Exhibit 10.27
[Execution Copy]
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$150,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 25, 1999
among
LODGENET ENTERTAINMENT CORPORATION,
as Borrower,
NATIONAL WESTMINSTER BANK PLC,
as Administrative Agent,
BANKBOSTON, N.A.
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Syndication Agents
and
THE LENDERS NAMED HEREIN
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Arranged By
GLEACHER NATWEST INC., BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC. and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2. THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.1 Amounts and Terms of Commitments. . . . . . . . . . . . . 23
(a) The Term Credit . . . . . . . . . . . . . . . . . . . . . 23
(b) The Revolving Credit. . . . . . . . . . . . . . . . . . . 23
Section 2.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.3 Procedure for Borrowing . . . . . . . . . . . . . . . . . 23
Section 2.4 Conversion and Continuation Elections . . . . . . . . . . 25
Section 2.5 Change in Aggregate Revolving Commitment. . . . . . . . . 26
Section 2.6 Optional Prepayments. . . . . . . . . . . . . . . . . . . 27
Section 2.7 Mandatory Prepayments of Loans; Mandatory
Commitment Reductions . . . . . . . . . . . . . . . . . . 27
(a) Asset Dispositions; Events of Loss. . . . . . . . . . . . 27
(b) Excess Cash Flow. . . . . . . . . . . . . . . . . . . . . 27
(c) General . . . . . . . . . . . . . . . . . . . . . . . . . 27
(d) Reduction of Commitment . . . . . . . . . . . . . . . . . 28
(e) Mandatory Prepayment Notice . . . . . . . . . . . . . . . 28
(f) Letters of Credit . . . . . . . . . . . . . . . . . . . . 28
Section 2.8 Repayment . . . . . . . . . . . . . . . . . . . . . . . . 28
(a) The Term Credit . . . . . . . . . . . . . . . . . . . . . 28
(b) The Revolving Credit. . . . . . . . . . . . . . . . . . . 29
Section 2.9 Interest. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(a) Arranger Fees . . . . . . . . . . . . . . . . . . . . . . 30
(b) Commitment Fees . . . . . . . . . . . . . . . . . . . . . 31
(c) Agency Fee. . . . . . . . . . . . . . . . . . . . . . . . 31
(d) L/C Fees. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.11 Computation of Fees and Interest. . . . . . . . . . . . . 31
Section 2.12 Payments by the Borrower. . . . . . . . . . . . . . . . . 32
Section 2.13 Payments by the Lenders to the Administrative Agent . . . 33
Section 2.14 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . 33
Section 2.15 Security and Guaranties . . . . . . . . . . . . . . . . . 34
Section 2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.17 Illegality. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.18 Increased Costs and Reduction of Return . . . . . . . . . 38
Section 2.19 Funding Losses. . . . . . . . . . . . . . . . . . . . . . 38
Section 2.20 Inability to Determine Rates. . . . . . . . . . . . . . . 39
Section 2.21 Certificates of Lenders . . . . . . . . . . . . . . . . . 39
Section 2.22 Survival. . . . . . . . . . . . . . . . . . . . . . . . . 39
i
Section 2.23 Letters of Credit . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 45
Section 3.1 Organization. . . . . . . . . . . . . . . . . . . . . . . 45
Section 3.2 Power, Authority, Consents. . . . . . . . . . . . . . . . 46
Section 3.3 No Violation of Law or Agreements . . . . . . . . . . . . 46
Section 3.4 Due Execution, Validity, Enforceability . . . . . . . . . 47
Section 3.5 Properties, Liens . . . . . . . . . . . . . . . . . . . . 47
Section 3.6 Litigation. . . . . . . . . . . . . . . . . . . . . . . . 47
Section 3.7 No Defaults, Compliance With Laws . . . . . . . . . . . . 47
Section 3.8 Burdensome Documents. . . . . . . . . . . . . . . . . . . 48
Section 3.9 Financial Statements; Projections . . . . . . . . . . . . 48
Section 3.10 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 48
Section 3.11 Intellectual Property . . . . . . . . . . . . . . . . . . 49
Section 3.12 Regulation U. . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.13 Name Changes, Mergers, Acquisitions . . . . . . . . . . . 49
Section 3.14 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 49
Section 3.15 Licenses and Approvals. . . . . . . . . . . . . . . . . . 49
Section 3.16 Labor Disputes; Collective Bargaining Agreements;
Employee Grievances . . . . . . . . . . . . . . . . . . . 50
Section 3.17 Condition of Assets . . . . . . . . . . . . . . . . . . . 50
Section 3.18 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.19 Material Agreements . . . . . . . . . . . . . . . . . . . 50
Section 3.20 Collateral Documents. . . . . . . . . . . . . . . . . . . 51
Section 3.21 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 3.22 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 4. CONDITIONS TO THE LOANS. . . . . . . . . . . . . . . . . . . . . 52
Section 4.1 Conditions to Initial Loans . . . . . . . . . . . . . . . 52
Section 4.2 Conditions to Subsequent Loans and L/Cs . . . . . . . . . 54
ARTICLE 5. DELIVERY OF FINANCIAL REPORTS AND
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 55
Section 5.1 Annual Financial Statements . . . . . . . . . . . . . . . 55
Section 5.2 Quarterly Financial Statements. . . . . . . . . . . . . . 55
Section 5.3 Projections . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.4 Compliance Information. . . . . . . . . . . . . . . . . . 56
Section 5.5 No Default Certificate. . . . . . . . . . . . . . . . . . 56
Section 5.6 Accountants' Reports. . . . . . . . . . . . . . . . . . . 56
Section 5.7 Copies of Documents . . . . . . . . . . . . . . . . . . . 56
Section 5.8 Notices of Defaults . . . . . . . . . . . . . . . . . . . 57
Section 5.9 ERISA Notices and Requests. . . . . . . . . . . . . . . . 57
Section 5.10 Additional Information; Guest-Pay Rooms . . . . . . . . . 58
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ARTICLE 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 58
Section 6.1 Books and Records . . . . . . . . . . . . . . . . . . . . 58
Section 6.2 Inspections and Audits. . . . . . . . . . . . . . . . . . 59
Section 6.3 Maintenance and Repairs . . . . . . . . . . . . . . . . . 59
Section 6.4 Continuance of Business . . . . . . . . . . . . . . . . . 59
Section 6.5 Copies of Corporate Documents . . . . . . . . . . . . . . 59
Section 6.6 Perform Obligations . . . . . . . . . . . . . . . . . . . 59
Section 6.7 Notice of Litigation. . . . . . . . . . . . . . . . . . . 60
Section 6.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 6.9 Financial Covenants . . . . . . . . . . . . . . . . . . . 60
Section 6.10 Notice of Certain Events. . . . . . . . . . . . . . . . . 62
Section 6.11 Comply with ERISA . . . . . . . . . . . . . . . . . . . . 63
Section 6.12 Environmental Compliance. . . . . . . . . . . . . . . . . 63
Section 6.13 Further Assurances. . . . . . . . . . . . . . . . . . . . 63
ARTICLE 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . 65
Section 7.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 7.3 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.4 Mergers, Acquisitions . . . . . . . . . . . . . . . . . . 67
Section 7.5 Redemptions; Distributions. . . . . . . . . . . . . . . . 67
Section 7.6 Stock Issuances . . . . . . . . . . . . . . . . . . . . . 68
Section 7.7 Changes in Business; Asset Dispositions . . . . . . . . . 69
Section 7.8 Prepayments and Repayments of Indebtedness. . . . . . . . 69
Section 7.9 Investments . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.10 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.11 ERISA Obligations . . . . . . . . . . . . . . . . . . . . 72
Section 7.12 Amendments of Documents . . . . . . . . . . . . . . . . . 73
Section 7.13 Capital Expenditures. . . . . . . . . . . . . . . . . . . 73
Section 7.14 Rental Obligations. . . . . . . . . . . . . . . . . . . . 74
Section 7.15 Management Fees . . . . . . . . . . . . . . . . . . . . . 74
Section 7.16 Transactions with Affiliates. . . . . . . . . . . . . . . 74
Section 7.17 Hazardous Material. . . . . . . . . . . . . . . . . . . . 74
ARTICLE 8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 75
Section 8.1 Event of Default. . . . . . . . . . . . . . . . . . . . . 75
(a) Payments. . . . . . . . . . . . . . . . . . . . . . . . . 75
(b) Certain Covenants . . . . . . . . . . . . . . . . . . . . 75
(c) Other Covenants . . . . . . . . . . . . . . . . . . . . . 75
(d) Other Defaults. . . . . . . . . . . . . . . . . . . . . . 75
(e) Representations and Warranties. . . . . . . . . . . . . . 76
(f) Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . 76
(g) Judgments . . . . . . . . . . . . . . . . . . . . . . . . 76
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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(i) Change of Control . . . . . . . . . . . . . . . . . . . . 77
(j) Collateral. . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.3 Rights Not Exclusive. . . . . . . . . . . . . . . . . . . 78
Section 8.4 Right of Administrative Agent to Use and Operate
Collateral; Consent to Appointment of Receiver. . . . . . 78
ARTICLE 9. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . 79
Section 9.1 Appointment, Powers and Immunities. . . . . . . . . . . . 79
Section 9.2 Reliance by Administrative Agent. . . . . . . . . . . . . 80
Section 9.3 Events of Default . . . . . . . . . . . . . . . . . . . . 80
Section 9.4 Rights as a Lender. . . . . . . . . . . . . . . . . . . . 80
Section 9.5 Indemnification . . . . . . . . . . . . . . . . . . . . . 81
Section 9.6 Non-Reliance on Administrative Agent and other Lenders. . 81
Section 9.7 Failure to Act. . . . . . . . . . . . . . . . . . . . . . 81
Section 9.8 Resignation or Removal of Administrative Agent. . . . . . 82
Section 9.9 Sharing of Payments . . . . . . . . . . . . . . . . . . . 82
Section 9.10 Collateral Matters. . . . . . . . . . . . . . . . . . . . 83
Section 9.11 Syndication Agents. . . . . . . . . . . . . . . . . . . . 84
ARTICLE 10. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . 84
Section 10.1 Fees and Expenses; Indemnity. . . . . . . . . . . . . . . 84
Section 10.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.3 Payments. . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 10.4 Survival of Agreements and Representations;
Construction. . . . . . . . . . . . . . . . . . . . . . . 86
Section 10.5 Lien on and Set-off of Deposits . . . . . . . . . . . . . 86
Section 10.6 Amendments and Waivers; Entire Agreement. . . . . . . . . 86
Section 10.7 Remedies Cumulative; Counterclaims. . . . . . . . . . . . 87
Section 10.8 Additional Actions. . . . . . . . . . . . . . . . . . . . 87
Section 10.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 10.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 89
Section 10.11 Severability. . . . . . . . . . . . . . . . . . . . . . . 89
Section 10.12 Successors and Assigns. . . . . . . . . . . . . . . . . . 89
Section 10.13 GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF TRIAL BY JURY . . . . . . . . . . . . . . . . . 91
ARTICLE 11. INCREASES IN COMMITMENTS; CHANGES IN LENDERS . . . . . . . . . . 92
Section 11.1 Resignation of Lenders. . . . . . . . . . . . . . . . . . 92
Section 11.2 Addition of New Lenders . . . . . . . . . . . . . . . . . 92
Section 11.3 No Reliance by New Lenders. . . . . . . . . . . . . . . . 92
Section 11.4 New Notes . . . . . . . . . . . . . . . . . . . . . . . . 93
Section 11.5 Adjustment of Loan Amounts. . . . . . . . . . . . . . . . 93
iv
SCHEDULES AND EXHIBITS
SCHEDULES
I Term and Revolving Commitments
II Amortization of Term Loans
3.1 Organization and Capitalization
3.5 Properties
3.11 Intellectual Property
3.19 Material Agreements
EXHIBITS
A Form of Term Note
B Form of Revolving Note
C Form of Notice of Borrowing
D Form of Notice of Conversion/Continuation
E Assignment and Assumption Agreement
F Borrower U.S. Legal Opinion
v
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of February
25, 1999 is among LODGENET ENTERTAINMENT CORPORATION, a Delaware corporation
(the "BORROWER"), the Lenders (as defined in Article 1), NATIONAL WESTMINSTER
BANK PLC, a United Kingdom public limited company, as administrative agent
for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), and
BANKBOSTON, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC., as Syndication
Agents.
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and certain of the
Lenders are parties to that certain Amended and Restated Credit Agreement
dated as of December 19, 1996 (the "EXISTING CREDIT AGREEMENT") pursuant to
which certain loans and letter of credit obligations are presently
outstanding;
WHEREAS, the Borrower has requested the Lenders to amend and restate the
Existing Credit Agreement to provide to the Borrower a term loan facility and
a revolving credit facility (including a letter of credit subfacility) upon
the terms and conditions set forth in this Agreement in order to finance
systems upgrades and other capital expenditures and to provide for the
ongoing working capital requirements of the Borrower and its Subsidiaries; and
WHEREAS, this Agreement confirms and evidences (i) the amendment and
restatement hereunder of the indebtedness and other obligations heretofore
existing under the Existing Credit Agreement and (ii) the continuation as
security for the indebtedness and other obligations under this Agreement and
related agreements and instruments, without any release or termination
whatsoever, of all liens and security interests previously securing the
indebtedness and other obligations under the Existing Credit Agreement and
related agreements and instruments.
NOW THEREFORE, the parties hereto, intending to be legally bound hereby,
amend and restate the Existing Credit Agreement in its entirety on and from
the Closing Date and further agree as follows:
ARTICLE 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
AFFILIATE: as to any Person, any other Person that directly or
indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control
1
with") shall mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through ownership of
securities or partnership or other ownership interests, by contract or
otherwise).
AGGREGATE COMMITMENT: at any time, the combined Commitments of the
Lenders.
AGGREGATE REVOLVING COMMITMENT: at any time, the combined Revolving
Commitments of the Lenders, in the initial amount of Seventy-Five Million
Dollars ($75,000,000), as such amount may be reduced or increased from time
to time pursuant to this Agreement.
AGGREGATE TERM COMMITMENT: the combined Term Commitments of the Lenders
in the amount of Seventy-Five Million Dollars ($75,000,000).
AGREEMENT: this Second Amended and Restated Credit Agreement, as amended
or otherwise modified from time to time in accordance with the terms hereof.
ANNUAL OPERATING CASH FLOW: as at any date of determination thereof, as
to the Borrower and its Restricted Subsidiaries, the Operating Cash Flow for
the immediately preceding four consecutive full fiscal quarters for which the
Administrative Agent has received financial statements in compliance with
Section 5.1 or Section 5.2 hereof (or, if as at any date of determination the
Administrative Agent shall not yet have received financial statements
delivered in compliance with Section 5.1 or Section 5.2 hereof, then the
Operating Cash Flow for such immediately preceding four consecutive full
fiscal quarters (or such shorter period) shall be determined by the
Administrative Agent in its sole judgment based, in the Administrative
Agent's discretion, on such financial information as it shall have requested
and received from the Borrower).
ANNUALIZED OPERATING CASH FLOW: as at any date of determination
thereof, as to the Borrower and its Restricted Subsidiaries, the product of
(a) Operating Cash Flow for the immediately preceding two consecutive full
fiscal quarters for which the Administrative Agent has received financial
statements in compliance with Section 5.1 or Section 5.2 hereof (or, if as at
any date of determination the Administrative Agent shall not yet have
received financial statements delivered in compliance with Section 5.1 or
Section 5.2 hereof, then the Operating Cash Flow for such immediately
preceding two consecutive full fiscal quarters shall be determined by the
Administrative Agent in its sole judgment based, in the Administrative
Agent's discretion, on such financial information as it shall have requested
and received from the Borrower), multiplied by (b) two (2).
APPLICABLE BASE RATE MARGIN: with respect to Base Rate Loans, one and
three-quarters percent (1.75%), subject to adjustment in accordance with
subsection 2.9(b) hereof.
APPLICABLE EURODOLLAR RATE MARGIN: with respect to Eurodollar Loans, two
and three-quarters percent (2.75%), subject to adjustment in accordance with
subsection 2.9(b) hereof.
2
APPLICABLE LENDING OFFICE: with respect to each Lender, with respect to
each type of Loan, the Lending Office as designated for such type of Loan
below its name on the signature pages hereof or such other office of such
Lender or of an affiliate of such Lender as such Lender may from time to time
specify to the Administrative Agent and the Borrower as the office at which
its Loans of such type are to be made and maintained.
APPLICATION DOCUMENTS: as defined in subsection 2.23(b) hereof.
ASSET DISPOSITION: any conveyance, sale, lease, assignment, transfer or
other disposition of property, assets or business of the Borrower or any
Subsidiary of the Borrower in a single transaction or a series of related
transactions (other than in the ordinary course of business).
ASSIGNMENT AND ASSUMPTION AGREEMENT: an agreement in the form of
Exhibit E hereto.
BASE MAXIMUM CAPITAL EXPENDITURES AMOUNT: as defined in Section 7.13
hereof.
BASE RATE: as of any date of determination, the higher of (i) the
interest rate established from time to time by NatWest Plc as its "prime
rate" at its Payment Office and (ii) the Federal Funds Rate plus one-half
percent (0.50%). Notwithstanding the foregoing, the Borrower acknowledges
that NatWest Plc may regularly make domestic commercial loans at rates of
interest less than the rate of interest referred to in the preceding
sentence. Each change in any interest rate provided for herein based upon
the "prime rate" resulting from a change in the "prime rate" shall take
effect at the time of such change in the "prime rate."
BASE RATE LOANS: Loans that earn interest at a rate based upon the Base
Rate.
BENEFICIARY DOCUMENTS: as defined in subsection 2.23(d) hereof.
BORROWING: a borrowing hereunder consisting of Loans of a particular
type made to the Borrower on the same day by Lenders having a Commitment to
make such Loans pursuant to Article II.
BUSINESS DAY: any day other than Saturday, Sunday or any other day on
which commercial banks in New York City are authorized or required by law to
close and, if the applicable Business Day relates to a Eurodollar Loan, such
a day on which dealings are carried on in the London interbank market.
CAPITAL EXPENDITURES: for any period, the aggregate amount of all
payments made during such period by any Person directly or indirectly for the
purpose of acquiring, constructing or maintaining fixed assets, real property
or equipment that, in accordance with generally accepted accounting
principles, would be added as a debit to the fixed asset account of such
Person, including, without limitation, all amounts paid or payable during
such period with
3
respect to Capitalized Lease Obligations and interest that are required to be
capitalized in accordance with generally accepted accounting principles.
CAPITALIZED LEASE: any lease the obligations to pay rent or other
amounts under which constitute Capitalized Lease Obligations.
CAPITALIZED LEASE OBLIGATIONS: as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations
are required to be classified and accounted for as a capital lease on a
balance sheet of such Person under generally accepted accounting principles
and, for purposes of this Agreement, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with generally
accepted accounting principles.
CASH: as to any Person, such Person's cash and cash equivalents, as
defined in accordance with generally accepted accounting principles
consistently applied.
CERCLA: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601, et seq.
CLOSING DATE: the date on which all conditions precedent set forth in
Section 4.1 hereof are satisfied or waived.
CODE: the Internal Revenue Code of 1986, as it may be amended from time
to time.
COLLATERAL: the property covered by the Security Agreement, the Patent
and Trademark Security Agreement, the Pledge Agreements, the Mortgage and the
other Collateral Documents, and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired that may at any
time be or become subject to a security interest or Lien in favor of the
Administrative Agent on behalf of itself, the Lenders and the Issuing Banks,
to secure the Obligations.
COLLATERAL DOCUMENTS: the Security Agreement, the Patent and Trademark
Security Agreement, the Pledge Agreements, the Irrevocable Proxies, the
Mortgage and each of the security agreements, mortgages and other instruments
and documents executed and delivered pursuant to any of the foregoing or
pursuant to Section 6.13 hereof.
COMMITMENT: for each Lender, the sum of its Revolving Commitment and
its Term Commitment.
COMMITMENT FEE: as defined in subsection 2.10(b) hereof.
COMMITMENT PERCENTAGE: as to any Lender, (i) with respect to Revolving
Loans and L/C Obligations, such Lender's Revolving Commitment divided by the
Aggregate Revolving Commitment, and (ii) with respect to a Term Loan, such
Lender's Term Commitment divided by the Aggregate Term Commitment.
4
COMPLIANCE CERTIFICATE: a certificate executed by the president, chief
financial officer or chief operating officer of the Borrower to the effect
that: (i) as of the effective date of the certificate, no Default or Event of
Default under this Agreement exists or would exist after giving effect to the
action intended to be taken by the Borrower as described in such certificate,
including, without limitation, that the covenants set forth in the Senior
Note Documents (including Section 4.03 of the Senior 1996 Note Indenture)
would not be breached after giving effect to such action, together with a
calculation in reasonable detail, and in form satisfactory to the
Administrative Agent, of such compliance; (ii) the representations and
warranties contained in Article 3 hereof are true and with the same effect as
though such representations and warranties were made on the date of such
certificate, except to the extent such representations and warranties
expressly relate to an earlier date; and (iii) since September 30, 1998,
there has not occurred any event or circumstance (including litigation
developments) that has resulted or could reasonably be expected to result in
a Material Adverse Effect.
CONTROLLED GROUP: all members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414(b), 414(c) or 414(m) of the Code and Section 4001(a)(2) of ERISA.
DEBT INSTRUMENT: as defined in subsection 8.4(a) hereof.
DEFAULTING LENDER: any Lender with respect to which a Lender Default is
in effect.
DEFAULT: an event which with notice or lapse of time, or both, would
constitute an Event of Default.
DEFINED CONTRIBUTION PLAN: a plan which is not covered by Title IV of
ERISA or subject to the minimum funding standards of Section 412 of the Code
and which provides for an individual account for each participant and for
benefits based solely on the amount contributed to the participant's account,
and any income, expenses, gains and losses, and any forfeitures of accounts
of other participants which may be allocated to such participant's account.
DISPOSAL: the discharge, deposit, injection, dumping, spilling, leaking
or placing of any hazardous materials into or on any land or water so that
such hazardous materials or constituent thereof may enter the environment or
be emitted into the air or discharged into any waters, including ground
waters.
DOLLARS and $: lawful money of the United States of America.
DOCUMENTARY L/C: any L/C which is issued for the benefit of a supplier
of system components and/or inventory for whose account such L/C is issued in
order to support payment of the purchase price of such inventory.
ELIGIBLE BANK: as defined in subsection 7.9(a)(ii) hereof.
5
EMPLOYEE BENEFIT PLAN: any employee benefit plan within the meaning of
Section 3(3) of ERISA which (a) is maintained for employees of Borrower or
any of its ERISA Affiliates or (b) has at any time within the preceding six
(6) years been maintained for employees of any Loan Party or any current or
former ERISA Affiliate.
ENVIRONMENTAL LAWS AND REGULATIONS: all federal, state and local
environmental, health and safety laws, regulations, ordinances, orders,
judgments and decrees applicable to the Borrower or any other Loan Party, or
any of their respective assets or properties.
ENVIRONMENTAL LIABILITY: any liability under any applicable
Environmental Laws and Regulations for any disposal, release or threatened
release of a Hazardous Substance pollutant or contaminant as those terms are
defined under CERCLA, and any liability which would require a removal,
remedial or response action, as those terms are defined under CERCLA, by any
person or any environmental regulatory body having jurisdiction over the
Borrower or any other Loan Party and/or any liability arising under any
Environmental Laws and Regulations for the Borrower's or any other Loan
Party's failure to comply with such laws and regulations, including without
limitation, the failure to comply with or obtain any applicable environmental
permit.
ENVIRONMENTAL PROCEEDING: any judgment, action, proceeding or
investigation pending before any court or governmental authority, with
respect to the Borrower or any other Loan Party and arising under or relating
to any Environmental Laws and Regulations.
ERISA: the Employee Retirement Income Security Act of 1974, as it may
be amended from time to time, and the regulations promulgated thereunder.
ERISA AFFILIATE: with respect to any Loan Party, any corporation,
person or trade or business which is a member of a group which is under
common control with any Loan Party, who together with any Loan Party, is
treated as a single employer within the meaning of Sections 414(b) - (o) of
the Code and, if applicable, Sections 4001(a)(14) and (b) of ERISA.
EURODOLLAR LOANS: Loans the interest on which is determined on the
basis of the Eurodollar Rate.
EURODOLLAR RATE: for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the sum
of: (a) the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) quoted by the Reference Bank at approximately 10:00 a.m. New York
time (or as soon thereafter as practicable) two (2) Business Days prior to
the first day of such Interest Period for the offering by the Reference Bank
to leading banks in the Eurodollar interbank market of Dollar deposits having
a term comparable to such Interest Period and in an amount comparable to the
principal amount of the Eurodollar Loan to be made by the Lenders to which
such Interest Period relates; divided by (b) 1 minus the Reserve Requirement
for such Eurodollar Loan for such Interest Period. The Administrative Agent
shall use its best efforts to advise the Borrower of the Eurodollar Rate as
soon as practicable after each change in the
6
Eurodollar Rate; PROVIDED, HOWEVER, that the failure of the Administrative
Agent to so advise the Borrower on any one or more occasions shall not affect
the rights of the Lenders or the Administrative Agent or the obligations of
the Borrower hereunder.
EVENT OF DEFAULT: as defined in Section 8.1 hereof.
EVENT OF LOSS: with respect to any property, (a) any loss, destruction
or damage of such property or (b) any condemnation, seizure or taking, by
exercise of the power of eminent domain or otherwise, of such property, or
confiscation of such property or the requisition of the use of such property.
EXCESS CASH FLOW: for any period, an amount equal to, for the Borrower
and its Restricted Subsidiaries: (i) the amount of the Operating Cash Flow
for such period PLUS Cash actually received by the Borrower from or in
respect of Investments or Subsidiaries which are not Restricted Subsidiaries;
(ii) MINUS, without duplication, the sum of: (a) all Capital Expenditures
incurred during such period, (b) all payments of principal on Permitted Debt
(other than payments of principal on the Loans pursuant to subsection 2.7(b)
hereof) and interest on Indebtedness for money borrowed incurred in
accordance with Section 7.1 hereof that were or are due and payable during
such period, (c) any provision for income taxes, (d) Cash used for
Investments permitted pursuant to and in accordance with subsection 7.9(e)
hereof, and (e) $500,000.
EXISTING CREDIT AGREEMENT: as defined in the first recital to this
Agreement.
FACILITY TERMINATION DATE: the earlier of (i) February 25, 2005 and (ii)
the date on which the Aggregate Revolving Commitment is terminated in full or
reduced to zero and the Term Loans and all other Obligations have been paid
in full.
FEDERAL FUNDS RATE: for any day, the weighted average of the rates on
overnight federal funds transactions with member banks of the Federal Reserve
System arranged by federal funds brokers as published by the Federal Reserve
Bank of New York for such day, or if such day is not a Business Day, for the
next preceding Business Day (or, if such rate is not so published for any
such day, the average rate charged to the Administrative Agent on such day on
such transactions as reasonably determined by the Administrative Agent).
FEE(S): as defined in subsection 2.10(e) hereof.
FINANCIAL STATEMENTS: with respect to the Borrower, (i) its unaudited
consolidated Balance Sheet as at September 30, 1998, together with the
related unaudited consolidated Statements of Operations and Statements of
Cash Flows for the fiscal period then ended, and (ii) its audited
consolidated Balance Sheet as at December 31, 1997, together with the related
audited consolidated Statements of Operations and Statements of Cash Flows
for the fiscal year then ended.
7
GOVERNMENTAL AUTHORITY: any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
GUARANTOR(S): ResNet Inc., LodgeNet Canada, ResNet LLC and any other
Subsidiary of the Borrower designated by the Borrower to execute a Subsidiary
Guaranty pursuant to subsection 6.13(e) hereof.
GUARANTY(IES): (i) the Amended and Restated Guaranty of even date
herewith of ResNet Inc. in favor of the Administrative Agent for the benefit
of itself, the Lenders and the Issuing Banks, (ii) the Amended and Restated
Guaranty of even date herewith of LodgeNet Canada in favor of the
Administrative Agent for the benefit of itself, the Lenders and the Issuing
Banks, and (iii) the Amended and Restated Guaranty of even date herewith of
ResNet LLC in favor of the Administrative Agent for the benefit of itself,
the Lenders and the Issuing Banks, as each such Guaranty may be, from time to
time, further amended, modified or supplemented.
GUEST-PAY ROOMS: at any time of determination, the aggregate number of
guest rooms of all lodging, hospital, cruise line and related properties, (i)
which have a firm contract with the Borrower or any Subsidiary for the
provision of in-room television entertainment and/or information services
which are provided to the guests of such property for a charge and (ii)
against which the Borrower or such Subsidiary has not, in accordance with its
ordinary business practice, chosen to exercise any remedies for non-payment
under such contract.
HAZARDOUS MATERIALS: any toxic chemical, Hazardous Substances,
contaminants or pollutants, medical wastes, infectious wastes, or hazardous
wastes.
HAZARDOUS SUBSTANCE: as set forth in Section 101(14) of CERCLA or state
or local law.
HAZARDOUS WASTE: as set forth in the Resource Conservation and Recovery
Act, 42 U.S.C. Section 9603(5), and the Environmental Protection Agency's
implementing regulations, or state or local law.
INDEBTEDNESS: with respect to any Person, without duplication, all: (i)
liabilities or obligations, direct and contingent, with respect to money
borrowed, including, without limitation (a) contingent liabilities of any
kind for which the Borrower or any Subsidiary incurs or becomes responsible
for in connection with any Investment made pursuant to subsection 7.9(e)
hereof, (b) that portion of Capitalized Lease Obligations of such Person
that, in accordance with generally accepted accounting principles, should be
classified as a liability on the balance sheet of such Person, (c) the
deferred purchase price of assets or services which in accordance with
generally accepted accounting principles would be shown on the liability side
of the balance sheet of such Person, and (d) all obligations of such Person
to pay a specified purchase price for goods or services whether or not
delivered or accepted, I.E., take-or-pay and similar obligations;
8
(ii) liabilities or obligations of others for which such Person is directly
or indirectly liable, by way of guaranty (whether by direct guaranty,
suretyship, discount, endorsement, take-or-pay agreement, agreement to
purchase or advance or keep in funds or other agreement having the effect of
a guaranty) or otherwise; (iii) liabilities or obligations secured by Liens
on any assets of such Person, whether or not such liabilities or obligations
shall have been assumed by it; (iv) liabilities or obligations of such
Person, direct or contingent, with respect to letters of credit issued for
the account of such Person and bankers acceptances created for such Person
and (v) net obligations of such Person under any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate futures contract, interest rate option contract or any other
agreement or arrangement designed to protect such Person against fluctuations
in interest rates or exchange rates.
INTEREST COVERAGE: as at any date, for the immediately preceding fiscal
period, the ratio determined by dividing (a) Annual Operating Cash Flow PLUS
Rentals by (b) Interest Expense on all Indebtedness of the Borrower and its
Restricted Subsidiaries on a consolidated basis (excluding for this purpose
the TCI Convertible Debt) PLUS Rentals PLUS Preferred Stock Dividends.
INTEREST EXPENSE: as to any Person as at any date, with respect to any
Indebtedness of such Person, the sum of all (a) interest and all amortization
of debt discount and expense (including, without limitation, interest that is
imputed in accordance with generally accepted accounting principles on
Capitalized Lease Obligations that are included in Indebtedness) and (b)
commitment fees, commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Contracts, in each case that were due and payable
relating to such Indebtedness during the immediately preceding four
consecutive full fiscal quarters for which the Administrative Agent has
received financial statements in compliance with Sections 5.1 and 5.2 hereof
(or, if as at any date of determination the Administrative Agent shall not
yet have received financial statements delivered in compliance with Section
5.1 or Section 5.2 hereof, then Interest Expense for such immediately
preceding four consecutive full fiscal quarters (or such shorter period)
shall be determined by the Administrative Agent in its sole judgment based,
in the Administrative Agent's discretion, on such financial information as it
shall have requested and received from the Borrower).
