borrower
shall do, and shall cause each of its Subsidiaries to do, all of the following:
5.1 Corporate Existence, Etc.
-------------------------
At all times preserve and keep in full force and effect its and its
Subsidiaries' corporate existence, rights, franchises and licenses material to
its business and those of each of its Subsidiaries; provided, however, that the
-------- -------
corporate existence of any such Subsidiary may be terminated if such termination
is in the best interest of the Borrower and is not materially disadvantageous to
the Lender.
5.2 Payment of Taxes and Claims
---------------------------
Make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or change
any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of its federal income tax return
for the taxable year ending December 31, 1999, except as may be required by
applicable law; provided, however, nothing herein shall be deemed to prohibit
the filing of the Borrower's federal income tax return for the taxable year
ended December 31, 2000.
-11-
5.3 Maintenance of Properties; Insurance
------------------------------------
Maintain or cause to be maintained in good repair, working order and
condition all material properties used in the business of the Borrower and its
Subsidiaries and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. The Borrower and each of its
Subsidiaries will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business and
the properties and business of its Subsidiaries against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or similar businesses and similarly situated, of such types
and in such amounts as are customarily carried under similar circumstances by
such other corporations. The Borrower and each of its Subsidiaries will comply
with any other insurance requirement set forth in any other Loan Document.
5.4 Financial Information
---------------------
The Borrower shall, and shall cause each of its Subsidiaries to,
furnish promptly to the Lender, (a) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of federal or state securities laws and (b) all
other information concerning its business, properties and personnel as the
Lender may reasonably request.
5.5 Inspection
----------
Subject to Section 5.2(c) of the Merger Agreement, upon reasonable
prior written notice, permit any authorized representatives designated by the
Lender to visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and accounts with its and their officers and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably requested.
5.6 Compliance with Laws, Etc.
--------------------------
Exercise, and cause each of its Subsidiaries to exercise, all due
diligence in order to comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority, including, without
limitation, all Environmental Laws, noncompliance with which could reasonably be
expected to cause, either individually or in the aggregate, a Material Adverse
Effect.
5.7 Notice of Certain Events
------------------------
The Borrower shall give prompt written notice to the Lender, and the
Lender shall give prompt written notice to the Borrower, of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect, (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this
-12-
Agreement or (iii) the occurrence of any change or event having, or which
insofar as can reasonably be foreseen to have, a Material Adverse Effect on the
Borrower; provided, however, that no such notification shall (A) affect the
-------- -------
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement or (B) limit
or otherwise affect the remedies available hereunder to the party receiving such
notice.
5.8 Delivery of Control Agreement
-----------------------------
Within thirty (30) days of the Lender's request, the Borrower shall
deliver to Lender a duly authorized and executed original of one or more Control
Agreements among the Lender, the Borrower and the depository institutions that
have provided such Control Agreements pursuant to the Bridge Credit Agreement.
The form of such Control Agreements shall be substantially the same as those
delivered to the Trust with respect to the Bridge Credit Agreement.
SECTION 6 BORROWER'S NEGATIVE COVENANTS
-----------------------------
The Borrower covenants and agrees that so long as the Lender has any
obligations under the Guaranty in favor of the Servicers, or any of them, or any
amounts or Obligations are owing or remain outstanding hereunder and unless this
Agreement has been terminated pursuant to subsection 2.6 hereof, the Borrower
shall not do, nor shall it allow any of its Subsidiaries to do, any of the
following without the written consent of the Lender:
6.1 Intentionally Omitted
---------------------
6.2 Intentionally Omitted
---------------------
6.3 Liens
-----
Directly or indirectly, create, incur, assume or permit to exist any
Lien on or with respect to the Collateral, except the following (collectively,
the "Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not at the time required by subsection 4.10 hereof;
(ii) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, landlords and customs agents and
authorities and other Liens imposed by law incurred in the ordinary course of
business, if such reserve or other appropriate provision, if any, as shall be
required by sound accounting principles shall have been made therefor;
(iii) Liens arising from judgments, decrees and attachments not
constituting an event of default;
(iv) Liens in favor of financial institutions arising in connection
with Borrower's deposit accounts held at such institutions;
(v) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment
-13-
insurance and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(vi) Leases or subleases granted to others not interfering with the
ordinary conduct of the business of the Borrower or of its Subsidiaries;
(vii) Easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering with the ordinary conduct of the
business of the Borrower or of its Subsidiaries;
(viii) purchase money Liens upon or in any property acquired or held
by the Borrower or any Subsidiary in the ordinary course of business to secure
the purchase price of such property or to secure indebtedness incurred solely
for the purpose of financing the acquisition of such property;
(ix) Liens in existence on the date hereof, including Liens in favor
of the Trust;
(x) Liens securing the Obligations; and
(xi) Other Liens arising in the ordinary course that do not create a
Material Adverse Effect.