INTEREST PERIOD: with respect to any Eurodollar Loan, each period
commencing on the date such Loan is made or converted from a Loan or Loans of
another type, or the last day of the next preceding Interest Period with
respect to such Loan, and ending on the same day in the first, second, third
or sixth calendar month thereafter (or such longer period which each of the
Lenders shall have notified the Administrative Agent is available at any
time) as the Borrower may select as provided in Section 2.3 hereof, except
that each such Interest Period that commences on the last Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month;
Notwithstanding the foregoing: (i) each Interest Period that would otherwise
end on a day that is not a Business Day shall end on the next succeeding
Business Day (or, if such next succeeding
9
Business Day falls in the next succeeding calendar month, on the next
preceding Business Day); (ii) no Interest Period for any type of Loan shall
end later than the Facility Termination Date; and (iii) notwithstanding
clause (ii) above, no Interest Period shall have a duration of less than one
(1) month.
INTEREST RATE CONTRACTS: interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements, interest rate insurance or
any other agreements or arrangements designed to provide protection against
fluctuation in interest rates or exchange rates, in each case, in form and
substance reasonably satisfactory to the Administrative Agent and, in each
case, with a Lender or such other counterparties satisfactory to the
Administrative Agent.
INVESTMENT: by any Person,
(a) the amount paid or committed to be paid, or the value of property
or services contributed or committed to be contributed, by such Person for or
in connection with the acquisition by such Person of any stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of
any other Person; and
(b) the amount of any advance, loan or extension of credit by such
Person, to any other Person, or guaranty or other similar obligation of such
Person with respect to any Indebtedness of such other Person, and (without
duplication) any amount committed to be advanced, loaned, or extended by such
Person to any other Person, or any amount the payment of which is committed
to be assured by a guaranty or similar obligation by such Person for the
benefit of, such other Person.
IRS: Internal Revenue Service.
IRREVOCABLE PROXIES: (i) the Amended and Restated Irrevocable Proxy of
even date herewith of the Borrower relating to ResNet Inc. shares, (ii) the
Amended and Restated Irrevocable Proxy of even date herewith of the Borrower
relating to LodgeNet Canada shares, (iii) the Amended and Restated
Irrevocable Proxy of even date herewith of ResNet Inc. relating to its ResNet
LLC ownership interest, and (iv) the Amended and Restated Irrevocable Proxy
of even date herewith of ResNet LLC relating to the Newco Common Stock, as
each such Irrevocable Proxy may be, from time to time, further amended,
modified or supplemented.
ISSUING BANK(S): NatWest Plc and BankBoston, N.A. and any other Lender
or any successor appointed with the consent of the Required Lenders and the
Borrower.
LATEST BALANCE SHEET: as defined in subsection 3.9(a) hereof.
L/C(S): (i) any standby letter of credit or documentary letter of credit
issued by the Issuing Banks pursuant to Section 2.23 hereof and (ii) each
existing letter of credit issued pursuant to the Existing Credit Agreement
outstanding on the date hereof, in each case, as amended, supplemented or
modified from time to time.
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L/C DRAWING AVAILABILITY: as of any date of determination, the sum of
the aggregate maximum amount then available to be drawn under all L/Cs but
excluding the aggregate amount of any Unreimbursed Drawings then outstanding
and excluding that portion of L/Cs for which portion demands for drawings
have been made but not yet paid by the Issuing Bank.
L/C FEES: as defined in subsection 2.10(d) hereof.
L/C ISSUANCE REQUEST: as defined in subsection 2.23(b) hereof.
L/C OBLIGATIONS: as of any date of determination, all the existing
liabilities (including all L/C Fees) of the Borrower to the Issuing Banks and
the Lenders and the Administrative Agent in respect of all L/Cs, whether such
liability is contingent or fixed and shall be computed to include the sum of
the aggregate maximum amount then available to be drawn under all L/Cs and
the aggregate amount of any Unreimbursed Drawings then outstanding.
LEASES: leases and subleases (other than Capitalized Leases), licenses
for the use of real property, easements, rights-of-entry, grants, and other
attachment rights and similar instruments under which the Borrower or its
Subsidiaries has the right to use real or personal property or rights of way;
PROVIDED, HOWEVER, that "Leases" shall not be deemed to include video service
leases and similar agreements utilized by the Borrower or its Subsidiaries in
the ordinary course of business for the purpose of obtaining the right to
deliver cable television programming and/or other interactive, multimedia
entertainment and information services to specific customer properties.
LENDER DEFAULT: (i) the refusal (which has not been retracted) of a
Lender to make available its portion of any Borrowing or to fund its portion
of any unreimbursed payment under Section 2.23 hereof or (ii) a Lender having
notified the Administrative Agent and/or the Borrower that it does not intend
to comply with its obligations under Section 2.1 or Section 2.23 hereof, in
the case of either (i) or (ii) as a result of the appointment of a receiver
or conservator with respect to such Lender at the direction or request of any
regulatory agency or authority.
LICENSES: as defined in Section 3.15 hereof.
LIEN: any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any
of the foregoing), any conditional sale or other title retention agreement,
any lease in the nature of any of the foregoing, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction (excluding precautionary filings by lessors).
LOAN(S): an extension of credit by a Lender to the Borrower pursuant to
Article 2, and may be a Base Rate Loan or a Eurodollar Loan. Loans of
different types made or converted from Loans of other types on the same day
(or of the same type but having different Interest Periods) shall be deemed
to be separate Loans for all purposes of this Agreement.
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LOAN DOCUMENTS: this Agreement, the Notes, any Subsidiary Guaranty, the
Collateral Documents, the L/C(s), Interest Rate Contracts to which any Lender
is a party and all other documents executed and delivered in connection
herewith or therewith, including all amendments, modifications and
supplements of or to all such documents.
LOAN INTEREST(S): as defined in Section 2.14 hereof.
LOAN PARTY: the Borrower, each of the Guarantors and any other Person
(other than the Lenders, the Issuing Banks and the Administrative Agent)
which now or hereafter executes and delivers to any Lender or the
Administrative Agent any Loan Document.
LODGENET CANADA: LodgeNet Entertainment (Canada) Corporation, a
Canadian corporation and a Wholly-Owned Subsidiary of the Borrower.
MANAGEMENT FEES: for any period, all fees, emoluments or similar
compensation paid or incurred by any Person (other than any such fees,
emoluments or similar compensation paid to or incurred and payable to the
Borrower or any of its Subsidiaries) in respect of services rendered in
connection with the management or supervision of the management of such
Person, or any construction, operation or maintenance associated with the
business of the Borrower or its Subsidiaries, other than salaries, bonuses
and other compensation paid to any full-time executive employee in respect of
such full-time employment.
MANDATORY L/C BORROWING: as defined in subsection 2.23(c) hereof.
MATERIAL ADVERSE EFFECT: (a) a materially adverse effect on the
business, properties, assets, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole, (b)
material impairment of the ability of the Borrower or any Loan Party to
perform any of its obligations under any Loan Document to which it is a
party, or (c) material impairment of the rights or benefits available to the
Lenders, the Issuing Banks or the Administrative Agent under any Loan
Document.
MAXIMUM L/C AMOUNT: the sum of Twelve Million Dollars ($12,000,000) as
the same shall and/or may be reduced pursuant to Sections 2.5 and 2.7 hereof.
MORTGAGE: that certain mortgage of even date herewith relating to the
Borrower's headquarters property located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, by the Borrower for the benefit of the
Administrative Agent, on behalf of itself, the Lenders and the Issuing Banks,
as the same may be, from time to time, amended, modified or supplemented.
MULTIEMPLOYER PLAN: a "multiemployer plan" as defined in Section
4001(a)(3) or ERISA to which any Loan Party or any ERISA Affiliate is making,
or is accruing an obligation to make, contributions or has made, or been
obligated to make, contributions within the preceding six (6) years.
12
NATWEST PLC: National Westminster Bank Plc, New York branch.
NET L/C OBLIGATIONS: the L/C Obligations exclusive of Unreimbursed
Drawings which have been repaid with the proceeds of and simultaneously with
the incurrence of Loans.
NET PROCEEDS: proceeds in Cash, as and when received by the Person
making an Asset Disposition, net of (a) the direct costs relating to such
Asset Disposition excluding amounts payable to the Borrower or any Affiliate
of the Borrower, (b) sale, use or other transaction taxes paid or payable as
a result thereof, and (c) amounts required to be applied to repay principal,
interest and prepayment premiums and penalties on Indebtedness incurred to
acquire the asset which is the subject of such Asset Disposition and secured
by a purchase money lien on such asset. "Net Proceeds" shall also include
proceeds paid on account of any Event of Loss net of (i) all of the costs and
expenses reasonably incurred in connection with the collection of such
proceeds, awards or other payments and (ii) any amounts retained by or paid
to parties having superior rights to such proceeds, awards or other payments.
NEWCO INVESTMENTS: the following investments in Global Interactive
Technologies Corporation, a Delaware corporation ("Newco"): (i) 1,750 shares
of common stock, par value $.01 per share, of Newco representing
approximately 35% of Newco's outstanding capital stock (the "Newco Common
Stock"), (ii) secured promissory notes of Newco and Global Interactive
Communications Corporation, a subsidiary of Newco ("GICC"), in the aggregate
principal amount of $1,500,000 (the "Newco Term Notes") issued to ResNet
Inc., (iii) secured promissory note of GICC in the principal amount of up to
$3,000,000 (the "Newco Junior Term Note") issued to ResNet Inc., (iv)
promissory note of GICC in the principal amount of up to $3,000,000 (the
"Newco Capital Advance Note") issued to ResNet Inc., and (v) capital lease
obligations of GICC, as lessee, to ResNet Inc., as lessor, in the aggregate
amount of approximately $5,000,000 pursuant to a capital lease agreement
between ResNet Inc. and GICC (the "Newco Capital Lease").
NON-DEFAULTING LENDER: each Lender other than a Defaulting Lender.
NOTE: a Revolving Note or a Term Note; NOTES collectively means the
Revolving Notes and the Term Notes.
NOTICE OF BORROWING: a notice given by the Borrower to the
Administrative Agent pursuant to Section 2.3 in substantially the form of
EXHIBIT C.
NOTICE OF CONVERSION/CONTINUATION: a notice given by the Borrower to the
Administrative Agent pursuant to Section 2.4 in substantially the form of
EXHIBIT D.
OBLIGATIONS: collectively, all of the Loans, Indebtedness, liabilities
and obligations of the Borrower to the Lenders, the Issuing Banks and the
Administrative Agent arising out of this Agreement and the Loan Documents,
whether now existing or hereafter arising, whether or not currently
contemplated, including, without limitation, the L/C Obligations
13
and, to the extent provided by any Lender or its Affiliate, obligations under
any Interest Rate Contract or any currency hedging agreement.
OPERATING CASH FLOW: for any period, the consolidated net income of any
Person during such period (a) PLUS, but only to the extent such items shall
have been deducted in determining such net income, the sum of (i) all
interest, fees and costs paid or accrued during such period on Indebtedness,
including, without limitation, interest that is imputed in accordance with
generally accepted accounting principles on Capitalized Lease Obligations
that are included in Indebtedness, (ii) depreciation and amortization of
assets, (iii) any income tax provision and (iv) extraordinary non-operating
losses (including any non-recurring charges incurred in connection with the
transactions associated with the initial Newco Investments) and (b) MINUS the
sum of (i) extraordinary gains, (ii) income derived from other than the
consolidated operations of such Person and (iii) to the extent not already
deducted in determining such net income, all corporate overhead expenses of
such Person; all of the above items exclusive of minority interests (except
to the extent of Cash in respect thereof actually received by the Borrower in
such period); as to all of the foregoing, as determined in accordance with
generally accepted accounting principles consistently applied; PROVIDED,
THAT, notwithstanding any of the foregoing, except to the extent of Cash
actually received on an unconditional basis, any direct or indirect
Subsidiary the distribution of whose earnings and proceeds the Borrower does
not maintain the ability to direct in the ordinary course of business shall
not be considered for purposes of calculating Operating Cash Flow; and,
PROVIDED FURTHER, that, notwithstanding any of the foregoing, regardless of
the receipt of any proceeds or any other distributions therefrom, there shall
not be considered in calculating Operating Cash Flow any Subsidiary which is
not a Guarantor hereunder.
OTHER TAXES: as defined in subsection 2.16(b) hereof.
PATENT AND TRADEMARK SECURITY AGREEMENT: the Amended and Restated Patent
and Trademark Security Agreement of even date herewith among the Borrower,
ResNet Inc. and the Administrative Agent, on behalf of itself, the Lenders
and the Issuing Banks, as the same may be, from time to time, further
amended, modified or supplemented.
PAYMENT OFFICE: the principal U.S. office of NatWest Plc presently
located at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
PBGC: Pension Benefit Guaranty Corporation.
PENSION PLAN: at any time an employee pension benefit plan that is
covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code and is maintained either: (i) by the Borrower
or any ERISA Affiliate for employees of the Borrower, or by the Borrower for
any ERISA Affiliate, or (ii) pursuant to a collective bargaining agreement or
any other arrangement under which more than one employer makes contributions
and to which the Borrower or any ERISA Affiliate is then making or accruing
an obligation to make contributions or has within the preceding five (5) plan
years made contributions.
14
PERMITTED DEBT: Indebtedness (i) which is not secured by any Lien, (ii)
which contains terms, covenants and conditions satisfactory to the
Administrative Agent and the Required Lenders, and (iii) as to its
incurrence, no Default or Event of Default has occurred and is continuing
either immediately before or after giving effect thereto.
PERMITTED INTERCOMPANY DEBT: Indebtedness of ResNet Inc. for money
borrowed from the Borrower (i) which is evidenced by a promissory note of
ResNet Inc. to the Borrower, (ii) which represents senior, unsubordinated
Indebtedness of ResNet Inc., and (iii) the repayment of which is not
restricted in any manner by any covenant, agreement or other restriction
binding upon or affecting ResNet Inc.
PERMITTED LIENS: as to any Person: (i) pledges or deposits by such
Person under workers' compensation laws, unemployment insurance laws, social
security laws, or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness of
such Person), or leases to which such Person is a party, or deposits to
secure public or statutory obligations of such Person or deposits of Cash or
United States Government Bonds to secure surety, appeal, performance or other
similar bonds to which such Person is a party, or deposits as security for
contested taxes or import duties or for the payment of rent; (ii) Liens
imposed by law, such as carriers', landlords', warehousemen's, materialmen's
and mechanics' liens, or Liens arising out of judgments or awards against
such Person with respect to which such Person at the time shall currently be
prosecuting an appeal or proceedings for review; (iii) Liens for taxes not
yet subject to penalties for non-payment and Liens for taxes the payment of
which is being contested as permitted by Section 6.6 hereof; (iv) minor
survey exceptions, minor encumbrances, easements or reservations of, or
rights of, others for rights of way, highways and railroad crossings, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties; (v) Liens
incidental to the conduct of the business of such Person or to the ownership
of such Person's property that were not incurred in connection with
Indebtedness of such Person, all of which Liens referred to in the preceding
clause (v) do not in the aggregate materially detract from the value of the
properties to which they relate or materially impair their use in the
operation of the business taken as a whole of such Person, and as to all the
foregoing only to the extent arising and continuing in the ordinary course of
business; and (vi) Liens created pursuant to the Loan Documents.
PERSON: an individual, a corporation, a limited liability company, a
partnership, a joint venture, a trust or unincorporated organization, a joint
stock company or other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
PLAN: at any time an employee pension benefit plan that is covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and is either: (i) maintained by the Borrower or any member
of the Controlled Group for employees of the Borrower, or by the Borrower for
any other member of such Controlled Group, or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which the Borrower or any member
of the Controlled
15
Group is then making or accruing an obligation to make contributions or has
within the preceding five plan years made contributions.
PLEDGE AGREEMENT(S): (i) the Amended and Restated Pledge Agreement of
even date herewith between the Borrower and the Administrative Agent, on
behalf of itself, the Lenders and the Issuing Banks, pledging all capital
stock of the Borrower's Subsidiaries owned by the Borrower and all
intercompany notes owing to or held by the Borrower, (ii) the Amended and
Restated Pledge Agreement of even date herewith between ResNet Inc. and the
Administrative Agent, on behalf of itself, the Lenders and the Issuing Banks,
pledging all the capital stock of ResNet Inc.'s Subsidiaries and Affiliates
and all notes of such Persons owing to or held by ResNet Inc., and (iii) the
Amended and Restated Pledge Agreement of even date herewith between ResNet
LLC and the Administrative Agent, on behalf of itself, the Lenders and the
Issuing Banks, pledging the Newco Common Stock, as each such Pledge Agreement
may be, from time to time, further amended, modified or supplemented.
POST-DEFAULT RATE: (i) in respect of any Loans a rate per annum equal
to: (x) if such Loans are Base Rate Loans, two percent (2%) above the Base
Rate as in effect from time to time plus the Applicable Base Rate Margin (but
in no event less than the interest rate in effect on the due date), or (y) if
such Loans are Eurodollar Loans, two percent (2%) above the rate of interest
in effect thereon at the time of the Event of Default that resulted in the
Post-Default Rate being instituted until the end of the then current Interest
Period therefor and, thereafter, two percent (2%) above the Base Rate as in
effect from time to time plus the Applicable Base Rate Margin (but in no
event less than the interest rate in effect on the due date); and (ii) in
respect of other amounts payable by the Borrower hereunder (including
interest to the extent permitted by law) not paid when due (whether at stated
maturity, by acceleration or otherwise), a rate per annum during the period
commencing on the due date until such other amounts are paid in full equal to
two percent (2%) above the Base Rate as in effect from time to time plus the
Applicable Base Rate Margin (but in no event less than the interest rate in
effect on the due date).
PREFERRED STOCK DIVIDENDS: as defined in subsection 7.5(b) hereof for
payments made during the immediately preceding four consecutive full fiscal
quarters for which the Administrative Agent has received financial statements
in compliance with Sections 5.1 and 5.2 hereof (or, if as at any date of
determination the Administrative Agent shall not yet have received financial
statements delivered in compliance with Section 5.1 or Section 5.2 hereof,
then Preferred Stock Dividends for such immediately preceding four
consecutive full fiscal quarters (or such shorter period) shall be determined
by the Administrative Agent in its sole judgment based, in the Administrative
Agent's discretion, on such financial information as it shall have requested
and received from the Borrower).
PROJECTIONS: with respect to the Borrower, its forecasted consolidated
Balance Sheet and related forecasted consolidated Statements of Operations
and Statements of Cash Flows for the period from the date hereof through
December 31, 2005, as updated on an annual basis pursuant hereto, all
prepared on a basis consistent with the Financial Statements, together with
appropriate supporting details and a statement of underlying assumptions.
16
PURCHASE MONEY SECURITY INTEREST: as defined in subsection 7.2(b)
hereof.
QUARTERLY DATES: the last day of each of March, June, September and
December, the first of which shall be the first such day after the date of
this Agreement, PROVIDED THAT, if any such date is not a Business Day, the
relevant Quarterly Date shall be the next succeeding Business Day (or, if the
next succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day).
REFERENCE BANK: (i) for purposes of determining the Eurodollar Rate,
the non-United States office or offices or international banking facility or
facilities of NatWest Plc as NatWest Plc may from time to time select and
(ii) for all other purposes hereunder, NatWest Plc's Payment Office.
REGULATION D: Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to time.
REGULATORY CHANGE: as to any Lender, any change after the date of this
Agreement in United States federal, state or foreign laws or regulations
(including Regulation D and the laws or regulations that designate any
assessment rate relating to certificates of deposit or otherwise) or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of banks, including such Lender, of or under any
United States federal, state or foreign laws or regulations (whether or not
having the force of law) by any court or Governmental Authority charged with
the interpretation or administration thereof.
RELEASE: as set forth in Section 101(22) of CERCLA or state or local
law.
RENTALS: for the Borrower and its Restricted Subsidiaries on a
consolidated basis, as of the date of any determination thereof, all fixed
payments (including as such all payments which the lessee is obligated to
make to the lessors on termination of the lease or surrender of the property)
payable by a Person, as lessee or sublessee under a lease of real or personal
property, during the immediately preceding four consecutive full fiscal
quarters for which the Administrative Agent has received financial statements
in compliance with Sections 5.1 and 5.2 hereof (or, if as at any date of
determination the Administrative Agent shall not yet have received financial
statements delivered in compliance with Section 5.1 or Section 5.2 hereof,
then Rentals for such immediately preceding four consecutive full fiscal
quarters (or such shorter period) shall be determined by the Administrative
Agent in its sole judgment based, in the Administrative Agent's discretion,
on such financial information as it shall have requested and received from
the Borrower), but shall be exclusive of any amounts required to be paid by a
Person (whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges.
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REQUIRED LENDERS: (i) at any time while no Loans are outstanding
hereunder, Non-Defaulting Lenders having more than 50% of the Aggregate
Commitment, and (ii) at any time while Loans are outstanding hereunder,
Non-Defaulting Lenders holding more than 50% of the then aggregate unpaid
principal amount of such Loans and the unused Aggregate Revolving Commitment.
REQUIREMENT OF LAW: as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property
is subject.
RESERVE REQUIREMENT: for any Eurodollar Loans for any quarterly period
(or, as the case may be, shorter period) as to which interest is payable
hereunder, the maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
period under Regulation D by member banks of the Federal Reserve System in
New York City with deposits exceeding One Billion Dollars against
"Eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect
any other reserves required to be maintained by such member banks by reason
of any Regulatory Change against: (i) any category of liabilities that
includes deposits by references to which the Eurodollar Rate for Eurodollar
Loans is to be determined, or (ii) any category of extensions of credit or
other assets that include Eurodollar Loans.
RESNET INC.: ResNet Communications, Inc., a Delaware corporation and a
Subsidiary of the Borrower.
RESNET LLC: ResNet Communications, LLC, a Delaware limited liability
company and a Subsidiary of the Borrower.
RESTRICTED PAYMENTS: (i) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock of the Borrower now
or hereafter outstanding, except a dividend or distribution payable solely in
shares of stock of the Borrower which are not shares of preferred stock; (ii)
any redemption, retirement, purchase or other acquisition, direct or
indirect, of any shares of any class of stock of the Borrower in respect of
such shares now or hereafter outstanding, or of any warrants, rights or
options to acquire any such shares, except to the extent that the
consideration therefor consists of shares of stock of the Borrower; (iii) any
other distributions whatsoever, or any loans or advances, to any holder of
shares of any class of stock of the Borrower now or hereafter outstanding, or
of any warrants, rights or options to acquire any such shares; and (iv) any
fees or expenses paid to any shareholder or Affiliate (other than directors,
officers and full-time employees) of the Borrower for management services
provided to the Borrower or any Subsidiary.
RESTRICTED SUBSIDIARY: each Subsidiary of the Borrower which is or
becomes a Guarantor hereunder.
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REVOLVING COMMITMENT: with respect to each Lender, has the meaning
specified in subsection 2.1(b) hereof.
REVOLVING LOAN: as defined in subsection 2.1(b) hereof.
REVOLVING NOTE: a promissory note of the Borrower payable to the order
of a Lender, in substantially the form of Exhibit B, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from Revolving Loan(s)
made by such Lender.
REVOLVING TERMINATION DATE: the earlier to occur of:
(a) February 25, 2005; and
(b) the date on which the Aggregate Revolving Commitment shall
terminate or be reduced to zero in accordance with the provisions of
this Agreement.
SEC: the Securities and Exchange Commission or any Governmental
Authority succeeding to any of its principal functions.
SECURITY AGREEMENT: the Amended and Restated Security Agreement of even
date herewith among the Borrower, ResNet Inc., LodgeNet Canada and the
Administrative Agent, on behalf of itself, the Lenders and the Issuing Banks,
as the same may be, from time to time, further amended, modified or
supplemented.
SENIOR 1995 NOTES: those certain 11.5% Senior Notes due July 15, 2005 of
the Borrower in an aggregate outstanding principal amount of $30,000,000, as
amended or otherwise modified as permitted hereby.
SENIOR 1995 NOTE AGREEMENT: that certain Securities Purchase Agreement
dated as of August 9, 1995 by and among the Borrower and the holders of the
Senior 1995 Notes, as amended or otherwise modified as permitted hereby.
SENIOR 1996 NOTES: those certain 10 1/4% Senior Notes due December 15,
2006 of the Borrower in an aggregate outstanding principal amount of
$150,000,000, as amended or otherwise modified as permitted hereby.
SENIOR 1996 NOTE INDENTURE: that certain Indenture dated as of December
19, 1996 between the Borrower and Marine Midland Bank, as Trustee, relating
to the Senior 1996 Notes, as amended or otherwise modified as permitted
hereby.
SENIOR NOTE DOCUMENTS: collectively, the Senior 1995 Notes, the Senior
1995 Note Agreement, the Senior 1996 Notes, the Senior 1996 Note Indenture
and each other agreement, instrument or other document executed in connection
therewith.
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SOLVENT: as to any Person at any time, that (i) the fair value of the
property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Federal Bankruptcy Reform Act of 1978 and, in the alternative,
for purposes of the New York Uniform Fraudulent Transfer Act; (ii) the
present fair saleable value of the property of such Person is not less than
the amount that will be required to pay the probable liability of such Person
on its debts as they become absolute and matured; (iii) such Person is able
to realize upon its property and pay its debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature
in the normal course of business; (iv) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (v) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute unreasonably small capital.
STANDBY L/C: any L/C which is not a Documentary L/C.
SUBSIDIARY: with respect to any Person, any corporation, partnership,
limited liability company or joint venture whether now existing or hereafter
organized or acquired: (i) in the case of a corporation, of which a majority
of the securities having ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) are at the time owned by such Person and/or one or more
Subsidiaries of such Person, or (ii) in the case of a partnership, limited
liability company or joint venture in which such Person is a general partner,
managing member or joint venturer or of which a majority of the partnership,
membership or other ownership interests are at the time owned by such Person
and/or one or more of its Subsidiaries. Unless the context otherwise
requires, references in this Agreement to "Subsidiary" or the "Subsidiaries"
shall be deemed to be references to a Subsidiary or Subsidiaries of the
Borrower. Notwithstanding anything herein to the contrary, ResNet Inc. and
ResNet LLC shall each be deemed to be a Subsidiary of the Borrower so long as
(i) in the case of ResNet Inc., the Borrower owns 50% of ResNet's outstanding
capital stock and retains the right to elect a majority of ResNet's board of
directors, and (ii) in the case of ResNet LLC, the Borrower directly or
indirectly owns over 50% of all members' interests and is the managing member.
SUBSIDIARY GUARANTY(IES): each of the Guaranties and any additional
guaranty substantially in the same form as the Guaranties subsequently
executed by any Person that hereafter becomes a Guarantor in favor of the
Administrative Agent, for the benefit of itself, the Lenders and the Issuing
Banks, as the same may be, from time to time, amended, modified or
supplemented.
SUBSTANTIAL PORTION: assets of the Borrower and its Restricted
Subsidiaries which (a) represent more than fifteen percent (15%) of the
consolidated assets of the Borrower and its Restricted Subsidiaries, as would
be shown in the consolidated financial statements of the Borrower and its
Restricted Subsidiaries as at the end of the fiscal quarter immediately
preceding the date on which such determination is made or (b) are responsible
for more than fifteen percent (15%) of the Operating Cash Flow of the
Borrower and its Restricted Subsidiaries for the
20
consecutive full twelve (12) month period ending as of the end of the fiscal
quarter immediately preceding the date on which such determination is made.
TAXES: as defined in subsection 2.16(a) hereof.
TCI CONVERTIBLE DEBT: that certain Indebtedness of ResNet LLC in an
aggregate principal amount of up to $34,603,947 incurred pursuant to that
certain Subordinated Convertible Term Loan Agreement dated as of October 21,
1996 between ResNet Inc. and TCI Digital Satellite Entertainment, Inc.
TERM COMMITMENT: with respect to each Lender, as defined in subsection
2.1(a) hereof.
TERM LOAN: as defined in subsection 2.1(a) hereof.
TERM LOAN PRINCIPAL PAYMENT DATE: as defined in subsection 2.8(a) hereof.
TERM MATURITY DATE: February 25, 2005.
TERM NOTE: each promissory note of the Borrower payable to the order of
a Lender, in substantially the form of Exhibit A, evidencing the respective
Indebtedness of the Borrower to the Lender resulting from the Term Loan made
by such Lender.
TERMINATION EVENT: any one of the following:
(a) a "Reportable Event" described in Section 4043 of ERISA and the
regulations issued thereunder;
(b) the withdrawal of any Loan Party or any ERISA Affiliate from a
Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA or was deemed such under Section
4068(f) of ERISA; or
(c) the termination of a Pension Plan, the filing of a notice of intent
to terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination under Section 4041 of ERISA;
(d) the institution of proceedings to terminate a Pension Plan by the
PBGC;
(e) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan;
(f) the partial or complete withdrawal of any Loan Party or any ERISA
Affiliate from a Multiemployer Plan;
(g) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA;
(h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or Section 4245 of
ERISA, respectively; or
21
(i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the
PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA.
TOTAL DEBT: the aggregate outstanding principal balance of all
Indebtedness of the Borrower and its Restricted Subsidiaries on a
consolidated basis, including without limitation, all Permitted Debt (but
excluding for this purpose the TCI Convertible Debt). Total Debt shall be
determined by the Administrative Agent, in its reasonable judgment, based
upon its review of a certificate of the Borrower delivered to the
Administrative Agent which shall set forth, in reasonable detail, such
calculation of Total Debt, along with such financial information as the
Administrative Agent shall have requested and received from the Borrower or,
in the absence of such certificate, such other pertinent financial
information as the Administrative Agent in its sole discretion shall deem
appropriate.
TOTAL LEVERAGE: as at any date, the ratio determined by dividing (a)
Total Debt PLUS the amount of any outstanding preferred stock of the Borrower
providing for the payment of cash dividends, by (b) Annualized Operating Cash
Flow.
UCC: as defined in the Security Agreement.
UNREIMBURSED DRAWINGS: as defined in subsection 2.23(c) hereof.
UNUSED REVOLVING COMMITMENT: as at any date, for each Lender, the
difference, if any, between (i) the amount of such Lender's Revolving
Commitment as in effect on such date, MINUS (ii) the sum of the then
aggregate outstanding principal amount of all Revolving Loans made by such
Lender and such Lender's Commitment Percentage of Net L/C Obligations at such
time.
WHOLLY-OWNED SUBSIDIARY: as to any Person: (i) any corporation 100% of
whose capital stock (other than directors' qualifying shares) is at the time
owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity
in which such Person and/or one or more Wholly-Owned Subsidiaries of such
Person has a 100% equity interest at such time, and in each case where there
exists no restriction on the right or ability of such Person to receive
dividend payments or other cash flow from such corporation or other entity.
"YEAR 2000 ISSUES": anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle data including dates on and after January 1, 2000, as such inability
affects the business, operations and financial condition of the Borrower and
its Subsidiaries and of the Borrower's and its Subsidiaries' material
customers, suppliers and vendors.
"YEAR 2000 PROGRAM": as defined in SECTION 3.22.
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Any accounting terms used in this Agreement that are not specifically defined
herein shall have the meanings customarily given to them in accordance with
generally accepted accounting principles as in effect on the date of this
Agreement, except that references in Article 5 to such principles shall be
deemed to refer to such principles as in effect on the date of the financial
statements delivered pursuant thereto.
ARTICLE 2. THE CREDITS
Section 2.1 AMOUNTS AND TERMS OF COMMITMENTS.
(a) THE TERM CREDIT. Each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make a Loan to the Borrower (each
such Loan, a "TERM LOAN") on the Closing Date in the amount set forth
opposite such Lender's name on Schedule I under the heading "Term Commitment"
(such amount, as the same may be reduced pursuant to the provisions of this
Agreement, such Lender's "TERM COMMITMENT"). Amounts borrowed as a Term Loan
which are repaid or prepaid by the Borrower may not be reborrowed.
(b) THE REVOLVING CREDIT. Each Lender severally agrees, on the
terms and conditions hereinafter set forth, to make Loans to the Borrower
(each such Loan, a "REVOLVING LOAN") from time to time on any Business Day
during the period from the Closing Date to the Revolving Termination Date, in
an aggregate amount not to exceed at any time outstanding (when added to such
Lender's Commitment Percentage of the then outstanding Net L/C Obligations)
the amount set forth opposite such Lender's name on Schedule I under the
heading "Revolving Commitment" (such amount, as the same may be reduced or
increased pursuant to the provisions of this Agreement, such Lender's
"REVOLVING COMMITMENT"); PROVIDED, HOWEVER, that, after giving effect to any
Borrowing of Revolving Loans, the aggregate principal amount of all
outstanding Revolving Loans and Net L/C Obligations shall not exceed the
Aggregate Revolving Commitment. Within the limits of each Lender's Revolving
Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this subsection 2.1(b), prepay pursuant to Section
2.6 and reborrow pursuant to this subsection 2.1(b).
Section 2.2 NOTES.
(a) Each Term Loan made by each Lender shall be evidenced by a Term
Note payable to the order of such Lender in an amount equal to its Term
Commitment.
(b) The Revolving Loans made by each Lender shall be evidenced by a
Revolving Note payable to the order of such Lender in an amount equal to its
Revolving Commitment.
(c) Each Lender shall endorse on schedules annexed to its Notes, or
in its internal records, the date, amount and maturity of each Loan made by
it and the amount of each payment of principal made by the Borrower with
respect thereto. Each Lender is irrevocably authorized by the Borrower to so
endorse its Notes, and each Lender's records shall be conclusive absent
manifest error; PROVIDED, HOWEVER, that the failure of a Lender to make, or
an error in
23
making, a notation thereon or in its internal records with respect to any
Loan shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any such Note to such Lender.
Section 2.3 PROCEDURE FOR BORROWING.
(a) Each Borrowing of Term Loans and Revolving Loans shall be made
upon the Borrower's irrevocable written notice delivered to the
Administrative Agent in the form of a Notice of Borrowing, which notice must
be received by the Administrative Agent prior to 11:00 a.m. (New York time)
(i) three Business Days prior to the requested Borrowing date, in the case of
Eurodollar Loans, and (ii) one Business Day prior to the requested Borrowing
date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of (x) Five Hundred Thousand
Dollars ($500,000) or any multiple of Five Hundred Thousand Dollars
($500,000) in excess thereof for Base Rate Loans and (y) One
Million Dollars ($1,000,000) or any multiple of One Million Dollars
($1,000,000) in excess thereof for Eurodollar Loans:
(B) the requested Borrowing date, which shall be a
Business Day;
(C) whether the Borrowing is to be comprised of Eurodollar
Loans or Base Rate Loans; and
(D) subject to subsection 2.3(d) hereof, the duration of the
Interest Period applicable to any Eurodollar Loans included in such
notice. If the Notice of Borrowing shall fail to specify the duration
of the Interest Period for any Borrowing comprised of Eurodollar
Loans, such Interest Period shall be one month;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Administrative Agent not
later than 2:00 p.m. (New York time) one Business Day before the Closing Date
and such Borrowing will consist of Base Rate Loans only; and FURTHER PROVIDED,
if the primary syndication of this Agreement is not completed by the Closing
Date, and if so requested by the Administrative Agent, all Borrowings comprised
of Eurodollar Loans during the first 60 days following the Closing Date shall
have the same Interest Period, which shall be one month.
(b) Upon receipt of the Notice of Borrowing, the Administrative
Agent will promptly notify each Lender thereof and of the amount of such
Lender's Commitment Percentage (as applicable) of the Borrowing.
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(c) Each Lender will make the amount of its Commitment Percentage
(as applicable) of the Borrowing available to the Administrative Agent for
the account of the Borrower at the Administrative Agent's Payment Office by
11:00 a.m. (New York time) on the Borrowing date requested by the Borrower in
funds immediately available to the Administrative Agent. The proceeds of all
such Loans will then be made available to the Borrower by the Administrative
Agent by wire transfer in accordance with written instructions provided to
the Administrative Agent by the Borrower of like funds as received by the
Administrative Agent.
(d) Unless the Required Lenders shall otherwise agree, during the
existence of a Default or an Event of Default, the Borrower may not elect to
have a Loan be made as, or converted into or continued as, a Eurodollar Loan.
(e) After giving effect to any Borrowing, there shall not be more
than five (5) different Interest Periods in effect with respect to
outstanding Revolving Loans and Term Loans.
Section 2.4 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrower may upon irrevocable written notice to the
Administrative Agent in accordance with subsection 2.4(b):
(i) elect to convert on any Business Day, any Base Rate Loans
(or any part thereof in an amount not less than $1,000,000 or that is in
an integral multiple of $1,000,000 in excess thereof) into Eurodollar
Loans; or
(ii) elect to continue and convert on the last day of the
applicable Interest Period any Eurodollar Loans having Interest Periods
maturing on such day (or any part thereof in an amount not less than
$500,000, or that is in an integral multiple of $500,000 in excess
thereof) into Base Rate Loans; or
(iii) elect to continue and renew on the last day of the
applicable Interest Period any Eurodollar Loans having Interest Periods
maturing on such day (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof);
PROVIDED, that if the aggregate amount of Eurodollar Loans in respect of any
Borrowing shall have been reduced, by payment, prepayment, or conversion of part
thereof to be less than $1,000,000, such Eurodollar Loans shall automatically
convert into Base Rate Loans, and on and after such date the right of the
Borrower to continue such Loans as, and convert such Loans into, Eurodollar
Loans shall terminate.
(b) The Borrower shall deliver a Notice of Conversion/Continuation
to be received by the Administrative Agent not later than 11:00 a.m. (New
York time) at least (i) three Business Days in advance of the conversion date
or continuation date, if the Loans are to be converted into or continued as
Eurodollar Loans, and (ii) on the conversion date, if the Loans are to be
converted into Base Rate Loans, specifying:
25
(A) the proposed conversion date or continuation date;
(B) the aggregate amount of Loans to be converted or continued;
(C) the nature of the proposed conversion or continuation; and
(D) the duration of the requested Interest Period, if applicable.
(c) If, upon the expiration of any Interest Period applicable to
Eurodollar Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to such Eurodollar Loans or if any Default or Event
of Default shall then exist, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, the
Administrative Agent will promptly notify each Lender thereof, or, if no
timely notice is provided by the Borrower, the Administrative Agent will
promptly notify each Lender of the details of any automatic conversion. All
conversions and continuations shall be made PRO RATA according to the
respective outstanding principal amounts of the Loans (with respect to which
the notice was given) that are held by each Lender.
(e) Unless the Required Lenders shall otherwise agree, during the
existence of a Default or Event of Default, the Borrower may not elect to
have a Loan converted into or continued as a Eurodollar Loan.
(f) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Loans, there
shall not be more than five (5) different Interest Periods in effect with
respect to outstanding Revolving Loans and Term Loans.
Section 2.5 CHANGE IN AGGREGATE REVOLVING COMMITMENT. (a) The Borrower
shall be permitted to make an application at any time on or after December
31, 2000 to increase the Aggregate Revolving Commitment (but not the
Commitment of any Lender without such Lender's agreement) in a principal
amount of not less than $10,000,000 and not more than $25,000,000 (and in an
integral multiple of $5,000,000 within such range), which increase in the
Aggregate Revolving Commitment may be effected, if at all, by an increase in
the Revolving Commitment(s) of NatWest Plc or the then-existing Lenders,
and/or by the addition of new Lenders; PROVIDED that (i) the Borrower shall
give written notice of such application to the Administrative Agent not less
than 45 days (or such shorter period as may be acceptable to the
Administrative Agent) prior to the effective date of such increase and (ii)
the Borrower shall have delivered to the Administrative Agent a Compliance
Certificate dated as of the date of such proposed increase, and the matters
certified therein, including without limitation, the absence of any Default
or Event of Default or Material Adverse Effect, both before and after giving
effect to such increase, shall be true as of such date.
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(b) The Borrower may, upon not less than three Business Days' prior
notice to the Administrative Agent, terminate the Aggregate Revolving
Commitment or permanently reduce the Aggregate Revolving Commitment by an
aggregate minimum amount of $5,000,000 or any multiple of $1,000,000 in
excess thereof; PROVIDED that no such reduction or termination shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Loans made on the effective date thereof, the then outstanding
principal amount of the Revolving Loans and Net L/C Obligations would exceed
the Aggregate Revolving Commitment; and, PROVIDED, FURTHER, that, once
reduced in accordance with this subsection 2.5(b), the Aggregate Revolving
Commitment may not be increased (except pursuant to subsection 2.5(a)). Any
reduction of the Aggregate Revolving Commitment shall be applied to each
Lender's Revolving Commitment in accordance with such Lender's applicable
Commitment Percentage. All accrued Commitment Fees to but not including the
effective date of any termination of Commitments shall be paid on the
effective date of such termination.
Section 2.6 OPTIONAL PREPAYMENTS. Subject to Section 2.19 hereof, the
Borrower may, at any time or from time to time, upon notice given not later
than 11:00 a.m. (New York time) at least three Business Days in advance (in
the case of Eurodollar Loans) and at least one Business Day in advance (in
the case of Base Rate Loans) to the Administrative Agent, ratably prepay
Loans in whole or in part, in amounts of (i) $500,000 or any multiple of
$500,000 in excess thereof for Eurodollar Loans, or (ii) $500,000 or any
multiple of $500,000 in excess thereof for Base Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and whether
such prepayment is of Term Loans or Revolving Loans, or any combination
thereof. The Administrative Agent will promptly notify each Lender thereof
and of such Lender's applicable Commitment Percentage of such prepayment. If
such notice is given by the Borrower, the Borrower shall make such
prepayment, and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
2.19 hereof. Partial prepayments of Term Loans shall be applied ratably over
the remaining installments of each such Loan.
Section 2.7 MANDATORY PREPAYMENTS OF LOANS; MANDATORY COMMITMENT
REDUCTIONS.
(a) ASSET DISPOSITIONS; EVENTS OF LOSS. If the Borrower or any of its
Subsidiaries shall at any time or from time to time make or agree to make an
Asset Disposition constituting less than a Substantial Portion or shall
suffer an Event of Loss constituting less than or greater than a Substantial
Portion, then (i) the Borrower shall promptly notify the Administrative Agent
of such proposed Asset Disposition or Event of Loss (including the amount of
the estimated Net Proceeds to be received by the Borrower in respect thereof)
and (ii) promptly upon receipt by the Borrower or its Subsidiary of the Net
Proceeds of such Asset Disposition or on account of such Event of Loss (and
in any event not later than the third Business Day following such receipt),
the Borrower shall prepay Loans in accordance with subsection 2.7(c) hereof
in each case in an aggregate amount equal to the amount of such Net Proceeds;
PROVIDED, HOWEVER, that the Borrower shall not be required to prepay Loans
upon receipt of such Net Proceeds of any Asset Disposition or Event of Loss
constituting less than a
27
Substantial Portion to the extent that such Net Proceeds are reinvested by
the Borrower in substantially similar assets within 180 days from the receipt
thereof.
(b) EXCESS CASH FLOW. As soon as the required financial information is
available to determine the amount, if any, of Excess Cash Flow generated by
the Borrower and its Subsidiaries during the then-preceding fiscal year, but
not later than the 120th day following the last day of such fiscal year
commencing with the fiscal year ending on December 31, 1998, the Borrower
shall prepay Loans in accordance with subsection 2.7(c) hereof in an amount
equal to fifty percent (50%) of such Excess Cash Flow, if any, for the
then-preceding fiscal year of the Borrower.
(c) GENERAL. Any prepayments pursuant to this Section 2.7 shall be
applied (i) first, to the prepayment of the outstanding amount of Term Loans,
ratably over the remaining installments of each such Loan until all Term
Loans have been repaid in full; then to the outstanding amount of any
Revolving Loans; and then to prepay or cash collateralize the outstanding
amount of any L/C Obligations; and (ii) subject to the foregoing priorities,
first to any Base Rate Loans then outstanding and then to Eurodollar Loans
with the shortest Interest Periods remaining; PROVIDED, HOWEVER, that if the
amount of Base Rate Loans then outstanding is not sufficient to satisfy the
entire prepayment requirement, the Borrower may, at its option, place any
amounts which it would otherwise be required to use to prepay Eurodollar
Loans on a day other than the last day of the Interest Period therefor in an
interest-bearing account pledged to the Administrative Agent for the benefit
of the Lenders until the end of such Interest Period, at which time such
pledged amounts will be applied to prepay such Eurodollar Loans. The
Borrower shall pay, together with each prepayment under this Section 2.7,
accrued interest on the amount prepaid and any amounts required pursuant to
Section 2.19.
(d) REDUCTION OF COMMITMENT. Upon the making of any mandatory
prepayment under this Section 2.7, the applicable Commitments of each Lender
shall automatically be reduced by an amount equal to such Lender's ratable
share of the aggregate of principal repaid, effective as of the earlier of
the date that such prepayment is made or the date by which such prepayment is
due and payable hereunder. All accrued Commitment Fees to, but not including
the effective date of any termination of Commitments, shall be paid on the
effective date of such termination.
(e) MANDATORY PREPAYMENT NOTICE. The Borrower shall deliver to the
Administrative Agent (i) at the time of each prepayment required under
subsections 2.7(a) and (b) above, a certificate signed by the chief financial
officer of the Borrower setting forth in reasonable detail the calculation of
the amount of such prepayment, and (ii) to the extent reasonably practicable,
at least three Business Days prior to the time of each such prepayment, a
notice of such prepayment which shall specify the prepayment date and the
principal amount of the Loans (or portion thereof) to be prepaid pursuant to
subsection 2.7(c) hereof.
(f) LETTERS OF CREDIT. If on any date the effective amount of L/C
Obligations exceeds the Maximum L/C Amount, the Borrower shall cash
collateralize on such date the outstanding L/Cs in an amount equal to the
excess of the maximum amount then available to be
28
drawn under the L/Cs over the Maximum L/C Amount. Subject to Section 2.19,
if on any date after giving effect to any cash collateralization made on such
date pursuant to the preceding sentence, the effective amount of all
Revolving Loans then outstanding plus the effective amount of Net L/C
Obligations exceeds the Aggregate Revolving Commitment, the Borrower shall
immediately, and without notice or demand, prepay the outstanding principal
amount of Revolving Loans by an amount equal to the applicable excess.
Section 2.8 REPAYMENT.
(a) THE TERM CREDIT. The Borrower shall repay the Term Loans in
installments on each quarterly date (or on the next Business Day if such date
is not a Business Day) indicated on Schedule II hereto (each a "TERM LOAN
PRINCIPAL PAYMENT DATE") in the amount indicated opposite each such Term Loan
Principal Payment Date (net of any optional or mandatory prepayments
previously applied in accordance with Section 2.6 or subsection 2.7(c)).
(b) THE REVOLVING CREDIT. The Borrower shall repay to the Lenders in
full on the Revolving Termination Date the aggregate principal amount of the
Revolving Loans outstanding on such date.
Section 2.9 INTEREST. (a) The Borrower shall pay to the Administrative
Agent for the account of each Lender interest on the unpaid principal amount
of each Loan made by such Lender for the period commencing on the date of
such Loan until such Loan shall be paid in full, at the following rates per
annum:
(i) During such periods that such Loan is a Base Rate Loan, the
Base Rate plus the Applicable Base Rate Margin; and
(ii) During such periods that such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan for
such Interest Period plus the Applicable Eurodollar Rate Margin.
(b) The initial Applicable Base Rate Margin shall be 1.75% and the
initial Applicable Eurodollar Rate Margin shall be 2.75%. So long as no
Default or Event of Default shall have occurred and be continuing, on each
occasion that, as of the last day of any fiscal quarter ending on or after
September 30, 1999, the Borrower's Total Leverage on such date shall fall
within one of the categories set forth in the table below, the Applicable
Base Rate Margin and the Applicable Eurodollar Rate Margin in respect of Base
Rate Loans and Eurodollar Loans, respectively, shall be automatically
changed, if necessary, to reflect the percentages indicated for such category
in the table below, with any such change to be effective on and after the
date of delivery to the Administrative Agent of the certificate described in
Section 5.5 hereof relating to such fiscal quarter:
29
Applicable Applicable
Base Rate Eurodollar
Total Leverage Margin Rate Margin
-------------- ------ -----------
5.0 to 1 or higher 1.75% 2.75%
Lower than 5.0 to 1 1.50% 2.50%
Lower than 4.5 to 1 1.25% 2.25%
Lower than 4.0 to 1 1.00% 2.00%
In the event that the condition that gives rise to any change in a Total
Leverage category pursuant to the first sentence of this subsection 2.9(b) is
no longer satisfied as of the end of any subsequent fiscal quarter, on and
after the date of delivery to the Administrative Agent of the certificate
described in Section 5.5 hereof relating to such subsequent fiscal quarter,
the Applicable Base Rate Margin and the Applicable Eurodollar Rate Margin
shall be automatically changed to reflect the Total Leverage category
indicated by such certificate. Notwithstanding the foregoing, at any time
during which the Borrower has failed to deliver the certificate described in
Section 5.5 hereof with respect to a fiscal quarter in accordance with the
provisions thereof, or at any time that a Default or Event of Default shall
have occurred and be continuing, the Applicable Base Rate Margin and the
Applicable Eurodollar Rate Margin shall be determined by reference to the
definition of such terms, without any adjustment pursuant to this subsection
2.9(b), until such time as the Borrower shall deliver such certificate in
accordance with the provisions of Section 5.5 hereof or such Default or Event
of Default shall be cured or waived.
(c) Notwithstanding the foregoing, whenever an Event of Default has
occurred and is continuing, the Borrower shall pay interest on any Loan, and
on any other amount payable by the Borrower hereunder (to the extent
permitted by law) for the period commencing on the occurrence of such Event
of Default until such Event of Default has been cured or waived as
acknowledged in writing by the Administrative Agent at the applicable
Post-Default Rate.
(d) Except as provided in the next sentence, accrued interest on each
Loan shall be payable: (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of a Eurodollar Loan, on the last day of
each Interest Period for such Loan (and, if such Interest Period exceeds
three months' duration, quarterly, commencing on the first quarterly
anniversary of the first day of such Interest Period), and (iii) in the case
of any Loan, upon the payment or prepayment thereof or the conversion thereof
into a Loan of another type (but only on the principal so paid, prepaid or
converted). Interest that is payable at the Post-Default Rate shall be
payable from time to time on demand of the Administrative Agent or any
Lender. Promptly after the establishment of any interest rate provided for
herein or any change therein, the Administrative Agent will notify the
Lenders and the Borrower thereof, PROVIDED THAT the failure of the
Administrative Agent to so notify the Borrower or the Lenders shall not
affect the obligations of the Borrower hereunder or under any of the Notes in
any respect.
(e) Anything in this Agreement or any of the Notes to the contrary
notwithstanding, the obligation of the Borrower to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be made to any Lender to the
30
extent that such Lender's receipt thereof would not be permissible under the
law or laws applicable to such Lender limiting rates of interest that may be
charged or collected by such Lender. Any such payments of interest that are
not made as a result of the limitation referred to in the preceding sentence
shall be made by the Borrower to such Lender on the earliest interest payment
date or dates on which the receipt thereof would be permissible under the
laws applicable to such Lender limiting rates of interest that may be charged
or collected by such Lender. Such deferred interest shall not bear interest.
Section 2.10 FEES.
(a) ARRANGER FEES.The Borrower shall pay to Gleacher NatWest Inc.,
BankBoston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, for the respective accounts
of each, fees in such amounts and at such times as are agreed upon between or
among such parties.
(b) COMMITMENT FEES.The Borrower shall pay to the Administrative Agent
for the account of each Lender a commitment fee (the "COMMITMENT FEE") equal
to 0.5% per annum on the average daily amount of such Lender's Unused
Revolving Commitment, for the period from the date hereof to and including
the earlier of the date such Lender's Revolving Commitment is terminated or
the Revolving Termination Date. The accrued Commitment Fee shall be payable
quarterly on the Quarterly Dates and on the earlier of the date the Revolving
Commitments are terminated or the Revolving Termination Date, and, in the
event the Borrower reduces the Aggregate Revolving Commitment as provided in
Section 2.5 hereof, on the effective date of such reduction.
(c) AGENCY FEE.The Borrower shall pay to the Administrative Agent, for
the Administrative Agent's own account, an annual agency fee in the amount
and at the times agreed upon by the Borrower and the Administrative Agent in
that certain letter agreement between such parties dated January 12, 1999.
(d) L/C FEES.(i) The Borrower shall pay to the Administrative Agent
for the benefit of the Lenders, PRO RATA according to their respective
Commitment Percentages, non-refundable letter of credit fees as follows: on
the maximum amount of each L/C available from time to time to be drawn under
such outstanding L/Cs, a fee, for the period from and including the date of
issuance of such L/C to and including the termination thereof, computed at a
rate per annum equal to the Applicable Eurodollar Rate Margin from time to
time used to determine the interest rate on Eurodollar Loans pursuant to
subsection 2.9(b) hereof, payable in arrears on the Quarterly Dates and on
the date of termination thereof.
(ii) In addition to the foregoing fees described in the preceding
clause (i), the Borrower shall pay on demand to the Issuing Bank, exclusively
for the account of the Issuing Bank, a fee for the period from and including
the date of issuance of such Issuing Bank's L/C to and including the
termination thereof, computed at the rate of one-quarter of one percent
(.25%) per annum on the face amount of such L/C, payable in arrears on the
Quarterly Dates and on the date of termination thereof, and in addition, such
standard fees, charges and expenses as are customarily charged or incurred by
the Issuing Bank from time to time in
31
connection with the issuance, amendment, transfer, administration,
cancellation or payment under any or all L/Cs. The fees referred to in
subsections 2.10(d)(i) and (ii) are hereinafter sometimes referred to
individually as an "L/C FEE" and collectively as the "L/C FEES".
(e) The Commitment Fee, the arranger and agency fees, and the L/C Fees
are hereinafter sometimes referred to individually as a "FEE" and
collectively as the "FEES".
Section 2.11 COMPUTATION OF FEES AND INTEREST.
(a) All computations of interest payable in respect of Base Rate Loans
shall be made on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed. All other computations of Fees and interest under
this Agreement shall be made on the basis of a 360-day year and actual days
elapsed. Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) The Administrative Agent will, with reasonable promptness, notify
the Borrower and the Lenders of each determination of the Base Rate or of the
Eurodollar Rate; PROVIDED that any failure to do so shall not relieve the
Borrower of any liability hereunder or provide the basis for any claim
against the Administrative Agent. Any change in the interest rate on a Loan
resulting from a change in the Applicable Base Rate Margin or Applicable
Eurodollar Rate Margin shall become effective as of the opening of business
on the day on which such change in such Applicable Margin becomes effective.
The Administrative Agent will with reasonable promptness notify the Borrower
and the Lenders of the effective date and the amount of each such change,
PROVIDED that any failure to do so shall not relieve the Borrower of any
liability hereunder or provide the basis for any claim against the
Administrative Agent.
(c) Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error.
(d) If the Reference Bank's Commitment shall terminate (otherwise than
on termination of all the Commitments), or for any reason whatsoever the
Reference Bank shall cease to be a Lender hereunder, that Lender shall
thereupon cease to be the Reference Bank, and the Base Rate and the
Eurodollar Rate shall be determined on the basis of the rates as notified by
a successor Reference Bank appointed by the Administrative Agent.
Section 2.12 PAYMENTS BY THE BORROWER.
(a) All payments (including prepayments) to be made by the Borrower on
account of principal, interest, Fees and other amounts required hereunder
shall be made without set-off, recoupment or counterclaim; shall, except as
otherwise expressly provided herein, be made to the Administrative Agent for
the ratable account of the Lenders at the Administrative Agent's Payment
Office, and shall be made in dollars and in immediately available funds, no
later than 2:00 p.m. (New York time) on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Commitment
Percentage (or other applicable share as expressly provided herein) of such
principal, interest, Fees or other amounts, in like funds as received. Any
payment which is received by the Administrative Agent later than 2:00 p.m.
(New
32
York time) shall be deemed to have been received on the immediately
succeeding Business Day and any applicable interest or Fee shall continue to
accrue.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in
the computation of interest or Fees, as the case may be; subject to the
provisions set forth in the definition of "Interest Period" herein.
(c) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders
hereunder that the Borrower will not make such payment in full as and when
required hereunder, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date in
immediately available funds and the Administrative Agent may (but shall not
be so required), in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrower shall not have made such payment
in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent on demand such amount distributed to such Lender,
together with interest thereon for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to
the Administrative Agent, at the Federal Funds Rate as in effect for each
such day.
Section 2.13 PAYMENTS BY THE LENDERS TO THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have received notice from a
Lender on the Closing Date or, with respect to each Borrowing after the
Closing Date, at least one Business Day prior to the date of any proposed
Borrowing, that such Lender will not make available to the Administrative
Agent as and when required hereunder for the account of the Borrower the
amount of that Lender's Commitment Percentage of the Borrowing, the
Administrative Agent may assume that each Lender has made such amount
available to the Administrative Agent in immediately available funds on the
Borrowing date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, make available to the Borrower
on such date a corresponding amount. If and to the extent any Lender shall
not have made its full amount available to the Administrative Agent in
immediately available funds and the Administrative Agent in such
circumstances has made available to the Borrower such amount, that Lender
shall on the next Business Day following the date of such Borrowing make such
amount available to the Administrative Agent, together with interest at the
Federal Funds Rate for and determined as of each day during such period. A
notice of the Administrative Agent submitted to any Lender with respect to
amounts owing under this subsection 2.13(a) shall be conclusive, absent
manifest error. If such amount is so made available, such payment to the
Administrative Agent shall constitute such Lender's Loan on the date of
Borrowing for all purposes of this Agreement. If such amount is not made
available to the Administrative Agent on the next Business Day following the
date of such Borrowing, the Administrative Agent shall notify the Borrower of
such failure to fund and, upon demand by the Administrative Agent, the
Borrower shall pay such amount to the Administrative Agent for the
Administrative Agent's account, together with interest thereon for each day
elapsed since the date
33
of such Borrowing, at a rate per annum equal to the intrest rate applicable
at the time to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any date of Borrowing
shall not relieve any other Lender of any obligation hereunder to make a Loan
on the date of such Borrowing, but no Lender shall be responsible for the
failure of any other Lender to make the Loan to be made by such other Lender
on the date of any Borrowing.
Section 2.14 SHARING OF PAYMENTS, ETC. If, other than as expressly
provided elsewhere herein, any Lender shall obtain on account of the Loans
made by it any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) in excess of its Commitment Percentage
of payments on account of the Loans obtained by all the Lenders, such Lender
shall forthwith (a) notify the Administrative Agent of such fact, and (b)
purchase from the other Lenders such participations, assignments or other
interests in the Loans made by them ("LOAN INTEREST(S)") as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; PROVIDED, HOWEVER, that if all or any portion of such
excess payment is thereafter recovered from the purchasing Lender, such
purchase shall to that extent be rescinded and each other Lender shall repay
to the purchasing Lender the purchase price paid therefor, together with an
amount equal to such paying Lender's Commitment Percentage (according to the
proportion of (i) the amount of such paying Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a Loan Interest from another Lender pursuant to this Section 2.14
may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 10.5) with
respect to such Loan Interest as fully as if such Lender were the direct
creditor of the Borrower in the amount of such Loan Interest. The
Administrative Agent will keep records (which shall be conclusive and binding
in the absence of manifest error) of Loan Interests purchased pursuant to
this Section 2.14 and will in each case notify the Lenders following any such
purchases or repayments.
Section 2.15 SECURITY AND GUARANTIES.
(a) All Obligations of the Borrower under this Agreement, each of the
Notes and all other Loan Documents shall be secured in accordance with the
Collateral Documents.
(b) All Obligations of the Borrower under this Agreement, each of the
Notes and all other Loan Documents shall be unconditionally guaranteed by the
Guarantors pursuant to the Subsidiary Guaranties.
Section 2.16 TAXES.
(a) Subject to subsection 2.16(g), any and all payments by the Borrower
to each Lender or the Administrative Agent under this Agreement shall be made
free and clear of, and without deduction or withholding for, any and all
present or future taxes, levies, deductions or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
34
the Administrative Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by each Lender's or the Administrative
Agent's net income by the jurisdiction under the laws of which such Lender or
the Administrative Agent, as the case may be, is organized or maintains a
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities
being hereinafter referred to as "TAXES").
(b) In addition, the Borrower shall pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents (hereinafter referred to as "OTHER TAXES").
(c) Subject to subsection 2.16(g), the Borrower shall indemnify and
hold harmless each Lender and the Administrative Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.16) paid by the Lender
or the Administrative Agent and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect thereto.
Payment under this indemnification shall be made within 30 days from the date
the Lender or the Administrative Agent makes written demand therefor.
(d) If the Borrower shall be required by law to deduct or withhold any
Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or the Administrative Agent, then, subject to subsection 2.16(g):
(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 2.16) such Lender or the
Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made;
(ii) the Borrower shall make such deductions, and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(e) Within 30 days after the date of any payment by the Borrower of
Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent
the original or a certified copy of a receipt evidencing payment thereof, or
other evidence of payment satisfactory to the Administrative Agent.
(f) Each Lender which is a foreign person (I.E., a person other than a
United States person for United States Federal income tax purposes) agrees
that:
35
(i) it shall, no later than the Closing Date (or, in the case of a
Lender which becomes a party hereto pursuant to Section 10.12 after the
Closing Date, the date upon which the Lender becomes a party hereto)
deliver to the Borrower through the Administrative Agent two accurate
and complete signed originals (one of which shall be retained by the
Administrative Agent) of Internal Revenue Service Form 4224 or any
successor thereto ("FORM 4224"), or two accurate and complete signed
originals of Internal Revenue Service Form 1001 or any successor thereto
("FORM 1001"), as appropriate, in each case indicating that the Lender
is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding
of United States Federal income tax;
(ii) if at any time the Lender makes any changes necessitating a
new Form 4224 or Form 1001, it shall with reasonable promptness deliver
to the Borrower through the Administrative Agent in replacement for, or
in addition to, the forms previously delivered by it hereunder, two
accurate and complete signed originals (one of which shall be retained
by the Administrative Agent) of Form 4224; or two accurate and complete
signed originals (one of which shall be retained by the Administrative
Agent) of Form 1001, as appropriate, in each case indicating that the
Lender is on the date of delivery thereof entitled to receive payments
of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in (ii)
above) requiring a change in or renewal of the most recent Form 4224 or
Form 1001 previously delivered by such Lender and deliver to the
Borrower through the Administrative Agent two accurate and complete
original signed copies (one of which shall be retained by the
Administrative Agent) of Form 4224 or Form 1001 in replacement for the
forms previously delivered by the Lender; and
(iv) it shall, promptly upon the Borrower's or the Administrative
Agent's reasonable request to that effect, deliver to the Borrower or
the Administrative Agent (as the case may be) such other forms or
similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes.