6.4 Restricted Payments
-------------------
The Borrower and each of its Subsidiaries shall not, directly or
indirectly declare, order, pay, make or set apart any sum for any Restricted
Payments.
6.5 Loans, Investments, Contingent Liabilities
------------------------------------------
A. Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another Person, except under this Agreement or the Bridge Credit
Agreement, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Borrower or any of its Subsidiaries,
guarantee any debt securities of another Person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of any of the
foregoing; or
B. make any loans, advances or capital contributions to, or
investments in, any other Person, other than (1) to the Borrower or any direct
or indirect wholly owned subsidiary of the Borrower or (2) loans or advances to
employees of the Borrower or any of its Subsidiaries for travel or business
expenses in the ordinary course of business;
except that the Borrower may:
(i) own, purchase or acquire commercial paper rated Standard &
Poor's A-1 or Moody's P-1, direct obligations of the United States of America or
its agencies, and obligations guaranteed by the United States of America;
-14-
(ii) acquire and own stock, obligations or securities received from
customers in connection with debts created in the ordinary course of business
owing to the Borrower or any of its Subsidiaries;
(iii) continue to own the existing capital stock of the Borrower's
and each of its Subsidiaries' subsidiaries (including stock in its minority
interests); and
(iv) endorse negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business.
6.6 Consolidation, Merger, Acquisition
----------------------------------
Consolidate with or merge into any other corporation or entity other
than pursuant to, or as permitted by, the Merger Agreement, including upon the
exercise of the Borrower's rights under subsection 7.1(h) thereof, or acquire or
agree to acquire (for cash or shares of stock or otherwise) (A) by merging or
consolidating with, or by purchasing a substantial portion of the assets of, or
by any other manner, any business or any corporation, partnership, limited
liability company, joint venture, association or other business organization or
division thereof or (B) any assets with a fair market value in excess of $50,000
except purchases of inventory in the ordinary course of business consistent with
past practice or as otherwise permitted by the Merger Agreement, including upon
the exercise of the Borrower's rights under subsection 7.1(h) thereof.
6.7 Asset Sales
-----------
Sell, lease, exchange or otherwise dispose of any of, its or any of
its Subsidiaries' business, properties or assets, except for sales of its or
their properties or assets in the ordinary course of business consistent with
past practice or as otherwise permitted by the Merger Agreement, including upon
the exercise of the Borrower's rights under subsection 7.1(h) thereof.
6.8 Agreements; Billing Practices
-----------------------------
Except in the ordinary course of business consistent with past
practice, modify, or amend in any material respect, or, to the extent within the
Company's control, renew, fail to renew or terminate, any Material Contract to
which the Company or any subsidiary is a party or waive, release or assign any
material rights or claims. In addition, the Company shall not modify or change
its current practice of billing its credit card sales until after merchandise
has been shipped.
6.9 Remedies of Lender
------------------
The Borrower and each of its Subsidiaries shall not seek to obtain any
stay on the exercise of the remedies available to the Lender under this
Agreement.
SECTION 7 EVENTS OF DEFAULT
-----------------
The occurrence of any one or more of the following conditions or
events, regardless of the reason therefore, shall constitute an "Event of
Default" hereunder:
-15-
7.1 Failure to Pay
--------------
Failure to make any payment of principal or interest with respect to a
Loan hereunder by the Expiration Date; or failure to pay any amounts required by
subsection 8.10 hereof as and when due.
7.2 Breach of Covenant
------------------
Failure of the Borrower to perform or observe any other term or
condition of this Agreement or other Loan Document which failure results in a
Material Adverse Effect, unless such failure has been cured by the Borrower on
or before the Expiration Date; provided that any such Material Adverse Effect
--------
that is incapable of cure under the terms of the Merger Agreement shall
constitute an Event of Default hereunder on and as of the date the Trust
exercises its right to terminate the Merger Agreement pursuant to subsection
7.1(b) thereof.