(g) The Borrower will not be required to pay any additional amounts in
respect of United States Federal income tax pursuant to subsection 2.16(d) to
any Lender for the account of any Applicable Lending Office of such Lender:
(i) if the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with its obligations
under subsection 2.16(f) in respect of such Applicable Lending Office;
(ii) if such Lender shall have delivered to the Borrower a Form 4224 in
respect of such Applicable Lending Office pursuant to subsection 2.16(f),
and such
36
Lender shall not at any time be entitled to exemption from deduction or
withholding of United States Federal income tax in respect of payments
by the Borrower hereunder for the account of such Applicable Lending
Office for any reason other than a change in United States law or
regulations or in the official interpretation of such law or regulations
by any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form 4224; or
(iii) if the Lender shall have delivered to the Borrower a Form
1001 in respect of such Applicable Lending Office pursuant to subsection
2.16(f), and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by the Borrower hereunder for the account of such
Applicable Lending Office for any reason other than a change in United
States law or regulations or any applicable tax treaty or regulations or
in the official interpretation of any such law, treaty or regulations by
any governmental authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001.
(h) If, at any time, the Borrower requests any Lender to deliver any
forms or other documentation pursuant to subsection 2.16(f)(iv), then the
Borrower shall, on demand of such Lender through the Administrative Agent,
reimburse such Lender for any costs and expenses (including attorney costs)
reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
(i) If the Borrower is required to pay additional amounts to any Lender
or the Administrative Agent pursuant to subsection 2.16(d), then such Lender
shall use its reasonable best efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office so
as to eliminate any such additional payment by the Borrower which may
thereafter accrue if such change in the judgment of such Lender is not
otherwise disadvantageous to such Lender.
Section 2.17 ILLEGALITY.
(a) If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is
unlawful, for any Lender or its Applicable Lending Office to make Eurodollar
Loans, then, on notice thereof by the Lender to the Borrower through the
Administrative Agent, the obligation of that Lender to make Eurodollar Loans
shall be suspended until the Lender shall have notified the Administrative
Agent and the Borrower that the circumstances giving rise to such
determination no longer exists.
(b) If a Lender shall determine that it is unlawful to maintain any
Eurodollar Loan, all Eurodollar Loans of that Lender then outstanding shall
be converted into Base Rate Loans either on the last day of the Interest
Period thereof if the Lender may lawfully continue to maintain such
Eurodollar Loans to such day, or immediately, if the Lender may not lawfully
37
continue to maintain such Eurodollar Loans, and the Borrower shall prepay
accrued interest thereon to the date of conversion, together with any amounts
required to be paid in connection therewith pursuant to Section 2.19.
(c) If the obligation of any Lender to make or maintain Eurodollar
Loans has been terminated, the Borrower may elect, by giving notice to the
Lender through the Administrative Agent that all Loans which would otherwise
be made by the Lender as Eurodollar Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Administrative Agent pursuant to
this Section 2.17, the affected Lender shall designate a different Applicable
Lending Office with respect to its Eurodollar Loans if such designation will
avoid the need for giving such notice or making such demand and will not, in
the judgment of the Lender, be illegal or otherwise disadvantageous to the
Lender.
Section 2.18 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If, on or after the date of this Agreement, any Lender shall in
good faith determine that, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall
be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any Eurodollar Loans, then the Borrower shall be
liable for, and shall from time to time, upon demand therefor by such Lender
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender, additional amounts as
are sufficient to compensate such Lender for such increased costs.
(b) If, on or after the date of this Agreement, any Lender shall have
in good faith determined that (i) the introduction of any capital adequacy
regulation, (ii) any change in any capital adequacy regulation, or (iii) any
change in the interpretation or administration of any capital adequacy
regulation by any central bank or other Governmental Authority charged with
the interpretation or administration thereof, affects or would affect the
amount of capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy and
such Lender's anticipated return on capital) determines that the amount of
such capital is increased as a consequence of its Commitment, loans, credits
or obligations under this Agreement, then, upon demand of such Lender (with a
copy to the Administrative Agent), the Borrower shall upon demand pay to the
Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
Section 2.19 FUNDING LOSSES. The Borrower agrees to reimburse each
Lender and to hold each Lender harmless from any loss or expense which the
Lender may sustain or incur as a consequence of:
38
(a) the failure of the Borrower to make any payment or mandatory
prepayment of principal of any Eurodollar Loan (including payments made after
any acceleration thereof);
(b) the failure of the Borrower to borrow, continue or convert a Loan
after the Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of the Borrower to make any prepayment after the
Borrower has given a notice in accordance with Section 2.6 hereof;
(d) the prepayment (including pursuant to Section 2.7 hereof) of a
Eurodollar Loan on a day which is not the last day of the Interest Period
with respect thereto; or
(e) the conversion pursuant to Section 2.4 or 2.17 hereof of any
Eurodollar Loan to a Base Rate Loan on a day that is not the last day of the
respective Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Loans hereunder or from fees
payable to terminate the deposits from which such funds were obtained.
Section 2.20 INABILITY TO DETERMINE RATES. If the Administrative Agent
shall have determined that for any reason adequate and reasonable means do
not exist for ascertaining the Eurodollar reference rate for any requested
Interest Period with respect to a proposed Eurodollar Loan or that the
Eurodollar reference rate applicable pursuant to subsection 2.9(a)(ii) for
any requested Interest Period with respect to a proposed Eurodollar Loan does
not adequately and fairly reflect the cost to the Lenders of funding such
Loan, the Administrative Agent will forthwith give notice of such
determination to the Borrower and each Lender. Thereafter, the obligation of
the Lenders to make or maintain Eurodollar Loans, as the case may be,
hereunder shall be suspended until the Administrative Agent revokes such
notice in writing. Upon receipt of such notice, the Borrower may revoke any
Notice of Borrowing or Notice of Conversion/Continuation then submitted by
it. If the Borrower does not revoke such notice, the Lenders shall make,
convert or continue the Loans, as proposed by the Borrower, in the amount
specified in the applicable notice submitted by the Borrower, but such Loans
shall be made, converted or continued as Base Rate Loans instead of
Eurodollar Loans.
Section 2.21 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement
or compensation pursuant to this Article II shall deliver to the Borrower
(with a copy to the Administrative Agent) a certificate setting forth in
reasonable detail the amount payable to the Lender hereunder and such
certificate shall be conclusive and binding on the Borrower in the absence of
manifest error.
Section 2.22 SURVIVAL. The agreements and obligations of the Borrower
in Sections 2.16 through 2.22 hereof shall survive the payment of all other
Obligations.
Section 2.23 LETTERS OF CREDIT.
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(a) AMOUNT AND EXPIRATION.
(i) Subject to the terms and conditions of this Agreement, the
Borrower may request that NatWest Plc in its individual capacity (in the case
of Standby L/Cs) or BankBoston, N.A. in its individual capacity (in the case
of Standby L/Cs and Documentary L/Cs) issue one or more L/Cs (in such
capacity, each of NatWest Plc and BankBoston, N.A. is herein referred to as
the "ISSUING BANK" and collectively as the "ISSUING BANKS") for the account
of the Borrower, PROVIDED, HOWEVER, that no L/C shall be issued if, after
giving effect to the issuance of such L/C (i) the aggregate amount of all Net
L/C Obligations and the aggregate amount of all Revolving Loans then
outstanding would exceed the Aggregate Revolving Commitment at such time, or
(ii) the aggregate amount of all L/C Obligations then outstanding would
exceed the Maximum L/C Amount. Subject to the foregoing, the Borrower may
request the issuance of L/Cs under this Section 2.23, repay any drawings
thereunder and request the issuance of additional L/Cs under this Section
2.23. For all purposes of this Agreement, reference to the "issue" or
"issuance" of any L/C or any L/C being "issued" shall include the amendment,
supplement or modification of any L/C, including, without limitation, any
increase in the amount thereof, or any extension or renewal thereof.
(ii) No L/C shall have an expiration date later than the earlier of
(A) three hundred sixty-five (365) days after the date of issuance thereof,
or (B) the date which is thirty (30) days prior to the Revolving Termination
Date. No L/C may by its terms be automatically renewable, unless consented
to in writing by the Administrative Agent and the Issuing Bank in the
exercise of their sole discretion, subject to the foregoing restriction
regarding expiration dates, and no L/C may be denominated or drawable other
than in Dollars.
(b) NOTICE AND ISSUANCE.
(i) The Borrower shall give notice to the Issuing Bank and to the
Administrative Agent of a request for issuance of any L/C not less than three
(3) Business Days prior to the proposed issuance date (which prescribed time
period may be waived at the option of the Issuing Bank and the Administrative
Agent in the exercise of their sole discretion). Each such notice (an "L/C
ISSUANCE REQUEST") shall specify: (A) the requested date of such issuance
(which shall be a Business Day); (B) the maximum amount of such L/C; (C) the
expiration date of such L/C; (D) the purpose of such L/C; (E) the name and
address of the beneficiary of such L/C; and (F) the required documents under
any such L/C and, if requested by the Issuing Bank, the form of such L/C
(which shall be acceptable to both of the Issuing Bank and the Administrative
Agent in their respective sole discretion). The making of each L/C Issuance
Request shall be deemed to be a representation and warranty by the Borrower
that such L/C may be issued in accordance with and will not violate the terms
of subsection 2.23(a) hereof. Each L/C Issuance Request shall be
accompanied by the Issuing Bank's customary Standby or Documentary L/C
application and other standard documents as may be required by the Issuing
Bank (the "APPLICATION DOCUMENTS") each duly completed and executed and
delivered by the Borrower.
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(ii) Upon acceptance of the form of the proposed L/C by the Issuing
Bank and the Administrative Agent and upon fulfillment of the conditions set
forth above in this subsection 2.23(b) and applicable conditions in Article 4
hereof, the Issuing Bank shall issue such Standby L/C or Documentary L/C.
Each Documentary L/C shall be issued upon such other terms and conditions as
may be approved by both the Issuing Bank and the Administrative Agent (in
their sole discretion) which are not inconsistent with this Agreement.
(iii) Notwithstanding the foregoing, the Issuing Bank shall be under
no obligation to issue any L/C if at the time of such issuance:
(A) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or restrain the
Issuing Bank from issuing such L/C or any requirement of law applicable to
the Issuing Bank or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over the Issuing
Bank shall prohibit, or request that the Issuing Bank refrain from, the
issuance of letters of credit generally or such L/C in particular or shall
impose upon the Issuing Bank with respect to such L/C any requirement (for
which the Issuing Bank is not otherwise compensated) not in effect on the
date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Issuing Bank as of the date hereof and
which the Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(B) the Issuing Bank shall have received notice from any
Lender prior to the issuance of such L/C that one or more of the applicable
conditions specified in this Section 2.23 or 4.2 are not then satisfied, or
that the issuance of such L/C would violate subsection 2.23(a) above.
(iv) The Issuing Bank shall promptly give written notice to each of
the other Lenders of the information specified in subsections 2.23(b)(i)(A)
through (E) above.
(c) REIMBURSEMENT OBLIGATIONS.
(i) The Borrower shall be obligated to reimburse the Administrative
Agent, for the account of the Issuing Bank, in immediately available funds at
its Payment Office, on the day of each payment under an L/C by the Issuing
Bank for drafts drawn and all amounts paid or disbursed under each such L/C
(all such amounts so drawn, paid or disbursed until reimbursed are
hereinafter referred to as "UNREIMBURSED DRAWINGS"); PROVIDED that if any
such Unreimbursed Drawings are not so reimbursed on the date of any drafts
drawn, the Borrower's reimbursement obligation in respect of such
Unreimbursed Drawings shall be funded on such date with the borrowing of
Loans (each such borrowing a "MANDATORY L/C BORROWING") in the full amount of
the Unreimbursed Drawings from all Lenders PRO RATA based on each Lender's
Commitment Percentage. The Issuing Bank shall promptly notify the
Administrative Agent of the amount of any Unreimbursed Drawings and the
Administrative Agent shall promptly notify the Lenders of the amount of each
such Mandatory L/C Borrowing not later than 12:00 noon (New York City time)
on the date on which such Mandatory L/C Borrowing is to be made. Each such
Lender hereby irrevocably agrees to make Revolving Loans
41
pursuant to each Mandatory L/C Borrowing in the amount, and not later than
5:00 p.m. (New York City time) on the date, and in the manner specified in
the preceding sentence, for immediate payment to the Issuing Bank,
notwithstanding (i) that the amount of the Mandatory L/C Borrowing may not
comply with the minimum amount for borrowings otherwise required hereunder,
(ii) whether any conditions specified in Article 4 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of such
Mandatory L/C Borrowing and (v) any reduction in the Aggregate Revolving
Commitment after any such L/C was issued. In the event that the
Administrative Agent delivers the above-described notice to any Lender later
than 12:00 noon (New York City time) on the date of the required Mandatory
L/C Borrowing, then such Lender shall not be obligated to effect such
Mandatory L/C Borrowing until the next succeeding Business Day (but not later
than 5:00 p.m. (New York City time)).
(ii) Notwithstanding the foregoing, in the event that at any time
when a draft is drawn under an L/C, there are not sufficient funds in any
account of the Borrower with the Issuing Bank (or with the Administrative
Agent for the account of the Issuing Bank) or sufficient availability to
permit creation of Revolving Loans sufficient to fund payment of the drafts,
any funds advanced by the Issuing Bank (or by the Administrative Agent on
behalf of the Issuing Bank) and the other Lenders in payment thereof shall be
due and payable immediately and shall bear interest until paid in full at the
Post-Default Rate, such interest to be payable on demand. In the event of
any conflict, discrepancy or any omission of terms provided herein between
the terms established by the Issuing Bank in its Application Documents or
otherwise and this Loan Agreement, the terms provided herein shall prevail.
The obligations of the Lenders in respect of any funds so advanced or to be
advanced by the Issuing Bank (or by the Administrative Agent on behalf of the
Issuing Bank) under this subsection (c) shall be as more particularly
described in subsections 2.23(e)(ii) and (iii) hereof.
(d) GENERAL UNCONDITIONAL OBLIGATIONS.
The obligations of the Borrower under this Agreement and the Application
Documents and any other agreement, instrument or document relating to
reimbursement or payment of L/C Obligations shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms
of this Agreement and the Application Documents, under all circumstances
whatsoever, including, without limitation, the following circumstances,
whether relating to any one or more L/Cs:
(i) any agreement between the Borrower and any beneficiary or any
agreement or instrument relating thereto (the "BENEFICIARY DOCUMENTS")
proving to be forged, fraudulent, invalid, unenforceable or insufficient in
any respect;
(ii) any amendment or waiver of or any consent to departure from all
or any of the Beneficiary Documents;
(iii) the existence of any claim, set off, defense or other rights
which the Borrower may have at any time against any beneficiary or any
transferee of any L/C (or any persons or entities for whom any beneficiary or
any such transferee may be acting), the
42
Issuing Bank, any other Lender, the Administrative Agent or any other person
or entity, whether in connection with the Agreement, the Beneficiary
Documents or any unrelated transaction;
(iv) any demand presented under any L/C (or any endorsement thereon)
proving to be forged, fraudulent, invalid, unenforceable or insufficient in
any respect or any statement therein being inaccurate in any respect
whatsoever;
(v) payment by the Issuing Bank under any L/C against presentation
of a demand which does not comply with the terms of such L/C, including,
without limitation, the circumstances referred to in clause (iv) above or the
failure of any document to bear reference or to bear adequate reference to
such L/C;
(vi) the use to which any L/C may be put or any acts or omission of
any beneficiary in connection therewith; or
(vii) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
(e) PARTICIPATIONS BY LENDERS.
(i) On the date of issuance of each L/C the Issuing Bank shall be
deemed irrevocably and unconditionally to have sold and transferred to each
Lender without recourse or warranty, and each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Bank,
an undivided interest and participation, to the extent of such Lender's PRO
RATA share of the Aggregate Revolving Commitment in effect on the date of
such issuance, in such L/C, each substitute letter of credit, each drawing
made thereunder, the related Application Documents and all L/C Obligations
relating to such L/C and all Loan Documents securing, guaranteeing,
supporting, or otherwise benefitting the payment of such L/C Obligation. The
Issuing Bank shall furnish to any Lender, upon request, copies of any L/C and
any Application Documents as may be requested by such Lender.
(ii) In the event that any reimbursement obligation under subsection
2.23(c) hereof is not paid to the Issuing Bank with respect to any L/C in
full immediately or by a Mandatory L/C Borrowing from all the Lenders PRO
RATA pursuant to paragraph 2.23(c)(i), the Issuing Bank shall promptly notify
the Administrative Agent to that effect, and the Administrative Agent shall
promptly notify the Lenders of the amount of such reimbursement obligation
and each such Lender shall immediately pay to the Administrative Agent, for
immediate payment to the Issuing Bank, in lawful money of the United States
and in immediately available funds, an amount equal to such Lender's ratable
portion of the amount of such unpaid reimbursement obligation.
(iii) The obligation of each Lender to make Loans in respect of each
Mandatory L/C Borrowing and to make payments under the preceding clause (ii)
shall be absolute and unconditional and irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances and shall
not be subject to any conditions set forth in Article 4 hereof or
43
otherwise affected by any circumstance including, without limitation, (A) the
occurrence or continuance of a Default or Event of Default; (B) any adverse
change in the business condition (financial or otherwise), operations,
performance, properties or prospects of any Loan Party; (C) any breach of
this Agreement or any Application Documents or other Loan Documents by the
Borrower, any other Loan Party or any Lender; (D) any set-off, counterclaim,
recoupment, defense or other right which such Lender or the Borrower may have
at any time against the Issuing Bank, any other Lender, any Loan Party, or
any beneficiary named in any L/C in connection herewith or otherwise; (E) the
validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (F) any lack of validity or
enforcement of this Agreement or any of the Loan Documents; (G) the surrender
or impairment of any security for the performance or observance of any of the
terms of any of the Loan Documents; or (H) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing. The
Borrower agrees that any Lender purchasing a participation in any L/C from
the Issuing Bank hereunder may, to the fullest extent permitted by law,
exercise all of its rights of payment with respect to such participation as
fully as if such Lender were the direct creditor of such Borrower in the
amount of such participation.
(iv) Promptly after the Issuing Bank (or the Administrative Agent
acting on behalf of the Issuing Bank) receives a payment on account of a
reimbursement obligation with respect to any L/C as to which any other Lender
has funded its participation pursuant to subsection 2.23(e)(ii) above, the
Issuing Bank (or the Administrative Agent acting on behalf of the Issuing
Bank) shall promptly pay to the Administrative Agent, and the Administrative
Agent shall promptly pay to each Lender which funded its participation
therein, in lawful money of the United States and in the kind of funds so
received, an amount equal to such Lender's ratable share thereof.
(v) If any payment received on account of any reimbursement
obligation with respect to an L/C and distributed to a Lender as a
participant under subsection 2.23(e)(iv) is thereafter recovered from the
Issuing Bank in connection with any bankruptcy or insolvency proceeding
relating to the Borrower or otherwise, each Lender which received such
distribution shall, upon demand by the Administrative Agent, repay to the
Issuing Bank such Lender's ratable share of the amount so recovered together
with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to (ii) the
total amount so recovered) of any interest or other amount paid or payable by
the Issuing Bank in respect of the total amount so recovered.
(f) NON-LIABILITY.
The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any L/C with respect to its use of such L/C.
Neither the Administrative Agent, the Issuing Bank nor any other Lender, nor
any of their respective officers or directors, shall be liable or responsible
for: (A) the use that may be made of any L/C or any acts or omissions of any
beneficiary or transferee in connection therewith; (B) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even
if such documents
44
should prove to be in any or all respects invalid, insufficient, fraudulent
or forged; (C) payment by the Issuing Bank against presentation of documents
that do not comply with the terms of an L/C, including failure of any
documents to bear any reference or adequate reference to an L/C, EXCEPT that
the Borrower shall have a claim against the Issuing Bank, and such Issuing
Bank shall be liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower proves were
caused solely by (1) the Issuing Bank's willful misconduct or gross
negligence in determining whether documents presented under any L/C comply
with the terms of the L/C or (2) the Issuing Bank's willful failure to make
lawful payment under an L/C after the presentation to it of a draft and
documents and/or certificates strictly complying with the terms and
conditions of the L/C; (D) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they are in cipher; (E) for errors in
interpretation of technical terms; (F) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such L/C or of the proceeds thereof; and (G) for any consequence
arising from causes beyond the control of such Issuing Bank, including,
without limitation, any government acts. None of the above shall affect,
impair, or prevent the vesting of any of such Issuing Bank's rights or powers
hereunder. In furtherance and not in limitation of the foregoing, the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. The Uniform Customs and Practice for
Documentary Credits as most recently published by the International Chamber
of Commerce shall be deemed a part of this Section 2.23 as if incorporated
herein in all respects and shall apply to the L/Cs.
(g) INDEMNIFICATION.
In addition to amounts payable as elsewhere provided in this
Agreement, without duplication, the Borrower agrees to indemnify and save
harmless the Administrative Agent and each Lender including the Issuing Bank,
from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and
allocated costs of internal counsel) which such Administrative Agent or
Lender may incur or be subject to as a consequence, direct or indirect, of
the issuance of any L/C or any action or proceeding relating to a court
order, injunction, or other process or decree restraining or seeking to
restrain the Issuing Bank or the Administrative Agent from paying any amount
under any applicable L/C or the failure of the Issuing Bank to honor a
drawing under an L/C as a result of any act or omission, whether rightful or
wrongful of any present or future DE JURE or DE FACTO government or
Governmental Authority, except that no such Person shall be entitled to
indemnification for matters caused solely by such Person's gross negligence
or willful misconduct. Without modifying the foregoing, and anything
contained herein to the contrary notwithstanding, the Borrower shall cause
each L/C issued for its account to be canceled and returned to the Issuing
Bank on or before the Revolving Termination Date.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to the Lenders and the
Administrative Agent that:
45
Section 3.1 ORGANIZATION. (a) Each of the Borrower and each Subsidiary
and each other Loan Party is duly organized and validly existing under the
laws of its jurisdiction of organization and has the power to own its assets
and to transact the business in which it is presently engaged and in which it
proposes to be engaged. Schedule 3.1 hereto accurately and completely lists,
as to each of the Borrower and each Subsidiary and each other Loan Party:
(i) the jurisdiction of incorporation or organization of each such entity,
and the type of legal entity that each of them is, (ii) as to each of them
that is a corporation, the classes and number of authorized and outstanding
shares of capital stock of each such corporation, (iii) as to each of them
that is a legal entity other than a corporation (but not a natural person),
the type and amount of equity interests authorized and outstanding of each
such entity, and the owners of such equity interests, and (iv) the business
in which each of such entities is engaged. All of the foregoing shares or
other equity interests that are issued and outstanding have been duly and
validly issued and are fully paid and non-assessable. The Borrower owns,
beneficially and of record, all of the outstanding shares of each class of
stock of the Subsidiaries as shown on Schedule 3.1. Except as set forth on
Schedule 3.1, there are no outstanding warrants, options, contracts or
commitments of any kind entitling any Person to purchase or otherwise acquire
any shares of capital stock or other equity interests of the Borrower (other
than warrants and options now or hereafter granted to employees and/or
directors of the Borrower in the ordinary course of its business) or any
Subsidiary or any other Loan Party nor are there outstanding any securities
that are convertible into or exchangeable for any shares of capital stock or
other equity interests of the Borrower or any Subsidiary or any other Loan
Party. Except as set forth on Schedule 3.1, neither the Borrower nor any
Subsidiary nor any other Loan Party has any Subsidiary.
(b) Each of the Borrower and each Subsidiary and each other Loan Party
is in good standing in its jurisdiction of organization and in each
jurisdiction in which it is qualified to do business, except where the
failure to be in good standing could not have a material adverse effect on
the business, operations, financial condition or properties of the Borrower
or any Subsidiary or any other Loan Party; and none of such Persons is aware
of any jurisdiction in which it is qualified to do business but not in good
standing. There are no jurisdictions in which the character of the
properties owned or leased by the Borrower or any Subsidiary or any other
Loan Party or in which the transaction of business of the Borrower or any
Subsidiary or any other Loan Party requires the Borrower or any Subsidiary or
any other Loan Party to qualify to do business, other than those
jurisdictions in which such Person is qualified to do business.
Section 3.2 POWER, AUTHORITY, CONSENTS. The Borrower and each other
Loan Party has the power to execute, deliver and perform the Loan Documents
to be executed by it. The Borrower has the power to borrow hereunder and has
taken all necessary corporate action to authorize the borrowing hereunder on
the terms and conditions of this Agreement. The Borrower and each other Loan
Party has taken all necessary action, corporate or otherwise, to authorize
the execution, delivery and performance of the Loan Documents to be executed
by it. No consent or approval of any Person (including, without limitation,
any stockholder of any corporate Loan Party or any partner in any partnership
Loan Party), no consent or approval of any landlord or mortgagee, no waiver
of any Lien or right of distraint or other similar right and no consent,
46
license, certificate of need, approval, authorization or declaration of any
Governmental Authority, bureau or agency, is or will be required in
connection with the execution, delivery or performance by the Borrower or any
other Loan Party, or the validity, enforcement or priority, of the Loan
Documents.
Section 3.3 NO VIOLATION OF LAW OR AGREEMENTS. The execution and
delivery by the Borrower and each other Loan Party of each Loan Document to
which it is a party and performance by it hereunder and thereunder, will not
violate any provision of law and will not, conflict with or result in a
breach of any order, writ, injunction, ordinance, resolution, decree, or
other similar document or instrument of any court or Governmental Authority,
domestic or foreign, or any certificate of incorporation or by-laws of the
Borrower or any other corporate Loan Party or partnership agreement or other
organizational document or instrument of any Loan Party that is not a
corporation, or create (with or without the giving of notice or lapse of
time, or both) a default under or breach of any agreement, bond, note or
indenture to which the Borrower or any other Loan Party is a party, or by
which any of them is bound or any of their respective properties or assets is
affected, or result in the imposition of any Lien of any nature whatsoever
upon any of the properties or assets owned by or used in connection with the
business of the Borrower or any other Loan Party (other than the Liens
contemplated by the Collateral Documents). Any borrowing under this
Agreement will not result in any violation of any debt incurrence test or
other applicable covenant under the Senior Note Documents.
Section 3.4 DUE EXECUTION, VALIDITY, ENFORCEABILITY. This Agreement
and each other Loan Document to which any Loan Party is a party has been duly
executed and delivered by the Loan Party that is a party thereto and each
constitutes the valid and legally binding obligation of the Borrower or such
other Loan Party that is a party thereto, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other similar laws, now or
hereafter in effect, relating to or affecting the enforcement of creditors'
rights generally and except that the remedy of specific performance and other
equitable remedies are subject to judicial discretion.
Section 3.5 PROPERTIES, LIENS. The real estate listed on Schedule 3.5
(together with the addresses thereof) constitutes all of the real property
owned, leased, subleased or used by any Loan Party. Each Loan Party owns
good and marketable fee simple title to all of its owned real estate, and
valid and marketable leasehold interests in all of its leased real estate,
all as described on Schedule 3.5. Schedule 3.5 further describes any real
estate with respect to which any Loan Party is a lessor, sublessor or
assignor. Each Loan Party also has good and marketable title to, or valid
leasehold interests in, all of its personal properties and assets. None of
the properties and assets of any Loan Party are subject to any Liens other
than Permitted Liens and other security interests permitted under the Loan
Documents. Schedule 3.5 also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any real estate
owned or leased by the Borrower or any Loan Party.
Section 3.6 LITIGATION. There are no outstanding judgments, actions or
proceedings, including, without limitation, any Environmental Proceeding,
pending before any court or Governmental Authority with respect to or, to the
best of the Borrower's knowledge,
47
threatened against or affecting the Borrower or any Subsidiary or any other
Loan Party, involving, in the case of any court proceeding, a claim in excess
of $2,500,000, nor, to the best of the Borrower's knowledge, is there any
reasonable basis for the institution of any such action or proceeding that is
probable of assertion, nor are there any such actions or proceedings in which
the Borrower or any Subsidiary or any other Loan Party is a plaintiff or
complainant.
Section 3.7 NO DEFAULTS, COMPLIANCE WITH LAWS. Neither the Borrower
nor any Subsidiary nor any other Loan Party is in default under any
agreement, resolution, decree, bond, note, indenture, order or judgment to
which it is a party or by which it is bound, or any other agreement or other
instrument by which any of the properties or assets owned by it or used in
the conduct of its business is affected, which default could have a material
adverse effect on the business, operations, financial condition or properties
of the Borrower or any Subsidiary or any other Loan Party or on the ability
of the Borrower or any other Loan Party to perform its obligations under the
Loan Documents to which it is a party. The Borrower and each Subsidiary has
complied and is in compliance in all respects with all applicable laws,
ordinances and regulations, resolutions, ordinances, decrees and other
similar documents and instruments of all courts and governmental authorities,
bureaus and agencies, domestic and foreign, including, without limitation,
all applicable provisions of the Americans with Disabilities Act (42 U.S.C.
Section 12101-12213) and the regulations issued thereunder, and all
applicable Environmental Laws and Regulations, non-compliance with which
could have a material adverse effect on the business, operations, financial
condition or properties of the Borrower or any Subsidiary or on the ability
of the Borrower or any Subsidiary to perform its obligations under the Loan
Documents to which it is a party.
Section 3.8 BURDENSOME DOCUMENTS. Neither the Borrower nor any of the
other Loan Parties is a party to or bound by, nor are any of the properties
or assets owned by the Borrower or any other Loan Party used in the conduct
of their respective businesses affected by, any agreement, ordinance,
resolution, decree, bond, note, indenture, order or judgment, including,
without limitation, any of the foregoing relating to any Environmental
Liability, that materially and adversely affects their respective businesses,
assets or conditions, financial or otherwise.
Section 3.9 FINANCIAL STATEMENTS; PROJECTIONS.
(a) Each of the Financial Statements is correct and complete
and presents fairly the consolidated financial position of the Borrower and
its Subsidiaries, and each other entity to which it relates, as at its date,
and has been prepared in accordance with generally accepted accounting
principles. Neither the Borrower nor any of the Subsidiaries, nor any other
entity to which any of the Financial Statements relates, has any material
obligation, liability or commitment, direct or contingent (including, without
limitation, any Environmental Liability), that is not reflected in the
Financial Statements. There has occurred no Material Adverse Effect since the
date of the latest balance sheet included in the Financial Statements (the
"LATEST BALANCE SHEET"). The Borrower's fiscal year is the twelve-month
period ending on December 31 in each year.
48
(b) The Projections have been prepared on the basis of information and
accompanying assumptions that the Borrower believes to be reasonable and
reflect as of the date thereof the Borrower's good faith projections, after
reasonable analysis, of the matters set forth therein, based on such
assumptions, it being understood that such assumptions may be incorrect and
unanticipated events and circumstances may affect the Projections;
accordingly, the Borrower's actual financial performance and operating
results may vary and such variations may be material.
Section 3.10 TAX RETURNS. Each of the Borrower and its Subsidiaries
has filed all federal, state and local tax returns required to be filed by it
and has not failed to pay any taxes, or interest and penalties relating
thereto, on or before the due dates thereof. Except to the extent that
reserves therefor are reflected in the Financial Statements: (i) there are
no material federal, state or local tax liabilities of the Borrower or any
Subsidiary due or to become due for any tax year ended on or prior to the
date of the Latest Balance Sheet relating to such entity, whether incurred in
respect of or measured by the income of such entity, that are not properly
reflected in the Latest Balance Sheet relating to such entity, and (ii) there
are no material claims pending or, to the knowledge of the Borrower, proposed
or threatened against any of the Borrower or any Subsidiary for past federal,
state or local taxes, except those, if any, as to which proper reserves are
reflected in the Financial Statements.
Section 3.11 INTELLECTUAL PROPERTY. Each of the Borrower and its
Subsidiaries possesses all patents, trademarks, service marks, trade names,
and copyrights, and rights with respect to the foregoing, necessary to
conduct its business as now conducted and as proposed to be conducted,
without any conflict with the patents, trademarks, service marks, trade
names, and copyrights and rights with respect to the foregoing, of any other
Person, and each of such patents, trademarks, service marks, trade names,
copyrights and rights with respect thereto, together with any pending
applications therefor, are listed on Schedule 3.11 hereto.
Section 3.12 REGULATION U. No part of the proceeds received by the
Borrower or any Subsidiary from the Loans will be used directly or indirectly
for: (a) any purpose other than to finance systems upgrades and other
capital expenditures and to provide for the ongoing working capital
requirements of the Borrower and its Subsidiaries, or (b) the purpose of
purchasing or carrying, or for payment in full or in part of Indebtedness
that was incurred for the purposes of purchasing or carrying, any "margin
stock", as such term is defined in Section 221.3 of Regulation U of the Board
of Governors of the Federal Reserve System, 12 C.F.R., Chapter II, Part 221.
Section 3.13 NAME CHANGES, MERGERS, ACQUISITIONS. Neither the Borrower
nor any of the Subsidiaries nor any other Loan Party has within the six-year
period immediately preceding the date of this Agreement changed its name,
been the surviving entity of a merger or consolidation, or acquired all or
substantially all of the assets of any Person.
Section 3.14 FULL DISCLOSURE. None of the Financial Statements, the
Borrower's Annual Report on Form 10-K dated March 25, 1998 relating to the
fiscal year ended December 31, 1997 filed by the Borrower with the SEC and
previously delivered to the Lenders (the "1998
49
10-K Report"), Borrower's Quarterly Report on Form 10-Q dated November 11,
1998 relating to the period ending September 30, 1998 filed by the Borrower
with the SEC and previously delivered to the Lenders (the "Third Quarter 10-Q
Report"), the Projections, nor any certificate, opinion, or any other
statement made or furnished in writing to the Administrative Agent or any
Lender by or on behalf of the Borrower or any of the Subsidiaries or any
other Loan Party in connection with this Agreement or the transactions
contemplated herein, contains any untrue statement of a material fact, or
omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading, as of the date such statement was
made. There is no fact known to the Borrower that has, or would in the now
foreseeable future have, a material adverse effect on the business, prospects
or condition, financial or otherwise, of the Borrower or any of its
Subsidiaries or any other Loan Party, which fact has not been set forth
herein, in the Financial Statements, the 1998 10-K Report, the Third Quarter
10-Q Report, the Projections, or any certificate, opinion or other written
statement so made or furnished to the Administrative Agent or the Lenders.
Section 3.15 LICENSES AND APPROVALS. The Borrower and each of its
Subsidiaries has all requisite power and authority and necessary licenses,
permits and governmental authorizations, including, without limitation,
licenses, permits and authorizations arising under or relating to
Environmental Laws and Regulations, to own and operate its properties and to
carry on its business as now conducted (collectively, the "LICENSES"). No
event has occurred that: (i) results in, or after notice or lapse of time or
both would result in, revocation or termination of any License, or (ii)
materially and adversely affects or in the future may (so far as the Borrower
can now reasonably foresee) materially adversely affect any of the rights of
the Borrower or any of its Subsidiaries under any License. The Borrower has
no reason to believe (other than in connection with there being no legal
assurance thereof) that any License will not be renewed in the ordinary
course.
Section 3.16 LABOR DISPUTES; COLLECTIVE BARGAINING AGREEMENTS; EMPLOYEE
GRIEVANCES. (a) There are no collective bargaining agreements or other labor
contracts covering the Borrower or any Subsidiary; (b) no such collective
bargaining agreement or other labor contract will expire during the term of
this Agreement; (c) no union or other labor organization is seeking to
organize, or to be recognized as bargaining representative for, a bargaining
unit of employees of the Borrower or any Subsidiary; (d) there is no pending
or threatened strike, work stoppage, material unfair labor practice claim or
charge, arbitration or other material labor dispute against or affecting the
Borrower or any Subsidiary or their representative employees; (e) there has
not been, during the five (5) year period prior to the date hereof, a strike,
work stoppage, material unfair labor practice claim or charge, arbitration or
other material labor dispute against or affecting the Borrower or any
Subsidiary or any of their representative employees, and (f) there are no
actions, suits, charges, demands, claims, counterclaims or proceedings
pending or, to the best of the Borrower's knowledge, threatened against the
Borrower or any of its Subsidiaries, by or on behalf of, or with, its
employees, other than employee grievances arising in the ordinary course of
business that are not, in the aggregate, material.
Section 3.17 CONDITION OF ASSETS. The Collateral and all of the assets
and properties of the Borrower and its Subsidiaries that are reasonably
necessary for the operation of
50
its business, are in good working condition, ordinary wear and tear excepted,
and are able to serve the function for which they are currently being used.
Section 3.18 ERISA. (a) No Employee Benefit Plan is maintained or has
ever been maintained by any Loan Party or any ERISA Affiliate, nor has any
Loan Party or any ERISA Affiliate ever contributed to, a Multiemployer Plan.
(b) There are no agreements which will provide payments to any officer,
employee, shareholder or highly compensated individual which will be
"parachute payments" under 280G of the Code that are nondeductible to any
Loan Party and which will be subject to tax under Section 4999 of the Code
for which any Loan Party will have a material withholding liability.
Section 3.19 MATERIAL AGREEMENTS. All of the agreements, contracts and
leases of the Borrower and its Subsidiaries with lodging industry and other
customers relating to the provision of the Borrower's video and video-related
services (guest-pay, free-to-guest and other) are freely assignable by the
Borrower or its Subsidiaries, except as listed on Schedule 3.19 hereto.
Borrower has previously provided true and correct copies of a representative
sample of such contracts to the Administrative Agent, including copies of any
such contracts which are not freely assignable by the Borrower or its
Subsidiaries. Also set forth on Schedule 3.19 hereto is an accurate and
complete list of the following agreements, documents or instruments to which
the Borrower or any of its Subsidiaries is subject: (a) all material master
agreements with studios and other program providers, (b) any lease of
equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $50,000 per annum; and (c)
all material licenses and permits held by the Borrower or its Subsidiaries.
Section 3.20 COLLATERAL DOCUMENTS. (a) The Pledge Agreement is
effective to create in favor of the Administrative Agent, for the benefit of
itself, the Lenders and the Issuing Banks, a legal, valid and enforceable
security interest in the Pledged Collateral (as defined in the Pledge
Agreement) and, when the Pledged Collateral is delivered to the
Administrative Agent, the Pledge Agreement shall constitute a fully perfected
first priority Lien on, and security interest in, all right, title and
interest of the pledgor thereunder in such Pledged Collateral, in each case
prior and superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Administrative Agent, for the benefit of itself, the Lenders and the Issuing
Banks, a legal, valid and enforceable security interest in the Collateral (as
defined in the Security Agreement) and, when financing statements in
appropriate form are filed in the offices specified therein, the Security
Agreement shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the grantors thereunder in such
Collateral, in each case prior and superior in right to any other Person,
other than with respect to Permitted Liens and other security interests
permitted by the Loan Documents.
(c) When the Patent and Trademark Security Agreement is filed in the
United States Patent and Trademark Office, said Security Agreement shall
constitute a fully
51
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Intellectual Property Collateral (as defined in said
Security Agreement) in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or
analogous document in the United States Patent and Trademark Office, in each
case prior and superior in right to any other Person (it being understood
that subsequent recordings in the United States Patent and Trademark Office
may be necessary to perfect a lien on registered patents, trademarks and
applications therefor acquired by the Loan Parties after the date hereof).
Section 3.21 SOLVENCY. The Borrower (individually, and on a
consolidated basis) and each of its Subsidiaries is Solvent on the date
hereof and will be Solvent after giving effect to the transactions
contemplated by the Loan Documents.
Section 3.22 YEAR 2000. The Borrower has made a full and complete
assessment of the Year 2000 Issues and has a realistic and achievable program
for remediating the Year 2000 Issues on a timely basis (the "Year 2000
Program"). Based on such assessment and on the Year 2000 Program, the
Borrower does not reasonably anticipate that Year 2000 Issues will have a
Material Adverse Effect.
ARTICLE 4. CONDITIONS TO THE LOANS.
Section 4.1 CONDITIONS TO INITIAL LOANS. The obligation of each
Lender to make the initial Loan to be made by it hereunder shall be subject
to the fulfillment (to the satisfaction of the Administrative Agent and the
Lenders) of the following conditions precedent on or prior to the Closing
Date:
(a) LOAN DOCUMENTS. This Agreement shall have been executed by the
Borrower, the Administrative Agent, the Issuing Banks and each of the
Lenders; the Term Notes and the Revolving Notes shall have been executed by
the Borrower; the Guaranties shall have been executed by ResNet Inc.,
LodgeNet Canada and ResNet LLC; and each other Loan Document shall have been
executed by the parties thereto.
(b) COLLATERAL. The Borrower and its Subsidiaries shall have executed
and delivered the Collateral Documents, in appropriate form for recording
where necessary, together with:
(i) acknowledgment copies of all UCC-1 financing statements
(or any assignments thereof) filed, registered or recorded to perfect the
security interests of the Administrative Agent for the benefit of the
Lenders, or other evidence satisfactory to the Administrative Agent that
there has been filed, registered or recorded all financing statements and
other filings, registrations and recordings necessary and advisable to
perfect the Liens of the Administrative Agent for the benefit of the Lenders
in accordance with applicable law;
(ii) written advice relating to such Lien and judgment searches
as the Administrative Agent shall have requested of the Borrower and its
Subsidiaries, and such termination statements or other documents as may be
necessary to confirm that the Collateral is
52
subject to no other Liens in favor of any Persons (other than Permitted Liens
and any other security interests permitted under the Loan Documents);
(iii) all certificates and instruments representing the Pledged
Collateral and undated stock transfer powers executed in blank;
(iv) evidence that all other actions necessary or, in the opinion
of the Administrative Agent and its counsel, desirable to perfect and protect
the first priority security interest created by the Collateral Documents
(subject to Permitted Liens and any other security interests permitted under
the Loan Documents), and to enhance the Administrative Agent's ability to
preserve and protect its interest in and access to the Collateral, have been
taken;
(v) standard lenders payable endorsements with respect to the
insurance policies or other instruments or documents evidencing insurance
coverage on the properties of the Borrower and its Subsidiaries in accordance
with Section 6.8 hereof; and
(vi) funds sufficient to pay any filing or recording tax or fees
in connection with any and all UCC-1 financing statements and any other
filings or actions taken in regard to the Collateral.
(c) CORPORATE ORGANIZATION, AUTHORIZATION, GOOD STANDING. The
Administrative Agent shall have received copies of the following:
(i) Any consents, approvals and waivers referred to in Section 3.2
hereof;
(ii) The certificate of incorporation of the Borrower and of ResNet
Inc., each certified by the Secretary of State of Delaware; the certificate
of incorporation of LodgeNet Canada, certified by its corporate secretary;
(iii) The by-laws of the Borrower, ResNet Inc. and LodgeNet Canada
certified by their respective corporate secretaries;
(iv) All corporate action taken by the Borrower, ResNet Inc. and
LodgeNet Canada to authorize the execution, delivery and performance of each
of the Loan Documents to which it is a party and the transactions
contemplated thereby, certified by their respective corporate secretaries;
(v) Good standing certificates, as of dates not more than ten (10)
days prior to the Closing Date, with respect to the Borrower, from the States
of Delaware, South Dakota, California, Texas, Florida, New York, Illinois,
Hawaii, Ohio, Washington, Georgia, Nevada, Arizona, Louisiana, Colorado,
Virginia, Michigan, Pennsylvania, North Carolina, Minnesota, Wisconsin, South
Carolina and New Jersey; and
53
(vi) Incumbency certificates (with specimen signatures) with respect
to officers of the Borrower, ResNet Inc. and LodgeNet Canada.
(d) OFFICER'S CERTIFICATE. (i) The Borrower shall have complied and
shall then be in compliance with all of the terms, covenants and conditions
of this Agreement and the Senior Note Documents (including Section 4.03 of
the Senior 1996 Note Indenture);
(ii) There shall exist no Default or Event of Default hereunder;
(iii) The representations and warranties contained in Article 3 hereof
shall be true and correct on the Closing Date;
(iv) Since September 30, 1998, there has not occurred any event or
circumstance that has resulted or could reasonably be expected to result in a
Material Adverse Effect; and
(v) The Borrower (individually, and on a consolidated basis) and each
of its Subsidiaries shall be Solvent on the Closing Date and will continue to
be Solvent after giving effect to the transactions contemplated hereby;
and the Administrative Agent shall have received a certificate of the Borrower's
chief financial officer dated the Closing Date certifying, INTER ALIA, that the
conditions set forth in this subsection 4.1(d) are satisfied on such date.
(e) LEGAL OPINIONS. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Director of Corporate and
Legal Affairs of the Borrower, and Pillsbury Madison & Sutro LLP, counsel to
the Borrower and ResNet Inc., shall have delivered their opinions to the
Administrative Agent substantially in the composite form of Exhibit F hereto.
(f) FINANCIALS AND SENIOR NOTE DOCUMENTS. The Administrative Agent
shall have received true and complete copies of the following, each certified
as such in a certificate executed by the president, chief financial officer
or chief operating officer of the Borrower:
(i) Notice delivered by the Borrower to the Trustee pursuant to the
definition of "New Credit Facility" under the Senior 1996 Note Indenture;
(ii) The Financial Statements and the Projections; and
(iii) The Senior Note Documents, each as amended and in effect on the
date hereof.
(g) EXCHANGE OF NOTES. The loans represented by the notes outstanding
under the Existing Loan Agreement shall be repaid, and such notes shall be
surrendered and replaced by the Term Notes and the Revolving Notes hereunder.
54
(h) PAYMENT OF FEES.The Borrower shall have paid on the Closing Date the
arranger and agency fees payable pursuant to Section 2.10 hereof and the fees
of counsel to the Administrative Agent and other expenses payable pursuant to
Section 10.1 hereof.
(i) OTHER DOCUMENTS. The Administrative Agent shall have received such
other certificates, opinions, approvals, documents or other evidence of
compliance with the conditions set forth in this Section 4.1 as the
Administrative Agent and its counsel may request.
Section 4.2 CONDITIONS TO SUBSEQUENT LOANS AND L/CS. The obligation of
each Lender to make any Revolving Loan subsequent to the Closing Date and the
obligation of the Issuing Bank to issue any L/C shall be subject to the
fulfillment (to the satisfaction of the Administrative Agent) of the
following conditions precedent:
(a) In respect of each Revolving Loan, the Administrative Agent shall
have received a Notice of Borrowing in accordance with Section 2.3 hereof.
(b) In respect of each requested L/C, the Issuing Bank and the
Administrative Agent shall have received an L/C Issuance Request in
accordance with subsection 2.23(b)(i) hereof, together with all other
documents required to be delivered in connection with an L/C Issuance Request
and all Application Documents, and the Issuing Bank shall have been paid any
and all fees then due in accordance with the terms of Sections 2.10 and 2.23
hereof.
(c) The Administrative Agent shall have received a Compliance
Certificate dated the date of such Revolving Loan or L/C (as the case may be)
and effective as of such date, and the matters certified therein, including,
without limitation, the absence of any Default or Event of Default, shall be
true as of such date.
(d) Neither the Administrative Agent nor any Lender nor the Issuing Bank
shall have received from the Borrower any notice that any Collateral Document
will no longer secure on a first priority basis (subject to Permitted Liens
and other security interests permitted under the Loan Documents) future
advances or future Loans to be made or extended under this Agreement.
(e) All legal matters incident to such Revolving Loan or L/C (as the
case may be) shall be satisfactory to counsel for the Administrative Agent.
ARTICLE 5. DELIVERY OF FINANCIAL REPORTS AND OTHER INFORMATION.
While any Commitments are outstanding, and, in the event any Loan or
any L/C Obligation remains outstanding, so long as the Borrower is indebted
to the Lenders or the Administrative Agent and until payment in full of the
Notes and full and complete performance of all of its other obligations
arising hereunder, the Borrower shall deliver to each Lender:
55
Section 5.1 ANNUAL FINANCIAL STATEMENTS. Annually, as soon as
available, but in any event within ninety (90) days after the last day of
each of its fiscal years, a consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as at such last day of the fiscal year, and
consolidated and consolidating statements of income and retained earnings and
statements of cash flow, for such fiscal year, each prepared in accordance
with generally accepted accounting principles consistently applied, in
reasonable detail, and, as to the consolidated statements, certified without
qualification by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or another firm of independent
certified public accountants satisfactory to the Administrative Agent, or
certified, as to the consolidating statements, by the chief financial officer
of the Borrower, as fairly presenting the financial position and the results
of operations of the Borrower and its Subsidiaries as at and for the year
ending on its date and as having been prepared in accordance with generally
accepted accounting principles.
Section 5.2 QUARTERLY FINANCIAL STATEMENTS. As soon as available, but
in any event within forty-five (45) days after the end of the Borrower's
first three fiscal quarterly periods (and for purposes of calculating the
financial ratios in Section 6.9 hereof, for the immediately preceding two or
four consecutive full fiscal quarters (including fiscal quarters ending prior
to the date of this Agreement) necessary to such calculations), a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the last day of such quarter and consolidated and
consolidating statements of income and retained earnings and statements of
cash flow, for such quarter, and on a comparative basis figures for the
corresponding period of the immediately preceding fiscal year, all in
reasonable detail, each such statement to be certified in a certificate of
the president, chief financial officer or chief operating officer of the
Borrower as accurately presenting the financial position and the results of
operations of the Borrower and its Subsidiaries as at its date and for such
quarter and as having been prepared in accordance with generally accepted
accounting principles consistently applied (subject to non-material, year-end
audit adjustments in accordance with generally accepted accounting
principles).
Section 5.3 PROJECTIONS. Annually, as soon as available, but in any
event within ninety (90) days after the last day of each of its fiscal years,
a forecasted consolidated balance sheet and related forecasted consolidated
statement of operations and statement of cash flows of the Borrower for the
period from the first day of the Borrower's then current fiscal year through
December 31, 2005, all prepared on a basis consistent with the Financial
Statements, together with appropriate supporting details and a statement of
underlying assumptions.
Section 5.4 COMPLIANCE INFORMATION. Promptly after a written request
therefor, such other financial data or information evidencing compliance with
the requirements of this Agreement, the Notes, the Collateral Documents and
the other Loan Documents, as any Lender may reasonably request from time to
time.
Section 5.5 NO DEFAULT CERTIFICATE. At the same time as it delivers
the financial statements required under the provisions of Sections 5.1 and
5.2 hereof, a certificate of the president, chief financial officer or chief
operating officer of the Borrower to the effect that no Event of Default
hereunder and that no default under any other agreement to which the Borrower
or any of its Subsidiaries is a party or by which it is bound, or by which,
to the best knowledge of
56
the Borrower or any Subsidiary, any of its properties or assets, taken as a
whole, may be materially affected, and no event which, with the giving of
notice or the lapse of time, or both, would constitute such an Event of
Default or default, exists, or, if such cannot be so certified, specifying in
reasonable detail the exceptions, if any, to such statement. Such
certificate shall be accompanied by a detailed calculation indicating
compliance with the covenants contained in Sections 6.9, 7.13 and 7.14
hereof.
Section 5.6 ACCOUNTANTS' REPORTS. Promptly upon receipt thereof,
copies of all reports submitted to the Borrower or any of its Subsidiaries by
its independent accountants in connection with any annual or interim audit or
review of the books of the Borrower or its Subsidiaries made by such
accountants, including, without limitation, any report addressing whether a
Default or an Event of Default had occurred hereunder.
Section 5.7 COPIES OF DOCUMENTS. Promptly upon their becoming
available, copies of any: (i) financial statements, projections, non-routine
reports, notices (other than routine correspondence), requests for waivers
and proxy statements, in each case delivered by the Borrower or any of its
Subsidiaries to any holder of Indebtedness of the Borrower other than the
Lenders; (ii) correspondence or notices received by the Borrower from any
federal, state or local governmental authority that regulates the operations
of the Borrower or any of its Subsidiaries, relating to an actual or
threatened change or development that would be materially adverse to the
Borrower or any Subsidiary; (iii) registration statements and any amendments
and supplements thereto, and any regular and periodic reports, if any, filed
by the Borrower or any of its Subsidiaries with any securities exchange or
with the SEC (or any Governmental Authority succeeding to any or all of the
functions of the SEC); (iv) letters of comment or correspondence sent to the
Borrower or any of its Subsidiaries by any such securities exchange or the
SEC in relation to the Borrower or any of its Subsidiaries and its affairs,
except to the extent sent in the ordinary course of business with respect to
routine filings; and (v) any appraisals received by the Borrower or any of
its Subsidiaries with respect to material properties or assets of the
Borrower or its Subsidiaries.
Section 5.8 NOTICES OF DEFAULTS. Promptly, notice of the occurrence of
any Default or Event of Default, or any event that would constitute or cause
a material adverse change in the condition, financial or otherwise, or the
operations of the Borrower or any of its Subsidiaries.
Section 5.9 ERISA NOTICES AND REQUESTS. Notice of each of the following
within ten (10) days after such event or occurrence:
(a) any Loan Party or ERISA Affiliate knowing or having reason to know
that a Termination Event has occurred or that a Defined Contribution Plan has
been terminated or partially terminated, together with a written statement by
the appropriate chief financial officer setting forth the details of such
event;
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(b) the filing of a request for a funding waiver by any Loan Party or
ERISA Affiliate with respect to any Pension Plan, and a copy of such request
and all communications received by any Loan Party or ERISA Affiliate with
respect to such request;
(c) receipt by any Loan Party or ERISA Affiliate of a notice of the
PBGC's intent to terminate a Pension Plan, and a copy of such notice;
(d) the failure of any Loan Party or ERISA Affiliate to make a required
installment or payment under Section 302 of ERISA or Section 412 of the Code
by the applicable due date thereof, together with a written notice of such
failure;
(e) any Loan Party or ERISA Affiliate knowing or having reason to know
that a prohibited transaction (as defined in Section 406 of ERISA or Section
4975 of the Code) has occurred with respect to any Employee Benefit Plan, and
a written statement by the appropriate chief financial officer setting forth
the details of such transaction and the action taken with respect thereto;
(f) any increase in the benefits of any existing Employee Benefit Plan
or the establishment of any new Employee Benefit Plan or the commencement of
contributions to any Employee Benefit Plan to which any Loan Party or ERISA
Affiliate had not theretofore been contributing, together with a written
notice of such occurrence;
(g) receipt by any Loan Party or ERISA Affiliate of any favorable or
unfavorable determination letter from the IRS regarding the qualification of
a Pension Plan under Section 401(a) of the Code, together with a copy of such
letter;
(h) the filing of an annual report (Form 5500 series), including
Schedule B thereto, filed by any Loan Party or ERISA Affiliate with respect
to an Employee Benefit Plan, together with a copy of such report;
(i) receipt by any Loan Party or ERISA Affiliate of an actuarial report
for any Pension Plan, together with a copy of such report;
(j) receipt by any Loan Party or ERISA Affiliate of all correspondence
with the PBGC, the Secretary of Labor of the United States of America or any
representative of the IRS with respect to any Employee Benefit Plans,
relating to an actual or threatened change or development which would be
materially adverse to the Borrower or any ERISA Affiliate; and
(k) receipt by any Loan Party or ERISA Affiliate of any correspondence
from a Multiemployer Plan with respect to withdrawal liability.
Section 5.10 ADDITIONAL INFORMATION; GUEST-PAY ROOMS. Such other
information regarding the business, affairs and condition of the Borrower and
its Subsidiaries as the Administrative Agent or the Required Lenders may from
time to time reasonably request, including, without limitation, as soon as
available, but in any event not later than forty-five (45)
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days after the end of the first three fiscal quarters of the Borrower and not
later than ninety (90) days after the end of the last fiscal quarter of the
Borrower, a report, certified by the president, chief financial officer or
chief operating officer of the Borrower as having been prepared personally by
him or under his personal supervision and to be substantially true and
complete, of the number of Guest-Pay Rooms served by the Borrower and its
Subsidiaries (on a state-by-state basis) as of the last day of such fiscal
quarter, together with such other information with respect to ▇▇▇▇▇▇▇▇,
operating costs, Operating Cash Flow or other matters as the Administrative
Agent or the Required Lenders may reasonably request from time to time.
ARTICLE 6. AFFIRMATIVE COVENANTS.
While any Commitments are outstanding, and, in the event any Loan or
any L/C Obligation remains outstanding, so long as the Borrower is indebted
to the Lenders or the Administrative Agent, and until payment in full of the
Notes and full and complete performance of all of its other obligations
arising hereunder, the Borrower shall and shall cause each Subsidiary to:
Section 6.1 BOOKS AND RECORDS. Keep proper books of record and
account in a manner reasonably satisfactory to the Administrative Agent in
which full, true and correct entries shall be made of all dealings or
transactions in relation to its business and activities.
Section 6.2 INSPECTIONS AND AUDITS. Permit the Lenders to make or
cause to be made (and, after the occurrence of and during the continuance of
an Event of Default, at the Borrower's expense), inspections and audits of
any books, records and papers of the Borrower and each of its Subsidiaries
and to make extracts therefrom and copies thereof, or to make inspections and
examinations of any properties and facilities of the Borrower and its
Subsidiaries (including the Collateral), on reasonable notice, at all such
reasonable times and as often as any Lender may reasonably require, in order
to assure that the Borrower is and will be in compliance with its obligations
under the Loan Documents (including the Collateral Documents) or to evaluate
the Lenders' investment in the then outstanding Notes. The Administrative
Agent and each Lender agrees to hold in confidence all information, whether
furnished to it pursuant to any such inspection or audit or otherwise under
the Loan Documents, that is indicated as confidential by the Borrower in
writing at the time furnished and not otherwise generally available to the
public; PROVIDED, THAT, the Administrative Agent and the Lenders shall be
permitted to disclose such confidential information (a) among each other and
their respective directors, officers, employees, agents and Affiliates, (b)
to their attorneys and accountants, (c) in connection with the enforcement of
the rights of the Administrative Agent or the Lenders under the Loan
Documents, (d) in connection with assignments or participations and the
solicitation thereof pursuant to Section 10.12 hereof, provided that each
such actual or prospective assignee or purchaser agrees to be bound by the
provisions of this sentence, and (e) as may otherwise be requested by any
regulatory authority having jurisdiction over the Administrative Agent, the
Lenders or such participant or assignee, or by any applicable law, rule,
regulation or judicial process.
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Section 6.3 MAINTENANCE AND REPAIRS. Maintain in good repair,
working order and condition, subject to normal wear and tear, all properties
and assets from time to time owned by it and used in or necessary for the
operation of its business (including the Collateral), and make all reasonable
repairs, replacements, additions and improvements thereto, unless any failure
to accomplish any of the foregoing would not and could not be reasonably
expected to, either singly or in the aggregate, have a material adverse
effect on the Collateral or the business, operations or financial condition
of the Borrower or any Subsidiary.
Section 6.4 CONTINUANCE OF BUSINESS. Do, or cause to be done, all
things reasonably necessary to preserve and keep in full force and effect its
corporate existence and all permits, rights and privileges necessary for the
proper conduct of its business, comply in all material respects with all
applicable laws, regulations and orders and, except as otherwise permitted
pursuant to and in accordance with Sections 7.4 and 7.7, continue to engage
in the same line of business.
Section 6.5 COPIES OF CORPORATE DOCUMENTS. Subject to the
prohibitions set forth in Section 7.12 hereof, promptly deliver to the
Administrative Agent copies of any amendments or modifications to its and any
Subsidiary's certificate of incorporation and by-laws, certified with respect
to the certificate of incorporation by the Secretary of State of its state of
incorporation and, with respect to the by-laws, by the secretary or assistant
secretary of such corporation.
Section 6.6 PERFORM OBLIGATIONS. Pay and discharge all of its
obligations and liabilities, including, without limitation, all taxes,
assessments and governmental charges upon its income and properties when due,
unless and to the extent only that such obligations, liabilities, taxes,
assessments and governmental charges shall be contested in good faith and by
appropriate proceedings and that, to the extent required by generally
accepted accounting principles then in effect, proper and adequate book
reserves relating thereto are established by the Borrower, or, as the case
may be, by the appropriate Subsidiary, and then only to the extent that a
bond is filed in cases where the filing of a bond is necessary to avoid the
creation of a Lien against any of its properties.
Section 6.7 NOTICE OF LITIGATION. Promptly notify the Administrative
Agent in writing of any litigation, legal proceeding or dispute, other than
disputes in the ordinary course of business or, whether or not in the
ordinary course of business, involving amounts in excess of $2,500,000,
affecting the Borrower or any Subsidiary whether or not fully covered by
insurance, and regardless of the subject matter thereof (excluding, however,
any actions relating to workers' compensation claims or negligence claims
relating to use of motor vehicles, if fully covered by insurance, subject to
deductibles).
Section 6.8 INSURANCE. (a) (i) In addition to insurance requirements
set forth in the Collateral Documents, maintain with responsible insurance
companies acceptable to the Administrative Agent such insurance on such of
its properties, in such amounts and against such risks as is customarily
maintained by similar businesses (provided, that the Borrower and each
Subsidiary may in lieu of maintaining such insurance maintain a system or
systems of self-
60
insurance in accordance with good business practice and as customary for
corporations of established reputation engaged in the same or similar
business and owning and operating similar properties as the Borrower or such
Subsidiary), including workers' compensation insurance, general liability and
property and casualty insurance. All such insurance (except for workers'
compensation insurance) shall name the Administrative Agent as loss payee and
as additional insured (in the case of general liability), for the benefit of
itself, the Lenders and the Issuing Banks, as their interests may appear.
Upon request of the Administrative Agent or any Lender, the Borrower shall
furnish the Administrative Agent, with sufficient copies for each Lender, at
reasonable intervals (but not more than once per policy year), a certificate
of an officer of the Borrower (and, if requested by the Administrative Agent,
any insurance broker of the Borrower) setting forth the nature and extent of
all insurance maintained by the Borrower and its Subsidiaries in accordance
with this Section 6.8 or any Collateral Document (and which, in the case of a
certificate of a broker, was placed through such broker).
(b) Carry all insurance available through the PBGC or any private
insurance companies covering its obligations, if any, to the PBGC.
Section 6.9 FINANCIAL COVENANTS. Have or maintain, on a consolidated
basis, at all times:
(a) Total Leverage during any fiscal quarter ending in any period
set forth below at not more than the applicable ratio set forth opposite such
period:
During each Fiscal Quarter
Ending in Each of the
Following Periods Maximum Total Leverage
-------------------------- ----------------------
from the Closing Date through
March 31, 1999 5.85 to 1
from April 1, 1999 through
June 30, 1999 5.75 to 1
from July 1, 1999 through
December 31, 1999 5.25 to 1
from January 1, 2000 through
March 31, 2000 5.85 to 1
from April 1, 2000 through
June 30, 2000 5.25 to 1
from July 1, 2000 through
December 31, 2000 4.75 to 1
from January 1, 2001
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through March 31, 2001 5.25 to 1
from April 1, 2001 through
June 30, 2001 4.75 to 1
from July 1, 2001 through
December 31, 2001 4.25 to 1
from January 1, 2002 through
March 31, 2002 4.75 to 1
from April 1, 2002 through
Facility Termination Date 4.25 to 1
(b) Interest Coverage for each fiscal period set forth below
(determined as of the last day of such fiscal period) at not less than the
applicable ratio set forth opposite such fiscal period:
FISCAL PERIOD MINIMUM INTEREST COVERAGE
------------- -------------------------
from the Closing Date through
December 31, 1999 1.75 to 1
from January 1, 2000 through
June 30, 2000 1.88 to 1
from July 1, 2000 through
June 30, 2001 2.00 to 1
from July 1, 2001 through
June 30, 2002 2.25 to 1
from July 1, 2002 through
June 30, 2003 2.50 to 1
from July 1, 2003 through
December 31, 2003 2.75 to 1
from January 1, 2004 through
Facility Termination Date 3.00 to 1
(c) That number of Guest-Pay Rooms as of the end of each fiscal
quarter of the Borrower (i) which is not less than ninety percent (90%) of
the number of Guest Pay Rooms as of the end of the immediately preceding
fiscal quarter of the Borrower and (ii)
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which is not less than ninety percent (90%) of the number of Guest Pay Rooms
as of the end of the corresponding fiscal quarter of the Borrower ending in
the immediately preceding fiscal year.