7.3 Breach of Representation or Warranty
------------------------------------
Any of the Borrower's representations or warranties made herein, in
any Loan Document or in any statement or certificate at any time given in
writing pursuant hereto or thereto or in connection herewith or therewith, shall
be false or misleading on any date to which such representation or warranty is
applicable in any respect that results in a Material Adverse Effect and that has
not been cured by the Borrower on or before the Expiration Date; provided that
--------
any Material Adverse Effect that is incapable of cure under the terms of the
Merger Agreement shall constitute an Event of Default hereunder on and as of the
date that the Lender exercises its right to terminate the Merger Agreement
pursuant to subsection 7.1(b) thereof.
7.4 Termination of Merger Agreement
-------------------------------
A. The passage of five (5) days after the termination of the Merger
Agreement if and only if such termination is solely pursuant to the terms of
subsection 7.1(d) of the Merger Agreement; provided that no other uncured Event
of Default shall have occurred hereunder; or
B. termination of the Merger Agreement under any other
circumstances than those enumerated in the preceding subsection 7.4A, unless
this Agreement has been terminated pursuant to subsection 2.6.
7.5 Bankruptcy or Insolvency
------------------------
A. The Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
of its Subsidiaries shall make a general assignment for the benefit of its
creditors; or
-16-
B. there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed or undischarged for
a period of sixty (60) days.
7.6 Intentionally Omitted
---------------------
7.7 Intentionally Omitted
---------------------
7.8 Intentionally Omitted
---------------------
7.9 Invalidity of Loan Documents
----------------------------
The Borrower denies that it has any further liability, other than as a
result of or based upon the fraud or material misrepresentation of the Lender,
including without limitation with respect to future advances by the Lender,
under any Loan Document to which it is a party, or gives notice to such effect;
or the Lender, through no action or fault on the part of the Lender, shall not
have or shall cease to have a valid and perfected security interest in any
material and significant portion of the Collateral of the same nature and
priority (relative to any other Liens in the Collateral) as the security
interest purported to be granted in such Collateral pursuant to the Loan
Documents on the date thereof; or any Loan Document or any Lien granted to the
Secured Party thereunder shall be determined to be invalid or unenforceable in a
material and significant respect; or any treaty, law, regulation, communique,
decree, ordinance or policy of any Governmental Authority shall render any
material provision of any Loan Document invalid or unenforceable in a material
and significant respect; or the Borrower shall fail to comply with its
obligations under Section 5 of the Security Agreement.
THEN immediately and automatically upon the occurrence of any Event of Default
described in subsections 7.1 or 7.5 hereof, and immediately and automatically on
the Expiration Date with respect to any other Event of Default that remains
uncured on such date: (i) (a) all Loans hereunder with accrued interest thereon,
and (b) all other Obligations under this Agreement and the other Loan Documents,
shall all automatically become immediately due and payable, without notice,
presentment, demand, protest or other requirements of any kind, all of which are
hereby expressly waived by the Borrower.
Further, upon the occurrence and during the continuance of any Event
of Default, the Lender may exercise all rights and remedies of the Lender set
forth in any of the Loan Documents, in addition to all rights and remedies
allowed by, the United States and of any state thereof, including but not
limited to the UCC. The Lender shall have no obligation of any kind to make any
presentment, demand, protest or other notice or action of any kind. The
enumeration of the foregoing rights and remedies is not intended to be
exhaustive and the exercise of any right or remedy shall not preclude the
exercise of any other rights or remedies, all of which shall be cumulative and
not alternative.
The Borrower hereby waives (i) presentment, demand and protest and
notice of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and
-17-
guaranties or other property at any time held by the Lender on which the
Borrower and any of its Subsidiaries may in any way be liable and hereby ratify
and confirm whatever the Lender may lawfully do in this regard, (ii) all rights
to notice and hearing prior to the Lender's taking possession or control of, or
to the Lender's attachment or levy upon, the Collateral, or any bond or security
which might be required by any court prior to allowing the Lender to exercise
any of its remedies, and (iii) the benefit of all valuation, appraisal and
exemption laws. The Borrower and each of its Subsidiaries acknowledges that it
has been advised by counsel of its choice with respect to the effect of the
foregoing waivers and this Agreement, the other Loan Documents and the
transactions evidenced by this Agreement and the other Loan Documents.
SECTION 8 MISCELLANEOUS
-------------
8.1 Survival of Warranties
----------------------
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, and the making of the
Loans, and shall terminate on the fulfillment of the conditions set forth in
subsection 2.6 herein.