Section 6.10 NOTICE OF CERTAIN EVENTS. (a) Promptly notify the
Administrative Agent in writing of the occurrence of any Reportable Event, as
defined in Section 4043 of ERISA, if a notice of such Reportable Event is
required under ERISA to be delivered to the PBGC within 30 days after the
occurrence thereof, together with a description of such Reportable Event and
a statement of the action the Loan Party or the ERISA Affiliate intends to
take with respect thereto, together with a copy of the notice thereof given
to the PBGC.
(b) Promptly notify the Administrative Agent in writing if any
Loan Party or ERISA Affiliate receives an assessment of withdrawal liability
in connection with a complete or partial withdrawal with respect to any
Multiemployer Plan, together with a statement of the action that such Loan
Party or ERISA Affiliate intends to take with respect thereto.
(c) Promptly notify the Administrative Agent in writing if the
Borrower or any other Loan Party receives: (i) any notice of any violation
or administrative or judicial complaint or order having been filed or about
to be filed against the Borrower or such other Loan Party alleging violations
of any Environmental Law and Regulation, or (ii) any notice from any
governmental body or any other Person alleging that the Borrower or such
other Loan Party is or may be subject to any Environmental Liability; and
promptly upon receipt thereof, provide the Administrative Agent with a copy
of such notice together with a statement of the action the Borrower or such
other Loan Party intends to take with respect thereto.
Section 6.11 COMPLY WITH ERISA. Materially comply with all
applicable provisions of ERISA and the Code now or hereafter in effect.
Section 6.12 ENVIRONMENTAL COMPLIANCE. Operate all property owned,
operated or leased by it in material compliance with all Environmental Laws
and Regulations, such that no Environmental Liability arises under any
Environmental Laws and Regulations, which would result in a Lien on any
property of the Borrower or any other Loan Party; PROVIDED, HOWEVER, that in
the event that any such claim is made or any such Environmental Liability
arises, the Borrower or such other Loan Party shall (subject to the
Borrower's or such Loan Party's right to contest such claim in good faith and
at its own expense by appropriate legal proceedings, PROVIDED, HOWEVER, that
during such contest, the Borrower or such other Loan Party shall, at the
option of the Administrative Agent, set aside reserves in an amount
satisfactory to the Administrative Agent, assuring the discharge of the
Borrower's or such Loan Party's obligations thereunder and of any additional
interest charge, penalty or expense arising from or incurred as a result of
such contest), at its own cost and expense, in a timely manner, immediately
satisfy such claim or Environmental Liability.
Section 6.13 FURTHER ASSURANCES.
(a) DISCLOSURE. The Borrower shall ensure that all written
information, exhibits and reports furnished to the Administrative Agent or
the Lenders do not and will not
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contain any untrue statement of a material fact and do not and will not omit
to state any material fact or any fact necessary to make the statements
contained therein not misleading, in light of the circumstances in which
made, and will promptly disclose to the Administrative Agent and the Lenders
and correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.
(b) PROTECTION OF EXISTING INTERESTS. Promptly upon request by the
Administrative Agent or the Required Lenders, the Borrower shall (and shall
cause any of its Subsidiaries to) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments which the Administrative Agent or such
Lenders, as the case may be, may reasonably require from time to time in
order (i) to carry out more effectively the purposes of this Agreement or any
other Loan Document, (ii) to subject to the Liens created by any of the
Collateral Documents any of the properties, rights or interests covered by
any of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Administrative Agent
and the Lenders the rights granted or now or hereafter intended to be granted
to the Lenders under any Loan Document or under any other document executed
in connection therewith.
(c) SECURITY INTEREST IN ADDITIONAL COLLATERAL. Promptly, and in any
event within 30 days after the acquisition or construction by the Borrower or
any other Guarantor of property of the type that would have constituted
Collateral on the date hereof (and also including real property that is not
being held for sale by the Borrower or its Subsidiaries), in each case in
which the Administrative Agent does not have a perfected security interest
under the Collateral Documents (other than (x) property of the type covered
by a Pledge Agreement which is provided for in subsection 6.13(d) hereof, (y)
property subject to Liens permitted under subsection 7.2(b) hereof under
agreements which prohibit the creation of additional Liens on such property,
or (z) any other property with a fair market value of less than $500,000
individually; PROVIDED that all such other property collectively shall have a
fair market value of less than $2,500,000), or within 30 days after request
by the Administrative Agent with respect to any other property of the
Borrower or its Restricted Subsidiaries deemed material by the Administrative
Agent or the Required Lenders (the "ADDITIONAL COLLATERAL"), the Borrower
will, and will cause each of the Guarantors to, take all necessary action,
including (i) the amendment or supplementing of the Security Agreement to
subject such Additional Collateral to the terms thereof, (ii) the filing of
appropriate financing statements under the provisions of the UCC, applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate, and (iii) with respect to real
property, the execution of a mortgage and the providing of environmental
reports, title insurance policies, surveys and appraisals, in order to grant
to the Administrative Agent a perfected Lien (subject only to Permitted Liens
and other security interests permitted under the Loan Documents) in such
Collateral pursuant to, and to the full extent required by, the Collateral
Documents and this Agreement.
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(d) ADDITIONAL PLEDGE. The Borrower shall, and shall cause each
Guarantor to, pursuant to and in accordance with the appropriate Pledge
Agreement, pledge and deliver to the Administrative Agent for the benefit of
itself, the Lenders and the Issuing Banks, all shares of stock, intercompany
promissory notes and other property that would have constituted Collateral
under such Pledge Agreement on the date hereof that are acquired by the
Borrower or any Guarantor after the date hereof.
(e) ADDITIONAL GUARANTORS. The Borrower will cause each Subsidiary of
the Borrower established or created after the Closing Date which the Borrower
determines in its sole discretion to designate as a Guarantor and Restricted
Subsidiary hereunder to execute a Subsidiary Guaranty and thereby become a
Guarantor and Restricted Subsidiary for all purposes hereunder.
(f) GRANT OF SECURITY BY NEW GUARANTORS. The Borrower will cause each
Guarantor established or created after the Closing Date to grant to the
Administrative Agent a first priority Lien (subject to Permitted Liens and
other security interests permitted under the Loan Documents) on all property
(tangible and intangible) of such Guarantor by executing and delivering an
appropriate Security Agreement and Pledge Agreement, or on other terms
satisfactory in form and substance to the Administrative Agent. The Borrower
shall cause each such Guarantor, at its own expense, to execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in any appropriate governmental office,
any documents or instruments reasonably deemed by the Administrative Agent to
be necessary or desirable for the creation and perfection of the foregoing
Liens. The Borrower will cause each of the Guarantors to take all actions
requested by the Administrative Agent (including, without limitation, the
filing of UCC-1s) in connection with the granting of such security interests.
ARTICLE 7. NEGATIVE COVENANTS.
So long as any Lender shall have any Commitment hereunder, or any
Loan or any other Obligation shall remain outstanding, unpaid or unsatisfied
to the Lenders, the Issuing Banks or the Administrative Agent, the Borrower
shall not, and shall not permit any Restricted Subsidiary or any of its other
Subsidiaries, to do, agree to do, or permit to be done, any of the following:
Section 7.1 INDEBTEDNESS. As to the Borrower or any Restricted
Subsidiary, create, incur, permit to exist or have outstanding any
Indebtedness, except:
(a) Indebtedness of the Borrower and the Guarantors to the Lenders, the
Issuing Banks and the Administrative Agent under this Agreement and the Notes;
(b) Indebtedness of the Borrower outstanding under the Senior 1995 Notes
and the Senior 1996 Notes;
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(c) Permitted Debt and the TCI Convertible Debt;
(d) Taxes, assessments and governmental charges, non-interest bearing
accounts payable and accrued liabilities, in any case not more than 120 days
past due from the original due date thereof, and non-interest bearing
deferred liabilities other than for borrowed money (e.g., deferred
compensation and deferred taxes), in each case incurred and continuing in the
ordinary course of business;
(e) Indebtedness secured by the security interests referred to in
subsection 7.2(b) hereof and Capitalized Lease Obligations, in an aggregate
amount for such Indebtedness and Capitalized Lease Obligations not exceeding
$15,000,000, and in each case incurred only if, after giving effect thereto,
the limitation on Capital Expenditures set forth in Section 7.13 hereof would
not be breached;
(f) Permitted Intercompany Debt outstanding on the date of this
Agreement, so long as (i) no Default or Event of Default has occurred and is
continuing either before or after giving effect thereto, (ii) no Material
Adverse Effect would result therefrom, and (iii) during the time such Debt is
outstanding, neither ResNet Inc. nor ResNet LLC shall make any distributions
on or in respect of its capital stock or membership interests to any Person
other than the Borrower or ResNet Inc.; PROVIDED, HOWEVER, that ResNet LLC
may make such distributions as are permitted by subsection 7.5(c) hereof;
(g) Indebtedness, not exceeding an amount equal to 5% of the
consolidated assets of the Borrower and its Restricted Subsidiaries taken as
a whole, of Restricted Subsidiaries which are acquired by the Borrower after
the date hereof; PROVIDED, HOWEVER, that such Indebtedness was not created in
anticipation of or in connection with such acquisition;
(h) Indebtedness not to exceed $1,000,000 in the aggregate incurred by
the Borrower in connection with its purchase and construction of improvements
on real property constituting the Borrower's headquarters offices; PROVIDED,
that such Indebtedness shall not exceed the lesser of the cost or fair market
value of such real property and shall not be renewed, extended or, except in
accordance with Section 7.8 hereof, prepaid from the proceeds of any
borrowing by the Borrower or any Subsidiary; and
(i) Refinancings of Indebtedness permitted pursuant hereto in
accordance with Section 7.8 hereof.
Section 7.2 LIENS. Create, or assume or permit to exist, any Lien on
any of the properties or assets of the Borrower or any Restricted Subsidiary,
whether now owned or hereafter acquired, except:
(a) Permitted Liens;
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(b) Purchase money mortgages or security interests, conditional sale
arrangements and other similar security interests, on motor vehicles and
equipment acquired by the Borrower or any Subsidiary (hereinafter referred to
individually as a "PURCHASE MONEY SECURITY INTEREST") with the proceeds of
the Indebtedness referred to in subsection 7.1(e) hereof; PROVIDED, HOWEVER,
that:
(i) The transaction in which any Purchase Money Security Interest is
proposed to be created is not then prohibited by this Agreement;
(ii) Any Purchase Money Security Interest shall attach only to the
property or asset acquired in such transaction and shall not extend to or
cover any other assets or properties of the Borrower or a Subsidiary;
(iii) The Indebtedness secured or covered by any Purchase Money
Security Interest shall not exceed the lesser of the cost or fair market
value of the property or asset acquired and shall not be renewed, extended
or, except in accordance with Section 7.8 hereof, prepaid from the proceeds
of any borrowing by the Borrower or any Subsidiary; and
(iv) Any such Lien shall be created within one hundred twenty (120)
days after the date on which the property or asset to which such Lien relates
is acquired;
(c) The interests of the lessor under any Capitalized Lease permitted
hereunder;
(d) Liens securing Indebtedness of newly-acquired Restricted
Subsidiaries; PROVIDED, THAT such Liens (i) existed at the time such
Restricted Subsidiary was acquired, extend only to the property and assets of
such Restricted Subsidiary and were not created in anticipation of or in
connection with such acquisition, (ii) do not exceed 5% of the consolidated
assets of the Borrower and its Restricted Subsidiaries taken as a whole, and
(iii) secure Indebtedness which does not exceed the limitation set forth in
subsection 7.1(g) hereof; and
(e) A mortgage securing the Indebtedness referred to in subsection
7.1(h) hereof; PROVIDED that such mortgage shall attach only to the real
property to which such Indebtedness relates and shall not extend to or cover
any other assets or properties of the Borrower or a Subsidiary.
Section 7.3 GUARANTIES. As to the Borrower or any Restricted
Subsidiary, assume, endorse, be or become liable for, or guarantee, the
obligations of any Person, except:
(a) as permitted under Sections 7.1 and 7.9 hereof; and
(b) by the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
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For the purposes hereof, the term "guarantee" or "guaranties" shall include
any agreement, whether such agreement is on a contingency or otherwise, to
purchase, repurchase or otherwise acquire Indebtedness of any other Person,
or to purchase, sell or lease, as lessee or lessor, property or services, in
any such case primarily for the purpose of enabling another person to make
payment of Indebtedness, or to make any payment (whether as an advance,
capital contribution, purchase of an equity interest or otherwise) to assure
a minimum equity, asset base, working capital or other balance sheet or
financial condition, in connection with the Indebtedness of another Person,
or to supply funds to or in any manner invest in another Person in connection
with such Person's Indebtedness.
Section 7.4 MERGERS, ACQUISITIONS. As to the Borrower or any
Restricted Subsidiary, merge or consolidate with any Person (whether or not
the Borrower or any Subsidiary is the surviving entity), or acquire all or
substantially all of the assets or any of the capital stock of any Person;
except, so long as no Default or Event of Default shall have occurred and be
continuing either immediately before or after giving effect thereto and no
Material Adverse Effect would result therefrom, that (a) any Wholly-Owned
Subsidiary of the Borrower may merge with and into the Borrower so long as
the Borrower is the surviving entity, (b) any Wholly-Owned Subsidiary of the
Borrower may merge with and into any other Wholly-Owned Subsidiary of the
Borrower, and (c) any acquisition constituting an Investment made in
accordance with the conditions set forth in subsection 7.9(e) hereof shall be
permitted hereunder.
Section 7.5 REDEMPTIONS; DISTRIBUTIONS.
(a) As to the Borrower or any Restricted Subsidiary, make or become
obligated to make, directly or indirectly, any purchase, redemption,
retirement, repayment, prepayment, defeasance, or acquisition, whether by way
of put, call, sinking fund or otherwise, with respect to any shares of any
class of capital stock (or warrants or options with respect thereto) of the
Borrower or, except as permitted in accordance with subsections 7.9(d) or
7.9(e) hereof, any Subsidiary, now or hereafter outstanding or set apart any
sum for any such purpose; PROVIDED, HOWEVER, that the Borrower may purchase
or acquire shares of capital stock of the Borrower or a Restricted Subsidiary
(or options, warrants or other rights to acquire such capital stock) (i) in
exchange for, or out of the proceeds of a substantially concurrent offering
of, shares of capital stock of the Borrower or such Restricted Subsidiary or
(ii) at any time when Total Leverage (as shown in the most recent certificate
delivered pursuant to Section 5.5) is 4.50 to 1.0 or less (before and after
giving effect thereto) and no Default or Event of Default has occurred and
continuing (before and after giving effect thereto), in an aggregate
cumulative amount of $5,000,000 during the term of this Agreement (cumulated
with any dividends or distributions made pursuant to subsection 7.5(b)); or
(b) As to the Borrower, declare or pay any dividends or make any
distribution of any kind on the Borrower's outstanding stock, or set aside
any sum for any such purpose, PROVIDED, HOWEVER, that the Borrower may (i)
declare or pay any dividend payable solely in shares of its capital stock,
(ii) so long as no Default or Event of Default has occurred and is
continuing, pay dividends on shares of preferred stock issued after the date
of this Agreement (on terms, convenants and conditions satisfactory to the
Administrative Agent and the Required
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Lenders) and solely for cash proceeds if such dividends do not exceed an
annual amount equal to ten percent (10%) of such cash proceeds (the
"PREFERRED STOCK DIVIDENDS") and (iii) at any time when Total Leverage (as
shown in the most recent certificate delivered pursuant to Section 5.5) is
4.50 to 1.0 or less (before and after giving effect thereto) and no Default
or Event of Default has occurred and continuing (before and after giving
effect thereto), pay such dividends or make such distributions in an
aggregate cumulative amount of $5,000,000 during the term of this Agreement
(cumulated with any purchases, redemptions or acquisitions made pursuant to
subsection 7.5(a)); or
(c) As to any Restricted Subsidiary, declare or pay any dividends or
make any distribution of any kind on the outstanding capital stock (or
membership interests, in the case of a limited liability company) of any
Restricted Subsidiary, or set aside any sum for any such purpose, except for
payments or distributions made to the Borrower; PROVIDED, HOWEVER, that
ResNet LLC shall be permitted to (i) pay PRO RATA dividends or distributions
on its outstanding membership interests, including the interests of its
minority member, for the purpose of enabling its members to meet their
federal, state and local estimated tax obligations or (ii) make a PRO RATA
distribution of the Newco Common Stock to its minority member.
Section 7.6 STOCK ISSUANCES. As to any Restricted Subsidiary of the
Borrower, not issue any additional shares or any right or option to acquire
any shares, or any security convertible into any shares, of such Restricted
Subsidiary's capital stock, except (a) as permitted under Section 7.5 hereof,
(b) for the purpose of qualifying directors of such Restricted Subsidiary,
and (c) for issuances, at the greater of cost or fair value (as determined in
good faith by the Borrower's board of directors), of securities or other
ownership interests in any Restricted Subsidiary of the Borrower constituting
an Investment made after the date of this Agreement in accordance with
subsection 7.9(e) hereof; PROVIDED, HOWEVER, that all issuances of securities
or other ownership interests permitted under clause (c) above shall not
exceed a Substantial Portion in regard to Restricted Subsidiaries other than
ResNet Inc.
Section 7.7 CHANGES IN BUSINESS; ASSET DISPOSITIONS. Make any
material change in its business, or in the nature of its operation, or
liquidate or dissolve itself (or suffer any liquidation or dissolution), or
make any Asset Disposition or sell or transfer (other than in an original
issuance) any shares of stock or any Indebtedness, whether now owned or
hereafter acquired, or discount, sell, pledge, hypothecate or otherwise
dispose of accounts receivable; except (a) (i) the Borrower may dissolve any
Subsidiary which is not a Restricted Subsidiary, provided, that, immediately
thereafter, all of the proceeds thereof are received by the Borrower in
proportion to its ownership of such Subsidiary and (ii) the Borrower and its
Subsidiaries may make Asset Dispositions which, in the aggregate in any
fiscal year, do not constitute a Substantial Portion, PROVIDED, THAT (1) the
asset which is the subject of such Asset Disposition shall not consist of any
security or other ownership interest in a Restricted Subsidiary, (2) no
Default or Event of Default shall have occurred and be continuing either
immediately before or after giving effect thereto, (3) no Material Adverse
Effect would result therefrom, (4) the consideration received therefor is at
least equal to the fair market value of such Assets, (5) the consideration
received therefor is at least 75% in cash and the balance in a promissory
note on commercially reasonable terms and not subordinate to any other
Indebtedness of the purchaser
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thereof and (6) the aggregate net proceeds thereof are applied as required by
subsection 2.7(a) hereof; and (b) as permitted pursuant to and in accordance
with subsection 7.9(e) hereof.
Section 7.8 PREPAYMENTS AND REPAYMENTS OF INDEBTEDNESS. As to the
Borrower or any Restricted Subsidiary, make any voluntary or optional
prepayment, repurchase, redemption or defeasance of any Indebtedness for
borrowed money incurred or permitted to exist under the terms of this
Agreement, other than Indebtedness evidenced by the Notes; PROVIDED, HOWEVER,
that the Borrower or any Restricted Subsidiary may refinance Indebtedness for
money borrowed incurred pursuant to and in accordance with Section 7.1
hereof, so long as: (1) except to the extent otherwise permitted pursuant to
subsection 7.1(g) hereof, the principal amount of the proposed Indebtedness
shall not exceed the principal amount of the Indebtedness being refinanced,
(2) such refinancing would not result in the payment of a prepayment penalty
or other similar fees in respect thereof which in the aggregate would exceed
$10,000,000, but in any case payment of such penalty or fees shall be
permitted only to the extent such penalty or fees are payable out of the
proceeds of the proposed Indebtedness, (3) the terms and conditions of the
proposed Indebtedness are no less favorable to the Borrower, its Restricted
Subsidiaries or, in the Administrative Agent's determination, the Lenders,
than the Indebtedness being refinanced, and (4) no Default or Event of
Default shall have occurred and be continuing either immediately before or
after giving effect to such refinancing and no Material Adverse Effect would
result from such refinancing.
Section 7.9 INVESTMENTS. Make, or suffer to exist, any Investment in
any Person, including, without limitation, any shareholder, director, officer
or employee of the Borrower or any of its Subsidiaries, except:
(a) Investments in:
(i) obligations issued or guaranteed by the United States of
America;
(ii) certificates of deposit, bankers acceptances and other
"money market instruments" issued by any commercial bank organized under the
laws of the United States or any State thereof or any other country which is
a member of the Organization for Economic Cooperation and Development
(provided that such bank is acting through a branch or agency located in the
United States) and having capital and surplus in an aggregate amount of not
less than $100,000,000 (an "ELIGIBLE BANK");
(iii) open market commercial paper bearing the highest credit
rating issued by Standard & Poor's Corporation or by another nationally
recognized credit rating agency;
(iv) repurchase agreements entered into with any Eligible Bank
relating to United States of America government obligations; and
(v) shares of "money market funds", each having net assets of
not less than $100,000,000;
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in each case maturing or being due or payable in full not more than 180 days
after the Borrower's acquisition thereof;
(b) Investments in the form of (i) loans or advances to directors,
officers or employees of the Borrower or any Subsidiary, or guarantees or
assumptions of the payment obligations of such Persons with respect to such
loans or advances, made for the purpose of financing the exercise of stock
options or similar instruments issued by the Borrower to such Persons (and
the payment of taxes related thereto in an aggregate amount not exceeding
$3,000,000), which loans or advances are secured by, and repayable out of the
proceeds of any sale of, the stock issued upon exercise of such options;
PROVIDED that the terms of any such loan, advance, guarantee or assumption
have been approved by the Compensation Committee of the Borrower, and (ii)
other loans to employees of the Borrower or any Subsidiary not exceeding
$60,000 to any one employee, or $250,000 in the aggregate to all employees,
in principal amount at any time outstanding.
(c) Investments by the Borrower in any Restricted Subsidiary and
by any Restricted Subsidiary in the Borrower or another Restricted Subsidiary
as in effect on the date hereof;
(d) So long as no Default or Event of Default shall have occurred
and be continuing either immediately before or after giving effect to any
such Investment, Investments by the Borrower or any Restricted Subsidiary
consisting of Permitted Intercompany Debt; and
(e) (A) Investments in ResNet Inc. consisting of the Newco
Investments; PROVIDED, HOWEVER, that up to an additional $5,000,000 of
Investments (which shall include the cash portion of any buy-out of PrimeStar
Inc.'s interest in ResNet LLC or the Newco Common Stock) may be made in Newco
to the extent that any such amount is included within, and subject to the
overall limitation, on aggregate Investments permitted under Section
7.9(e)(C); (B) Investments in Restricted Subsidiaries other than ResNet
Inc.; (C) Investments, other than those set forth above, by the Borrower or
its Subsidiaries in other Persons which do not exceed in the aggregate at any
time outstanding an amount equal to 10% of the consolidated assets of the
Borrower and its Restricted Subsidiaries taken as a whole; and (D) non-cash,
acquisition Investments by the Borrower (x) of any entity which has had
positive Operating Cash Flow during the immediately preceding twelve-month
period, (y) in which shares of the Borrower's common stock constitute the
sole consideration used in the acquisition transaction, and (z) the
cumulative aggregate amount of shares of the Borrower's common stock used for
such Investments during the term of this Agreement does not exceed 20% of the
number of Borrower's shares of common stock outstanding on the date hereof;
PROVIDED, THAT in the case of (B), (C) and (D) above:
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(i) the entire amount of all Indebtedness assumed, directly or
indirectly, by the Borrower or any Subsidiary in connection with each such
Investment shall be permitted under Section 7.1 hereof;
(ii) except to the extent permitted under Section 7.1 hereof, all
liabilities associated with any such Investment shall be non-recourse to the
Borrower and its Subsidiaries (other than the Subsidiary in which any such
Investment is being made), and the Borrower and its Subsidiaries shall have
no further obligation to provide funds or otherwise finance such Investment;
(iii) each such Investment shall be in Persons incorporated, organized
or otherwise formed under the laws of any state of the United States of
America or any province of Canada;
(iv) no such Investment shall be of a nature which would subject the
Administrative Agent or any Lender to regulatory or third party approval in
connection with the exercise of their rights and remedies under this
Agreement, the Subsidiaries Guaranty, the Collateral Documents or any other
Loan Document; and
(v) no Default or Event of Default shall have occurred and be
continuing either immediately before or after giving effect to such
Investment and no Material Adverse Effect would result therefrom.
Section 7.10 FISCAL YEAR. Change its fiscal year.
Section 7.11 ERISA OBLIGATIONS. (a) Permit the occurrence of any
Termination Event, or the occurrence of a termination or partial termination
of a Defined Contribution Plan which would result in a liability to any Loan
Party or ERISA Affiliate in excess of $100,000; or
(b) Permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension Plans
allocable to such benefit liabilities by more than $100,000; or
(c) Permit any accumulated deficiency (as defined in Section 302
of ERISA and Section 412 of the Code) with respect to any Pension Plan,
whether or not waived; or
(d) Fail to make any contribution or payment to any Multiemployer
Plan which any Loan Party or ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto which results in or is likely to result in a liability in excess of
$100,000; or
(e) Engage, or permit any Loan Party or ERISA Affiliate to engage,
in any prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code, for which a civil penalty pursuant to Section 502(i) of ERISA or a
tax pursuant to Section 4975 of the Code in excess of $100,000 is imposed; or
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(f) Engage or permit any Loan Party or ERISA Affiliate to engage,
in any breach of fiduciary duty under Part 4 of Title I of ERISA for which
twenty percent (20%) of the applicable recovery amount imposed under Section
502(l) of ERISA could exceed $100,000; or
(g) Permit the establishment of any Employee Benefit Plan
providing post-retirement welfare benefits or establish or amend any Employee
Benefit Plan which establishment or amendment could result in liability to
any Loan Party or ERISA Affiliate or increase the obligation of any Loan
Party or ERISA Affiliate to a Multiemployer Plan which liability or increase,
individually or together with all similar liabilities and increases, is
material to any Loan Party or ERISA Affiliate; or
(h) Permit any Loan Party or ERISA Affiliate to be or become
obligated to the PBGC in excess of $100,000 other than in respect of annual
premium payments; or
(i) Fail, or permit any Loan Party or ERISA Affiliate to fail, to
establish, maintain and operate each Employee Benefit Plan in compliance in
all material respects with the provisions of ERISA, the Code and all other
applicable laws and the regulations and interpretations thereof, which action
or omission by such Loan Party or ERISA Affiliate is not curable or
resolvable under the Voluntary Compliance Resolutions Program or the Closing
Agreement Program with the IRS (which action is at all times being diligently
pursued by such Loan Party or ERISA Affiliate in good faith by appropriate
proceedings) and would result in a liability to any Loan Party or ERISA
Affiliate in excess of $100,000.
Section 7.12 AMENDMENTS OF DOCUMENTS. As to the Borrower or any
Restricted Subsidiary, modify, amend, supplement or terminate, or agree to
modify, amend, supplement or terminate, its certificate of incorporation
(except, with respect to the Borrower or a Restricted Subsidiary and to the
extent permitted hereunder, in connection with the issuance of capital stock
of the Borrower or a Restricted Subsidiary pursuant to a public offering or
private placement of such securities; PROVIDED, THAT reasonably prior to the
effectiveness of any such amendment, the Borrower shall deliver a copy of
such amendment to the Administrative Agent) or by-laws; or modify, amend or
supplement, or agree to modify, amend or supplement, any Senior Note Document
if the effect of such amendment, modification or supplement is to increase
the principal amount of the Senior 1995 Notes or the Senior 1996 Notes,
increase the interest rate on the Senior 1995 Notes or the Senior 1996 Notes,
change (to earlier dates) the dates upon which payments of principal or
interest are due on the Senior 1995 Notes or the Senior 1996 Notes, shorten
the amortization schedule on the Senior 1995 Notes or the Senior 1996 Notes,
alter any default, event of default or condition thereto with respect to the
Senior Note Documents or the remedies applicable thereto in a manner which
would be adverse to the Borrower, its Subsidiaries or, in the Administrative
Agent's determination, to the Lenders, grant any security interest in favor
of the holders of the Senior 1995 Notes or the Senior 1996 Notes, change the
redemption provisions of the Senior Note Documents in a manner which, in the
Administrative Agent's determination, would be adverse to the Lenders, or,
together with all other amendments,
73
modifications or supplements made to the Senior Note Documents, would
increase materially the obligations of the Borrower under the Senior Note
Documents or confer additional rights on the holders of the Senior 1995 Notes
or the Senior 1996 Notes which would be adverse to the Borrower, its
Subsidiaries or, in the Administrative Agent's determination, the Lenders.
Section 7.13 CAPITAL EXPENDITURES. Make or be or become obligated to
make Capital Expenditures in the aggregate for the Borrower and its
Restricted Subsidiaries during each fiscal year of the Borrower in excess of
the sum of (i) the respective base amounts set forth below opposite each
fiscal year (each, a "BASE MAXIMUM CAPITAL EXPENDITURES AMOUNT"), PLUS (ii)
the amount of net cash proceeds received by the Borrower during such fiscal
year from the issuance by the Borrower after January 1, 1999 of capital stock
and/or Permitted Debt:
Fiscal Year
Ending Base Maximum Capital
December 31, Expenditures Amount
------------ -------------------
1999 $57,500,000
2000 $55,500,000
2001 $54,000,000
2002 $50,000,000
2003 $45,000,000
2004 $40,000,000
2005 $40,000,000
PROVIDED, HOWEVER, that the amount permitted to be expended in a fiscal year
which is not expended in such fiscal year shall be permitted to be expended
in the immediately succeeding fiscal year only.
Section 7.14 RENTAL OBLIGATIONS. Enter into, or permit to remain in
effect, any Lease (other than Capitalized Leases that are governed by
subsection 7.1(e) hereof) if, after giving effect thereto, the aggregate
amount of all Rentals due from the Borrower and its Restricted Subsidiaries
thereunder would exceed $750,000 during any fiscal year.
Section 7.15 MANAGEMENT FEES. Pay, or be or become obligated to pay,
any Management Fees to any Person, or any interest on any deferred obligation
therefor, including, without limitation, to any shareholder, director,
officer or employee of the Borrower.