8.2 Failure or Indulgence Not Waiver
--------------------------------
No failure or delay on the part of the Lender in the exercise of any
power, right or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
8.3 Modification
------------
This Agreement may be not be amended, waived or modified without the
written consent of the Lender and the Borrower.
8.4 Notices
-------
Except as otherwise expressly provided herein, any notice herein
required or permitted to be given shall be in writing and may be personally
served or sent by United States mail or by telegram, telex or facsimile
transmission and shall be deemed to have been given on the earlier of the date
of receipt or two (2) days after deposit in the United States mail, registered,
with postage prepaid and properly addressed, provided that notices under Section
2 hereof shall not be effective until actually received by the recipient
thereof. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof served as provided in this Section 8.4) shall be as
follows:
-18-
The Borrower: ▇▇▇.▇▇▇ Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to: ▇▇▇▇▇▇ Godward LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
The Lender: SB Acquisition, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
with a copy to: O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
8.5 Severability
------------
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, such provision shall be severable from the remainder of such
contract and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8.6 Effectiveness; Binding Effect; Governing Law
--------------------------------------------
This Agreement shall become effective when it shall have been executed
by the Borrower and the Lender and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Lender. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW
PRINCIPLES WHICH WOULD RESULT IN THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION.
8.7 Waiver of Jury Trial
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
-19-
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
8.8 Consent to Jurisdiction
-----------------------
All judicial proceedings brought against the Borrower and each of its
Subsidiaries with respect to this Agreement and the Loan Documents may be
brought in any state or federal court of competent jurisdiction in the State of
California, and by execution and delivery of this Agreement, the Borrower
accepts for itself and for its Subsidiaries and in connection with its and their
properties, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. The Borrower for itself and on
behalf of its Subsidiaries irrevocably waives any right it may have to assert
the doctrine of forum non conveniens or to object to venue to the extent any
----- --- ----------
proceeding is brought in accordance with this Section.
8.9 Assignability
-------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns, and shall inure to the benefit of the parties
hereto and the successors and assigns of each party hereto, provided that
neither party hereto may assign its rights under this Agreement without the
prior written consent of the other party hereto; except that the Lender may
assign, delegate or otherwise transfer all of the Lender's interest in or rights
or obligations under this Agreement (i) at any time to any Person controlling,
controlled by, or under common control with, the Lender, with the consent of the
Borrower and (ii) after an Event of Default to any Person with a net worth of
not less than $50,000,000, without the consent of the Borrower.
8.10 Costs and Expenses
------------------
The Borrower agrees to pay on the Expiration Date all costs and
expenses of the Lender (including attorney's fees and the reasonable estimate of
the allocated cost of in-house counsel and staff) in connection with the
preparation, amendment, modification, enforcement (including, without
limitation, in appellate, bankruptcy, insolvency, liquidation, reorganization,
moratorium or other similar proceedings) or restructuring of the Loan Documents,
including without limitation the costs and expenses referenced in Section 19 of
the Security Agreement; provided that the Lender agrees to and shall waive the
--------
right to receive any of the foregoing costs of preparation, amendment and
modification of the Loan Documents in each case incurred prior to the date
hereof upon the payment in full of (i) all amounts due the Parent under
subsection 7.5 of the Merger Agreement and (ii) all other Obligations (exclusive
of such costs of preparation, amendment and modification of the Loan Documents
incurred prior to the date hereof). Any amount of any costs and expenses under
this paragraph not paid when due, whether at stated maturity, by acceleration or
otherwise, shall thereafter bear interest at a rate that is equal to the rate of
interest that would apply to unpaid principal under the Loans for the same
period. Upon four days written request of the Borrower, such requests to be
made no more often than is necessary and reasonable, the Lender agrees to
deliver to the Borrower a payoff letter setting forth the then-present amount of
the Obligations owed under this subsection 8.10.
-20-
8.11 Counterparts
------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
8.12 Headings
--------
The various headings used in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretations of this
Agreement or any provision hereof.
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their properly and duly authorized individuals
as of the day and year first above written.
"Lender"
By _______________________
▇▇▇▇▇ ▇. ▇▇▇▇,
an individual
"Borrower"
▇▇▇.▇▇▇, INC.
By ________________________________
Title _________________
A-
SCHEDULE 3.1B
ADDITIONAL PERFECTION INFORMATION
-23-
DISCLOSURE SCHEDULE
ADDITIONAL DISCLOSURE RELEVANT TO
REPRESENTATIONS AND WARRANTIES
-24-
EXHIBIT A
FORM OF GUARANTY
A-1