Section 7.16 TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, directly or indirectly: (a) make any Investment
in an Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of
any assets to an Affiliate; (c) merge into or consolidate with or purchase or
acquire assets from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of any Affiliate (including,
without limitation, guarantees and assumptions of obligations of an
Affiliate); PROVIDED, HOWEVER, that: (i) Investments expressly permitted by
Section 7.9 hereof may be made, (ii) any Affiliate who is a natural person
may serve as an employee or director of the Borrower or any Subsidiary and
receive reasonable
74
compensation for his services in such capacity, and (iii) the Borrower or any
Subsidiary may enter into any transaction with an Affiliate providing for the
leasing of property, the rendering or receipt of services or the purchase or
sale of product, inventory and other assets in the ordinary course of
business if the monetary or business consideration arising therefrom would be
substantially as advantageous to the Borrower or a Subsidiary as the monetary
or business consideration that would obtain in a comparable arm's length
transaction with a Person not an Affiliate (and for this purpose, the payment
of a Management Fee by ResNet Inc. to the Borrower shall be deemed to be a
permitted transaction hereunder).
Section 7.17 HAZARDOUS MATERIAL. (a) Cause or permit: (i) any
Hazardous Material to be placed, held, located or disposed of, on, under or
at any real property of Borrower or any Subsidiary or any part thereof,
except for such Hazardous Materials that are necessary for the Borrower's or
any Subsidiary's or any tenant's operation of its business thereon and which
shall be used, stored, treated and disposed of in compliance with all
applicable Environmental Laws and Regulations or (ii) such real property or
any part thereof to be used as a collection, storage, treatment or disposal
site for any Hazardous Material.
(b) The Borrower and each Subsidiary acknowledges and agrees that
the Administrative Agent and the Lenders shall have no liability or
responsibility for either:
(i) damage, loss or injury to human health, the environment or
natural resources caused by the presence, disposal, release or threatened
release of Hazardous Materials on any part of such real property; or
(ii) abatement and/or clean-up required under any applicable
Environmental Laws and Regulations for a release, threatened release or
disposal of any Hazardous Materials located at such real property or used by
or in connection with the Borrower's or any Subsidiary's or any such tenant's
business.
ARTICLE 8. EVENTS OF DEFAULT.
Section 8.1 EVENT OF DEFAULT. Any of the following shall constitute
an "EVENT OF DEFAULT":
(a) PAYMENTS. Failure to (a) make any payment or mandatory
prepayment of principal when due on any Loan or any Note or (b) make any
payment of any interest on any Loan or Note or any Fee or other amount owing
under the Loan Documents within five (5) Business Days of when due; or
(b) CERTAIN COVENANTS. Failure to perform or observe any of the
agreements of the Borrower or any Subsidiary contained in Section 6.9 or
Article 7 hereof; or
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(c) OTHER COVENANTS. (i) Failure by the Borrower to perform or
observe any other term, condition or covenant of this Agreement or of any of
the other Loan Documents to which it is a party, which shall remain
unremedied for a period of thirty (30) days after notice thereof shall have
been given to the Borrower by the Administrative Agent; or
(ii) Failure by any Loan Party other than the Borrower to
perform or observe any term, condition or covenant of any of the Loan
Documents to which it or he is a party, which shall remain unremedied for a
period of thirty (30) days after notice thereof shall have been given to the
Borrower by the Administrative Agent; or
(d) OTHER DEFAULTS. (i) Failure to perform or observe any term,
condition or covenant of any bond, note, debenture, loan agreement,
indenture, guaranty, trust agreement, mortgage or similar instrument to which
the Borrower or any Subsidiary is a party or by which it is bound, or by
which any of its properties or assets may be affected including, without
limitation, any Senior Note Document (a "DEBT INSTRUMENT"), so that, as a
result of any such failure to perform, the Indebtedness included therein or
secured or covered thereby may be declared due and payable prior to the date
on which such Indebtedness would otherwise become due and payable; or
(ii) Any event or condition referred to in any Debt Instrument
shall occur or fail to occur, so that, as a result thereof, the Indebtedness
included therein or secured or covered thereby may be declared due and
payable prior to the date on which such Indebtedness would otherwise become
due and payable; or
(iii) Failure to pay any Indebtedness for borrowed money due at
final maturity or pursuant to demand under any Debt Instrument;
PROVIDED, HOWEVER, that the provisions of this Section 8.1(d) shall not be
applicable to (y) any Debt Instrument other than a guarantee (as defined in
Section 7.3 hereof) that, on the date this Section 8.1(d) would otherwise be
applicable thereto, relates to or evidences Indebtedness in a principal
amount of less than $2,500,000 or (z) Debt Instruments which constitute
guaranties (as defined in Section 7.3 hereof) that, on the date this Section
8.1(d) would otherwise be applicable thereto, relate to or evidence, both
individually and collectively, Indebtedness in a principal amount of less
than $2,500,000; or
(e) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made in writing to the Lenders or the Administrative Agent in any of the Loan
Documents or in connection with the making of the Loans, or any certificate,
statement or report made or delivered in compliance with this Agreement,
shall have been false or misleading in any material respect when made or
delivered; or
(f) BANKRUPTCY.
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(i) The Borrower or any Subsidiary shall make an assignment for
the benefit of creditors, file a petition in bankruptcy, be adjudicated
insolvent, petition or apply to any tribunal for the appointment of a
receiver, custodian, or any trustee for it or a substantial part of its
assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect, or
the Borrower or any Subsidiary shall take any corporate action to authorize
any of the foregoing actions; or there shall have been filed any such
petition or application, or any such proceeding shall have been commenced
against it, that remains undismissed for a period of sixty (60) days or more;
or any order for relief shall be entered in any such proceeding; or the
Borrower or any Subsidiary by any act or omission shall indicate its consent
to, approval of or acquiescence in any such petition, application or
proceeding or the appointment of a custodian, receiver or any trustee for it
or any substantial part of any of its properties, or shall suffer any
custodianship, receivership or trusteeship to continue undischarged for a
period of sixty (60) days or more; or
(ii) The Borrower or any Subsidiary shall generally not pay its
debts as such debts become due; or
(iii) The Borrower or any Subsidiary shall have concealed,
removed, or permitted to be concealed or removed, any part of its property,
with intent to hinder, delay or defraud its creditors or any of them or made
or suffered a transfer of any of its property that may be fraudulent under
any bankruptcy, fraudulent conveyance or similar law; or
(g) JUDGMENTS. Any judgment against the Borrower or any Subsidiary
or any attachment, levy or execution against any of its properties for any
amount in excess of $2,500,000, individually or in the aggregate, shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for
a period of thirty (30) days or more; or
(h) ERISA.
(i) The termination of any Plan or the institution by the PBGC
of proceedings for the involuntary termination of any Plan, in either case,
by reason of, or that results or could result in, a "material accumulated
funding deficiency" under Section 412 of the Code; or
(ii) Failure by the Borrower to make required contributions, in
accordance with the applicable provisions of ERISA, to each of the Plans
hereafter established or assumed by it; or
(i) CHANGE OF CONTROL. At any time, (i) any Person or "group" has
acquired "beneficial ownership" (as such terms are defined under Section
13d-3 of and Regulation 13D under the Securities Exchange Act of 1934, as
amended) either directly or indirectly, of more than forty percent (40%) of
the outstanding shares of stock of the Borrower having the right to vote for
the election of directors of the Borrower under ordinary circumstances or
(ii) more than fifty percent (50%) of the Persons constituting the Borrower's
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board of directors at the beginning of any consecutive twenty-four (24) month
period shall have been replaced by new directors not nominated for membership
on the board of directors by two-thirds of the directors who were directors
at the beginning of such period.
(j) COLLATERAL.
(i) any Collateral Document shall for any reason cease to be
valid and binding on or enforceable in any material respect against the
Borrower or any Loan Party thereto, or the Borrower or any Loan Party shall
so state in writing or bring an action to limit its obligations or
liabilities thereunder; or
(ii) any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid security interest in
the Collateral purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first priority security
interest subject only to Permitted Liens and other security interests
permitted under the Loan Documents.
Section 8.2 REMEDIES. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the consent of,
the Required Lenders,
(a) declare the Commitment of each Lender to make Loans, and of any
Issuing Bank to issue L/Cs, to be terminated, whereupon such Commitments
shall forthwith be terminated;
(b) declare the unpaid principal amount of all outstanding Loans
and all outstanding Unreimbursed Drawings, together with all interest accrued
and unpaid thereon, and all other amounts owing or payable hereunder or under
any other Loan Document, to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself, the Lenders and the Issuing Banks
all rights and remedies available to it and the Lenders under the Loan
Documents or applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in
paragraph (f) of Section 8.1 above (in the case of clause (i) of paragraph
(f) upon the expiration of the 60-day period mentioned therein), the
obligation of each Lender to make Loans shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without
further act of the Administrative Agent or any Lender.
Section 8.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not exclusive
of any other rights, powers, privileges or remedies provided by law or in
equity, or under any other instrument, document or agreement now existing or
hereafter arising.
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Section 8.4 RIGHT OF ADMINISTRATIVE AGENT TO USE AND OPERATE
COLLATERAL; CONSENT TO APPOINTMENT OF RECEIVER.
(a) Upon the occurrence and during the continuance of any Event of
Default, but subject to the provisions of the UCC or other applicable law,
the Administrative Agent, on behalf of itself, the Lenders and the Issuing
Banks, shall have the right and power to take possession of all or any part
of the Collateral, and to exclude the Borrower and all persons claiming under
the Borrower wholly or partly therefrom, and thereafter to hold, store,
and/or use, operate, manage and control the same. Upon any such taking of
possession, the Administrative Agent may, from time to time, at the expense
of the Borrower, make all such repairs, replacements, alterations, additions
and improvements to and of the Collateral as the Administrative Agent may
reasonably deem proper. In any such case the Administrative Agent shall have
the right to manage and control the Collateral and to carry on the business
and to exercise all rights and powers of the Borrower in respect thereto as
the Administrative Agent shall deem best, including the right to enter into
any and all such agreements with respect to the operation of the Collateral
or any part thereof as the Administrative Agent may see fit, and the
Administrative Agent shall be entitled to collect and receive all rents,
issues, profits, fees, revenues and other income of the same and every part
thereof. The reasonable costs and expenses of the collection, including
without limitation, attorneys' fees, shall be borne by the Borrower. Such
rents, issues, profits, fees, revenues and other income shall be applied to
pay the expenses of holding and operating the Collateral and of conducting
the business thereof, and of all maintenance, repairs, replacements,
alterations, additions and improvements, and to make all payments which the
Administrative Agent may be required or may elect to make, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments which the Administrative Agent may be
required or authorized to make under the povision of this Agreement
(including legal costs and reasonable attorneys' fees). The remainder of such
rents, issues, profits, fees, revenues and other income shall be applied to
the payment of the Obligations in such order of priority as provided in the
Collateral Documents and, unless otherwise provided by law or by a court of
competent jurisdiction, any surplus shall be returned to the Borrower or to
any person or party lawfully entitled thereto (including, if applicable, any
subordinated creditors of the Borrower).
(b) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING AND WITHOUT
DEROGATING FROM ANY RIGHT, REMEDY OR OTHER PROVISION CONTAINED IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AT ANY TIME FROM AND AFTER THIRTY (30)
DAYS AFTER THE OCCURRENCE OF A PAYMENT DEFAULT, THE ADMINISTRATIVE AGENT
SHALL HAVE THE RIGHT TO APPLY FOR AND HAVE A RECEIVER APPOINTED BY A COURT OF
COMPETENT JURISDICTION IN ANY ACTION TAKEN BY THE ADMINISTRATIVE AGENT TO
ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER IN ORDER TO MANAGE, PROTECT AND
PRESERVE THE COLLATERAL AND CONTINUE THE OPERATION OF THE BUSINESS OF THE
BORROWER, OR TO SELL OR DISPOSE OF THE COLLATERAL, AND TO COLLECT ALL
REVENUES AND PROFITS THEREOF AND APPLY THE SAME TO THE PAYMENT OF ALL
EXPENSES AND OTHER CHARGES OF SUCH RECEIVERSHIP, INCLUDING THE COMPENSATION
OF THE RECEIVER, SAID
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EXPENSES TO CONSTITUTE PART OF THE OBLIGATIONS, AND TO THE PAYMENT OF THE
OBLIGATIONS AS AFORESAID. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
THE BORROWER HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO
OR OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. THE
BORROWER (I) GRANTS SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED
THE IMPLICATIONS THEREOF WITH COUNSEL, (II) ACKNOWLEDGES THAT (A) THAT
UNCONTESTED RIGHT TO HAVE A RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS
CONSIDERED ESSENTIAL BY THE LENDERS IN CONNECTION WITH THE ENFORCEMENT OF
THEIR RIGHTS AND REMEDIES HEREUNDER AND UNDER THE LOAN DOCUMENTS, AND (B) THE
AVAILABILITY OF SUCH APPOINTMENT AS A REMEDY UNDER THE FOREGOING
CIRCUMSTANCES WAS A MATERIAL FACTOR IN INDUCING THE LENDERS TO MAKE THE LOANS
TO THE BORROWER; AND (III) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW,
AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL ACTIONS, OR
AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING AND TO
COOPERATE FULLY WITH THE ADMINISTRATIVE AGENT AND THE LENDERS IN CONNECTION
WITH THE ASSUMPTION AND EXERCISE OF CONTROL BY THE RECEIVER OVER ALL OR ANY
PORTION OF THE COLLATERAL.
ARTICLE 9. THE ADMINISTRATIVE AGENT.
Section 9.1 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents together with such other powers as are
reasonably incidental thereto. The Administrative Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement and
the other Loan Documents and shall not be a trustee for any Lender. The
Administrative Agent shall not be responsible to the Lenders for any
recitals, statements, representations or warranties contained in this
Agreement or the other Loan Documents in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement or the other Loan Documents, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
or the other Loan Documents or any other document referred to or provided for
herein or therein or for the collectibility of the Loans or for any failure
by the Borrower or any of the other Loan Parties to perform any of its
obligations hereunder or under the other Loan Documents. The Administrative
Agent may employ agents and attorneys-in-fact and shall not be answerable,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable or responsible for
any action taken or omitted to be taken by it or them hereunder or under the
other Loan Documents or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct.
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Section 9.2 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telegram or cable)
believed by it to be genuine and correct and to have been signed or sent by
or on behalf of the proper person or persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by this
Agreement or the other Loan Documents, the Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
or under the other Loan Documents in accordance with instructions signed by
the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of
the Lenders.
Section 9.3 EVENTS OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default (other than the
non-payment of principal of or interest on Loans) unless the Administrative
Agent has received notice from a Lender or the Borrower specifying such
Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default, the Administrative Agent shall give notice thereof to the Lenders
(and shall give each Lender notice of each such non-payment). The
Administrative Agent shall (subject to Section 9.7 hereof) take such action
with respect to such Default as shall be directed by the Required Lenders.
Section 9.4 RIGHTS AS A LENDER. With respect to its Commitment and
the Loans made by it, the Administrative Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Administrative
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to and generally
engage in any kind of banking, trust or other business with the Borrower or
its Affiliates, as if it were not acting as the Administrative Agent, and the
Administrative Agent may accept fees and other consideration from the
Borrower or its Affiliates, for services in connection with this Agreement or
any of the other Loan Documents or otherwise without having to account for
the same to the Lenders.
Section 9.5 INDEMNIFICATION. The Lenders shall indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower under
Sections 10.1 and 10.2 hereof), ratably in accordance with the aggregate
principal amount of the Loans made by the Lenders (or, if no Loans are at the
time outstanding, ratably in accordance with their respective Commitments),
for any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement
or any of the other Loan Documents or any other documents contemplated by or
referred to herein or therein or the transactions contemplated by or referred
to herein or therein or the transactions contemplated hereby and thereby
(including, without limitation, the costs and expenses that the Borrower is
obligated to pay under Sections 10.1 and 10.2 hereof, but excluding, unless a
Default has occurred and is continuing, normal administrative costs and
expenses incident to the performance of its agency duties hereunder) or
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the enforcement of any of the terms hereof or of any such other documents,
PROVIDED THAT no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
Section 9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or the other Loan Documents.
The Administrative Agent shall not be required to keep itself informed as to
the performance or observance by the Borrower of this Agreement or the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Administrative Agent hereunder or under the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower, that
may come into the possession of the Administrative Agent or any of its
Affiliates.
Section 9.7 FAILURE TO ACT. Except for action expressly required of
the Administrative Agent hereunder, the Administrative Agent shall in all
cases be fully justified in failing or refusing to act hereunder or
thereunder unless it shall be indemnified to its satisfaction by the Lenders
against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.
Section 9.8 RESIGNATION OR REMOVAL OF ADMINISTRATIVE AGENT. Subject
to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving not
less than thirty (30) days' prior written notice thereof to the Lenders and
the Borrower, and the Administrative Agent may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal,
the Required Lenders shall have the right to appoint a successor
Administrative Agent from among the Lenders. If no successor Administrative
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent's giving of notice of resignation or the Required Lenders' removal of
the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Lenders, after consultation with the Borrower, appoint
a successor Administrative Agent from among the Lenders which shall be a bank
with a combined capital and surplus of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon 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. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Article 9 shall
continue in effect for its
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benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Administrative Agent.
Section 9.9 SHARING OF PAYMENTS.
(a) Prior to any acceleration by the Administrative Agent and the
Lenders of the Obligations:
(i) in the event that any Lender shall obtain payment in
respect of a Note, or interest thereon, whether voluntarily or involuntarily,
and whether through the exercise of a right of banker's lien, set-off or
counterclaim against the Borrower or any other Loan Party or otherwise, in a
greater proportion than any such payment obtained by any other Lender in
respect of the corresponding Note held by it, then the Lender so receiving
such greater proportionate payment shall purchase for cash a participation
from the other Lender or Lenders such portion of each such other Lender's or
Lenders' Loan as shall be necessary to cause such Lender receiving the
proportionate overpayment to share the excess payment with each Lender; and
(ii) in the event that any Lender shall obtain payment in respect
of any Interest Rate Contract to which such Lender is a party, whether
voluntarily or involuntarily, and whether through the exercise of a right of
banker's lien, set-off or counterclaim against the Borrower or any other Loan
Party or otherwise, such Lender shall be permitted to retain the full amount
of such payment and shall not be required to share such payment with any
other Lender.
(b) Upon or following any acceleration by the Administrative Agent
and the Lenders of the Obligations, in the event that any Lender shall obtain
payment in respect of a Note, or interest thereon, or in respect of an
Interest Rate Contract to which such Lender is a party, or receive any
collateral or proceeds thereof with respect to any Note or any Interest Rate
Contract to which it is a party, whether voluntarily or involuntarily, and
whether through the exercise of a right of banker's lien, set-off or
counterclaim against the Borrower or any other Loan Party or otherwise, in a
greater proportion than any such payment obtained by any other Lender in
respect of the aggregate amount of the corresponding Note held by such Lender
and any Interest Rate Contract to which such Lender is a party, then the
Lender so receiving such greater proportionate payment or such greater
proportionate amount of collateral, shall purchase for cash from the other
Lender or Lenders such portion of each such other Lender's or Lenders' Loan,
or shall provide the other Lenders with the benefits of any such collateral,
or the proceeds thereof, as shall be necessary to cause such Lender receiving
the proportionate overpayment to share the excess payment or benefits of such
collateral or proceeds ratably with each Lender. For the purposes of this
subsection 9.9(b), payments on Notes received by each Lender and receipt of
collateral by each Lender shall be in the same proportion as the proportion
of: (A) the sum of: (x) the Obligations owing to such Lender in respect of
the Notes held by such Lender, plus (y) the Obligations owing to such Lender
in respect of Interest Rate Contracts to which such Lender is party, if any,
to (B) the sum of: (x) the Obligations owing to all of the Lenders in
respect of all
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of the Notes, plus (y) the Obligations owing to all of the Lenders in respect
of all Interest Rate Contracts to which any Lender is a party;
PROVIDED, HOWEVER, that, with respect to subsections 9.9(a)(i) and (b) above,
if all or any portion of such excess payment or benefits is thereafter
recovered from the Lender that received the proportionate overpayment, such
purchase of Loans or payment of benefits, as the case may be, shall be
rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
Section 9.10 COLLATERAL MATTERS.
(a) The Administrative Agent is authorized on behalf of all the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral
or the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by
the Administrative Agent upon any Collateral (i) upon termination of the
Commitments and payment in full of all Loans and all other Obligations
payable under this Agreement and under any other Loan Document; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any Asset Disposition permitted hereunder pursuant to Section
7.7; (iii) constituting property in which the Borrower or any Subsidiary of
the Borrower owned no interest at the time the Lien was granted or at any
time thereafter; (iv) constituting property leased to the Borrower or any
Subsidiary of the Borrower under a lease which has expired or been terminated
in a transaction permitted under this Agreement or is about to expire and
which has not been, and is not intended by the Borrower or such Subsidiary to
be, renewed or extended; (v) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the Indebtedness evidenced thereby
has been paid in full; or (vi) if approved, authorized or ratified in writing
by the Required Lenders or all the Lenders, as the case may be, as provided
in Section 10.6 hereof. Upon request by the Administrative Agent at any
time, the Lenders will confirm in writing the Administrative Agent's
authority to release particular types or items of Collateral pursuant to this
subsection 9.10(b).
Section 9.11 SYNDICATION AGENTS. None of the Lenders identified on the
cover page, introduction or signature pages of this Agreement as a
Syndication Agent or Arranger shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Each Lender acknowledges that it has not
relied, and will not rely, on any of the Lenders identified as a Syndication
Agent or Arranger in deciding to enter into this Agreement or in taking or
refraining from taking any action hereunder or pursuant hereto.
ARTICLE 10. MISCELLANEOUS PROVISIONS.
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Section 10.1 FEES AND EXPENSES; INDEMNITY. The Borrower will
promptly pay all costs of the Administrative Agent in preparing the Loan
Documents and all costs and expenses of the issue of the Notes and of the
Borrower's and the other Loan Parties' performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with (including, without limitation, all costs of filing or
recording any assignments, mortgages, financing statements and other
documents and all lien search, appraisal and environmental review fees and
expenses), and the reasonable fees and expenses and disbursements of counsel
to the Administrative Agent in connection with the preparation, execution and
delivery, syndication, administration, interpretation and enforcement of this
Agreement, the other Loan Documents and all other agreements, instruments and
documents relating to this transaction, the consummation of the transactions
contemplated by all such documents, the preservation of all rights of the
Lenders and the Administrative Agent, the negotiation, preparation, execution
and delivery of any amendment, modification or supplement of or to, or any
consent or waiver under, any such document (or any such instrument that is
proposed but not executed and delivered) and with any claim or action
threatened, made or brought against any of the Lenders or the Administrative
Agent arising out of or relating to any extent to this Agreement, the other
Loan Documents or the transactions contemplated hereby or thereby (other than
a claim or action resulting from the gross negligence, willful misconduct, or
intentional violation of law by the Administrative Agent and/or the Lenders).
In addition, the Borrower will promptly pay all costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel)
suffered or incurred by each Lender in connection with its enforcement of the
payment of the Notes held by it or any other sum due to it under this
Agreement or any of the other Loan Documents or any of its other rights
heeunder or thereunder. In addition to the foregoing, the Borrower shall
indemnify each Lender and the Administrative Agent, their Affiliates, and
each of their respective directors, officers, employees, attorneys, agents
and Affiliates against, and hold each of them harmless from, any loss,
liabilities, damages, claims, costs and expenses (including reasonable
attorneys' fees and disbursements) suffered or incurred by any of them
arising out of, resulting from or in any manner connected with, the
execution, delivery and performance of each of the Loan Documents, the Loans
and any and all transactions related to or consummated in connection with the
Loans (other than as a result of the gross negligence, willful misconduct or
intentional violation of law by the Administrative Agent and/or the Lenders),
including, without limitation, losses, liabilities, damages, claims, costs
and expenses suffered or incurred by any Lender or the Administrative Agent
or any of their respective directors, officers, employees, attorneys, agents
or Affiliates arising out of or related to any Environmental Liability or
Environmental Proceeding, or in investigating, preparing for, defending
against, or providing evidence, producing documents or taking any other
action in respect of any commenced or threatened litigation, administrative
proceeding or investigation under any federal securities law or any other
statute of any jurisdiction, or any regulation, or at common law or otherwise
against the Administrative Agent, the Lenders or any of their officers,
directors, affiliates, agents or Affiliates, that is alleged to arise out of
or is based upon: (i) any untrue statement or alleged untrue statement of
any material fact of the Borrower and its affiliates in any document or
schedule filed with the SEC or any other governmental body; (ii) any omission
or alleged omission to state any material fact required to be stated in such
document or schedule, or necessary to make the statements made therein, in
light of the circumstances under which made, not misleading; (iii) any acts,
practices or omission or alleged acts, practices or
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omissions of the Borrower or its agents related to the making of any
acquisition, purchase of shares or assets pursuant thereto, financing of such
purchases or the consummation of any other transactions contemplated by any
such acquisitions that are alleged to be in violation of any federal
securities law or of any other statute, regulation or other law of any
jurisdiction applicable to the making of any such acquisition, the purchase
of shares or assets pursuant thereto, the financing of such purchases or the
consummation of the other transactions contemplated by any such acquisition;
or (iv) any withdrawals, termination or cancellation of any such proposed
acquisition for any reason whatsoever. The indemnity set forth herein shall
be in addition to any other obligations or liabilities of the Borrower to the
Administrative Agent and the Lenders hereunder or at common law or otherwise.
The provisions of this Section 10.1 shall survive the payment of the Notes
and the termination of this Agreement.
Section 10.2 TAXES. If, under any law in effect on the date of the
closing of any Loan hereunder, or under any retroactive provision of any law
subsequently enacted, it shall be determined that any federal, state or local
tax is payable in respect of the issuance of any Note, or in connection with
the filing or recording of any assignments, mortgages, financing statements,
or other documents (whether measured by the amount of Indebtedness secured or
otherwise) as contemplated by this Agreement, then the Borrower will pay any
such tax and all interest and penalties, if any, and will indemnify the
Lenders and the Administrative Agent against and save each of them harmless
from any loss or damage resulting from or arising out of the nonpayment or
delay in payment of any such tax. If any such tax or taxes shall be assessed
or levied against any Lender or any other holder of a Note, such Lender, or
such other holder, as the case may be, may notify the Borrower and make
immediate payment thereof, together with interest or penalties in connection
therewith, and shall thereupon be entitled to and shall receive immediate
reimbursement therefor from the Borrower. Notwithstanding any other
provision contained in this Agreement, the covenants and agreements of the
Borrower in this Section 10.2 shall survive payment of the Notes and the
termination of this Agreement.
Section 10.3 PAYMENTS. As set forth in Article 2 hereof, all
payments by the Borrower on account of principal, interest, fees and other
charges (including any indemnities) shall be made to the Administrative Agent
at its Payment Office, in lawful money of the United States of America in
immediately available funds, by wire transfer or otherwise, not later than
2:00 p.m. (New York City time) on the date such payment is due. Any such
payment made on such date but after such time shall, if the amount paid bears
interest, be deemed to have been made on, and interest shall continue to
accrue and be payable thereon until, the next succeeding Business Day. If
any payment of principal or interest becomes due on a day other than a
Business Day, such payment may be made on the next succeeding Business Day
and such extension shall be included in computing interest in connection with
such payment. All payments hereunder and under the Notes shall be made
without set-off or counterclaim and in such amounts as may be necessary in
order that all such payments shall not be less than the amounts otherwise
specified to be paid under this Agreement and the Notes (after withholding
for or on account of: (i) any present or future taxes, levies, imposts,
duties or other similar charges of whatever nature imposed by any government
or any political subdivision or taxing authority thereof, other than any tax
(except those referred to in clause (ii) below) on or measured by the net
income of the Lender to which any such payment is due pursuant to applicable
federal,
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state and local income tax laws, and (ii) deduction of amounts equal to the
taxes on or measured by the net income of such Lender payable by such Lender
with respect to the amount by which the payments required to be made under
this sentence exceed the amounts otherwise specified to be paid in this
Agreement and the Notes). Upon payment in full of any Note, the Lender
holding such Note shall ▇▇▇▇ the Note "Paid" and return it to the Borrower.
Section 10.4 SURVIVAL OF AGREEMENTS AND REPRESENTATIONS;
CONSTRUCTION. All agreements, representations and warranties made herein
shall survive the delivery of this Agreement and the Notes. The headings
used in this Agreement and the table of contents are for convenience only and
shall not be deemed to constitute a part hereof. All uses herein of the
masculine gender or of singular or plural terms shall be deemed to include
uses of the feminine or neuter gender, or plural or singular terms, as the
context may require.
Section 10.5 LIEN ON AND SET-OFF OF DEPOSITS. As further security
for the due payment and performance of all the Obligations, the Borrower
hereby grants to Administrative Agent for the ratable benefit of the Lenders
a Lien on any and all deposits or other sums at any time credited by or due
from the Administrative Agent or any Lender to the Borrower, whether in
regular or special depository accounts or otherwise, and any and all monies,
securities and other collateral of the Borrower, and the proceeds thereof,
now or hereafter held or received by or in transit to any Lender or the
Administrative Agent from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and any such
deposits, sums, monies, securities and other collateral, may at any time
after the occurrence and during the continuance of any Event of Default be
set-off, appropriated and applied by any Lender or the Administrative Agent
against any of the Obligations, whether or not any of such Obligations is
then due or is secured by any Collateral.
Section 10.6 AMENDMENTS AND WAIVERS; ENTIRE AGREEMENT. Any provision
of this Agreement, the Notes or the other Loan Documents may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed
by the Borrower and the Required Lenders (and, if the rights or duties of the
Administrative Agent are affected thereby, by the Administrative Agent);
PROVIDED THAT no such amendment or waiver shall, unless signed by all the
Non-Defaulting Lenders, (i) increase the Commitment of any Lender or subject
any Lender to any additional obligation (it being understood that a waiver of
any Default or Event of Default or of a non-scheduled reduction in the
Aggregate Commitment shall not constitute a change in the terms of any
Commitment of any Lender), (ii) reduce the principal of or rate of interest
on any Loan or Fees or Unreimbursed Drawing hereunder (other than as a result
of waiving the applicability of any Post-Default Rate), (iii) extend the date
fixed for any payment of principal of any Loan pursuant to Article 2 hereof
or of interest on any Loan or any Fees or Unreimbursed Drawing hereunder or
for any termination of any Commitment (it being understood that any waiver of
the application of any prepayment of, or the method of application of any
prepayment to the amortization of, the Loans shall not constitute any such
extension), (iv) release any Guarantor (other than ResNet LLC, which shall be
automatically released as a Guarantor upon termination of its existence so
long as the Newco Common Stock is thereafter held by ResNet Inc. or the
Borrower) or release all or substantially all of the Collateral (except as
expressly permitted by this Agreement and the Loan Documents), (v) change the
definition of Required
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Lenders or the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans and Aggregate Revolving Commitment which shall
be required for the Lenders or any of them to take any action under this
Section 10.6 or any other provision of this Agreement or (vi) amend or modify
this Section 10.6. Any waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No consent to or
demand on the Borrower in any case shall, of itself, entitle it to any other
or further notice or demand in similar or other circumstances. This
Agreement, the other Loan Documents and agreements referred to herein embody
the entire agreement and understanding among the Lenders, the Administrative
Agent and the Borrower and supersede all prior agreements and understandings
relating to the subject matter hereof.
Section 10.7 REMEDIES CUMULATIVE; COUNTERCLAIMS. Each and every
right granted to the Administrative Agent and the Lenders hereunder or under
any other document delivered hereunder or in connection herewith, or allowed
it by law or equity, shall be cumulative and may be exercised from time to
time. No failure on the part of the Administrative Agent or any Lender or
the holder of any Note to exercise, and no delay in exercising, any right
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right preclude any other or future exercise thereof or the exercise of
any other right. The due payment and performance of the Obligations shall be
without regard to any counterclaim, right of offset or any other claim
whatsoever that the Borrower may have against any Lender or the
Administrative Agent and without regard to any other obligation of any nature
whatsoever that any Lender or the Administrative Agent may have to the
Borrower, and no such counterclaim or offset shall be asserted by the
Borrower in any action, suit or proceeding instituted by any Lender or the
Administrative Agent for payment or performance of the Obligations.
Section 10.8 ADDITIONAL ACTIONS. At any time and from time to time,
upon the request of the Administrative Agent, the Borrower shall execute,
deliver and acknowledge or cause to be executed, delivered and acknowledged,
such further documents and instruments and do such other acts and things as
the Administrative Agent may reasonably request in order to fully effect the
purposes of this Agreement, the other Loan Documents and any other
agreements, instruments and documents delivered pursuant hereto or in
connection with the Loans.
Section 10.9 NOTICES. All notices, requests, reports and other
communications pursuant to this Agreement shall be in writing, either by
letter (delivered by hand or commercial messenger service or sent by
certified mail, return receipt requested, except for routine reports
delivered in compliance with Article 5 hereof which may be sent by ordinary
first-class mail) or telegram or telecopy, addressed as follows:
(a) If to the Borrower:
LodgeNet Entertainment Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President and Chief Financial
Officer
88
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Director of Corporate and Legal Affairs
LodgeNet Entertainment Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to any Lender:
To its address set forth below its
name on the signature pages hereof,
with a copy to the Administrative Agent; and
(c) If to the Administrative Agent:
National Westminster Bank Plc, as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (other than in the case
of Borrowing Notices and reports
and other documents delivered in
compliance with Article 5 hereof) to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice, request, demand or other communication hereunder shall be deemed
to have been given on: (x) the day on which it is telecopied to such party
at its telecopier number specified above (provided such notice shall be
effective only if followed by one of the other methods of delivery set forth
herein) or delivered by receipted hand or such commercial messenger service
to such party at its address specified above, or (y) on the third Business
Day after the day deposited in the mail, postage prepaid, if sent by mail, or
(z) on the day it is delivered to the telegraph company, addressed as
aforesaid, if sent by telegraph. Any party hereto may change the Person,
address or telecopier number to whom or which notices are to be given
hereunder, by notice duly
89
given hereunder; PROVIDED, HOWEVER, that any such notice shall be deemed to
have been given hereunder only when actually received by the party to which
it is addressed.
Section 10.10 COUNTERPARTS. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Section 10.11 SEVERABILITY. The provisions of this Agreement are
severable, and if any clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity
or unenforceability shall affect only such clause or provision, or part
thereof, in such jurisdiction and shall not in any manner affect such clause
or provision in any other jurisdiction, or any other clause or provision in
this Agreement in any jurisdiction. Each of the covenants, agreements and
conditions contained in this Agreement is independent and compliance by the
Borrower with any of them shall not excuse non-compliance by the Borrower
with any other. All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 10.12 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, except that the Borrower
may not assign or otherwise transfer any of its rights and obligations under
this Agreement without the prior written consent of all the Lenders.
(b) Any Lender may at any time grant to one or more banks or other
institutions (each a "PARTICIPANT") participating interests in its Commitment
or any or all of its Loans. In the event of any such grant by a Lender of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Administrative Agent, such Lender shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement pursuant to which any Lender may grant such a
participating interest shall provide that such Lender shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
participation agreement may provide that such Lender will not agree to any
modification, amendment or waiver of this Agreement described in clause (i),
(ii), (iii) or (iv) of Section 10.6 without the consent of the Participant.
The Borrower agrees that each Participant shall, to the extent provided in
its participation agreement, be entitled to the benefits of Sections 2.16,
2.18 and 2.19 hereof with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent
of a participating interest granted in accordance with this subsection (b).
90
(c) Any Lender may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part (comprising
equal or unequal percentages of such Lender's Term Loan, on the one hand, and
such Lender's Revolving Loans and Revolving Commitment, on the other hand) of
all, of its rights and obligations under this Agreement and the other Loan
Documents, and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement in substantially the form
of Exhibit E hereto executed by such Assignee and such transferor Lender,
with (and subject to) the subscribed consent of the Borrower, which shall not
be unreasonably withheld, and the Administrative Agent; PROVIDED that if (i)
an Assignee is an affiliate of such transferor Lender or was a Lender
immediately prior to such assignment or (ii) a Default or Event of Default
has occurred and is continuing, no such consent of the Borrower shall be
required. No assignment pursuant to the immediately preceding sentence shall
to the extent such assignment represents an assignment to an institution
other than one or more Lenders hereunder, be in an aggregate amount less than
$5,000,000 unless the entire Commitment of the assigning Lender is so
assigned. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Lender of an amount equal to the purchase price
agreed between such transferor Lender and such Assignee, such Assignee shall
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a Commitment as set forth in such instrument of
assumption, and the transferor Lender shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Lender, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note
or Notes are issued to the Assignee. In connection with any such assignment,
the transferor Lender shall pay to the Administrative Agent an administrative
fee for processing such assignment in the amount of $3,000. If the Assignee
is not incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with subsection 2.16(f) hereof.
(d) Any Lender may at any time assign all or any portion of its
rights under this Agreement and any other Loan Document to a Federal Reserve
Bank. No such assignment shall release the transferor Lender from its
obligations hereunder.
(e) No Assignee, Participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under Sections 2.16,
2.18 or 10.3 hereof than such Lender would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Sections
2.16 or 2.18 hereof requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.
Section 10.13 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF TRIAL
BY JURY. (a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL OTHER DOCUMENTS
AND INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH AND THEREWITH,
SHALL BE
91
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS AND
DECISIONS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS RULES PERTAINING TO
CONFLICTS OF LAWS.
(b) THE BORROWER IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS
AGREEMENT, AND EACH OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY COURT OF THE
STATE OF NEW YORK, COUNTY OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER, BY THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND SUBMITS TO
THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDING. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY
COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR
PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER
PROVIDED FOR IN SECTION 10.3 HEREOF. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING
BASED ON ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS OR ANY SIMILAR BASIS. THE BORROWER SHALL NOT BE ENTITLED IN
ANY SUCH ACTION OR PROCEEDING TO ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER
THE LAWS OF ANY STATE OTHER THAN THE STATE OF NEW YORK UNLESS SUCH DEFENSE IS
ALSO GIVEN OR ALLOWED BY THE LAWS OF THE STATE OF NEW YORK. NOTHING IN THIS
SECTION 10.13 SHALL AFFECT OR IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT
OF ANY LENDER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
BORROWER IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW.
(c) EACH OF THE BORROWER, THE LENDERS AND THE ADMINISTRATIVE AGENT
WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS
AGREEMENT, OR THE VALIDITY, PERFECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF.
ARTICLE 11. INCREASES IN COMMITMENTS; CHANGES IN LENDERS
Section 11.1 RESIGNATION OF LENDERS. The parties hereto hereby
acknowledge and confirm that immediately upon the Closing Date the Loans
owing to First Union National Bank and First Hawaiian Bank (collectively, the
"Resigning Lenders") together with all accrued interest thereon shall be
repaid in full and each of the Resigning Lenders shall thereupon cease to be
Lenders and shall cease to have any rights or obligations under this
Agreement or under any
92
other Loan Documents. Upon each of the Resigning Lender's receipt of an
amount equal to its outstanding Loans and accrued interest, such Resigning
Lender shall return to the Borrower the promissory note made payable by the
Borrower to each such Lender marked "Paid in Full".
Section 11.2 ADDITION OF NEW LENDERS. The parties hereto hereby
acknowledge and confirm that immediately upon the Closing Date (i) each of
Fleet Bank, N.A., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., State Street Bank and
Trust Company and Sun Trust Bank, Central Florida, N.A. (each, a "New Lender"
and collectively, the "New Lenders") shall become a party to this Agreement
and shall have the rights and obligations of a Lender hereunder, and (ii)
Commitments of all or some of the Lenders may or shall change and,
accordingly, the Aggregate Commitment and the amount of each Lender's
respective Commitments shall be as reflected on Schedule I hereto.
Section 11.3 NO RELIANCE BY NEW LENDERS. Each of the New Lenders (i)
confirms that it has received a copy of this Agreement, together with copies
of such financial statements and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to become
a Lender under this Agreement, (ii) agrees that it will independently and
without reliance upon the Administrative Agent or any Lender other than
itself, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decision in taking
or not taking action under this Agreement, (iii) acknowledges that neither
the Administrative Agent nor any Lender makes any representation or warranty
nor does the Administrative Agent or any Lender assume any responsibility
with respect to (a) any statements, warranties or representations made in or
in connection with this Agreement or any other instrument or document
furnished pursuant thereto or (b) the financial condition of the Borrower or
any other Loan Party, or the performance or observance by the Borrower or any
other Loan Party of any of their Obligations under this Agreement or any
other instrument or document furnished pursuant thereto, (iv) appoints and
authorizes the Administrative Agent to take such action as its agent on its
behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto, and (v) agrees that it will perform in
accordance with their terms all of the obligations which, by the terms of
this Agreement, are required to be performed by it as a Lender.
Section 11.4 NEW NOTES. The Borrower shall, simultaneously with the
execution and delivery of this Agreement, execute and deliver in favor of (i)
each of the New Lenders a Term Note and a Revolving Note in respective
principal amounts equal to the Term Commitment and Revolving Commitment of
such Lender as shown on Schedule I hereto, and (b) each of the other Lenders
a Term Note and new Revolving Note in respective principal amounts equal to
the Term Commitment and Revolving Commitment of such Lender as shown on
Schedule I hereto (collectively, all of the above-described promissory notes
are defined as the "New Notes"), whereupon such Lenders shall return the
existing promissory notes to the Borrower marked "Refinanced by New Notes".
Section 11.5 ADJUSTMENT OF LOAN AMOUNTS. In order to effect the
foregoing, the Lenders shall, on the Closing Date, make appropriate
adjustments among themselves in order
93
that the amount of Loans outstanding to the Borrower from any Lender under
this Agreement is, in principal amount (as of the Closing Date), in the same
proportion to the outstanding aggregate principal amount of all Loans that
such Lender's Commitment bears to the Aggregate Commitment, after giving
effect to the resignation of the Resigning Lenders from the Lender group, the
addition of the New Lenders to the Lender group, and the increase in the
Aggregate Commitment. All references in this Agreement, the Loan Documents
and all other instruments, documents and agreements executed and delivered
pursuant to any of the foregoing, to "Commitment Percentage", "the ratable
benefit of the Lenders", "pro rata", or terms of similar effect shall be
deemed to refer to the ratable interests of the Lenders, as their respective
pro rata interests shall be adjusted to reflect the changes in the
Commitments of each of the Lenders as set forth on Schedule I hereto. The
Borrower and each of the other Loan Parties agrees and consents to the terms
of this Article 11.
[signature page follows]
94
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date first above written.
LODGENET ENTERTAINMENT
CORPORATION
By
--------------------------------
Title
-----------------------------
NATIONAL WESTMINSTER BANK PLC,
AS ADMINISTRATIVE AGENT, ISSUING
BANK AND AS A LENDER
By
--------------------------------
Title
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
National Westminster Bank Plc
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
National Westminster Bank Plc
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
95
BANKBOSTON, N.A.,
AS SYNDICATION AGENT, ISSUING BANK
AND LENDER
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
AS SYNDICATION AGENT AND LENDER
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇.
▇'▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
MERCANTILE BANK NATIONAL
ASSOCIATION
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
Mercantile Bank National
Association
7th and Washington, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
-----------------------
Telephone:
-----------------------
Telecopier:
----------------------
Address for Notices:
Mercantile Bank National
Association
7th and Washington, ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
U.S. BANK NATIONAL ASSOCIATION
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
U.S. Bank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET BANK, N.A.
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
Fleet Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
-----------------------
Telephone:
-----------------------
Telecopier:
----------------------
Address for Notices:
Fleet Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
STATE STREET BANK AND TRUST
COMPANY
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
-----------------------
Telephone:
-----------------------
Telecopier:
----------------------
Address for Notices:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SUNTRUST BANK, CENTRAL FLORIDA,
NATIONAL ASSOCIATION
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
Sun Trust Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Notices:
Sun Trust Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
UNION BANK OF CALIFORNIA, N.A.
By:
--------------------------------
Title:
-----------------------------
Lending Office for Base Rate and
Eurodollar Loans:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
-----------------------
Telephone:
-----------------------
Telecopier:
----------------------
Address for Notices:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE I
TERM AND REVOLVING COMMITMENTS
Term Revolving
Bank Commitment Commitment Percentage
National Westminster Bank Plc 8,333,333.34 8,333,333.34 11.2%
BankBoston, N.A. 8,333,333.33 8,333,333.33 11.1%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. 8,333,333.33 8,333,333.33 11.1%
Mercantile Bank National Association 10,000,000.00 10,000,000.00 13.3%
U.S. Bank National Association 10,000,000.00 10,000,000.00 13.3%
Fleet Bank, N.A. 7,500,000.00 7,500,000.00 10%
State Street Bank and Trust Company 7,500,000.00 7,500,000.00 10%
Sun Trust Bank, Central Florida, N.A. 7,500,000.00 7,500,000.00 10%
Union Bank of California 7,500,000.00 7,500,000.00 10%
-------------- -------------- -----
Total $75,000,000.00 $75,000,000.00 100%
SCHEDULE II
AMORTIZATION OF TERM LOANS
-----------------------------------------------------------
Term Loan Principal Payment Date Amount
-----------------------------------------------------------
March 31, 2001 $3,750,000
-----------------------------------------------------------
June 30, 2001 $3,750,000
-----------------------------------------------------------
September 30, 2001 $3,750,000
-----------------------------------------------------------
December 31, 2001 $3,750,000
-----------------------------------------------------------
March 31, 2002 $4,687,500
-----------------------------------------------------------
June 30, 2002 $4,687,500
-----------------------------------------------------------
September 30, 2002 $4,687,500
-----------------------------------------------------------
December 31, 2002 $4,687,500
-----------------------------------------------------------
March 31, 2003 $4,687,500
-----------------------------------------------------------
June 30, 2003 $4,687,500
-----------------------------------------------------------
September 30, 2003 $4,687,500
-----------------------------------------------------------
December 31, 2003 $4,687,500
-----------------------------------------------------------
March 31, 2004 $5,625,000
-----------------------------------------------------------
June 30, 2004 $5,625,000
-----------------------------------------------------------
September 30, 2004 $5,625,000
-----------------------------------------------------------
December 31, 2004 $5,625,000
-----------------------------------------------------------
EXHIBIT A
FORM OF TERM NOTE
$________________ New York, New York
February ___, 1999
FOR VALUE RECEIVED, the undersigned LODGENET ENTERTAINMENT CORPORATION,
a Delaware corporation (the "Borrower"), hereby unconditionally promises to
pay to the order of _________________________________ ("Lender"), at the
address of NATIONAL WESTMINSTER BANK PLC, as administrative agent (the
"Administrative Agent") for Lender, at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, or at such other place as the Administrative Agent may from time
to time designate in writing, in lawful money of the United States of America
and in immediately available funds, the principal sum of
_______________________ DOLLARS AND NO CENTS ($____________), payable on the
dates and in the amounts set forth in the Credit Agreement defined below.
This Term Note is one of the Notes referred to in, was executed and
delivered pursuant to, and evidences the obligation of the Borrower under,
that certain Second Amended and Restated Credit Agreement dated as of
February 25, 1999 by and among the Borrower, the Administrative Agent, Bank
Boston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Syndication Agents, and the
other financial institutions from time to time party thereto (as the same may
be amended, restated, modified or supplemented and in effect from time to
time, the "Credit Agreement"), to which reference is hereby made for a
statement of the terms and conditions under which the loan evidenced hereby
is made and is to be repaid and for a statement of the Administrative Agent's
and Lender's remedies upon the occurrence of an Event of Default.
Capitalized terms used but not otherwise defined herein have the meanings set
forth in the Credit Agreement. The Term Loan made by Lender to the Borrower
pursuant to the Credit Agreement evidenced hereby and all payments on account
of principal hereof shall be recorded by Lender and prior to any transfer
thereof, endorsed on SCHEDULE A attached hereto which is part of this Term
Note or otherwise in accordance with its usual practices, PROVIDED, HOWEVER,
that the failure to so record or any error in any such record shall not
affect the Borrower's obligations under this Term Note.
The Borrower further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full hereof at
the rate from time to time applicable to the Term Loan evidenced hereby as
determined in accordance with the Credit Agreement.
This Term Note is secured pursuant to the Credit Agreement and the Loan
Documents referred to therein, and reference is made thereto for a statement
of the terms and conditions of such security.
A-1
The Administrative Agent shall have the continuing exclusive right to
apply and to reapply any and all payments hereunder against the Obligations
in the manner set forth in the Credit Agreement.
The Borrower hereby waives demand, presentment and protest and notice of
demand, presentment, protest and nonpayment.
The Borrower further agrees, subject only to any limitation imposed by
applicable law, to pay all reasonable expenses, including attorneys' fees and
legal expenses, incurred by the holder of this Term Note in endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise in accordance with the provisions of the Credit
Agreement.
THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
Whenever possible each provision of this Term Note shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Term Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Term Note. Whenever in this
Term Note reference is made to the Administrative Agent, Lender or the
Borrower, such reference shall be deemed to include, as applicable, a
reference to their respective permitted successors and assigns and, in the
case of Lender, any financial institutions to which it has sold or assigned
all or any part of its commitment to make the Term Loan evidenced hereby as
permitted under the Credit Agreement. The provisions of this Term Note shall
be binding upon and shall inure to the benefit of such permitted successors
and assigns. The Borrower's successors and assigns shall include, without
limitation, a receiver, trustee or debtor in possession of or for the
Borrower.
LODGENET ENTERTAINMENT CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
A-2
SCHEDULE A
Term Note
dated February ___, 1999
PRINCIPAL PAYMENTS
-----------------------------------------------------------------------------
Amount of Amount of Unpaid
Principal Principal Principal Notation
Date Borrowed Repaid Balance Made by
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
A-3
EXHIBIT B
FORM OF REVOLVING NOTE
$________________ New York, New York
February ___, 1999
FOR VALUE RECEIVED, the undersigned LODGENET ENTERTAINMENT CORPORATION,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order
of _________________________________ ("Lender"), at the address of NATIONAL
WESTMINSTER BANK PLC, as administrative agent (the "Administrative Agent")
for Lender, at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such
other place as the Administrative Agent may designate from time to time in
writing, in lawful money of the United States of America and in immediately
available funds, the principal sum of _______________________ DOLLARS AND NO
CENTS ($____________) or, if less, the aggregate unpaid amount of Lender's
Commitment Percentage (as defined in the Credit Agreement (as hereunder
defined)) under the Credit Agreement. The principal amount of this Revolving
Note shall be payable in the amounts and at such times as set forth in the
Credit Agreement with any then outstanding principal amount of this Revolving
Note being payable in full on the Facility Termination Date (as defined in
the Credit Agreement).
This Revolving Note is one of the Notes referred to in, was executed and
delivered pursuant to, and evidences the obligation of the Borrower under,
that certain Second Amended and Restated Credit Agreement dated as of
February 25, 1999 by and among the Borrower, the Administrative Agent,
BankBoston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Syndication Agents, and
the other financial institutions from time to time party thereto (as the same
may be amended, restated, modified or supplemented and in effect from time to
time, the "Credit Agreement"), to which reference is hereby made for a
statement of the terms and conditions under which the loans evidenced hereby
are made and are to be repaid and for a statement of the Administrative
Agent's and Lender's remedies upon the occurrence of an Event of Default.
Capitalized terms used but not otherwise defined herein have the meanings set
forth in the Credit Agreement. The Revolving Loans made by Lender to the
Borrower pursuant to the Credit Agreement and all payments on account of
principal hereof shall be recorded by Lender, and prior to any transfer
thereof, endorsed on SCHEDULE A attached hereto which is part of this
Revolving Note or otherwise in accordance with its usual practices; PROVIDED,
HOWEVER, that the failure to so record or any error in any such record shall
not affect the Borrower's obligations under this Revolving Note.
The Borrower further promises to pay interest on the outstanding unpaid
principal amount hereof from the date hereof until payment in full hereof at
the rate from time to time applicable to the Revolving Loans as determined in
accordance with the Credit Agreement.
B-1
This Revolving Note is secured pursuant to the Credit Agreement and the
Loan Documents referred to therein, and reference is made thereto for a
statement of the terms and conditions of such security.
The Administrative Agent shall have the continuing exclusive right to
apply and to reapply any and all payments hereunder against the Obligations
in the manner set forth in the Credit Agreement.
The Borrower hereby waives demand, presentment and protest and notice of
demand, presentment, protest and nonpayment.
The Borrower further agrees, subject only to any limitation imposed by
applicable law, to pay all reasonable expenses, including attorneys' fees and
legal expenses, incurred by the holder of this Revolving Note in endeavoring
to collect any amounts payable hereunder which are not paid when due, whether
by acceleration or otherwise in accordance with the provisions of the Credit
Agreement.
THIS REVOLVING NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE ADMINISTRATIVE
AGENT AND LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
Whenever possible each provision of this Revolving Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Revolving Note shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Revolving Note. Whenever in
this Revolving Note reference is made to the Administrative Agent, Lender or
the Borrower, such reference shall be deemed to include, as applicable, a
reference to their respective permitted successors and assigns and, in the
case of Lender, any financial institutions to which it has sold or assigned
all or any part of its commitment to make the Revolving Loans as permitted
under the Credit Agreement. The provisions of this Revolving Note shall be
binding upon and shall inure to the benefit of such permitted successors and
assigns. The Borrower's successors and assigns shall include, without
limitation, a receiver, trustee or debtor in possession of or for the
Borrower.
LODGENET ENTERTAINMENT CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
B-2
SCHEDULE A
Revolving Note
dated February ___, 1999
PRINCIPAL PAYMENTS
--------------------------------------------------------------------------------
Amount of Amount of Unpaid
Principal Principal Principal Notation
Date Borrowed Repaid Balance Made by
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B-3
EXHIBIT C
FORM OF NOTICE OF BORROWING
______________, ___
National Westminster Bank Plc,
as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Re: NOTICE OF BORROWING
Gentlemen:
The undersigned, LODGENET ENTERTAINMENT CORPORATION, a Delaware
corporation (the "Borrower"), hereby refers to that certain Second Amended
and Restated Credit Agreement dated as of February 25, 1999 (as from time to
time amended, restated, supplemented or otherwise modified, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the Borrower, National Westminster Bank Plc, as Administrative Agent,
BankBoston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Syndication Agents, and
the other financial institutions from time to time party thereto, and hereby
gives you notice, pursuant to Section 2.3 of the Credit Agreement, that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in
that connection sets forth below the information relating to such Borrowing
as required by Section 2.3 of the Credit Agreement:
(i) The aggregate amount of the requested Borrowing is $____________
[minimum of $500,000 or any multiple of $500,000 in excess thereof
for Base Rate Loans; $1,000,000 or any multiple of $1,000,000 in
excess thereof for Eurodollar Loans].
(ii) The requested date for the Borrowing is ___________, ___
[must be a Business Day].
(iii) The Borrowing shall be comprised of [Eurodollar/Base Rate Loans].
(iv) For Eurodollar Loans requested herein, the duration of the Interest
Period is ___________. [Failure to specify shall result in Interest
Period of one (1) month.]
C-1
The undersigned hereby certifies that all conditions precedent set forth
in Section 4.2 of the Credit Agreement have been fulfilled.
Very truly yours,
LODGENET ENTERTAINMENT
CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
C-2
EXHIBIT D
FORM OF NOTICE OF CONVERSION/CONTINUATION
______________, ___
National Westminster Bank Plc,
as Administrative Agent
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Re: NOTICE OF CONVERSION/CONTINUATION
Gentlemen:
The undersigned, LODGENET ENTERTAINMENT CORPORATION, a Delaware
corporation (the "Borrower"), hereby refers to that certain Second Amended
and Restated Credit Agreement dated as of February 25, 1999 (as from time to
time amended, restated, supplemented or otherwise modified, the "Credit
Agreement", the terms defined therein being used herein as therein defined),
among the Borrower, National Westminster Bank Plc, as Administrative Agent,
BankBoston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Syndication Agents, and
the other financial institutions from time to time party thereto, and hereby
gives you notice, pursuant to Section 2.4 (b) of the Credit Agreement, that
the undersigned hereby requests a conversion or continuation of Loans under
the Credit Agreement, and in that connection sets forth below the information
relating to such conversion or continuation as required by Section 2.4(b) of
the Credit Agreement:
(i) The proposed conversion date or continuation date is ____________.
(ii) The aggregate amount of Loans to be converted or continued
is $___________.
(iii) The nature of the proposed conversion or continuation is as follows:
--------------------------
--------------------------
--------------------------
D-1
(iv) For conversion into or continuations involving Eurodollar Loans
herein, the duration of the requested Interest Period is _________.
[Failure to specify shall result in Interest Period of one (1)
month.]
The undersigned hereby certifies that all conditions precedent set forth in
Section 4.2 of the Credit Agreement have been fulfilled.
Very truly yours,
LODGENET ENTERTAINMENT
CORPORATION
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
D-2
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
Dated ___________
Reference is hereby made to that certain Second Amended and Restated
Credit Agreement dated as of February 25, 1999 (the "CREDIT AGREEMENT") by
and among LodgeNet Entertainment Corporation, a Delaware corporation (the
"BORROWER"), National Westminster Bank Plc, as Administrative Agent,
BankBoston, N.A. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, as Syndication Agents, and
the other financial institutions from time to time party thereto.
Capitalized terms used herein that are defined in the Credit Agreement that
are not otherwise defined herein shall have the respective meanings ascribed
thereto in the Credit Agreement.
_______________________________, a __________________ (the "ASSIGNOR")
and _______________________________________, a ________________, (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a __ % interest in
and to all of the Assignor's rights and obligations under the Credit
Agreement and the other Loan Documents as of the Effective Date (as defined
below) (including, without limitation, such percentage interest in the
Assignor's Term Commitment and Revolving Commitment as in effect on the
Effective Date, the Term and Revolving Loans owing to the Assignor on the
Effective Date, and the Term and Revolving Notes held by the Assignor).
2. The Assignor: (i) represents and warrants that as of the date
hereof its Term and Revolving Commitment (without giving effect to
assignments thereof that have not yet become effective) are $__________ and
$__________, respectively, and the aggregate outstanding principal amount of
Term and Revolving Loans owing to it (without giving effect to assignments
thereof that have not yet become effective) are $__________ and $__________,
respectively; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder, and that
such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant
thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by the Borrower or any
other Loan Party of any of its obligations under the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (v) attaches the
Term and Revolving Notes referred to in paragraph 1 above and requests that
the Administrative Agent exchange such Notes for new Notes as follows: (y) a
Term Note dated the Effective Date (as such term is defined below) in the
principal amount of $__________ payable to the order of the Assignee and a
Term Note dated
E-1
the Effective Date in the principal amount of $ __________ payable to the
order of the Assignor, and (z) a Revolving Note dated the Effective Date in
the principal amount of $_________ payable to the order of the Assignee and a
Revolving Note dated the Effective Date in the principal amount of $_________
payable to the order of the Assignor.
3. The Assignee: (i) confirms that it has received a copy of the
Credit Agreement, together with copies of such financial statements and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption
Agreement; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Credit Agreement; (iii) appoints and authorizes the Administrative Agent to
take such action as its agent on its behalf and to exercise such powers under
the Credit Agreement as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto; (iv) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender; and (v) specifies as its addresses for Base
Rate Loans and Eurodollar Loans (and address for notices) the offices set
forth beneath its name on the signature page hereof.
4. The effective date for this Assignment and Assumption Agreement
shall be ________________ (the "EFFECTIVE DATE"). Following the execution of
this Assignment and Assumption Agreement, it will be delivered to the
Administrative Agent for acceptance by the Administrative Agent and the
Borrower.
5. Upon such acceptance, as of the Effective Date: (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Assumption Agreement, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Assumption Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement.
6. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes
for periods prior to the Effective Date directly between themselves.
7. This Assignment and Assumption Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be duly executed on the date first above written.
[NAME OF ASSIGNOR]
By
------------------------------
Title
---------------------------
[NAME OF ASSIGNEE]
By
------------------------------
Title
---------------------------
Lending Office for Base Rate and
Eurodollar Loans:
Address for Notices:
Accepted this ___ day Accepted this ___ day
of ______________, ___ of ______________, ___
NATIONAL WESTMINSTER BANK PLC, LODGENET ENTERTAINMENT
as Administrative Agent CORPORATION
By By
---------------------------- ------------------------------
Title Title
------------------------- ---------------------------
E-3
EXHIBIT F
BORROWER U.S. LEGAL OPINION
1. Each of the Borrower and ResNet Inc. is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware. Each of the Borrower and ResNet Inc. has the requisite
corporate power and authority to own, pledge, mortgage and operate its
properties, to lease any properties it operates under lease, to conduct its
business as presently conducted and to execute and deliver each of the Loan
Documents to which it is a party. Each of the Borrower and ResNet Inc. is
duly licensed or qualified and is in good standing as a foreign corporation
in each jurisdiction in which the character of the properties owned or leased
by it or the nature of the business transacted by it makes such licensing or
qualification necessary, except where the failure to qualify or be so
licensed would not have a material adverse effect on the financial condition
or business of the Borrower or ResNet Inc.
2. The execution, delivery and performance of each of the Loan
Documents to which the Borrower or ResNet Inc. is a party have been duly
authorized by the Borrower and ResNet Inc. (as applicable), and each of the
Loan Documents constitutes the legal, valid and binding obligation of the
Borrower and ResNet Inc. (as applicable) enforceable in accordance with its
terms.
3. Assuming the proceeds of the loans are used solely for the
purposes set forth in the Credit Agreement, neither the execution and
delivery by each of the Borrower and ResNet Inc. of the Loan Documents to
which it is a party, nor the consummation by each of the Borrower and ResNet
Inc. of the transactions contemplated thereby: (i) violates any provision of
the Borrower's or ResNet Inc.'s respective certificates of incorporation or
bylaws; (ii) violates any law or regulation (including any applicable order
or decree of any court or governmental instrumentality known to us)
applicable to the Borrower or ResNet Inc.; (iii) results in the breach of, or
constitutes a default under, any indenture, mortgage, deed of trust, lease or
other agreement to which the Borrower or ResNet Inc. is a party or by which
they or each of their respective properties are bound; (iv) results in the
creation or imposition of any lien upon any of the property of the Borrower
or ResNet Inc. under any indenture, mortgage or other agreement described in
clause (iii) above; or (v) requires the consent or approval of, or any filing
or registration with, any governmental body, agency or authority.
4. To our knowledge, there are no judgments outstanding against the
Company or ResNet Inc. Except as set forth on Schedule 3.6 of the Credit
Agreement, there is no action, suit or proceeding pending before any court or
any governmental or regulatory authority, against or otherwise involving the
Borrower or its Subsidiaries, or to our knowledge threatened, which, if
adversely determined, would have a material adverse effect upon the
consolidated financial condition or business of the Borrower.
5. To our knowledge, neither the Borrower nor ResNet Inc. is in
default with respect to any agreement, resolution, decree, bond, note,
indenture, order or judgment to which it is a
F-2
party or by which it is bound, or any other agreement or other instrument by
which any of the properties or assets owned or used by the Borrower or its
Subsidiaries in the conduct of their respective businesses is affected.
6. Neither the Borrower nor ResNet Inc. is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company.
7. Neither the Borrower nor ResNet Inc. is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" within the meaning of the Public Utility Holding Company Act of
1935, as amended.
8. The interest rates applicable to the obligations of the Borrower
under the Credit Agreement and the Notes do not violate any law, rule or
regulation prescribing a maximum rate of interest.
F-3